Special Reference by the Fly River Provincial Executive v Pala [2017] PGSC 25; SC1602 (1 September 2017)

SC1602

PAPUA NEW GUINEA
[IN THE SUPREME COURT OF JUSTICE]

SC REF No. 6 of 2014

SPECIAL REFERENCE PURSUANT TO SECTION 19 OF THE CONSTITUTION

SPECIAL REFERENCE BY THE FLY RIVER PROVINCIAL EXECUTIVE
Referor

AND:
Hon. ANO PALA, MP
Attorney General & Minister for Justice
First Intervenor

AND:
HON. PETER O’NEILL, CMG, MP
Prime Minister of Papua New Guinea
Second Intervenor

AND:
HON. JUSTICE WARWICK ANDREW (retired)
Commissioner, Commission of Inquiry into payments/brief-out
to lawyers and law firms by State Agencies
Third Intervenor

Waigani: Injia CJ, Salika DepCJ, Kirriwom & Higgins JJ
2015: 14^th December
2017: 1^st September

CONSTITUTIONAL LAW - Validity of Commission of Inquiry Act 1956- Whether Act is a pre-Independence law that should comply with Section 38 of the Constitution - Act not invalid- Constitution, s 38, Sch.2.6.

Facts:

The Fly River Provincial Executive filed a Special Reference challenging the Constitutional validity of the Commission of Inquiry Act 1956 (the Act). The reference was filed after a Commission of Inquiry established by the Prime Minister under the Act to investigate and report on the procedures employed by the Department of Justice and Attorney General to brief private law firms to represent the State, commenced hearing and summoned the Provincial Administrator of Western Province to give evidence in relation to brief out arrangements by the Fly River Provincial Government. The Provincial Executive took issue with the summons and filed the reference. The Provincial Executive argued that the Act was a pre-Independence law that should comply with the law-making conditions prescribed by s 38 of the Constitution, which the Act failed to do.

Held:

1. The Commission of Inquiry Act 1956 is a “pre-independence law” pursuant to Schedule 2.6(1) of the Constitution.
2. Pursuant to Schedule 2.6 (1) and (2), the adoption of, and application of, the Commission of Inquiry Act 1956 is “Subject to any Constitutional Law...” but not s 38 of the Constitution.
   
3. The Commission of Inquiry Act 1956 is a constitutionally valid law.

Cases cited:

SCR No. 5 of 1992; Re Organic Law on National Elections (Amendment No. 1) Law 1991 [1992] PNGLR 14.

The State v NTN Pty Ltd & NBN Limited [1992] PNGLR 1
Counsel:

Mr Egan with R Raka & T Yalapan, for the Referor
L Henao with M Kipa, for the for the First Intervenor
R J Webb QC with C Wara, for the Second and Third Intervenors

1st September, 2017

1. BY THE COURT: In this special reference, the Fly River Provincial Executive (Referor) represents the Fly River Provincial Government. The Referor raises certain Constitutional questions relating to the adoption and application of a pre- Independence law namely, the Commissions of Inquiry Act 1951 (CoI Act).
   
2. The questions posed in the Reference are the following:
   

“The primary questions are whether the CoI Act Applies with full force and effect to a provincial government and therefore the Fly River Provincial Government (FRFG), and whether the CoI Act is Constitutionally valid. This question depends on a resolution of the following separate but related questions:

(a) Whether the CoI Act qualifies as a “pre-independence law” pursuant to Schedule 2.6(1) of the Constitution;

(b) If the answer to the First Issue is yes, whether the adoption of, and application of, the CoI Act is “Subject to any Constitutional Law...” pursuant to schedule 2.6(2) of the Constitution; and

(c) If the answer to the Second Issue is yes, whether the CoI Act (as an adopted Act of the Parliament) satisfies the requirements of section 38(2) of the Constitution or otherwise is constitutionally invalid.”

Background

3. The Reference arises from a decision of the Prime Minister (second intervenor) made in 2014 to appoint a Commission of Inquiry (CoI) under s 4A of CoI Act 1951. The CoI was established to inquire into payments made to Lawyers and Law Firms by State Agencies following brief outs under the Attorney Generals Act 1989 ("AG Act"). Retired Justice Warwick Andrew (third intervenor) was appointed the Commissioner of the CoI.
   
4. The terms of reference (ToR) of the CoI were these:
   

"(a) Require the Commissioner and the Commission to inquire into and report on the following matters:

(a) the current practices and procedures used to award brief outs to law firm; and
(b) the current practices and procedures for processing payments or claims lodged by law firms for work completed.

(b) To inquire into cases from the last two (2) years and investigate in detail a sample of such cases to determine whether practices and procedures for brief outs and payments to law firms have been properly followed, such detailed investigation to be generally confined to cases in which the first memorandum of fees in relation to work completed was delivered within the last two years.

(c) To identify any weaknesses for avenues for corrupt conduct arising as a result of the practices and procedures for brief outs and payments to law firms.

(d) To make recommendations in relation to the practices and procedures for brief outs and payments to law firms that will minimize the opportunity for corruption and ensure value for money for the State."

5. The CoI commenced its inquiry in October 2014 in the course of which it began inquiring into whether; provincial governments including the Fly River Provincial Government had complied with the procedures set out in the AG Act in briefing law firms and paying their legal fees. The CoI summoned Dr Mudowa Gumoi, the Acting Provincial Administrator of the Fly River Provincial Government, to give evidence and to produce relevant documents: CoI Act, s 6. Upon service of the Summons, he was required to appear before the CoI to give evidence and produce documents, failing which he stood liable to be prosecuted and punished with a criminal offence which carried a fine of K5, 000 or imprisonment up to 3 years or both: CoI Act, s 9. The same penalty was provided for a person who appeared under a Summons but refused to give evidence under oath: CoI Act, s 10. A penalty of 14 years imprisonment was prescribed for a person who gave false evidence at a CoI: CoI Act, s 10A. Dr Gumoi objected to the summons. He argued that the CoI Act had no application to a Provincial Government and therefore, the CoI lacked jurisdiction to enquire into a Provincial Government including the Fly River Provincial Government. Dr Gumoi also argued that the CoI Act was unconstitutional. The Referor then filed this reference.
   

Relevant statutory provisions

6. Section 20 (3) of the Constitution states:
   

Certain pre-Independence statutes are adopted and shall be adopted, as Acts of Parliament and subordinate enactments of Papua New Guinea, as prescribed by Schedule 2 (adoption, etc; of certain laws)."

7. Schedule 2.6(1) & (2) of the Constitution provides:
   

PART 4.—ADOPTION OF CERTAIN STATUTES.

Sch.2.6. Adoption of pre-Independence laws.

(1) In Subsection (2), "pre-Independence law" means—

(a) a law (including a law that had not yet come into operation) that was repealed by the Laws Repeal Act 1975 made by the pre-Independence House of Assembly for Papua New Guinea, and includes—

(i) a law that was, and to the extent that it was, continued in force under or by virtue of any such law; and

(ii) a purported law that might have been (but had not been declared by a court to be) invalid by reason of a failure to comply with any other law in respect of the manner of its assent,

other than such a law that was repealed or superseded, or had expired or was spent, before the commencement of the Laws Repeal Act 1975; and

(b) the laws of Australia specified in Part 1 of Schedule 5 as in force in the country immediately before Independence Day; and

(c) the laws of England specified in Part 2 of Schedule 5 as in force in the country immediately before Independence Day; and

(d) subordinate legislative enactments under any such laws that were in force in the country immediately before the repeal, or immediately before Independence Day, as the case may be.

(2) Subject to any Constitutional Law, all pre-Independence laws are, by virtue of this section, adopted as Acts of the Parliament, or subordinate legislative enactments under such Acts, as the case may be, and apply to the extent to which they applied, or purported to apply, immediately before the repeal referred to in Subsection (1)(a), or immediately before Independence Day, as the case may be.

(3) For the avoidance of doubt it is hereby declared that where a pre-Independence law to which Subsection (2) applies has not been brought into operation, and does not itself express a date on which it is to come into operation, it may be brought into operation—

(a) in the case of an Act—on a date to be fixed by the Head of State by notice published in the National Gazette; and

(b) in the case of a subordinate legislative enactment—by publication in the National Gazette.

8. Section 38 of the Constitution states:
   

Subdivision C.—Qualified Rights.

General.

38. General qualifications on qualified rights.

(1) For the purposes of this Subdivision, a law that complies with the requirements of this section is a law that is made and certified in accordance with Subsection (2), and that—

(a) regulates or restricts the exercise of a right or freedom referred to in this Subdivision to the extent that the regulation or restriction is necessary—

(i) taking account of the National Goals and Directive Principles and the Basic Social Obligations, for the purpose of giving effect to the public interest in—

(A) defence; or

(B) public safety; or

(C) public order; or

(D) public welfare; or

(E) public health (including animal and plant health); or

(F) the protection of children and persons under disability (whether legal or practical); or

(G) the development of under-privileged or less advanced groups or areas; or

(ii) in order to protect the exercise of the rights and freedoms of others; or

(b) makes reasonable provision for cases where the exercise of one such right may conflict with the exercise of another,

to the extent that the law is reasonably justifiable in a democratic society having a proper respect for the rights and dignity of mankind.

(2) For the purposes of Subsection (1), a law must—

(a) be expressed to be a law that is made for that purpose; and

(b) specify the right or freedom that it regulates or restricts; and

(c) be made, and certified by the Speaker in his certificate under Section 110 (certification as to making of laws) to have been made, by an absolute majority.

(3) The burden of showing that a law is a law that complies with the requirements of Subsection (1) is on the party relying on its validity.

Arguments of the parties

9. The central issue in the Reference is whether the CoI Act 1951 is unconstitutional in that it fails to comply with the mandatory requirements of section 38(2) of the Constitution. The argument of the parties turned on the three specific but related sub-questions.
   
10. The referor argues that the CoI Act 1951 is a pre-Independence law. It was repealed by the Laws Repeal Act 1975 made by the pre-Independence Constituent Assembly and adopted and applied after Independence under special provisions made in s 20 (3) and Schedule 2.6(2) of the Constitution. Schedule 2.6(2), by its expression "Subject to any Constitutional Law" required the CoI Act to comply with the Constitution. The CoI Act must comply with the formal requirements of law-making prescribed by s 38 of the Constitution. The CoI Act must be expressed to be a law that is made for the purpose of regulating or restricting a specific right or freedom declared by the Constitution, specify the right or freedom that it regulates or restricts; and be made and certified by the Speaker under section 110 (certification as to making of laws) to have been so made, by an absolute majority. Sections 6, 9 and 10 of the CoI Act, s 6, s 9 and s 10 restrict or regulate the rights of persons summoned to appear and give evidence in the CoI. The rights restricted or regulated are their right to liberty of the person (s 42 of the Constitution), right to privacy (s 49(1) of the Constitution) and right to freedom of movement (s 52 of the Constitution). For this reason, s 38 applies to the CoI Act. The CoI Act fails to comply with the mandatory requirements. This Court has in previous cases struck down statutes that failed to comply with s 38 and the same result should follow in respect of the CoI Act: The State v NTN Pty Ltd & NBN Limited [1992] PNGLR 1. SCR No. 5 of 1992; Re Organic Law on National Elections (Amendment No. 1) Law 1991 [1992] PNGLR 14. For these reasons, the CoI Act is unconstitutional and invalid.
    
11. The first intervener agrees that the CoI Act is a pre-Independence Law. Its adoption and application is authorised by s 20(3) and Schedule 2.6 (1) and (2) of the Constitution. The CoI Act does not comply with the formal requirements of s38 of the Constitution because it is a pre-Independence law that was adopted for application after Independence under the special provisions found in s 20(3) and Schedule 2.6 (1) and (2) of the Constitution. Section 38 was not intended to apply to pre-Independence laws that were adopted for application after Independence. Further there is no provision in the Constitution that makes s 38 retrospective to apply to all pre-Independence laws adopted and applied after Independence.
    
12. The second and third interveners argue that the CoI is not a pre-Independence Law because although existed as pre-independence law, it was repealed and then restored and became "an Act of the Independent State effective from 16 September 1975 pursuant to Schedule 2.6 (2) of the Constitution." It is therefore not strictly correct to say the CoI Act is a pre-Independence law. It is wrong to classify the CoI Act as an Act that seeks to regulate or restrict a right because the CoI established under the CoI Act has an investigative function that does not involve determination of any civil rights of citizens. The investigation leads to a report made to the Prime Minister for presentation to the Parliament. A CoI does not determine any civil rights or liberties for which s38 should apply.
    
13. The second and third interveners argue that the CoI Act has been applied since Independence without question. It has been amended four times, twice before Independence in 1970 and 1971 and twice after Independence in 1989 and 2000 respectively. Various CoI have been established and reports presented to the Parliament and recommendations implemented by the executive government without question. The argument that the CoI Act is unconstitutional and invalid is "an alarming one" and should be rejected outright.
    

Determination

14. The central issue in the Reference as we have already noted is whether the CoI Act is unconstitutional. The drafting of the reference questions appear a little ambiguous. The "primary questions" in the Reference appear in two parts: whether the CoI Act applies with full force and effect to a Provincial government and therefore the Fly River Provincial Government; and, whether the CoI Act is constitutionally valid. They appear to be two distinct questions. The parties did not argue the first primary question. They argued the second primary question, which is the central issue in the Reference, by arguing the three separate but related sub-questions. For this reason, we would isolate the first primary question from the second primary question and decline to answer the former.
    
15. With regard to second primary question, the answer to the first of the three sub-questions is obvious. There is no real contest between the parties, and correctly so, that the CoI Act 1951 is a pre-Independence law. We would answer the first sub-question "Yes".
    
16. With regard to the second sub-question, all pre-Independence laws including the CoI Act 1951 adopted under s 20 (3) and Schedule 2.6(1) must comply with Constitutional Laws. Section 11 of the Constitution also makes ordinary statutes subject to the two forms of Constitutional Laws namely, Organic Laws and the Constitution. For this reason, we would answer this sub-question "Yes".
    
17. With regard to the third sub-question, whether the CoI Act should comply with section 38 depends on the purpose of s 38 of the Constitution. Section 38 is intended to apply to laws made after Independence that follow the normal law-making processes and procedures found in Subdivision D-Powers, Privileges and Procedures, which contains Sections 109 to 117 including s110 (certification as to making of laws) prescribed in section 38(2)(c). Section 38 is not intended to apply to pre-Independence laws that were adopted for application after Independence under s 20(3) and Schedule 2.6 (1) and (2) of the Constitution. Section 38 prescribes formal and mandatory requirements for laws proposed to be made by Parliament after Independence that adversely affected the personal freedoms, rights and liberties that were protected by the Constitution. Section 38 clearly had no application to pre-Independence laws whose adoption and application after Independence was authorised by special provisions made in s20(3) and Schedule 2.6 (1) and (2).
    
18. The case for the referror is not that the CoI should have been amended to comply with the formal requirements of s 38. Their case is that the CoI Act as a pre-Independence law did not comply with s 38 when it was adopted at the time of Independence. The argument is clearly without merit. We would answer the third sub-question "No".
    
19. It is open for a pre-Independence law to be challenged and tested for consistency with other provisions of the Constitution but not under s38. For instance if a pre-Independence law that is adopted and applied after Independence infringes the Constitutional right of a citizen, the provisions of the statute in question can be challenged in a Constitutional Reference brought under s 19 of the Constitution. That is not the case before us in this Reference. What is before us is a challenge to a pre-Independence law on the grounds that the Constituent Assembly failed to comply with s38 of the Constitution when it adopted the pre-Independence law under the Constitution that the Constituent Assembly had just enacted.
    
20. The Constitutional validity of the CoI Act 1951, since its adoption and application from the time of Independence to this day has never been questioned. The CoI Act has been amended four times, twice before Independence and twice after Independence. Various CoIs have been established under the CoI Act and they have discharged their investigative functions without any question as to the Constitutional validity of the CoI Act. We agree with the intervenors that the Referor's argument that the CoI Act is unconstitutional by reason of its failure to comply with s 38 of the Constitution is "an amazing one" and an argument that in our view is clearly untenable, bordering on abuse of court process and mischief to say the least, and a waste of the Court's time and costs. This is a clear case in which the Referor should be penalized with orders for costs against the Referor.
    

Summary of answers and orders

21. In summary, we would answer the questions in the reference as follows:
    

First primary question: The primary questions are whether the CoI Act applies with full force and effect to a provincial government and therefore the Fly River Provincial Government (FRFG)

Answer: Decline to answer

Second primary question: whether the CoI Act is Constitutionally valid.

Answer: Yes

Sub-question (a): Whether the CoI Act qualifies as a “pre-independence law” pursuant to section Schedule 2.6(1) of the Constitution

Answer: Yes

Sub-Question (b): If the answer to the First Issue is yes, whether the adoption of, and application of, the CoI Act is “Subject to any Constitutional Law...” pursuant to schedule 2.6(2) of the Constitution

Answer: Yes

Sub-question (c): If the answer to the Second Issue is yes, whether the CoI Act (as an adopted Act of the Parliament) satisfies the requirements of section 38(2) of the Constitution or otherwise is constitutionally invalid.

Answer: Section 38 of the Constitution has no application to the Commissions of Inquiry Act 1951. The Commissions of Inquiry Act 1951 is a constitutionally valid law.

22. We order that the Referor pay each intervenor’s costs of the proceedings.
    

________________________________________________________________
Posman Kua & Aisi Lawyers : Lawyer for the Referor
Henao Lawyers : Lawyer for the First Intervener
Nicholas Tame Lawyers : Lawyer for the Second and Third Interveners