Members of Parliament (Entitlement) Commission v Tabusasi [2016] SBCA 17; SICOA-CAC 09 of 2016 (14 October 2016)

IN THE SOLOMON ISLANDS COURT OF APPEAL

NATURE OF JURISDICTION:	APPEAL FROM JUDGMENT OF THE HIGH COURT OF SOLOMON ISLANDS (PALMER CJ)
COURT FILE NUMBER:	CIVIL APPEAL CASE NO.9 OF 2016 (ON APPEAL FROM HIGH COURT CIVIL CASE NO. 175 OF 2015)
DATE OF HEARING:	7 OCTOBER 2016
DATE OF JUDGMENT:	14 OCTOBER 2016
THE COURT:	GOLDSBROUGH P LUNABEK JA YOUNG JA
PARTIES:	MEMBERS OF PARLIAMENT (ENTITLEMENT) COMMISSION APPELLANT - V – WAETA BEN TABUSASI, RUTH LILOQULA, DEREK RAWCLIFFE MANUIARI, ANTHONY VERNON HUGHES AND GRAHAM MARK FIRST RESPONDENTS ATTORNEY GENERAL SECOND RESPONDENT
	J SULLIVAN QC APPELLANT J KATAHANAS A RADCLYFFE FIRST RESPONDENTS S. BANUVE SECOND RESPONDENT
KEY WORDS:	PARLIAMENTARIAN ENTITLEMENTS: S83 BREACH OF CONSTITUTION AND WHETHER ENTITLEMENT REGULATIONS ULTRA VIRES:
EX TEMPORE/RESERVED:	RESERVED
ALLOWED/DISMISSED	ALLOWED IN PART
PAGES	1- 17

JUDGMENT OF THE COURT

Introduction

1. The Solomon Island’s Constitution provides for a Members of Parliament (Entitlement) Commission. Its function is to determine the salaries, allowances and other benefits for Parliamentarians each year. Having determined the entitlements, the Commission is empowered to make Regulations relating to these entitlements.
   
2. On the 1^st April 2015 the Members of Parliament (Entitlement) Commission (Amendment) Regulations came into force.
   
3. The respondents issued proceedings seeking declarations by the High Court that a number of the 2015 Regulations were unconstitutional and therefore null and void. The Judge in the High Court concluded that 13 regulations were unconstitutional. Three challenged regulations were found to be unobjectionable. This appeal challenges the Judge’s conclusions with respect to 11 of the 13 regulations he found to be unconstitutional.
   

The Statutory Regime

4. Section 69A of the Constitution sets up the Commission with a Chairman and four other members. The Chairman and two members are appointed by the Governor General on the advice of the Prime Minister.The other two members are the Minister of Finance and the Chairman of the Public Accounts Committee.
   
5. S69B empowers the Commission to determine entitlements. The Commission is to consider representations made to it and relevant economic issues including the Government’s finances, movements in pay and entitlements generally in the Solomons and the cost of living.
   
6. The Regulations can provide for a wide range of entitlements which may “facilitate the discharge” of the functions of Parliamentarians.Section 69B (3) requires the Commission to consider a wide range of matters relating to Parliamentarians’ and their families needs. These include such matters as accommodation during Parliamentary sittings, transport, medical need and death and retirement benefits. All such entitlements must however “facilitate the discharge of functions as Parliamentarians”. The Commission is to ensure that the salary and other entitlements of Parliamentarians increase at no less a rate than other public officers. While the Regulations are in force S69 B (4) (b) deems them to be a provision of the Constitution.
   
7. Section 69C (2) definesentitlements widely including salary and allowances and provides that an entitlement is anything which the “Commission may consider it necessary to be provided to the Parliamentarians to enable them to maintain the dignity of their office”.
   
8. Finally S69C(1) provides as follows:

“Upon the commencement of the regulations made or amended under section 69B of this Constitution, no entitlement and no exemption of an entitlement from any tax or other liability shall be admissible to any Parliamentarian except in accordance with those regulations”.

9. The Respondent’s case in the High Court was based on an alleged breach of S83 of the Constitution. Section 83 entitles those who claim a breach of the Constitution to apply to the High Court for such a declaration.
   
10. There is general guidance for Commissions (including the Commission in this case) set out in S137 of the Constitution. Decisions of the Commission are by majority and the Commission is not to be subject to control of any other body. However the court’s jurisdiction is preserved by S138 in this way:

“No provision of this Constitution that any person or authority shall not be subject to the direction or control of any other or authority in the exercise of any functions under this Constitution shall be construed as precluding a court of law from exercising jurisdiction in relation to any question whether that person or authority has performed those functions in accordance with this Constitution or any other law or should not perform those functions”.

11. Finally S140 provides:

“(1) Where any person or authority other than the Governor-General is directed by this Constitution to exercise any function after consultation with any other person or authority, that person or authority shall not be obliged to exercise that function in accordance with the advice of that other person or authority”.

“(2) Where any person or authority is directed by any law to consult any other person or authority before taking any decision or action, that other person or authority must be given a genuine opportunity to present his or its views before the decision or action, as the case may be, is taken”.

12. We will return to this provision later in this judgment given the first respondent challenges its application to the process and decisions of the Commission.
    

The Respondents Case in the High Court

13. The respondents’ case in the High Court was essentially in two parts:
    • (i) A general claim that in promulgating the regulations the Commission failed to call for submissions and failed to consult. The Regulations did not facilitate the discharge of the functions of Parliamentarians and the Regulations gave entitlements far more generous than other public officers.
      
    • (ii) A specific challenge to Reg (s) 5, 6, 7, 8, 9, 10, 14, 16 28, 29, 32, 33, 34 and 36. These regulationsit was said failed to comply with S69B (2) and (3) and therefore contravened the Constitution.
      

The Decision in the High Court

14. The Judge first considered the general grounds of challenge to the Regulations. He was satisfied that the Commission had complied with S69B 2 (a) in that it had complied with its obligation to call for representations and consider representations made to the Commission.
    
15. The second ground of general challenge was that the obligations under S69 B (2) (b) (i) (ii) and (iii) were not complied with. The Judge was satisfied that there was no breach of this obligation. He considered the Commission did have regardto relevant information from the Government in terms of those subsections.The Judge decided that other general challenges to the Regulations could more usefully be consideredwhen the particular Regulations were assessed.
    
16. These conclusions favoured the appellant’s case. There is no appeal nor cross appeal from these conclusions and so in that sense no issue relating to these conclusions arises in this appeal. However for the sake of completeness we mention one issue urged upon us by the Appellant relating to these conclusions.
    
17. The Appellant at trial and before this Court submitted that the Commission is an independent legislature constitutionally established by S69A of the Constitution and supreme within the boundaries of its legislative powers.
    
18. The effect of S69A, B and C is that the Regulations made under these provisions are not subordinate legislation the Appellant says. They are made pursuant to the Constitution and they have effect as if they were a provision of the constitution.This supreme position the Appellant argues in turn informs the approach to be taken to any challenge to both the Commission’s process and the Regulations themselves.
    
19. As to these submissions the trial Judge said:-

“While I concur in principle with this argument it is erroneous to take it further and suggest that is imbues the MPEC with legislature powers and turns it into a separate and independent legislature, for it is not and cannot be. The most that can be construed from this is that once the regulations have been validly made, they assume constitutional status and thereby take priority over others. Nothing more can and should be added and construed from that enactment other than that the MPEC has a specific and limited constitutional role, to determine salaries, entitlements and benefits of Parliamentarians ( see section 69B (2)( c ) and 69B(3)). Within the cocoons of its constitutional mandate any regulations duly and validly made are unassailable”.

20. The Appellant’s complaint is that when the Judge came to consider the specific Regulations he did not apply this approach.
    
21. There are two parts by which Regulations under S69A, B and C are made. First there is the process the Commission undertakes to inform itself before settling on the Regulations. Then there are the Regulations themselves. As to the process to inform itself the Appellant submits that any challenge must focus on the relevant provisions in S69A, B and C. The Respondent argues for a wider review including assessments of reasonableness and justification similar to judicial review principles.
    
22. We do not need to resolve this difference. As we have noted there is no appeal from any conclusions reached by the Judge relating to the process to inform the Commission before it concluded the Regulations. The appeal issues all arise from the Judge’s approach to the challenges to the specific regulations. We turn to those challenges now.

Challenges to Specific Regulations.

23. First some general observations. We are satisfied that there are only two grounds on which these Regulations can be individually challenged. First if the Regulation being considered is in conflict with the Constitution (S83). Secondly if the Regulation is ultra vires the provisions in S69A, B and C. As we understood the Respondent’s submissions they did not challenge these propositions.
    
24. The trial Judge usefully considered the functions of Parliamentarians. This was of significance given S69B (3) (C) required the Commission in making the Regulations to consider all matters which “may facilitate the discharge of the functions as Parliamentarians”. Further, “entitlements” (by virtue of S69C (2) includes items which are necessary to enable Parliamentarians to maintain the dignity of their office.
    
25. The Judge said:-

39. “I do not think it can be denied that the role of a Member of Parliament is a multi-functional one. I have outlined to some extent their core functions of legislator, scrutinizer of Government business and representational. The list however is not exhaustive”.

40. “He is expected to find time to meet and interact with his constituents on a regular basis and to provide assistance, advice information where necessary. He is expected to monitor projects and programs that have been initiated in his constituency and at times to facilitate these for and on behalf of his constituency. He is also expected to give assistance and advice to those in difficulty, act as a lobbyist for local interest groups and assist in his party’s policies and activities and to continue to play an active community role”.

42. “In essence the definition of entitlements reiterates what is already commonly accepted that whatever entitlement is granted should assist Members of Parliament to maintain the integrity, discipline, decorum and respect that should be accorded to Parliament as the third arm of Government and as occupying a very important role in the government of the country”.

No challenge was made to this conclusion.

26. It is against these conclusions that we assess the trial Judge’s decisions relating to the individual regulations and the relevant Appellant’s submissions.We consider Regulations together as grouped by the Appellants and Respondents in their submissions.
    

Regulations 5 and 36

27. Members of Parliament have had at least from 1988 a Member’s Discretionary Fund. Originally members were authorised to spend the fund on micro projects and charities within their electorates. In 2010 this was changed to permit Parliamentarians to use the fund “for charitable purpose at the discretion of the Member.” (Reg 2, 2010 Amending Regulations).
    
28. In 2015, pursuant to Regulations 5 and 36, the Discretionary Fund for each Parliamentarian was increased from $300,000 to $500,000. It is this increase the respondent’s challenged in these proceedings as being in breach of the Constitution.
    
29. The trial Judge noted that the Commission said the increase was “a consequence of the increasing demands by voters for assistance”. Evidence was led before the Judge that significant time was spent by Parliamentarians in hearing and considering requests for help from Constituents.
    
30. The Judge concluded that:-

“The increase is not only unreasonable and totally unjustified but also fails to take into account the advice given by other authorities and in terms of the matters specified in section 69B(2)(b) of the Constitution and must be struck out as well as unconstitutional”.

31. In reaching that conclusion the Judge said:-
    50. “It seems that after the controls and accountability mechanisms were removed the use and purpose to which the fund could be used, as adduced in evidence before me could more accurately be described as now subject to the whims of the Member of Parliament as to what he considers is appropriate for the occasion, for it appears there is no longer any guideline or control as to what purposes and use such fund could now be applied to. It is not surprising the use of this fund has also attracted bad publicity and criticism and may even be a source of corruption and corrupt practices”.
        

51. “The reason given to justify the increase in my view cannot be sustained when the noble goals and intentions for the setup of the funds are noted. Of significance is the clear advice given against any increases and which has been ignored”.

52. “Those guidelines exist to facilitate the work of a Member of Parliament in his representational capacity and performance of other duties towards his constituents. It does not give him/her a blanket right to dispense cash or money willy-nilly or for any sort of reason. If it is for charitable purposes and to assist with the setup of micro-projects etc, then it cannot be seen as a means to facilitate the payment of just any need. These are not private funds to be dispensed with at will and pleasure!. These are people’s money and must be accounted for in a plain transparent and responsible manner. The Member of Parliament must not lower the standards, requirements and obligation imposed upon him by virtue of his office. He must always seek to maintain the integrity, honour and decorum of such respectable position and calling and ensure he/she does not bring it into disrepute and contempt by engaging in seemingly legitimate activities by which demean his status and office in the country”.
    
32. We agree with the Appellant that the Judge erred in his approach in assessing whether there had been a breach of the Constitution.
    
33. First the issue for the High Court was whether the increase in the fund was in breach not the existence of the fund itself. Secondly none of the advice given to the Commission was against the increase. As the Appellant noted submissions from Transparency International agreed with the increase.The Clerk of the Parliament expressed no view and the Ministry of Finance said the increase could be afforded.
    
34. In our view there can be no doubt that the existence of the fund (to use the language of S69B (2) (c)iv) and S5 (B) (a)) facilitates the discharge of Parliamentarian function. In particular there was evidence before the trial Judge that there was community expectation that these funds would be available for distribution. Distribution of the fund had therefore become a significant part of the function of a Parliamentarian in the Solomon Islands.
    
35. Of particular relevance in this case, where the increase in the fund was all that could be challenged, was evidence of an increasing constituent demand for these funds. This therefore provided a justification for the increase in terms of S69B.
    
36. We are satisfied these Regulations were not ultra vires or otherwise in breach of the Constitution.
    

Regulation 9

37. The Judge concluded that this Regulation meant that the Government could not recover a Parliamentarian debt from the terminal grant payable to an MP who had been incapacitated. The Judge said the debt must be recoverable in law and that there was no reason why the Government should not be able to recover the debt. The Judge therefore concluded the Regulation was ultra vires.
    
38. Regulations does not prevent recovery of the debt but simply prevents recovery from the terminal grant where the Parliamentarian is wholly depended or incapacitated.
    
39. Mr Siapu,the Chairman of the Commission, provided the rationale for this Regulation in his sworn statement before the trial court. Mr. Siapu said that :
    

“(44).It is a fact that Members given up their businesses and interrupt their careers to enter Parliament. If they are not re-elected, Members return to their former business following a four year absence. Otherwise, Members resume their careers having lost four years of seniority. This is unlike any other employment and represents a significant burden on Members.

(45). Terminal grants were always intended to assist Members in re-establishing their former business or occupation. It would be difficult to attract quality candidates. If the grants were not paid.

(46).Where Members medically certified to be wholly dependent and incapacitated, the 2015 Regulations exempt their terminal grant from deduction and repayment of any debt they owe to SIG. In that regard, the Commission considered this as a fair reflection of the position of other members of the community regarding exemption of their employees’contributions to the Solomon Islands National Provident Fund. The debt is not forgiven.

(47). The exemption applies only to medically unfit/dependent Members’ terminal grants. SIG is free to recover its debt from a Member’s other assets.”

40. This evidence provides a rationale for Regulation 9 in terms of S69B and C. This evidence illustrates how Regulation 9 can been seen as facilitating the functions of Parliamentarians and how it may help Parliamentarians maintain the dignity of their office (S69C (2) (a).
    
41. Given that conclusion we are satisfied that Regulation 9 was intra vires. The trial Judge was wrong when he concluded it was ultra vires and in breach of the Constitution.
    

Regulation 16

42. This Regulation is allied to Regulation 9. There are two parts to this Regulation. The only objection at trial was taken to Regulation 16(b) although we note the Judge ordered both (a) and (b) be struck out as ultra vires.Reg 16 (b) provides.
    

“ When a Member dies, the amount outstanding on a guaranteed loan shall be paid off by the Guarantor.”

43. The trial Judge seemed to conclude that Reg 16(b) meant that where a guarantor had paid the loan the guarantor in turn could not recover that sum from the entitlements of the Parliamentarian. The Judge said that such an arrangement could have “no legal or reasonable basis for it”
    

(64) “The objection taken to the amendment is paragraph 16(2) in that when a Member of Parliament dies in office, it seems to exclude recovery of any amount outstanding on any advance or guaranteed loan from his pay, terminal grants or pension payments etc. If that were the intention whether deliberate or not, I accept it would be going too far on the basis that there is simply no legal and reasonable basis for it. While the loan or advance may be paid off by the Guarantor there can be no impediment for recovery of that from the other entitlements of the Member of Parliament as set out in paragraph (a) of regulation 16. I accept submissions of learned counsel Mr. Radclyffe and order that the offending paragraph be struck out as ultra vires the powers of the MPEC”.

44. We agree that if Reg 16(b) indeed prevented a guarantor from being reimbursed for payment of a Parliamentarians debt from the members’ estate it would be difficult to see how such an arrangementwas intra vires S69B and C.
    
45. If such an interpretation was correct Regulation would significantly effect a third persons interests. (the guarantor) withoutan obvious rationale in terms of S69B and C. We note Mr. Siapu in his sworn evidence considered that Reg 16(b) not prevent recovery of the guarantors payment from the deceased Parliamentarians estate.
    
46. We consider sub Reg16(b) does no more than its plain words.In the limited circumstances, in an MP death, where the MP has a guaranteed loan against his Parliamentary entitlements, the loan is to be paid by the Guarantor. This doesnot prohibit the Guarantor from reimbursement from the MP’s estate which will likely include his terminal grant and other entitlements. We therefore consider the Judge was wrong in his interpretation of Reg 16(b) and therefore wrong to conclude the Regulation was ultra vires based on this interpretation.
    
47. However, we consider Reg 16(b) is ultra vires. S69B (3) (a) and S69B (2) C (ii) authorise the Regulations to provide for terminal grants and for the Commission to impose terms and conditions relating to the terminal grants. However not only does there have to be power to deal with these entitlements the entitlements must be provided to maintain the dignity of the office (S69C(2) and to facilitate the discharge of the functions of Parliamentarians (S69B(2)(c)iv). There is nothing in the evidence from any of the parties that specifically identifies the rationale of Reg 16(b) in terms of S69B and C. Nor can we identify any such rationale.
    
48. Where the member has died there may be a reason consistent with S69B and C to prevent a terminal grant being directly charged with an MPs Parliamentary debt. This would provide some protection for the family of the MP consistent with the need to maintain the dignity of the office and to facilitate the discharge of their functions. However it is quite a different matter to require a guarantor to first pay on MPs Parliamentary debt. The entitlements of Parliamentarians do not include the obligations of private persons who may guarantee Parliamentarian’s debts.
    
49. We are therefore satisfied Reg 16(b) is ultra vires and therefore in breach of the Constitution. No challenge was made to Reg 16(a). This Regulation does not appear to give any entitlement but merely confirms the legal position as to debt collection.
    

Reg 10

50. This Regulation amended provisions relating to Parliamentarian pension payments. The trial Judge concluded that given the Commission failed to take into account the capacity of the Government to afford the proposed increases (under S69B (2) (b)) the Commission had acted beyond its powers. The increases were set aside.
    
51. In the Judge’s discussion about the pension changes and in advice given by the Central Bank of the Solomons an error was made about the existing reach of the pension scheme and the 2015 Regulation changes. Both the Judge and the Central Bank believed the existing pension scheme was available only to those MPs who had served at least 8 years in Parliament and that the 2015 Regulations extended the scheme to all MPs no matter how many years served. This was wrong. The existing scheme (amended in 2013) applied to all MPs whatever their service period. The pensions were on a sliding scale depending on years of service. The lowest scale, which paid a pension of 30% of an MP’s salary, was for those who had served “up to 8 years”. This lowest scale therefore encompassed MPs who had served any period in Parliament up to 8 years. This error is particularly relevant to the Central Bank’s advice to the Commission about affordability of the pension changes proposed, which we will address shortly.
    
52. The pension changes in the 2015 Regulations increased the pension payable at the bottom scale from 30% to 35% of MP Salary. Other increases followed for each scale up to those MPs who had served more than 24 years who had an increase from 85% to 95% of Parliamentarian Salary.
    
53. The Commission sought wide ranging advice about the proposed changes including from the Central Bank, the Minister of Finance, and the Parliament Association. The Central Bank’s submission, based on an analysis of the proposed changes and the country’s financial position was that:
    • (a) The proposed increase should be delayed
    • (b) The Commission should do a comprehensive review of politicians pensions.
    • (c) The Commission should consider pension polices in other similar jurisdictions
    • (d) MPs should start contributing
      
54. This assessment was in part based on the Central Bank’s erroneous view that the 2015 Regulations widened eligibility for pensions to MPs who had only served 4 years. In its advice the Bank said “Amendments to include members serving four years could raise pension costs by more than double to $6.7 million per annum”
    
55. The bank noted that 54% of MP’s were in what it believed was the “new” category of eligible MPs, those with only 4 years’ service. This incorrect advice given its importance in assessing cost to the Government significantly undermined the Central Banks assessment and the Judge’s reliance upon it. However, because of our view of the other relevant issue relating to this Regulation we do not need to comment further on the effect of this incorrect advice.
    
56. The essence of the reason why the Judge found the Commission had acted beyond its powers with respect to this Regulation is that he considered the Commission had ignored or acted contrary to the advice of the Central Bank when it changed the pensions. We agree with the appellant that in approaching the Commission’s decision in this way the Judge was wrong. We are satisfied that with any advice received by the Commission, where it is relevant in terms of S69B and C, it must take that advice into account when concluding the Regulations. What it does not have to do is follow that advice.
    
57. S140 of the Constitution provides as follows:
    • (1) “Where any person or authority other than the Governor-General is directed by this Constitution to exercise any function after consultation with any other person or authority, that person or authority shall not be obliged to exercise that function in accordance with the advice of that other person or authority”
      
    • (2) “Where any person or authority is directed by any law to consult any other person or authority before taking any decision or action, that other person or authority must be given a genuine opportunity to present his or its views before the decision or action, as the case may be, is taken”.
      
58. Regretfully trial Counsel did not bring this section to the trial Judge’s attention. Although the Respondent submitted this section did not apply to the Commission’s functions we are satisfied it does. Even if the S140 did not apply we would have concluded that the Commission was not bound to accept any advice it received unless by doing so a Regulation became ultra vires.
    
59. In this case the position is even starker. The Commission had different advice from the Central Bank (in part in error) and the Minister of Finance as to affordability. And so whatever decision it reached it would inevitably not follow someone’s advice. Nor can it be suggested that because the Commission did not take the Central Bank’s advice it did not take the advice into account in its deliberations. A reading of the material from the Chairman of the Commission and the minutes of the Commission make it clear it did so. We are satisfied there was no ground established on which to conclude this Regulation breached the Constitution.
    

Reg 14

60. This Regulation increased the death benefit for MPs estates from $100,000 to $150,000. The Judge found the increase did not take in to account a relevant matter. He set the increase aside. The Judge said that the issue with respect to this Regulation was not whether the Commission had jurisdiction but whether the increase was justified. The Judge also observed that the advice given to the Commission was ignored.We are satisfied the Judge adopted the wrong approach. As we have discussed there were only two possible challenges to the Regulations. First were they ultra vires and second were they otherwise in breach of the Constitution.
    
61. There was no evidence before the Court that could justify the conclusion that advice was given against such a change, contrary to the Judge’s observation.
    
62. The increase given by Regulation 14 was to match the death benefit compensation given to private employed citizens. MPs were not covered by this death benefit and the Commission took the view that to protect MPs conditions and therefore the discharge of their functions and the dignity of office a similar increase to workers compensation has required. In those circumstances we are satisfied there was no breach of the Constitution.
    

Reg 32

63. This Regulation changed the quantum and changed the period of calculation for payments to MPs when they were acting temporarily in the capacity of a supervising Minister, the Prime Minister, or the Chairman of a Parliamentary Committee. Prior to 2015 the payments had been calculated on a monthly basis. The 2015 Regulations provided the allowances would be assessed on a daily basis and provided for effective increases on the daily rate. The Judge concluded that this was not a case where the Commission did not have jurisdiction but where the increases where unjustified and unreasonable in the circumstances. The Judge said that the Commission had made arbitrary decisions without proper basis and justification.
    
64. We are satisfied the Judge adopted the wrong approach here.The Judge appears to have accepted it was within the power of the Commission to make these changes. All that was being challenge were the new rates of calculation and quantum. The scheme itself, payment extra to those MPs who took an additional temporary responsibilities, was not under challenge.
    
65. The Commission altered the scheme from a monthly payment basis to a daily basis because of confusion about entitlements when the monthly rate was used. This especially arose when the acting Minister had the additional responsibilities only for part of a month. And so a daily rate was introduced. As to the increase in quantum the Commission considered the existing rates of approximately $3.50 per hour additional pay new wholly inadequate.
    
66. This assessment illustrates that the Commission did have regard to the relevant S69B and C factors and that the Regulation did not breach the Constitution. We add this. It is not the function of the Courts to assess whether the acting allowance was or was not fair pay for the job.That is the function of the Commission. Once it is clear the relevant statutory criteria have been considered and the Regulation therefore cannot be in breach of the Constitution, the Courts function is at an end.
    

Reg 33 and 34

67. These Regulations make Parliamentarian salaries tax free. The Chairman Mr. Siapu explained the background to this decision in his evidence before the trial court. As part of its work the Commission decided that Parliamentarian base salaries were far too low and needed to be increased. The Commission considered an increase in the basic salary from $112,000 to $200,000. This was later reduced to a proposed increase of 25%. As part of its process draft regulations (including this proposed increase) were released for comment to a number of organisations including the Central Bank, the Clerk of Parliament, the secretary to the Ministry of Finance and the Budget Unit,the Economic Reform Unit of the Ministry of Finance and the Minister of Finance and Treasury.
    
68. The Commission was told by the Attorney-General’s office that s69B (3) (b) prohibited an increase of Parliamentarian salaries beyond that given to the Public Service (7.5% over 2 years). The Attorney–General’s advice was wrong. On the contrary, S69 b (3) (b) provided that Parliamentarian salary increases could be at no less a rate than public service salary increases. However at the time of the Commissions decisions regarding the 2015 Regulations the Commission was not aware the advice was wrong.
    
69. The other factor which convinced the Commission not to proceed with the increase was the Central Bank’s advice that the increases could not be afforded. The Attorney–General’s office then suggested that the Commission consider making Parliamentarian salaries tax-free as a way of achieving an effective increase in salary for the members.
    
70. The Judge accepted that the Commission had the power to exempt Parliamentarian salary from tax (S69 B (2) (c) (iii)).The Judge concluded that the Commission failed to comply with S69 B (2) in that it failed to consult broadly about the changes and in particular it failed to consult with the “officers on the Ministry responsible for income tax....”.Further the Judge said the Commission failed to consult about whether the tax exemption was in line with “other budgetary considerations”. Finally the Judge concluded that because the Commission had failed to take into account these matters the decision was ultra vires the Commission’s power under S69 B (2).
    
71. The actual advice received from the Minister of Finance by the Commission was that the proposed increases in salary could not be afforded on the expense side of the Solomon Islands budget. However the Minister accepted that the lower 25% increase in salary could be achieved by making parliamentarian salaries exempt from tax. In deciding that the salaries could be exempt from tax the Commission also took into account that if a salary increase had been given there would have been a commensurate increase in pensions for Parliamentarians. With a tax exemption scheme an increase in pension payments would not occur. And so in that sense tax exemption carried a lesser cost.
    
72. We are satisfied therefore that the Commission did consult about the economic effect of the proposed tax exemption. It is abundantly clear that the Commission did “consider” the advice it received regarding Parliamentarian salaries. This is emphasised by their decision not to give a direct salary increase given the advice received as to affordability.
    
73. Finally, there is the issue of consultation with the Commissioner of Inland Revenue. The evidence from Mr. Snyder Rini the Minister of Finance and a member of the Commission is that he did consult the Commissioner regarding the tax exemption proposal. The Commissioner of Tax would not have been concerned with Government budgetary matters. His concern would have been whether there were any technical issues in achieving the tax exemption proposed.Mr Rini apparently did not report any problem from his discussion with the Commission. Importantly S69B (2) (c) (iii) specifically provided for the exemption of MP salaries from tax.
    
74. We are therefore satisfied there was jurisdiction to exempt Parliamentarian salary from tax, there was consultation about the exemption.Thereason for the effective salary increase was taken into account by the Commission and the exemption was for the purposes in S69 B and C. The Judge was wrong to conclude the Regulations were ultra vires and therefore wrong to strike out the Regulation.
    

Summary

75. The appeal will therefore be allowed as follows:-
    

The Judge’s orders with respect to Regulations 5, 36, 9, 16(a), 10(b), 14, 32, 33 and 34 and the Judge’s declaration that “any payments or tax exemptions made or granted pursuant to the Regulations are null and void” are set aside. Otherwise the Judge’s order dated 19^th April 2016 is confirmed except the order for costs (Order (e)).

Costs

76. We consider in both this Court and the High Court costs should lie were they fall for all parties. This case involved important questions about the Constitution in the context of Parliamentarians entitlements. Both main parties to this litigation had some success, although the Commission’s’ approached was mostly confirmed.
    

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Goldsbrough P Lunabek JA

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Young JA