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High Court of Solomon Islands |
HIGH COURT OF SOLOMON ISLANDS
Civil Case Number 114 of 1999
SOLOMONS MUTUAL INSURANCE LIMITED
V.
CONTROLLER OF INSURANCE
AND DIRECTOR OF PUBLIC PROSECUTIONS
High Court of Solomon Islands
(Palmer J.)
Date of Hearing: 2nd April – 4th April 2001
Date of Judgment: 31st July 2003
Motis Pacific Lawyers for the Applicant
S. Manetoali for the first Respondent
A. Radclyffe for the second Respondent
PALMER J.: Solomons Mutual Insurance Limited (hereinafter referred to as “SMI”) is a private limited liability company incorporated under the Companies Act [Cap. 175] and duly registered under the Insurance Act [Cap. 82] (“the Act”) to transact and carry on insurance business in Solomon Islands. On or about December 1998, the Director of Public Prosecutions (“DPP”) ordered an investigation into the set-up and establishment of SMI. On 11 December 1998, an article appeared in the front page of the Solomons Voice newspaper Volume 6, Issue 38 headlined in bold “DPP orders criminal investigation of SMI ” (a copy of that article is annexed to the affidavit of John Tomun filed 30th March 1999 and marked as exhibit “JT 10”). That particular article read as follows:
“In the letter, the DPP says that the documents led him to the conclusion that a criminal investigation was called for. Also in the letter, the DPP directed the Insurance Controller to withhold his approval for the transfer of funds (Reinsurance Premium) to Swiss Underwriting Services Limited in Singapore until the criminal investigation is completed.”
On or about 1st February 1999 a number of police officers attempted to execute a search and seizure warrant in the office of SMI but were unsuccessful. A copy of that search warrant is annexed as exhibit “JT 1” to the affidavit of John Tomun filed 30 March 1999. On 3rd February 1999, a further attempt was made resulting in the seizure of a number documents. On same date, a solicitor from Motis Pacific Lawyers (now Pacific Lawyers) applied to this court and obtained interim orders staying further execution of that search and seizure warrant.
On 30th March 1999 SMI filed ex parte application for leave to commence action for redress under section 18 of the Constitution, accompanied by a Statement and affidavit of John Tomun. Application was heard and orders for leave granted on the same date.
On 19th May 2000, Applicant filed an Amended Statement, which reduced the orders sought to the following:
Issues for determination
A number of crucial issues arise for determination by this court. For convenience they have been grouped together according to the order in which the Plaintiff has sought redress in its Statement. Paragraphs 1 and 2 of the orders sought can be dealt with together as relating to the same matter whilst paragraphs 3, 4 and 5 can be dealt with separately.
1. Orders of certiorari
The orders of certiorari relate to the issue of two search and seizure warrants; one issued on 1st February 1999 and the other on 3rd February 1999. The validity of those search and seizure warrants have been challenged on a number of grounds.
The first Search and Seizure Warrant of 1st February 1999
The first search and seizure warrant is challenged on the following grounds; that the issue and execution of the said warrant, (i) breached the requirements of section 101 of the Criminal Procedure Code [Cap. 7], (“the CPC”) and (ii) contravened the provisions of sections 3, 8, 9 and 10 of the Constitution. By virtue of those breaches the search and seizure warrant was invalid.
Breach of section 101 of the Criminal Procedure Code
Section 101 of the CPC provides as follows:
“Where it is proved on oath to a Magistrate or a justice of the peace that in fact or according to reasonable suspicion anything upon, by or in respect of which an offence has been committed or anything which is necessary to the conduct of an investigation into any offence is in any building, ship, vehicle, box, receptacle or place, the Magistrate or justice of the peace may by warrant (called a search warrant) authorize a police officer or other person therein named to search the building, ship, vehicle, box, receptacle or place (which shall be named or described in the warrant) for any such thing and, if anything searched for be found, or, any other thing which there is reasonable cause to suspect to have been stolen or unlawfully obtained be found, to seize it and carry it before the court issuing the warrant or some other court to be dealt with according to law.”
Mr. Moti submits the search and seizure warrant is defective on the following grounds:
(a) it was not addressed to any person;
(b) it omitted to specify either generally or particularly (whether by official designation or individual name) the identity of the person who was being authorized to execute it;
(c) failed to name or describe the building or place to be searched (it is unclear in the context of its usage whether “SMI Office” is a person or place;
(d) failed to identify (adequately if not correctly) the thing or object being searched: “Excess of Loss Insurance Ltd” (whether in it’s original or copy form) is more likely to be a corporate body than a corporeal thing or document(!);
(e) failed to disclose the offence or offences allegedly committed or being investigated and the connection of the searched object therewith.
Mr. Moti submits that those material errors, omissions and defects apparent on the face of the search warrant are incurable and render it “bad” and invalid.
(a) – warrant not addressed to any person
Section 101 of the CPC gives power to a Magistrate or justice of the peace by warrant (called a search warrant) to “authorize a police officer or other person named therein” to carry out a search. A search warrant cannot be carried out by a police officer unless he/she has been authorised therein by the said warrant. Form 15 of the Magistrates’ Courts Act (page 763) is the prescribed form for a search warrant. In bold letters the words “To all Police Officers within Solomon Islands” is printed at the top of the form. This is entirely consistent with the requirement of section 101 of the CPC that the warrant be specifically addressed to a police officer or someone for purposes of its execution. In this particular instance, the said search warrant (Exhibit JT1 annexed to the affidavit of John Tomun filed 30th March 1999) did omit the words “To all Police Officers within Solomon Islands”. Apart from that however it did contain the name Christian Mamu, a police officer of the CID Branch and entitled to apply for and be issued with a search warrant in the performance of his duties. To that extent, whilst the warrant was not addressed in the usual way “To all Police Officers within Solomon Islands” I fail to see how this omission would be fatal to the validity of the warrant in that the warrant did in any event contain the name of a police officer who was the person duly authorized to execute the search warrant and did execute the said search warrant on 1st February 1999 (see paragraph 4 of the affidavit of John Tomun filed 30th March 1999). There couldn’t be any confusion as to who was authorized to execute the search warrant and the identity of the person executing it.
(b) – omitted to specify either generally or particularly (whether by official designation or individual name) the identity of the person who was being authorized to execute it.
I have already dealt with this issue in paragraph (a) above and do not need to repeat what I have said there.
(c) – failed to name or describe the building or place to be searched (it is unclear in the context of its usage whether “SMI Office” is a person or place).
Section 101 of the CPC requires the building or place to be searched, to be named or described in the warrant. In this instance, the description of the building provided in the search warrant was “SMI Office”. The Plaintiff says this is inadequate as it is unclear whether it referred to a person or a place.
Respectfully the question whether the description is adequate or not must necessarily turn on the question whether it was so vague so as to cause confusion and difficulty in identifying the building or place to be searched. The question must be asked whether there was confusion or misunderstanding regarding the said description. Unfortunately this question must be answered in the negative. There is no evidence to suggest that there was confusion at any time in the mind of the Magistrate issuing the warrant, nor confusion in the mind of any executing officer or in the mind of the person in charge of the office of SMI, as to which office and building was referred to. At no time has it ever been contended that the search had been conducted in the wrong office, building or place and that this caused confusion or embarrassment. In the circumstances I am not satisfied the description was inadequate.
(d) – failed to identify (adequately if not correctly) the thing or object being searched: “Excess of Loss Insurance Ltd” (whether in its original or copy form) is more likely to be a corporate body than a corporeal thing or document (!).
Section 101 also requires the thing or object, which was to be the subject of the search to be adequately described. In this instance, the document was described as “the Original Copy of the Excess of Loss Insurance Ltd”. In the affidavit in support of Detective Station Sergeant Mamu dated 1st February 1999, the document was described in paragraphs 3 and 4 as “the Original of the Excess of loss Insurance Contract Ltd”. In paragraph 5 it was further described as “the Original of the Excess of Loss Insurance Contract”. None of those descriptions however correctly described the document that was required. The document required was the original copy of “the Excess of Loss Reinsurance Contract between Solomons Mutual Insurance Limited and Luxembourg European Reinsurance S.A.” executed on 5th June 1997.
The question for determination must be whether the various descriptions given above adequate? Did they cause confusion? Were they inadequate to identify the document, which was the subject of the search? Regrettably this must be answered in the affirmative. The descriptions were so inadequate, confused and inaccurate as to be capable of being identifiable. To that extent the warrant must be regarded as defective and insufficient.
(e) – failed to disclose the offence or offences allegedly committed or being investigated and the connection of the searched object therewith.
Section 101 requires a Magistrate to be satisfied on oath that either an offence had been committed or that according to reasonable suspicion an offence had been committed. The affidavit filed in support and the Information grounding a search warrant should disclose sufficient material which would entitle a Magistrate to have at least a reasonable suspicion that an offence had been committed and that it was necessary for a search warrant to be issued to enable investigators pursue the matter further. The relevant parts of section 101 read as follows:
“Where it is proved on oath to a Magistrate or a justice of the peace that in fact or according to reasonable suspicion any thing upon, by or in respect of which an offence has been committed or anything which is necessary to the conduct of an investigation into any offence is in any building, ship, vehicle, box, receptacle or place, ....”.
In the affidavit of Sgt Mamu accompanying the Information to ground a search warrant dated 1st February 1999, at paragraphs (3) – (4) he deposed as follows:
“(3) That the Duration of the Investigation, the Management of the SMI refused to release the Original of the Excess of loss Insurance Contract Ltd signed by the NPF Board Members, since they only released the photo copy of the said contract.
(4) That the matter has been set for PI next week and it is of relevant importance to have the Original of the Excess of Loss Insurance Contract Ltd to be presented before the court since only the Photo Copy of the signed contract is attached in the file.”
Regrettably no mention was made of the offence or alleged offence for which the investigation was being conducted. There was some reference to a PI (preliminary inquiry) and of the importance of having the original document before the court but there was no mention of the offence in respect of which the document was needed.
The Information To Ground the Search Warrant contained the following information:
“Excess of loss Insurance Ltd Contract was signed by certain NPF Board Members without following the normal procedures to sign the document that leads to the establishment of the SMI.”
“The Said Document involved in ellegal (sic) practice that leads to the establishment of the SMI sometimes in 1997.”
Again there was no mention of the offence alleged to have been committed. At the most, it was pointed out that the “normal procedures to sign the document” in the set up of SMI had not been complied with. Unfortunately what those normal procedures were, how they had not been complied with and how they have amounted to an illegal practice were never identified or mentioned.
In his submissions, learned Counsel Moti also pointed out that the factual preconditions regulating the issue of the search warrant were never complied with and that the learned Magistrate thereby could not have been satisfied pursuant to the requirements of section 101 of the CPC. Learned Counsel pointed out first that the “Information to Ground Search Warrant” was defective in that the informant did not sign it. The prescribed form set out as Form 14 in the Magistrates’ Courts Act, [Cap. 20] at page 762 of Volume II of the Revised Edition 1996, requires the information provided to be given under oath. The “Information To Ground Search Warrant” in support of this Second Warrant was never signed before any Magistrate. To that extent it is fundamentally defective.
The second defect identified related to the lack of specificity of the offence allegedly committed and the identity of the alleged offender. The Information contained the following details without more:
“...that before the establishment of SMI in 1997, the Document, viz:
Excess of loss Insurance Ltd Contract was signed by certain NPF Board Members with out following the normal procedures to sign the document that leads to the establishment of the SMI.
The Said Document were detained in the SMI Office by the Management who has reasonable cause to believe, and does believe the Document, to wit, the original of the Excess of Loss Insurance Contract are concealed in the SMI Office, Anthony Saru Building; for the Said D/S/Sgt 591 Mamu says that:
The Said Document involved in ellegal (sic) practice that leads to the establishment of the SMI sometimes in 1997.”
The Information mentioned that certain NPF Board Members did not follow normal procedures in signing a document that led to the establishment of the SMI. It further alleged that there was illegal practice involved in the set up of SMI. Unfortunately it failed to specify the offence(s) allegedly committed and the identity of the alleged offender.
The third defect mentioned was the failure to disclose (either “in fact” or “according to reasonable suspicion”) whether or not the document being sought was the “thing” or object “by or in respect of which” any specified “offence has been committed”. Fourthly, the Information failed to disclose (either “in fact” or “according to reasonable suspicion”) whether or not and, if so, how the document being sought was “necessary to the conduct of an investigation into” any specified offence”.
As to the affidavit of Detective Sergeant Mamu dated 12th February 1999 filed in support of the application for a search warrant the following defects were also noted. (i) It also failed to specify the offence allegedly committed and the identity of the alleged offender. (ii) It failed to disclose the link between the document sought and the conduct of an investigation into any specified offence. (iii) It revealed that the objective for the search and seizure warrant for purposes of obtaining the original copy which was not authorized by the provisions of section 101 of the CPC. If the original was not available there were other legitimate ways of obtaining it other than by search warrant. The second Respondent could have approached Counsel for the Applicant or simply make appropriate application for disclosure of the document in court.
I am satisfied the combined effect of those defects render the warrant bad in law. In fact in the case of Solomon Islands National Provident Fund Board v. Attorney General[1], Kabui J. had already ruled on the validity of the said search warrant of 1st February 1999 to be struck out as null and void. At page 10-11 his Lordship said:
“In my view, section 101 ... can be invoked only after the commission of an offence has occurred. It cannot be used to fish for evidence. As to the Search Warrant itself ..., it contains exactly the same information contained in the Information provided by Sergeant Balaga based upon his affidavit .... It must be necessarily defective as also for the same reason that it also discloses no offence having been committed by the Plaintiff .... It is also bad in law on the face of the record.”
His Lordship continued at page 12:
“... in this case, the only link the Plaintiff was the ambiguous allegation that it had refused access to certain documents in its possession regarding the alleged unprocedural establishment of SMI. There was nothing else before the Magistrate to satisfy him that there was reasonable suspicion that an offence had been committed and that the documents associated with the commission of that offence were in the possession of the Plaintiff. There is therefore an error of law on the face of the record.... In my view, the Magistrate did not have the jurisdiction to issue the Search Warrant issued on 1st February, 1999. The Search Warrant is null and void. The Search Warrant is therefore removed to this Court and quashed accordingly.”
The omission from the record of any reference to the commission of an offence and any links between the object sought and the investigations undertaken has also been held to be fatal to the validity of a search warrant. This was held in Zalao v. Attorney General and Commissioner of Police[2] (hereinafter referred to as “Maleli’s Case”) by the Solomon Islands Court of Appeal. The Court held that a search warrant was irregularly issued when it was obvious from the Information and supporting affidavit provided to ground the search warrant that there was insufficient information provided which would satisfy a Magistrate that there was reasonable cause for suspicion that an offence had been committed and that the object sought was linked to the investigations being undertaken. I quote:
“The principal point argued by counsel for the appellant was that no offence known to Solomon Islands law was alleged against the appellant and there were no, or insufficient grounds, alleged which could support a conclusion that Sgt. Taro had “reasonable cause to suspect” that the appellant (or somebody else) had committed an offence and property associated with the commission of that offence was in a building or at a place under the appellant’s control....
It is not necessary that the statement of the offence suspected to have been committed be as precise as would be required in an indictment. But there must be reasonable suspicion that an offence known to law has been committed.
....... There was nothing before the magistrate which would have entitled him to conclude that there was reasonable cause to suspect that the appellant had committed an offence under Solomon Islands law. It is not for this court to speculate whether or not there might have been further material which the enforcement could have placed before the magistrate.
The respondents can get no comfort from that part of s. 101 which speaks of the ‘conduct of an investigation into any offence’ because the information does not state the offence with sufficient particularity nor does it refer sufficiently to the detail of the investigation...
In all the circumstances the clear conclusion is that the warrant did not comply with s. 101 of the Criminal Procedure Code and there should be a declaration that it was unlawful and void. There should be a further order quashing the warrant and ordering the immediate return of all property seized thereunder.”
In some ways it has been superfluous for me to have to deal with the validity of this search warrant when it had already been ruled upon by his Lordship Kabui J in Solomon Islands National Provident Fund Board v. Attorney General (ibid). My conclusion adds nothing further to what has been held in that case. The search warrant is flawed and must be set aside as null and void.
Breach of section 9 of the Constitution
Section 9 of the Constitution provides as follows:
“(1) Except with his own consent, no person shall be subjected to the search of his person or his property or the entry by others on his premises.
(2) Nothing contained in or done under the authority of any law shall be held to be inconsistent with or in contravention of this section to the extent that the law in question makes provision –
(a) in the interests of defence, public safety, public order, the prevention and investigation of breaches of the law, public morality, public health, town and country planning, the development and utilization of mineral resources, or the development or utilization of any other property in such a manner as to promote the public benefit;
(b) for the purpose of protecting the rights or freedoms of other persons;
(c) for the purpose of authorizing an officer or agent of the Government, an authority of the government of Honiara city or of a provincial government or a body corporate established by law for a public purpose to enter on the premises of any person in order to inspect those premises or anything thereon for the purpose of any tax, rate or duty or in order to carry out work connected with any property that is lawfully on those premises and that belongs to the Government, that authority or that body corporate, as the case may be;
(d) for the purpose of authorizing the entry upon any premises in pursuance of an order of a court for the purpose of enforcing the judgment or order of a court in any proceedings; or
(e) for the purpose of authorizing the entry upon any premises for the purpose of preventing or detecting criminal offences,
and except so far as that provision or, as the case may be, anything done under the authority thereof is shown not to be reasonably justifiable in a democratic society.”
Section 9 of the Constitution provides for the protection of the rights to privacy of home or other property. Except with the consent of the owner of the home or property, no person is entitled to enter the premises of that person for purposes of carrying out any search unless it comes within the limitations set out in the subsection 9(2). In the context of this case, the actions of the police officers that executed the search warrant were purportedly performed under the exception in paragraph 9(2)(d) of the Constitution.
In Maleli’s Case the Court of Appeal had upheld the constitutional validity of section 101 of the CPC as a statute dealing with the detection of criminal offences.
(pages 1-2)
“Section 9 of the Constitution provides that no person shall be subjected to search of his person or property unless a statute, dealing inter alia with breaches of the law as detecting criminal offences makes specific provision for such a search. It is accepted by both sides that s. 101 of the Criminal Procedure Code was a statute so providing. S. 101 is constitutionally valid and where there has been compliance with its terms there will be no infringement of the Constitution.” [Emphasis added]
Mr. Moti points out by analogy that in so far as section 101 is not breached, there will be no breach of section 9. However, in the event that there is non-compliance with section 101, then the provisions of section 9 are enlivened except where there is consent by the owner. In the facts of this case, he submits there had been a breach of section 9.
This is somewhat an interesting proposition because it raises the question as to who had actually committed the breach? Was it the police officers who had executed a defective warrant, was it the second Respondent who had advised the said police officers to apply for a search warrant, or was it the presiding Magistrate who had issued a defective warrant? If it was the police officers who had committed the breach, unfortunately I am unable to deal with such claim as the police officers implicated had not been joined as parties to this case. The same would apply to the Magistrate who had issued the defective warrant. As for the second Respondent it would be difficult as well to bring him in as the person who had committed the breach as he was not directly involved in the execution of the warrant.
But even if he could be brought within the ambit of being directly responsible for the issue and execution of the warrant, I am unable to accept that section 9 is relevant. The issue is not so much breach of section 9 as non-compliance with the provisions of section 101 of the CPC. The remedy for non-compliance is striking out of the warrant as null and void. Further, even if a contravention of section 9 might have been established, I would have declined to exercise my powers for redress, as the remedy of striking out of the search warrant in my respectful view was more than adequate.
Breach of section 8 of the Constitution
Section 8 of the Constitution provides for the protection of the rights of a person from being deprived of his/her or its property save as set out in the said provision. Section 8(2)(vii) provides justification for the taking of property for purposes “of any examination, investigation, trial or enquiry”. The same reasoning in respect of the application of section of the Constitution applies to this case. First, the police officers that executed the search and seizure warrant have not been joined as parties to the case. Secondly, even if they had been joined, the issues for determination in this case is not so much the unlawful taking of property of the Applicants as the question of validity of the search and seizure warrants purportedly issued pursuant to section 101 of the CPC. Thirdly as pointed out above, redress for striking out would have been adequate and I would have declined to exercise my powers for redress even if a breach had been established.
Breach of Section 10 of the Constitution
Section 10 of the Constitution seeks to protect the rights of any person charged with a criminal offence. One of those rights is the right to a fair hearing within a reasonable time by an independent and impartial court established by law. Mr. Moti submits that where it was not denied by the Plaintiff that a copy of the Excess of Loss Reinsurance Contract was already in the possession of the Respondents and given the fact that its authenticity was never challenged at any time by the Plaintiff, the obtaining of a search and seizure warrant under the pretext of further investigations amounted to nothing more than police and prosecutorial harassment of the Plaintiffs. Mr. Moti further submits that it “negates, erodes and devalues” the accused’s right to a “fair hearing”. If the prosecution do not possess sufficient evidence to secure the committal of the accused for trial they should not have charged him in the first place.
For the same reasons give above, this submission must also be dismissed. Whilst I agree with learned Counsel’s observations on this matter, I am not satisfied the actions of the police and prosecution in the circumstances of this case have prejudiced the rights of SMI to a fair hearing. That it was a misjudgment and inappropriate cannot be disputed, but I am unable to accept that it prejudiced the rights of the Applicant to a fair hearing.
Breach of section 3 of the Constitution
Section 3 deals with the protection of the fundamental rights and freedoms of the individual:
“Whereas every person in Solomon Islands is entitled to the fundamental rights and freedoms of the individual, that is to say, the right, whatever his race, place of origin, political opinions, colour, creed or sex, but subject to respect for the rights and freedoms of others and for the public interest, to each and all of the following, namely:-
(a) life, liberty, security of the person and the protection of the law;
(b) freedom of conscience of expression and of assembly and association; and
(c) protection for the privacy of his home and other property and from deprivation of property without compensation,”
the provisions of this Chapter shall have effect for the purpose of affording protection to those rights and freedoms subject to such limitations of that protection as are contained in those provisions, being limitations designed to ensure that the enjoyment of the said rights and freedoms by any individual does not prejudice the rights and freedoms of others or the public interest.”
Mr. Moti submits that under the said section SMI was entitled to the protection of the law apart from the protection to the privacy of his home and property and from deprivation of property without compensation. This includes being protected from the entry and search of its premises by police officers and the seizure of a document where SMI had been charged with the offences of “uttering” and where a preliminary enquiry had been held in respect of those offences. Learned Counsel submits it was wrong for the Police to conduct a search of SMI’s premises and to seize a document in those circumstances. SMI was entitled to be protected by law from the continuation of a police “investigation” (whose sole purpose was to collect unnecessary and irrelevant evidence) as soon as the Applicant was charged and the criminal matter was properly placed before the courts. With the institution of criminal proceedings, the matter was effectively transferred from the hands of the executive/administrative branch of government to the judiciary. There must surely come a time when police must end their “investigation” into a criminal offence. In this case, the matter was already being defended by SMI in court. He says that the prosecution should have demanded any document from SMI through its counsel and if production was refused, to apply to the magistrate presiding in the preliminary inquiry to order production in the exercise of his jurisdiction so to do.
Mr. Moti cited a number of authorities in support on this subject. The first case A v. HM Treasury[3], involved B who had been arrested, charged and cautioned on charges alleging contravention of section 23 of the Exchange Control Act 1947 and conspiracy at common law with others to defraud the public revenue. On 19th December the Treasury, purporting to act under Sch 5, Part I, para I(I) to the 1947 Act, served B with a letter of direction requiring him to answer another questionnaire and to produce documents. The questionnaires were directed towards obtaining information relevant to the conspiracy charge against B. It was conceded that B might incriminate himself in respect of all the charges against him if he answered the questionnaire. It was held on the true construction of Sch 5, Part I, to the 1947 Act the power in para I(I) to direct a person to furnish information could not be invoked once that person had been charged and cautioned, and was limited to an earlier stage when matters were being investigated. At page 589-590, TP Russell QC sitting as a Deputy Judge of the High Court held:
“I cannot believe that the legislature ever intended that the powers contained in para 1(i) of Schedule 5 to the Exchange Control Act 1947, with the sanction of criminal penalties, should or could be invoked to obtain information or documents of a potentially incriminating nature from one who had already been cautioned and charged with offences under the Act, whether those charges are substantive under the Act or are to be found as ingredients of a common law conspiracy. If this were to be so, it would make a mockery of the caution and the concept of the right to silence after a charge has been preferred.
I am not persuaded that a proper construction of the 1947 Act requires me to hold that the rights of a person charged and cautioned, rights which are enshrined in the common law and emphasized by the judge’s rules, are removed by the provision ...
...I hold that Mr. B is not bound to answer or produce documents for the reasons which I have endeavoured to outline, and there must be judgment in his favour....”
The second case relied on was Melbourne Steamship Company Limited v. Moorehead[4]. In that case, a suit had been taken out by the Attorney General against a number of defendants to recover penalties for offences against the Australian Industries Preservation Act 1906-1909. It was alleged in that suit that the defendants and the Appellants (Melbourne Steamship Company Limited) had combined together to engage in trade and commerce activities with intent to restrain trade and commerce to the detriment of the public. Under section 15B of the Australian Industries Preservation Act 1906-1909 an Officer of Customs (Moorehead) had sought to obtain answers from the Appellant on a number of questions. Per Griffith C.J. at 340 – 341:
“That sec. 15B does not apply to questions asked for the purpose of obtaining information for use in proceedings already commenced against other persons, and does not empower the Comptroller – General to require answers to questions asked for such purpose; ....
...In my opinion, when the Attorney-General has formally instituted a prosecution in this Court in respect of an alleged offence, the power as well as the purpose of sec. 15B is exhausted so far as regards the persons whom the Attorney-General alleges to have committed the offence for which he prosecutes, whether they are made parties to the suit or not. From that time the matter becomes subject to the judicial power, or, to adapt a familiar phrase, transit in litem pendentem. The section cannot, therefore, as contended by Mr. Starke, be used for the purpose of collecting evidence in a pending suit.”
Per Barton J at 346:
“I am of the opinion that the view expressed by O’Connor J in Appleton v. Moorehead is the correct one. Broadly on the ground he states there, 15B was held to be within the constitutional powers of the Commonwealth. If sec. 15B were read as an interference with judicial proceedings, it would be an exercise by the legislature of a power vested by the Constitution in the judiciary. It cannot, therefore, be so read if it is, as without doubt it is, open to an interpretation consistent with the Constitution. Such interpretation removes it altogether from the area of judicial proceedings. It cannot therefore be used as an aid to such proceedings, and it follows that such a use of it as was admitted by Mr. Sharwood on behalf of the Crown Solicitor, was unauthorized by law, and that the defendant was not bound to answer questions administered under cover of the section in an inquiry in aid of pending judicial proceedings. When the point has been reached at which the Crown institutes such proceedings in respect of the subject matter of the questions, there is no right I the Comptroller General to institute such an inquiry. That subject matter has passed into the hands of the Courts alone.”
Per Isaacs J. at 347:
“If, however, the Executive is already so far satisfied as to both, that legal proceedings have been instituted, or as the case may be, consented to by the Attorney-General against the given person in respect of a given contravention then, as regards that person in relation to that offence, the object of the section is exhausted, and has no operation, because the limits of the power have been reached.”
In Huddart Parker & Co Pty Ltd v. Moorehead[5] per O’Connor J at 379-380:
“When a Judge orders the examination of a witness by commission the evidence is taken on behalf of the Court by its representative, under its order, in a cause pending, and is clearly part of the procedure in that cause. When the Comptroller makes his requirement under 15B there can be no proceeding pending in a Court. He is not empowered to use the section with reference to an offence when once it has been brought within the cognizance of the Court. The power to prevent any such interference by the Executive with a case pending before the ordinary tribunals is undoubtedly vested in this Court by the Constitution. I take it therefore as clear that, at the stage when the Comptroller-General is authorized to apply the provisions of the section, the suspected or alleged offence is no more within the cognizance of a Court than if it were under preliminary consideration by the Police Department. At that stage it is merely a subject of departmental inquiry in respect of which no member of the public has any right to interfere. The Comptroller-General may act on his own initiative or he may act on a complaint in writing. He can act only when he has arrived at a belief that an offence has been committed.”
The final case cited was Brambles Holdings Ltd v. Trade Practices Commission and Another[6]. In that case, proceedings had already been commenced before the court by the Trade Practices Commission against the applicant and a number of Defendants for the recovery of penalties and for injunctions arising out of alleged contraventions of s 45 of the Trade Practices Act 1974. At about the time when proceedings were ready for trial, the Commission served notices under s 155 of the Act on the defendants, which asked questions relevant to those proceedings. The applicant charged the Commission with contempt of court by the issue and service of those notices. It was held a contempt as it sought to interfere with the work of the court on a matter that was clearly already before the court. His Lordship Franki J. applied the principles propounded in the judgments in Huddart Parker & Co Pty Ltd v. Moorehead (ibid) and Melbourne Steamship Company Limited v. Moorehead (ibid).
The issue which arises for determination before this court is whether the use of section 101 of the CPC by the Police to apply for a search and seizure warrant before a magistrate to obtain the original copy of the Excess of Loss Reinsurance Contract granted that a copy was already in the possession of the Respondents and granted that the document alleged to have been uttered in any event was the copy of the said contract, justifiable in the circumstances.
In my respectful view, the answer to this question must be in the negative. The case authorities cited above make clear what the position of the law in this matter is, that once a person had been charged and brought before the courts it was improper for the police to rely on section 101 of the CPC to try and obtain further information or documents from SMI relating to the same matter. Effectively the matter had been removed from the cognizance of the executive and brought before the domain of the judiciary. The police therefore were acting beyond the powers conferred by and contemplated by section 101 which must necessarily be confined to the investigative and inquisitorial work of the police prior to the matter being brought before the cognizance of the courts. From the moment an accused has been charged and brought to court, he/she is entitled to the rights secured by the common law as enshrined in the Judge’s rules and guaranteed under the Constitution, being rights to the protection of the law which includes the right to silence. Unless ordered by the court (see Kim Kae Jun v. Director of Public Prosecutions and Commissioner of Police[7]) a defendant is entitled to remain silent and to be safeguarded from intrusions into its property and from being deprived of its property without lawful justification.
The actions of the police in this instant as directed by the second respondent to obtain a search and seizure warrant for the particular document referred to in the warrant were without basis in law. To that extent the Applicant is entitled to the protection of the law in safeguarding its document and not make it available to the police, and where it has been removed to its retrieval. Section 3 would extend its protective arm as a shield against the intrusions of the police.
Unfortunately, whilst accepting that section 3 may have been breached, the police officer executing the warrant had not been joined as a party. But even if the second Respondent is to be brought within the ambit of this claim as the person responsible for the actions of the police, again the proviso in section 18(2) would apply to this case in that adequate means of redress are available against the actions of the police in executing a defective warrant.
The Second Search and Seizure Warrant
The second search and seizure warrant was issued on 3rd February 1999 for the purpose of obtaining certified copies of receipts issued by SMI to Solomon Islands National Provident Fund for the monthly premium payments from July to 31st December 1998. It was also challenged on a number of grounds by SMI.
Breach of the requirements of section 101 of the CPC.
SMI alleges that the second search and seizure warrant (hereinafter referred to as “the Second Warrant”) is also riddled with the same defects as the former warrant of 1st February 1999:
(a) was not addressed to any person;
(b) omitted to specify either generally or particularly (whether by official designation or individual name) the identity of the person who was being authorized to execute it;
(c) failed to name or describe the building or place to be searched (the use of the acronym “SMI” is vague and confusing);
(d) failed to identify (adequately if not correctly) the things or objects being searched: it presumes and speculates that “there must have been a [sic] certified letters regarding” the “appointments and contracts” of Messrs Sivanantham and Tomun and refers to “certified copies of the receipts issued by the SMI to the SINPF for the monthly premium payments beginning from July to 31st December 1998” and later alleges that “the said original copies of the documents stated above are concealed as aforesaid”,
(e) failed to disclose the offence or offences allegedly committed or being investigated and the connection of the searched objects therewith.
The same conclusions raised in respect of the first search warrant regarding the matters in paragraphs (a) and (b) above equally apply to the Second Warrant. I am satisfied that the identity of the person executing the warrant was clearly identified in that search warrant. There can be no doubt as to who was authorized to execute it (see paragraph 9 of the same affidavit of John Tomun filed 30th March 1999).
As regarding item (c) above, the same conclusions reached by this court in respect of the first warrant apply equally to this case. It is my respectful view that the description “SMI” or “SMI Office” used in the Second Warrant is not vague or ambiguous. The Information to ground the search warrant did identify the building as the Anthony Saru Building in which the documents are located and so it could only have meant the office of SMI. There is only one SMI office in the Anthony Saru Building.
The defect mentioned in item (d) above refers to the identification of the objects for the search warrant. Whilst the descriptions were somewhat vague, they are not altogether impossible to identify or ascertain, or confusing. If such copies were not available then that would have been the end of the search. It is my respectful view that the objects referred to in the warrant are capable of ascertainment with some enquiry and search.
As regards item (e) above the affidavit of Mamu dated 3rd February 1999 did mention that the offence of uttering had been committed and that it was important to have the original copy of the said document, otherwise the photocopy might have been tampered with. Unfortunately it is not clear how the requirement for the original copies of the documents wanted could be linked to the offence of uttering when copies were already in the possession of the police and the second Respondent. Further it merely assumes that the photocopy might have been tampered with. Also it is not clear whether the offence of “uttering” was caused by the “tampering” of the “photocopy” or how the “tampered photocopy” was related to the offence of “uttering”. The said affidavit also failed to disclose the identity of the alleged offender. It did not say if the offender was SMI.
The affidavit also failed to disclose (either in fact or according to reasonable suspicion) whether or not the documents (whether photocopies or originals) apparently already in the possession of the prosecution were the “things” or objects “by or in respect of which” the offence of “uttering” “has been committed”. Further it also failed to disclose (either “in fact” or “according to reasonable suspicion” whether or not and, if so, how the documents being sought were “necessary to the conduct of an investigation” into the “offence” of “uttering”. Finally, the said affidavit revealed that the sole objective of the search and seizure warrant was “to have the Originals of the following documents for PI as in the accompanying Search Warrant” “which has been scheduled for next week” – a purpose which was clearly not authorized by the provisions of Section 101 of the CPC.
As regards the “Information To Ground Search Warrant” (Exhibit “JT4” to the Affidavit of John Tomun filed 30th March 1999) it also contains a number of defects. (i) The prescribed form (Form 14 – Magistrates’ Courts Act, Cap. 20-page 762) requires the information provided to be given under oath. The “Information To Ground Search Warrant” in support of this Second Warrant was never signed before any Magistrate. To that extent it is fundamentally defective. (ii) It failed to specify the offence allegedly committed and the identity of the alleged offender. (iii) It failed to disclose (either “in fact” or “according to reasonable suspicion”) whether or not the documents being sought were the “things” or objects “by or in respect of which” any specified “offence has been committed”. (iv) It failed to disclose (either “in fact” or “according to reasonable suspicion”) whether or not and, if so, how the documents being sought were “necessary to the conduct of an investigation into” any specified “offence”.
I am satisfied in the circumstances the combined effect of the above-identified errors of law appearing on the face of the record must result in the invalidation of this warrant as well.
Breach of section 9 of the Constitution
Section 9 of the Constitution seeks to protect the privacy of a person and his property from being searched or entered save with his consent or under the circumstances spelled out in subsection 9(2), more specifically paragraph 9(2)(e) – “for the purpose of authorizing the entry upon any premises for the purpose of preventing or detecting criminal offences”. It has not been contended in this case that section 101 of the CPC is not reasonably justifiable in a democratic society or that it is unconstitutional. Section 101 is one of the laws, which sets out the circumstances under which it is permissible for the police to enter a home and carry out search by way of a search warrant. Provided the search warrant is valid, it entitles and justifies entry and search on another person’s property. The procedures, requirements and forms to be completed have been meticulously set out for the reason that their compliance is crucial to justify what would otherwise be an invasion of that person’s protected right to the privacy of his person and property under the Constitution.
In the circumstances however where section 101 had not been complied with, the common remedy available to the Applicant would be the striking out of the warrant as invalid, nothing more. In the circumstances of this case I am satisfied such alternative remedy would have been adequate to compensate the complaint of the Applicant and to that extent even if there might have been a breach of section 9 of the Constitution I would for the above reason decline to exercise my powers.
Breach of section 8 of the Constitution
Section 8 of the Constitution protects the property of a person from being compulsorily acquired save in certain situations. Sub-paragraph 8(2)(a)(vii) permits the taking of property where it is needed for inter alia purposes of a trial. Section 101 of the CPC therefore can justify the taking of possession of property provided the requirements set out therein had been complied with. Where the search warrant is defective and a nullity, the common remedy available is the striking out of that warrant. In the circumstances of this case therefore whilst it is possible that a breach of section 8 may have been committed I am not prepared to exercise my powers under section 18 in that I am satisfied adequate means of redress in other law exist for the contravention alleged.
Breach of section 10 of the Constitution
What I said in regards to the first warrant concerning section 10 of the Constitution apply with equal force to the facts in this Second Warrant. Whilst the issue of this Second Warrant was a nullity and therefore did not justify the actions of the police I am not satisfied it prejudiced the right to a fair hearing of SMI.
Breach of section 3 of the Constitution
The issue for determination before this court is whether the use of section 101 of the CPC by the Police to apply for a search and seizure warrant before a magistrate to search for certain documents was justifiable in the circumstances where the matter had already been brought before the cognizance of the courts.
I do not need to repeat the principles of law, which apply in such a case. These have been canvassed in detail already. Those case authorities (A v. HM Treasury [1972] 2 All ER 586, Melbourne Steamship Company Limited v. Moorehead [1912] HCA 69; (1912) 15 CLR 333, Huddart Parker & Co Pty Ltd v. Moorehead [1909] HCA 36; (1908) 8 CLR 330 per O’Connor J at 379-380, Brambles Holdings Ltd v. Trade Practices Commission and Another [1926] VicLawRp 47; (1980) 32 ALR 328 at 332 – 335, and Kim Kae Jun v. Director of Public Prosecutions and Commissioner of Police (unreported, HCSI Civil Case No. 423 of 1999, December 20, 1999 per Muria CJ at 4) make clear what the law on this matter was; that once a person had been charged and brought before the courts, it was improper for the police to rely on section 101 of the CPC to try and obtain further information or documents from SMI relating to the same matter. Once a matter had been brought before the courts, it effectively takes it out of the cognizance of the executive. The investigative powers of the police must necessarily be confined to the period before the accused had been charged. Once charged a person’s rights to silence under section 3 of the Constitution are activated and can only be removed by order of the court.
The police therefore were acting beyond the powers conferred by and contemplated by section 101. To that extent again it could be argued that the provisions of section 3 of the Constitution had been breached. Unfortunately for the same reasons given above I would decline to exercise my powers under section 18(2) in that adequate redress are available in other law.
Prohibited Disclosure of Applicant’s Reinsurance Arrangements
The issue of the prohibited disclosure of SMI’s Excess of Loss Reinsurance Contract with Luxembourg European Reinsurance S A (hereinafter referred to as “the Reinsurance Treaty”) arise from the disclosure of details of SMI’s Reinsurance Treaty to Messrs Kevin Misi and Clive Amputch in December 1998 and to the second Respondent (“the DPP”) in September 1998. This claim is founded under sections 6(3) and 73 of the Insurance Act [cap. 82] (“the Act”). SMI further contends that by virtue of that breach the first Respondent contravened SMI’s fundamental right to the protection of the law guaranteed under sections 3 and 12 of the Constitution.
Section 6(3) of the Act reads:
“The Controller shall not directly or indirectly reveal to any person (other than the Minister, the Permanent Secretary or any member of the Controller’s staff) the nature and contents of, or permit any person to have access to any reinsurance treaty or any copy thereof.”
Section 73 of the Act specifies the penalty under which breaches may be subjected to punishment:
“Any person who contravenes any provisions of this Act for which no specific penalty is imposed shall be guilty of an offence and liable on conviction to a fine not exceeding five hundred dollars.”
Mr. Moti submits that section 6(3) is a “statutory secrecy provision prohibiting or forbidding the revelation, divulgence or disclosure by the Controller of Insurance of the nature and contents of ... any reinsurance treaty or any copy thereof’ ”. He submits that the use of the words “directly or indirectly” transforms the requirement into an absolute prohibition on disclosure of any information about any reinsurance treaty by the Controller of Insurance. This is reinforced by the statutory proscription of access to reinsurance documentation and the criminalisation of any contravention of the provision. Section 6(3) limits the persons to whom the Controller is allowed “directly or indirectly” to reveal details of any reinsurance treaty.
Mr. Manetoali for the first Respondent on the other hand submits that a reinsurance treaty arranged in breach of the law cannot be protected under section 6(3). He says it would be against public policy to have a treaty that is unlawful protected under the said secrecy provisions of the Act. The law cannot permit that. Learned Counsel relies on the case in A v. Hayden[8] in support of his submissions. In that case, the court held that it would not lend its aid to the enforcement of a contractual obligation of confidentiality undertaken by the Commonwealth, the effect of which would be to obstruct the administration of the criminal law and contrary to public policy.
Section 6(3) of the Act
Section 6(3) of the Act imposes a blanket prohibition to the revelation of the nature of the contents of any reinsurance treaty or access to any reinsurance treaty or its copy, to any person save those listed in the said subsection. That list only makes reference to the Minister, Permanent Secretary and members of staff in the Controller’s office. Where the words of a statute are clear and unambiguous and capable of only one meaning, they must be given their ordinary and grammatical meaning even if the court feels that the result is not in accordance with the ordinary policy of the law or with what seems to be reasonable - see Rowell v. Pratt[9]:
“But if the words properly constructed admit of only one meaning, the Court is not entitled to deny to the words that meaning, merely because the Court feels that the result is not in accordance with the ordinary policy of the law or with what seems to be reasonable. The Court cannot mould or control the language.”
In Cooper Brooks (Wollongong) Pty Ltd v. Commissioner of Taxation[10] the Chief Justice of the High Court of Australia said: “if the language of a statutory provision is clear and unambiguous, and is consistent and harmonious with the other provisions of the enactment, and can be intelligibly applied to the subject matter with which it deals, it must be given its ordinary and grammatical meaning, even if it leads to a result that may seem inconvenient or unjust. To say this is not to insist on too literal an interpretation or to deny that the court should seek the real intention of the legislature. The danger that lies in departing from the ordinary meaning of unambiguous provisions is that “it may degrade into mere judicial criticism of the propriety of the acts of the legislature” (quoted in R. v. Clarkson[11]).
Also in Vacher & Sons Ltd v. London Society of Compositors[12] (quoted in R. v. Clarkson (ibid)) Lord Moulton said:
“It may lead judges to put their own ideas of justice or social policy in place of words of the statute. On the other hand, if two constructions are open, the court will obviously prefer that which will avoid what it considers to be inconvenience or injustice.”
In Burmah Oil Co Ltd v. Bank of England[13] it was held that even in the face of an exception allowing disclosure in the performance of any duty as an officer, Courts are more disposed to give effect to the legislative policy of preserving secrecy.
“... whenever information is given in confidence, whether voluntarily or pursuant to a statutory obligation, of a kind which is necessary to enable the recipient of the information to perform an important public function with maximum efficiency and which would not be so readily forthcoming if the informant could not be sure that the confidence would be absolutely respected, then there is added to confidentiality a public interest in its protection which is sufficient to ensure that the confidential information will be withheld from production in legal proceedings.”
The revelation of the contents of the Reinsurance Treaty therefore to Messrs Kevin Misi and Clive Amputch can only be construed as having been done in breach of that section. No justification or excuse in law has been relied on for the divulgence of the contents of the said treaty to the two gentlemen. The fact the confidential information was divulged for purposes of the review of SMI (hereinafter referred to as “the ESCAP Report”) conducted by the two gentlemen as authorized by the Economic and Social Commission for Asia and the Pacific, does not justify the disclosure, nor the fact the ESCAP Report may have been commissioned by the Minister. The powers of the Controller spelled out by section 6(3) of the Act couldn’t be clearer.
In so far as references to breaches of the constitutional rights of the Applicant are concerned under sections 3(a) and (c), it is my respectful view that any reliance on those provisions are superfluous. Section 6(3) is capable of standing and holding its own and provides adequate remedy for any breaches to it.
Disclosure to the DPP
It is important to appreciate at the outset that the powers being challenged are the statutory powers of the Controller as prescribed by section 6(3) of the Act. Section 6(3) sets out the limits to his power to divulge “the nature and contents of ... any reinsurance treaty or any copy thereof” to any persons save those permitted under the said subsection. Those limits have been set out in very clear and simple terms. They do not require further clarification by this court.
The issue for consideration nevertheless is whether in spite of that clear prohibition and exceptions, disclosure may be given where criminal investigations in respect of that Reinsurance Treaty are underway, in particular in the light of the case authority in A v. Hayden[14] (“Hayden’s Case”) cited by Mr. Manetoali. The facts involved a contract of employment between the Commonwealth of Australia and its four employees (plaintiffs) who were officers in the Australia Secret Intelligence Service (“ASIS”). A term of their contract of employment provided confidentiality to their identities in any act done in the course of their training or work for ASIS. In an exercise in which those officers’ participated criminal offences appear to have been committed resulting in charges sought to be laid against those officers. Their identities therefore needed to be disclosed. The officers applied under this secrecy clause to have their identities withheld. It was held by the court at pages 595-596 per Deane J.:
“On the other hand, the defendants’ argument based on public policy must prevail. The relevant proposition of law was shortly stated at the commencement of this judgment. It is that the courts of this country will not lend their aid to enforce a promise not to disclose information where the circumstances are such that enforcement or insistence upon observation of the promise would obstruct the due administration of the criminal law of Australia, whether Commonwealth or State. The rational of that proposition is that, apart from the exceptional case (such as that of professional legal adviser) where the overall administration of the law itself requires that confidentiality be maintained, it would be contrary to public policy for the courts to enforce a right on the part of one person to insist that another fail or refuse to disclose relevant information to assist those entrusted with the ordinary administration of the criminal law in the proper investigation and prosecution of criminal activity: the enforcement by the courts of such a private right to insist that another fail or refuse to disclose relevant information would involve the courts in the obstruction of the due administration of the criminal law which is a mainstay both of the rule of law which they exist to serve and of the very existence of effective private rights. For the purposes of that proposition, the investigation of actual or reasonably apprehended criminal activity by a regular enforcement agency of the Commonwealth or of a State is part of the administration of the criminal law. Whether enforcement or observance of a term of a particular promise of confidentiality would obstruct that administration is a question which must be determined in the context of the circumstances of the particular case. Plainly enough, the enforcement of such a promise by an order forbidding a threatened voluntary disclosure to the Commissioner of a state police force of the identity of the participants in joint activity which involved actual or reasonably apprehended offences against the criminal law of that State would involve obstruction of the due administration of that criminal law.”
Mr. Manetoali submits that the disclosure of the Reinsurance Treaty to the DPP falls within the ambit of the administration of the criminal law in this jurisdiction and therefore permissible. He points out that the first Respondent being a public officer by virtue of his office was entitled to seek legal advice from the Attorney General on any issue that may arise in the course of the performance of his statutory duties. On seeking advice from the Attorney General on a matter which he had reason to believe was an attempt to breach the provisions of the Act and which on a legitimate and reasonable assumption on his part amounted to a criminal act was advised to bring the matter to the notice of the DPP. In such circumstances, Mr. Manetoali submits no breach of section 6(3) could possibly have occurred. He submits that the disclosure was in the public interest in that it assists the administration of the criminal law.
The first point to note about the submissions of Mr. Manetoali is that Hayden’s Case dealt with a contract of employment entered into between the Commonwealth Government and individual security intelligence officers. The obligation of non-disclosure was contractual in origin and nature and therefore afforded good protection provided the criminal law was not breached. When a criminal offence has been committed, the term of confidentiality in that agreement must bow to the demands of the criminal justice system. On its face therefore, whilst the said term of confidentiality was valid, it has the potential of illegality and of protecting criminal activities, which may be committed by officers of the ASIS. No court in such situations will be willing to uphold the validity of any agreement, which seeks to protect any criminal offence that has been committed under the guise of confidentiality. That would be contrary to good sense and public policy grounds. The principle stated by Lord Lyndhurst in Egerton v. Brownlow (Earl)[15] “that any contract or engagement having a tendency, however slight, to affect the administration of justice, is illegal and void” is good law and applicable in this jurisdiction.
In contrast, the prohibition on non-disclosure is not based on any agreement, contract or engagement but statutory in nature and origin (section 6(3) of the Act). The first Respondent is bound by the terms of the statute and cannot waive it unilaterally.
The issue, which arises for consideration is whether this court can maintain that strict literal interpretation when a criminal offence is being investigated. Should it bow to the demands of criminal investigation and the criminal justice system and is it contrary to public policy?
Unfortunately this submission is misguided in that it presumes the existence of a conflict between this provision and the administration of the criminal law. No submission has been made that this provision is unconstitutional or that it is in conflict with the investigative powers of the DPP as provided for under section 91(4)(a) of the Constitution. The DPP is not hindered in anyway from conducting any investigations into any criminal offence, which he reasonably suspects may have been committed by SMI and from obtaining a copy of any reinsurance treaty in the pursuit of that course. It is important to note the distinction that section 6(3) of the Act affords protection to SMI’s reinsurance treaty in so far as it relates to the powers of the Controller under the said Act.
To suggest therefore that when a criminal investigation is being conducted in respect of a reinsurance treaty, that the prohibition on non-disclosure imposed by section 6(3) would thereby not apply in my respectful view is misconceived. It presumes that the actions of the Controller in refusing to divulge information pertaining to a reinsurance treaty would be obstructive of the due administration of the criminal law. In my respectful view there is no basis for such presumption.
Further, to insist on such interpretation would be to compel the Controller to commit a criminal offence. This with respect cannot be permitted by this court (see Rowell v. Pratt[16]). Where the plain meaning of the statute is obvious, this court is obliged to give effect to that plain and unambiguous legislative intent (Cooper Brooks (Wollongong) Pty Ltd v. Commissioner of Taxation (ibid), R. v. Clarkson (ibid) Vacher & Sons Ltd v. London Society of Compositors (ibid)).
To that extent I am satisfied there had also been breach of section 6(3) of the Act.
Exclusion of the ESCAP Report
The ESCAP Report was commissioned by the Minister of Finance to conduct a review of SMI as a participant in the insurance industry. Of significance was the fact that its initial set up was directly connected to the aspirations and directions of the Board of Directors of Solomon Islands National Provident Fund (“the Fund”) to provide health and death benefits for its members. The Fund held 75% of the shares in SMI with the remaining 15% held by Workers Mutual Insurance (PNG) Pty Ltd (“WMI”) and 10% by Sathasivam Sivakumaran. From the outset there were concerns that the way and manner in which SMI’s set up had been rushed through by the Board of Directors of the Fund, (hereinafter referred to as “the Board”) gave room for doubt as to its viability and profitability. Some disgruntled members commenced writ action (see the case of Sam Iro, and Others v. Solomon Islands National Provident Fund Board[17]). The matter was also reported to the DPP for criminal investigation. Because of the public outcry by members, the Minister obliged and commissioned the ESCAP Report so-called because of the funding assistance provided by the Economic and Social Commission for Asia and the Pacific (ESCAP).
The ESCAP Report has been introduced as evidence (see affidavit of Kevin Misi filed 20th April 2000) on behalf of the Respondents. SMI takes objection against the acceptance of this document as tendered on a number of grounds:
(i) that it was never given an opportunity to comment on the contents of the report before it was finalized, presented and published;
(ii) that it was denied procedural fairness;
(iii) that the report was not a review of the insurance industry in Solomon Islands but a review of an individual participant in that industry;
(iv) granted the constitutional source of the Ministerial mandate to conduct the review of the Applicant, the authors of the report were obliged to accord procedural fairness;
(v) even if the inquiry was to be considered as an “investigation” under section 9(3) of the Act, a statutory duty was cast on the first Respondents and authors to give the Applicant a reasonable opportunity of making representations;
(vi) the principles of natural justice are so entrenched in our laws and therefore must be given effect to by all participants.
Opportunity to comment on the report before it was finalized and published
Was there a legal obligation on the authors of the report to give opportunity to SMI to comment on the report before it was finalized, or had SMI been given adequate opportunity?
The six objections listed by the Applicant basically say the same things. Natural justice, procedural fairness and giving reasonable opportunity to make representations are but different ways of expressing the same concern. Observation of rules of natural justice and procedural fairness are vital to any decision maker. They have been entrenched in our laws under section 3 of the Constitution, which guarantees to individuals the protection of the law. In Ong Ah Chuan v. Public Prosecutor[18] the Privy Council held that references to “law”, “in accordance with law”, “equality before the law”, “protection of the law” and such like, in the Constitution of Singapore refer to a system of law “which incorporates those fundamental rules of natural justice that had formed part and parcel of the common law of England that was in operation in Singapore at the commencement of the Constitution. It would have been taken for granted by the makers of the constitution that the “law” to which citizens could have recourse for the protection of fundamental liberties assured to them by the Constitution would be a system of law that did not flout those fundamental rules. If it were otherwise it would be misuse of language to speak of law as something which affords “protection” for the individual in the enjoyment of his fundamental liberties, and the purported entrenchment (by article 5) of articles 9(1) and 12(1) would be little better than a mockery.”
Apart from the requirements of the Constitution, the principles of natural justice and procedural fairness have been amply applied in this jurisdiction in numerous cases and form part of the law of Solomon Islands: Jim Waroka v. Mostin Habu and Attorney General[19]; Job Tuhaika v. Attorney General and Controller of Prisons[20]; Clement Kakano v. Attorney General[21]; Desmond Nimepo v. Premier of Guadalcanal Province[22]; Donald Suakapu v. Chairman of St Joseph’s Catholic Secondary School[23]; Hanley Simata v. Goldie College Secondary School Board of Management[24].
Case authorities relied on
In Re Pergamon Press Ltd[25] the Board of Trade had ordered an investigation under s. 165(b) of the Companies Act 1948 into the affairs of P Ltd and appointed inspectors. M and other directors were apprehensive that the inspectors appointed might make an interim report which could be used against them in the United States litigation, and that allegations might be made which impinge on their conduct. Despite assurances by the Inspectors to conduct their investigation fairly the Directors refused to cooperate and when asked to give evidence at a private hearing they declined. They wanted assurances to be given that if allegations were made against them they should be allowed to read transcripts of evidence adverse to them etc. The Directors claimed that the inspectors should conduct the inquiry much as if it were a judicial inquiry in a court of law. The inspectors on the other hand argued that they were not bound by the rules of natural justice in that rules of natural justice only applied to cases where the tribunal was under a duty to come to a determination or decision of some kind or not. Where there was no determination or decision but only an investigation or inquiry, the rules of natural justice did not apply.
In his judgment Lord Denning accepted that the inspectors were not a court of law.
“It is true, of course, that the inspectors were not a court of law. Their proceedings are not judicial proceedings .... They are not even quasi-judicial, for they decide nothing; they determine nothing. They only investigate and report. They sit in private and are not entitled to admit the public to their meetings .... They do not even decide whether there is a prima facie case ....”
His Lordship pointed out however that this did not matter.
“But this should not lead us to minimize the significance of their task. They have to make a report which may have wide repercussions. They may, if they think fit, make findings of fact which are very damaging to those who they name. They may accuse some; they may condemn others; they may ruin reputations or careers. Their report may lead to judicial proceedings. It may expose person to criminal prosecutions or to civil actions. It may bring about the winding-up of the company, and be used itself as material for the winding-up .... Even before the inspectors make their report, they may inform the Board of Trade of facts which tend to show that an offence has been committed .... When they make their report, the board are bound to send a copy of it to the company; and the board may, in their discretion, publish it, if they think fit, to the public at large. Seeing that their work and their report may lead to such consequences, I am clearly of opinion that the inspectors must act fairly. This is a duty which rests on them, as on many other bodies, although they are not judicial, nor quasi-judicial, but only administrative: see R v. Gaming Board for Great Britain ex parte Benaim. The inspectors can obtain information in any way which they think best, but before they condemn or criticize a man, they must give him a fair opportunity for correcting or contradicting what is said against him. They need not quote chapter and verse. An outline of the charge will suffice.”
Lord Justice Sachs also made similar comments[26]:
“The nature of the proceeding, the purposes for which the reports may be used, the matter which may be found in them and the extent of the publication being respectively as described, it seems to me, as well as to Lord Denning MR, very clear that in the conduct of the proceedings there must be displayed that measure of natural justice which Lord Reid in Ridge v. Baldwin described as “insusceptible of exact definition but what a reasonable man would regard as fair procedure in particular circumstances”. To come to that conclusion it is, as recent decisions have shown, not necessary to label the proceedings “judicial”, “quasi-judicial”, “administrative” or “investigatory”; it is the characteristics of the proceedings that matter, not the precise compartment or compartments into which they fall – and one of the principal characteristics of the proceedings under consideration is to be found in the inspectors duty in their statutory fact-finding capacity, to produce a report which may be made public and may thus cause severe injury to an individual by its findings.”
See also per Buckley LJ[27]:
“Inspectors are disposed to report on the conduct of anyone in such a way that he may in consequence be proceeded against, either in criminal or civil proceedings, the inspectors should give him, if he has not already had it, such information of the complaint or criticism which they may make of him in their report and of their reasons for doing so, including such information as to the nature and effect of the evidence which disposes them so to report, as is necessary to give the person concerned a fair opportunity of dealing with the matter, and they should give him such an opportunity.”
See also Selvarajan v. Race Relations Board[28] where this principle was reiterated by Lord Denning M.R.:
“In all these cases it has been held that the investigating body is under a duty to act fairly; but that which fairness requires depends on the nature of the investigation and the consequences which it may have on persons affected by it. The fundamental rule is that, if a person may be subjected to pains or penalties, or be exposed to prosecution or proceedings, or deprived of remedies or redress, or in some such way adversely affected by the investigation and report, then he should be told the case made against him and be afforded a fair opportunity of answering it.”
In Ombudsman Commission of Papua New Guinea v. Denis Donohoe[29] his Lordship Amet J, carefully analysed numerous court cases on this subject including the judgment of Lord Denning MR. in Re Pergamon Press Ltd (supra) and applied the same principles to the facts of the case before him. Other case authorities cited and relied on by the Applicants include Kioa v. West[30], R v. Panel on Take-overs and Mergers, ex parte Datafin plc[31], State of South Australia v. O’shea[32], Annetts v. McCann[33], Balog v. Independent Commission Against Corruption[34], Ainsworth v. Criminal Justice Commission[35], Rees v. Crane[36] and Kelson v. Forward[37].
Application
The clear proposition which can be deduced from the various case authorities cited above is that irrespective of the characterization of an inquiry as “preliminary”, “investigatory” or “recommendatory” where it has the capacity to affect, destroy, defeat or prejudice a person’s rights, interests or legitimate expectations, is sufficient reason for the implication of the duty to observe procedural fairness. This includes the reputation of a person, whether personal, business or commercial, is an interest that attracts the rules of natural justice.
When applied to the facts of this case, the mere fact that authors of the ESCAP Report were preparing a report for someone else, that it was recommendatory only and that they had no power to affect the Applicant’s rights, does not mean that they can evade complying with the requirements of procedural fairness. What is significant about the report was that it made conclusions, findings and recommendations which affected the legal rights of the Applicant: paragraphs 3 and 4 and Exhibits “MP1”, “MP2” and “MP3” to affidavit of Mackay Pitanoe sworn on March 22 2001 and filed on 23rd March 2001; paragraphs 7.2.7(f), 7.2.12, 8.2.4 of Exhibit “KM1” to affidavit of Kevin Misi sworn and filed on 10th April 2000. Further it also made legal findings adverse to the Applicant (see paragraphs 1.2.7, 1.2.10, 3.22, 7.2.7(f), 7.2.10, 7.2.12 and 8.2.4 of Exhibit “KM1” to Kevin Misi’s affidavit) even though the authors were not legally trained or qualified and admittedly did not consider it necessary to have their report vetted by lawyers. These comprise cogent reasons for the implication of procedural fairness to be applied in the facts of this case and the necessity for the observance thereof by the authors of the ESCAP Report. That the Applicant was not accorded opportunity to comment on the report before it was finalized, presented, published and distributed is not in dispute. The Applicant says that the report contained conclusions, findings and observations, which did not correctly reflect its true or correct position. Had opportunity been given to comment on the report, it would have corrected some misleading and incorrect statements and conclusions reached, or provided explanations for them. The Applicant submits that for those reasons the court should either exclude the report or in the event that this submission is rejected that little weight be attached to the report.
Authenticity or validity of the said document is not in issue. It is important to appreciate that not all of the report is objectionable. Much of it contains valid, objective and useful information. Only part and some of the matters commented on, conclusions reached and findings made were objectionable. To that extent I see no difficulty with excluding or giving little weight to such material as is objectionable but otherwise allowing the bulk of the report and such part there is as may be of assistance and of relevance, to be admitted as part of the evidence of the first and second Respondents in this case.
Prohibiting Remittance of Reinsurance Premiums
Mr. Moti points out that before registration of SMI as an insurer the Controller needed to be satisfied of the matters set out in paragraphs 14(a) – (g). Paragraph 14(f) provided that he needed to be satisfied that the reinsurance arrangements of the applicant were adequate and otherwise satisfactory. By issuing SMI with a “Certificate of Registration as an Insurer” signed by Mr. Harry under the seal of the First Respondent (Exhibit “JT9” to the affidavit of John Tomun sworn and filed on 30th March 1999) on 7th July 1997, it was conclusive proof of (a) due compliance by the Applicant with the requirements of the Act and the Insurance Regulations; and (b) the satisfaction of the First Respondent with the statutory criteria specified in section 14 of the Act. Mr. Moti submits the First Respondent is estopped by the clear terms of section 14(f) of the Statute from asserting that he had registered the Applicant as an insurer even though he was not “satisfied that the reinsurance arrangements of the Applicant were adequate and otherwise satisfactory”. Learned Counsel points out that section 21 of the Act gives power to the First Respondent to suspend, revoke or cancel SMI’s registration as an insurer where any of the matters specified in paragraphs 21(1)(a) – (j) apply. This has not been done. To the contrary, SMI’s registration had been subsequently renewed annually. Learned Counsel also pointes out that Section 6(2) of the Act gives power to the First Respondent where in relation to terms and conditions of any reinsurance treaty or contract that he considers are not in the “public interest” and / or “not favourable to the reinsurer” he:
“(a) ...may, in writing direct the insurer either to make, at the time when the renewal of such treaty or contract next comes due, such modification in its terms and conditions as he may specify or not to renew such treaty or contract;
(b) ... may, in writing, direct that the insurer shall not enter into such reinsurance treaty or other reinsurance contract unless a copy of such treaty or contract has been furnished to him in advance and the terms and conditions thereof have been approved by him in writing.”
Mr. Moti submits that section 6(2)(a) of the Act applies to the reinsurance contract that has already been registered. In such a case where the First Respondent considers that its terms and conditions “are not in the public interest”, he is entitled to “direct” the insurer “in writing”:
“either to make, at the time when the renewal of such treaty or contract next becomes due, such modification in its terms and conditions as he may specify or not to renew such treaty or contract.” (emphasis added)
No such direction has been received. Further, Mr. Moti submits section 4(b) of the Act simply cannot be relied on as justifying any exercise of power to withhold or prohibit transfers of reinsurance premiums. The said subsection is limited to defining the function and role of the First Respondent in “the formulation of standards in the conduct of the business of insurance with which insurers, agents and brokers must comply.”
The submission of the First Respondent
The First Respondent submits on the other hand that where a breach of section 10(3) of the Act had occurred and an offence committed under the Penal Code and the Act, the public interest demands that the remittance of reinsurance premiums overseas should be prevented.
The first Respondent relies on section 4(b) of the Act as giving him power to prohibit or withhold approval of the remittance of reinsurance premiums overseas by SMI pursuant to the Reinsurance Treaty.
Subsection 4(b) reads:
“The functions of the Controller shall include the following:
...
(b) the formulation of standards in the conduct of the business of insurance with which insurers, agents and brokers must comply;”
Unfortunately this reliance is misplaced. Subsection 4(b) pertains to the functions and roles of the First Respondent in “the formulation of standards in the conduct of the business of insurance with which insurers, agents and brokers must comply”. It pertains to standards, guidelines and practices, which may be drawn up for use by insurers, agents and brokers in the performance of their insurance business. It does not relate to the exercise of power in any particular situation, which may arise. There is no evidence to suggest that any standards have been formulated. All that has been suggested is that this subsection empowers the First Respondent in the prevailing circumstances to withhold premiums. Unfortunately to try and read such power into subsection 4(b) is tantamount to making law, which is not permitted and would be usurping the power of Parliament. That interpretation or construction cannot be accepted.
It has been suggested too that section 10(3) of the Act somehow gave the Controller powers to prohibit such transactions. Unfortunately, again this submission has been misplaced.
Subsection 10(3) creates an offence where “Any person without the permission of the Controller, directly or indirectly transacts any Solomon Islands business in Solomon Islands or abroad, with or through any insurer, agent or broker who has not been registered or otherwise exempted under this Act...”. SMI cannot fall within this provision as it had permission from the Controller to transact insurance business. SMI had been issued with a certificate of registration pursuant to section 16(1) of the Act, which presupposes that the Controller must have been satisfied with the matters stipulated in section 14 of the Act which includes at paragraph (f) that he be satisfied that “the reinsurance arrangements of the applicant are adequate and otherwise satisfactory”. Section 10(3) therefore cannot be used as the basis for the issue of any orders or direction from the Controller to prohibit remittance of reinsurance premiums overseas.
Section 6(1) and (2) of the Act
Mr. Manetoali also submits that the Controller has power in the public interest to prohibit the remittance of reinsurance premiums overseas where it appears an offence has been made out. Unfortunately he did not refer to any provisions in the Insurance Act which might have given such authority to the Controller. The only suggestion of any such power came from the Applicant’s Counsel with respect to the application of section 6(2) of the Act. I quote:
“Without prejudice to the generality of the powers conferred by subsection (1), the Controller-
(a) if he considers that the terms or conditions of any reinsurance treaty or other reinsurance contract entered into by an insurer are not in the public interest, may, in writing direct the insurer either to make, at the time when the renewal of such treaty or contract next comes due, such modification in its terms and conditions as he may specify or not to renew such treaty or contract;
(b) if he has reason to believe that an insurer is entering into or is likely to enter into a reinsurance treaty or other reinsurance contract which he considers not favourable to the insurer or is not in the public interest, may, in writing, direct that the insurer shall not enter into such reinsurance treaty or other reinsurance contract unless a copy of such treaty or contract has been furnished to him in advance and the terms and conditions thereof have been approved by him in writing.”
Mr. Moti had submitted that any references to reinsurance matters under section 6(2) should be confined to the matters spelled out in paragraphs 6(2)(a) and (b). Under paragraph 6(2)(a) where the terms and conditions of a reinsurance contract might not be in the public interest, the Controller’s power is confined to the options of either modifying the contract or declining to renew the contract when it fell due. Under paragraph (b), his power is confined to the issue of directions only to the insurer not to enter into such contract where he has reason to believe is not favourable to the insurer or not in the public interest. Learned Counsel submits that the powers stipulated in section 6(2)(a) and (b) therein do not allow the Controller to prohibit the remittance of reinsurance premiums overseas.
Unfortunately I do not agree that a restrictive interpretation should be applied to the construction of paragraphs 6(2)(a) and (b). I say this because of the effect of Section 29 of the Interpretation and General Provisions Act [Cap. 85], which provides as follows:
“Where an Act confers a power to do any act or thing, all powers reasonably necessary to enable the act or thing to be done are also conferred by the Act.”
Where the Controller considers that the terms or conditions of any reinsurance treaty or contract are not in the public interest, apart from requiring that modifications be made or refusing to renew the contract when it falls due, surely he must be able to do such other thing as would be necessary for that thing to be done. In my respectful view, that must necessarily include the power to be able to prohibit the remittance of premiums overseas. For instance, if some modification is required to the reinsurance contract, or where he declines to renew the contract, surely he must have the power to be able to prohibit the remittance of reinsurance premiums overseas. The power to prohibit reinsurance remittances overseas in my respectful view is directly connected to the powers of modification, amendment and approval or refusal, of a reinsurance treaty or contract. The payment of reinsurance premiums cannot be separated from the existence of a valid reinsurance treaty or contract. If a reinsurance treaty or contract is valid, it necessarily follows that reinsurance payments must be allowed to be made, but where the reinsurance contract is invalid or illegal, or where the Controller considers that certain terms or conditions are not in the public interest, surely he must have the power to be able to direct that such remittances be prohibited. Section 29 of the Interpretation and General Provisions Act in my respectful view permits him to do that.
But even if subsection 6(2) does not apply to the circumstances of this case, it is my respectful view that subsection 6(1) of the Act does and allows the Controller to do what he has done in this case. Learned Counsels did not make any particular reference to subsection 6(1) in their submissions in court. However it is my respectful view that it has direct relevance to the question whether the Controller has power to prohibit the remittance of reinsurance premiums overseas. When one looks carefully at what subsection 6(1) says it will be seen that the said section does give very broad powers to the Controller to exercise under certain situations. These include the following circumstances:
“(a) to prevent the affairs of any insurer, agent or broker being conducted in a manner which is detrimental or prejudicial to the interests of the insurer, agent, broker, any policy holder or the insurance industry;
(b) generally to secure the proper management of the affairs of any insurer, agent or broker; or
(c) otherwise in the public interest”.
In such situations, where the Controller considers it necessary to issue directions to insurers (would apply to the Applicant), agents or brokers he may issue such directions as he considers necessary to be effective from a specified date provided that reasonable opportunity is first given to such persons to make representations to the Controller.
The facts as depicted in the affidavit of Francis Mwanesalua filed 20th April 2000 at paragraph 4 clearly raised genuine concern not only on the part of the Controller and the second Respondent but so many others as well who had genuine vested interests in the way and manner SMI had been set up and established and the transactions relating to the payment of reinsurance premiums overseas. Apart from numerous complaints including the commissioning of the investigation by the Minister of Finance into SMI, it must be borne in mind that numerous litigation including criminal charges had been conducted to challenge the way SMI had been set up. Not until litigation had finally been determined on those matters before a lot of uncertainty surrounding the activities of the Applicant were dispelled. If those matters had not raised any triable or arguable issues, the courts would have thrown them out in their preliminary stages. Surely in the face of such factual situations confronting him, the Controller should have power under subsection 6(1) of the Act not only to make directions (to prevent the affairs of any insurer, agent or broker from being conducted in a manner which is detrimental or prejudicial to the interests of the insurer, agent, broker, any policy holder or the insurance industry, or generally to secure the proper management of the affairs of any insurer, agent or broker; or otherwise in the public interest), but to be able to prohibit the remittance of reinsurance premiums overseas. The powers conferred by subsection 6(1) to make directions must necessarily include the power to prohibit the remittance of reinsurance premiums overseas. Section 30(1)(d) of the Interpretation and General Provisions Act [Cap. 85] allows him to do that. I quote:
“A power conferred by an Act made after the commencement of this Act-
(a) ...
(b) ...
(c) ...
(d) to give directions with respect to, or regulate, any matter or thing, includes a power to prohibit that matter or thing; ....” (emphasis added)
Paragraph 30(1)(d) in my respectful view makes clear that a power to make directions to prevent the affairs of any insurer, agent or broker being conducted in a manner which is detrimental or prejudicial to the interests of the insurer, agent, broker, any policy holder or the insurance industry, or generally to secure the proper management of the affairs of any insurer, agent or broker, or otherwise in the public interest must necessarily include the power to be able to prohibit the remittance of reinsurance premiums where he is of the view that an offence may have been committed and is warranted under the circumstances before him. To say therefore that the Controller does not have power to prohibit the remittance of reinsurance premiums overseas is incorrect. The only requirement imposed by section 6(1) is for the Applicant to be given reasonable opportunity to make such representations to the Controller before such directions are issued. Where he fails to comply with that proviso under section 6(1), the Applicant has right to apply for declaration to have that direction or order set aside as being in breach of statutory requirements or, in the alternative in breach of the principles of natural justice.
Breach of section 3 of the Constitution
Mr. Moti further submits that the prohibition of remittance of reinsurance premiums overseas amounted to a breach of section 3 of the Constitution. Section 3(a) guarantees inter alia the “protection of the law”. In the context of this case, Mr. Moti submits it protects against “usurpation and arrogation of power and authority, officious intermeddling, unlawful interference with contract, arbitrary exercises of power, administrative actions taken for improper purposes, unfair practices, unreasonable conduct and officials acting under dictation.” Additionally it would protect against administrative action taken without due regard for or with prejudice to the Applicant’s rights and obligations under its Contract which had effectively been approved by the First Respondent when he registered the Applicant as an insurer under Section 14 of the Act. The Applicant had a legitimate expectation that any application for remittance of premiums due and payable thereunder would not be prevented – least of all by the very person who had earlier accepted it as “adequate and otherwise satisfactory”.
It is without dispute that section 3 of the Constitution protects against “usurpation and arrogation of power and authority, officious intermeddling, unlawful interference with contract, arbitrary exercises of power, administrative actions taken for improper purposes, unfair practices, unreasonable conduct and officials acting under dictation.”
In their submissions, the first and second Respondents argued that there were matters raised regarding the whole set up of the Applicant which raised a genuine concern on their part as to the appropriateness of allowing the reinsurance premiums to be remitted overseas or not. They argued that even if it may have been unlawful it was an error committed without malice or in a high-handed manner. If anything it was merely a mistaken use of power.
Having pointed out that under section 6(1) of the Act the Controller had power to prohibit such payments, the submission that the actions of the Controller amounted to a breach of section 3 of the Constitution cannot be sustained.
The factual circumstances surrounding the exercise of the power of the Controller to prohibit the remittances of reinsurance premiums overseas were clearly justifiable. There were matters, which raised genuine concern on the part of the Controller and the second Respondent as to whether the reinsurance premiums should be remitted overseas or not. Those factors already adverted to in this judgment included the matters set out in paragraph 4 of the second Respondent’s affidavit filed 20th April 2000.
I have also pointed out that SMI was not without remedy under other law. It could have applied for declarations for breach of statutory requirement under the proviso in section 6(1) of the Act and sought consequential orders for the payments of its reinsurance premiums to be released. It could also have filed application for a writ of mandamus to be issued against the Controller. But even if the Controller had no power under section 6(1) or (2) of the Act to prohibit the remittance of reinsurance premiums overseas I am not prepared to exercise my powers under the proviso in Section 18(2) of the Constitution on the grounds that adequate means of redress are available under other law.
Prosecutorial Indiscretion
3(i) a declaration that the second Respondent acted in excess of his powers and thereby prejudicially affected the rights and obligations of SMI in:
(i) advising and / or directing the first Respondent and the Central Bank of Solomon Islands to withhold approval for the remittance of reinsurance premiums overseas by the Applicant under the Contract;
(ii) thereafter publicizing his advice/direction and the conduct of the criminal investigation concerning SMI.
The Applicant says that the Second Respondent:
(i) lacks such power under section 91 of the Constitution and/or the Criminal Code [Cap 7] and/or the Penal Code [Cap 26] or otherwise; and
(ii) therefore acted in excess of power and/or arbitrarily and/or for an improper purpose and/or unfairly and/or unreasonably and/or without due regard or with prejudice to the Applicant’s rights and obligations under the Contract and its legitimate expectations; and
(iii) thereby contravened the provisions of Sections 3, 10, 12 and 15 of the Constitution.
The advice or direction of the second Respondent to the first Respondent to withhold approval for the remittance of reinsurance premiums overseas by the Applicant under the Contract is contained in his letter of 12 November 1998 to the first Respondent (see “Exhibit FM2” annexed to the affidavit of Francis Mwanesalua filed 20th April 2000). I quote:
“Thank you for your memorandum of 26 October 1998 and the attached documents which were received on 11 November, 1998.
I have perused the same and decided that a criminal investigation be carried out on the actions of certain persons which may have amounted to criminal offences under our laws. This investigation would take time and that your support in that regard would be sought in due course.
It has been noted that your approval has been sought to transfer funds (Reinsurance Premium) to Swiss Underwriting Services Ltd. in Singapore. May I suggest that you withhold your approval pending the completion of the said Criminal investigation.”[Emphasis added]
Powers of the Director of Public Prosecutions
The issue for consideration, which arises from this advice/direction is whether the second Respondent had acted ultra vires his powers. The powers of the Director of Public Prosecutions (“Director”) are set out more fully in section 91(4) of the Constitution. I quote:
“The Director of Public Prosecutions shall have power in any case in which he considers it desirable to do so –
(a) to institute and undertake criminal proceedings against any person before any court (other than a court – martial) in respect of any offence alleged to have been committed by that person;
(b) to take over and continue any such criminal proceedings that have been instituted or undertaken by any other person or authority; and
(c) to discontinue at any stage before judgement is delivered any such criminal proceedings instituted or undertaken by himself or any other person or authority.”
Those powers in my respectful view must necessarily include the investigative work done by police officers in the investigations of crime, the pursuit and arrest of criminals, the issue of search warrants, through to the actual commencement of court proceedings in the arraignment of criminals and trials. It necessarily includes providing advice to police officers and other persons directly involved in the pursuit and investigation of crimes and criminals.
I do not think it can be disputed that the learned Director was carrying out his constitutional duties when he commenced investigations into the set up of the insurance business operations of the Applicant after a complaint had been lodged with his office. In the process of his investigations it dawned on him that certain activities with regards to the reinsurance arrangements that the Applicant had entered into may not have been proper. It was in the context of his investigations and findings that the suggestion was made to the Applicant to withhold the transfer of reinsurance premiums overseas to Suisse Underwriting Services Limited. Was this advice ultra vires?
It is my respectful view that what the second Respondent said in his letter cannot by any standards be construed as amounting to an exercise of his powers which were ultra vires, in excess of or prejudicial to the rights and obligations and expectations of the Applicant under its Contract, or that it contravened sections 3, 10, 12 or 15 of the Constitution. The second Respondent was entitled to make his views known to the first Respondent where he had reasonable grounds for believing that offences had been or might have been committed by the Applicants, its servants or agents. In paragraphs 3-4 of his affidavit the second Respondent deposed as follows:
“3. On 11th November 1998 I received a letter from the first Respondent dated 26th October 1998. A copy of that letter (minus the enclosures) is attached hereto and marked “FM1”.
4. After considering the letter and the documents I replied on 12th November 1998. A copy of my reply is attached hereto and marked “FM2”. In my letter I suggested to the First Respondent that he withhold his approval to send the reinsurance premiums overseas pending completion of the criminal investigation. The reason for my so suggesting were as follows:-
(a) I needed time to carry out the investigation;
(b) I wanted to find out if the transferee Swiss Underwriting Services Ltd was a registered or exempted agent of the Applicant pursuant to section 10(3) of the Insurance Act. Article 12 of the reinsurance treaty states that Swiss Underwriting Services Ltd is the Applicant’s agent. Under section 10(3) of the Act an agent must be registered or exempted. Anyone who without the Controller of Insurance permission transacts Solomon Islands business in Solomon Islands or abroad with any unregistered agent commits an offence.
(c) The First Respondent had given me copies of documents concerning Swiss Underwriting Services Ltd and Michael Nyunt which are exhibited to John Tomun’s affidavit filed on 30th March 1999 which were cause for concern.
(d) The reinsurance treaty had been signed on behalf of the Applicant before it was incorporated. This also caused me concern as offences may have been committed under the Insurance Act, the Penal Code and the Companies Act.
(e) I wanted to find out from the Luxemburg authorities and Interpol if Lureco was a bona fide company.”
There were discrepancies, which needed further investigation and consideration. For that to be done, the second Respondent needed time to investigate. In the meantime it was vital that every player in the playing field were aware of his initial findings and observations. That was what he had sought to do in his letter of 12 November 1998 to the first Respondent.
There is no evidence to suggest that what the second Respondent had been accused of doing was done arbitrarily and/or for an improper purpose and/or unfairly and/or unreasonably and/or without due regard or with prejudice to the Applicant’s rights and obligations under the Contract and its legitimate expectations. To the contrary there is ample evidence which supports the view that what was done was done out of a sense of duty and concern for the rule of law and out of a sense of concern for those who may have been affected by the way SMI had been set up. It cannot be denied that the way SMI had been set up in the absence of proper consultation and communication with members of the Solomon Islands National Provident Fund was bound to raise queries and concerns. This was what had happened in this case and had given rise to lengthy, extensive and expensive litigation. As to the Applicant’s rights and obligations under the Contract and its legitimate expectations, the second Respondent was not a party to that agreement and therefore not bound by its terms in anyway. He cannot be accused of breaching any of its terms or interfering with any legitimate expectations of the Applicant.
Further, it is important to appreciate that the “advice and/or direction” alleged to have been made by the second Respondent was nothing more than a mere suggestion to the first Respondent to withhold approval pending completion of the criminal investigation. As correctly submitted by learned Counsel Mr. Radclyffe, the first Respondent was not obliged to follow the second Respondent’s suggestion. When Tony Makambo took over as Controller of Insurance he could have overruled Mr. Harry’s decision. He did not do so. The burden of responsibility for the ultimate decision cannot be shifted; it remains with the first Respondent.
Further still, the Applicant could easily have commenced action for orders for mandamus against the first Respondent. It did not do that.
Finally even if the advice/direction of the second Respondent was unlawful, in view of the ruling of this court, the legality of such advice/direction would have been immaterial. The Controller was entitled to rely on such advice/direction in his own deliberate judgment and to make such decisions he considers appropriate in the circumstances, including the power to prohibit the remittance of reinsurance premiums overseas.
Publication of details of the criminal investigation in the media
The second issue raised by the Applicant pertains to the question whether the second Respondent had acted ultra vires his powers when he disclosed and allowed publication of details of the “criminal investigation” which he had ordered against the Applicant. These pertain to the publication in the Solomons Voice newspaper of 11th December 1998, of his letter of 12th November 1998 wherein he was quoted as saying that “the DPP directed the Insurance Controller to withhold his approval for the transfer of funds (Reinsurance Premium) to Swiss Underwriting Services Limited in Singapore until the criminal investigation is completed”. The Applicant says that such action by the Second Respondent exceeded the proper scope of the powers he was entrusted with to exercise under Section 91(4) of the Constitution and that the second Respondent acted unfairly and irresponsibly, and prejudicially affected the conduct of its business by the disclosures and publication of details of the criminal investigation.
The first point to make regarding that publication is that it was a misquotation of parts of the letter of the second Respondent. Secondly, the objection of the Applicant must be balanced with the rights of the second Respondent to free speech and freedom of expression protected by the same Constitution. As long as the disclosures and publications do not infringe the reputations, rights and freedoms of others or the private lives of persons concerned in legal proceedings, or that they do not infringe the requirements of confidentiality over information received and that the authority and independence of the courts are not compromised, the second Respondent is entitled to disclose and publicize such material as in his own judgment he deems appropriate. Section 91 of the Constitution gives very wide powers to the DPP. This is re-affirmed in subsection 91(7), which provides that he shall not be subject to the direction or control of any other person or authority.
There is no rule of law, which directly imposes restrictions on the rights of the DPP to publicize such materials he deems appropriate in the public interest, provided what he discloses to the media does not constitute any contempt of court.
In his judgment in Attorney-General v. Times Newspapers Ltd.[38] applied in R. v. Border Television Ltd., ex p. the Attorney-General[39] Lord Reid said:
“The law on this subject is and must be founded entirely on public policy. It is not there to protect the private rights of parties to a litigation or prosecution. It is there to prevent interference with the administration of justice and it should in my judgement be limited to what is reasonably necessary for that purpose. Public policy generally requires a balancing of interests which may conflict. Freedom of speech should not be limited to any greater extent than is necessary, but it cannot be allowed where there would be real prejudice to the administration of justice,”
For the Applicant to succeed under this submission, it must be shown that the administration of justice had been or likely to be compromised as a result of the disclosure and publication of what the second Respondent had said. With respect, apart from the claims of unfairness, irresponsibility and prejudice, it has not been demonstrated to my satisfaction that what was published amounted to a compromise of the due administration of justice or that it amounted to a contempt of court. It is also pertinent as well to note that the Applicant could have applied for contempt of court action against the second Respondent in the first instance and required withdrawal of what was published, or an apology. He did not do that. Even if what he had done was unlawful I am not satisfied that such application is warranted under section 18(1) of the Constitution.
It follows that any allegations of breaches of the constitutional provisions in sections 3, 10, 12 and 15 cannot be sustained.
The status of Kevis Bezo Harry’s affidavits
Finally, during the hearing itself, objection was raised against the admissibility of two affidavits of Kevis Bezo Harry (“Harry”) filed 26th May 2000 and 1st June 2001. The first affidavit had been sworn before the Attorney-General (Primo Afeau) on 26th May 2000 and the second one before Jean Gordon also of the Attorney-General’s Chambers. The objection was based on the rule that the Solicitor acting for one of the parties should not be permitted to swear an affidavit for the party he represents in court. In this instance, the first Respondent was represented by the Attorney-General and that Harry’s affidavit was intended to be used in support of the first Respondent’s case. Section 3(2) of the Oaths Act [Cap. 23] prohibits the taking of an oath by a Commissioner for Oaths in any proceedings in which he is solicitor to any of the parties to the proceedings. Section 3(2) of the Oaths Act reads:
“A Commissioner for Oaths may, by virtue of his commission, administer any oath or take any affidavit for the purposes of any court or matter in Solomon Islands, including matters relating to the registration of any instrument in Solomon Islands, and take any bail or recognizance in or for the purpose of any civil proceeding in the High Court or any Magistrate’s Court:
Provided that a Commissioner for Oaths shall not exercise any of the powers conferred by this section in any proceeding in which he is solicitor to any of the parties to the proceeding, or clerk to any such solicitor, or in which he is interested.” [emphasis added]
The above restriction is re-emphasized by Order 40 rule 16 of the High Court (Civil Procedure) Rules 1964 (“the Rules”):
“No affidavit shall be sufficient if sworn before the advocate acting for the party on whose behalf the affidavit is to be used, or before any agent or correspondent of such advocate, or before the party himself.”
A number of English authorities were cited by Mr. Moti in support of the above statement of law. In Baker v. Ambrose[40], Wright J. held an affidavit sworn before the solicitor for the grantee of a bill of sale as insufficient and the bill of sale consequently void for want of due registration. Baker v. Ambrose was upheld and applied by the English Court of Appeal in In re Bagley[41]. At pages 323-324 Cozens-Hardy MR held that an affidavit which contravenes that rule is invalid.
“... I feel no doubt that under r. 16 of Order XXXVIII [the corresponding provision in the former English Supreme Court Rules] the same objection applies as under the general language of the Act to this so-called affidavit, that it was sworn before a person who had no authority - that in fact it was a proceeding coram non judice. Then how does it differ from the case of an affidavit sworn before a man who is not a commissioner at all? If I am right in the view that Goddard had no authority to administer this particular oath, it seems to me that there was no affidavit at all, and, that being so, the deed to the validity of which the filing of the debtor’s affidavit is essential is no deed at all and is gone. I ought to say that in the view which I have taken of this matter I am simply following the decision of Wright J. in Baker v. Ambrose, which was decided fourteen years ago.”
I agree the authorities cited (based on the corresponding rule in the former English Supreme Court Rules) are directly relevant to the situation before this court. Section 3(2) of the Oaths Act and Order 40 rule 16 of the Rules are very clear as to what should be done in this situation. Both affidavits of Kevis Bezo Harry sworn before Mr. Afeau and Mrs Gordon, who otherwise would have been authorised officers under the Oaths Act, offend against section 3(2) of the Oaths Act and rule 16 of Order 40. The result is that both affidavits must be declared as null and void. Having so ruled, nevertheless it would have been but a simple matter for the Respondent’s to re-file properly executed affidavits; I would have granted leave had that been necessary. That has not been necessary as Kevis Bezo Harry had been permitted to give oral evidence under Order 61A rule 6(1) of the Rules.
DECISION
I am satisfied the following decisions can now be made:
Orders made accordingly.
ORDERS OF THE COURT:
THE COURT
[1] unreported, HCSI Civil Case No. 042 of 1999, March 23, 1999 per Kabui J.
[2] unreported, Court of Appeal, Civil Appeal Case No. 9 of 1996, April 24, 1997, per Kapi P (Acting), Williams and Goldsborough JJA
at 5-7
[3] [1972] 2 All ER 586
[4] (1912) 15 CLR 333
[5] (1908) 8 CLR 330
[6] [1926] VicLawRp 47; (1980) 32 ALR 328 at 332 - 335
[7] (unreported, HCSI Civil Case No. 423 of 1999, December 20, 1999 per Muria CJ at 4)
[8] (1984) 156 CLR 533
[9] [1938] AC 101 per Lord Wright at 104-106.
[10] [1981] HCA 26; (1981) 55 ALJR 434 at 437
[11] (No. 2) [1982] VR 522
[12] [1913] AC 107, at p 130
[13] [1979] 2 All ER 461 at 473
[14] (1984) 156 CLR 533
[15] [1853] EngR 885; (1853) 4 H.L.C. 1 at 163
[16] [1938] AC 101 per Lord Wright at 106
[17] Civil Case Number 44 of 1998, date of judgment 31st August 1998.
[18] [1981] A.C. 648 (Privy Council) per Lord Diplock at 670G-671A
[19] (unreported), HCSI CC 41 of 1992, 11th June 1992 per Muria ACJ at 14-16
[20] (unreported) HCSI CC 383 of 1992, 28th July 1993 per Palmer J at 15
[21] (unreported) HCSI CC 214 of 1991, 29th January 1992 per Ward CJ at 2
[22] (unreported) HCSI CC 379 of 1995, 10th July 1996 per Muria CJ at 4-5
[23] (unreported) HCSI CC 54 of 1997, per Lungole-Awich J at 1-2
[24] (unreported) HCSI CC 89 of 1997, 2nd November 1998 per Lungole-Awich J. at 2-4
[25] [1970] 3 All ER 535
[26] at page 541-542
[27] at page 545
[28] [1976] 1 All E.R. 12 per Lord Denning at 19b-d
[29] [1985] PNGLR 348 per Amet J at 361-366
[30] (1985) 159 CLR 550
[31] [1987] 1 All ER 564
[32] (1987) 163 CLR 378 per Mason CJ at 389
[33] (1990) 170 CLR 596 per Mason CJ, Deane and McHugh JJ at 598, 599-600
[34] (1990) 169 CLR 625
[35] (1992) 175 CLR 564
[36] [1994] 1 All ER 833 (Privy Council) per Lord Slynn of Hadley at 846b-847j, 848j-849a
[37] (1995) 60 FCR 39
[38] [1974] A.C. 273, 294, H.L.
[39] (1979) 68 Cr. App. R. 375, D.C
[40] [1896] UKLawRpKQB 149; [1896] 2 QB 372 at 374
[41] [1910] UKLawRpKQB 161; [1911] 1 KB 317
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