National Reserve Bank of Tonga v Anti-Corruption Commissioner [2025] TOCA 25; AC 10 of 2024 (20 November 2025)

IN THE COURT OF APPEAL OF TONGA AC 10 of 2024
CIVIL JURISDICTION [CV 60 of 2024]
NUKU’ALOFA REGISTRY
__________________________________________________________________________

BETWEEN NATIONAL RESERVE BANK OF TONGA

First Appellant

FELETI SEVELE

TATAFU MOEAKI

SIOSI MAFI

KILISITINA TUAIMEI’API

MASASSO PAUNGA

JOHN PAUL CHAPMAN

VIKA FUSIMALOHI

Second Appellants

AND ANTI-CORRUPTION COMMISSIONER

Respondent

Hearing: 10 November 2025

Court: Randerson, White and Dalton JJ

Counsel: Stephen J Stanton and Tevita ‘Aho for the Appellants
Christopher Lahatte and Mele Mangisi for the Respondent

Judgment: 20 November 2025

__________________________________________________________________________

JUDGMENT OF THE COURT

_________________________________________________________________________

1. This is an appeal brought by leave from orders of the Lord Chief Justice of 30 June 2025 dismissing the appellants’ application to strike out certain paragraphs of the respondent’s statement of claim (Anti-Corruption Commissioner v National Reserve Bank of Tonga [2025] TOSC 56; CV 60 of 2024).
   
2. The appellants are the National Reserve Bank of Tonga (“NRBT” or “the Bank”) and its directors. The respondent is the Anti-Corruption Commissioner (“the ACC” or “the Commissioner”).
3. The ACC filed a writ of summons and statement of claim on 21 February 2025. He challenged a decision of the directors of NRBT to pay a bonus to staff of the NRBT. In essence, he alleged that the decision was illegal because it contravened s 16B (4) of the National Reserve Bank of Tonga Act. That sub-section provides:

“(4) No remuneration shall be based on the Reserve Bank’s profits or any type of revenue.”

4. Although the appellants’ application sought only the striking out of certain paragraphs of the statement of claim, their submissions went far wider. They submitted that the ACC had no power to institute the proceedings. They also submitted that the institution of the proceedings was an abuse of process. They relied on Order 8 rule 8(1)(b), (c) and (d) of the Supreme Court Rules. They eschewed reliance on O.8 r.8(1)(a).
5. Order 8 rule 8(1) provides:

“0.8 Rule 8. Striking out pleading

(1) The Court may at any time order that any pleading or part thereof be struck out if —

(a) it discloses no reasonable cause of action or defence, as the case may be;

(b) it is scandalous, frivolous or vexatious;

(c) it is unclear, or may otherwise prejudice or delay the fair trial of the action; or (d) it is otherwise an abuse of process of the Court, and may order the action to be stayed or dismissed, or judgment to be entered accordingly.”

6. Extensive evidence was adduced on the application. As explained below, the ACC had required, and obtained, all of the NRBT’s documents relating to the decision as to whether the payments would contravene s 16B (4).
7. Prior to the hearing of the appeal the Court directed the parties to address certain issues, including whether the claim as pleaded, or as appears from the evidence adduced, disclosed a reasonable cause of action. In taking that course we were mindful of the need for courts and practitioners to seek the quick, cheap and just resolution of the real issues in the proceedings.
8. Before addressing the pleading and the parties’ submissions it is appropriate to refer to the relevant facts.
   

Chronology of Events

9. In the 2023 financial year the Bank recorded a net profit of approximately $20 million, and in the 2024 financial year, a net profit of about $30 million.
10. The minutes of the board meeting held on 13 June 2024 record that:

“Directors also agreed on the bonus to be paid to staff to mark the record profit for the FY2024.”

11. The minutes for the board’s meeting on 17 June 2024 approved a re-submission of a budget for 2024-25 to include a special expenditure for the “celebration of NRBT’s 35^th Anniversary and awarding of staff.” A memorandum from the Bank’s Governor dated 24 July 2024 stated that the draft financial statement “... clarified that $350K staff costs is to recognise the Bank’s 35^th anniversary”.
12. An internal email of 31 July 2024 from the Governor to the Deputy Governor similarly characterised the proposed payments as “16 September anniversary (to include recognition for staff recognition)”. The Governor noted that legal clearance for staff recognition would be needed.
13. An internal email to the Governor of 9 September 2024 attached a draft board paper “for the commemorative payout”. The estimated cost was $531,810.
14. On 11 September 2024 the Governor emailed a lawyer, a Mr Ralph Stephenson, asking for his advice on a draft of a paper to be submitted to the board. The draft board submission stated:

“Directors had discussed the importance of the Bank’s staff including the proposed one-off payout to staff to recognise the dedication of staff building up to the Bank’s 35th anniversary, as incorporated in the Bank’s budget for FY2025. ... This complied with the restriction under section 16B(4) of the NRBT Act that no remuneration shall be based on the profits or any type of revenue.”

15. The Governor advised Mr Stephenson:

“Our Board had discussed this ‘commemorative recognition of staff [’] at its 35th Anniversary Event to mark next Monday 16 September 2024. As part of the commemorative, the Board supports for the bank to pay each staff a net amount around $5,000. This coincides with the Bank’s record net profit $20m in FY2023 and higher record net profit of $35m in FY2024. Our proposed submission to the Board 11.00 am Thursday 12 September to formalise the recognition payment is posted below if you don’t mind the quick checking, requesting your clearance of the highlighted sentence below.” [Annex D p 60/122]

16. The highlighted sentence was the last sentence underlined at [14] above.
17. Mr Stephenson’s advice was that:

“... the position can be taken that the bonuses do not contravene Section 16(b)(4) [sic]

...

The section, in my opinion, is addressing a situation where a staff member’s remuneration package includes an incentive or commission based on the revenue or profit generation. That is not permissible under s 16(b)(4) [sic].

By contrast, what is being done here is that all of the staff are being paid a single, one time recognition bonus, each in the same (more or less) net amount. In my opinion that does not contravene the intent of s 16B(4).”

18. Thus, Mr Stephenson’s advice was that to contravene s 16B(4) it was not enough that staff bonuses be referable to, or linked to, the Bank’s profit. Rather, a contravention occurred only when remuneration was “based on” the Bank’s profit, such as by way of commission or incentive. Profit or revenue had to provide a basis for remuneration if the section were to be contravened.
19. The Board paper submitted by the Governor to the Board invited the directors to endorse a resolution that a “one-off anniversary commemorative payout” be made to each staff member. The paper included the statement that the payout complied with the restriction under s 16B(4) that no remuneration be based on the Bank’s profits or any type of revenue. The attached schedule showed a payment of $6,600 to 73 staff, $2,000 to seven staff (either on study leave or note counters) and $600 to two probationary staff.
20. The proposed resolution was passed at the board meeting on 12 September 2024.
21. On 20 September 2024 the ACC wrote to the Governor advising that he intended to conduct a preliminary investigation to decide whether the bonus payments should be the subject of a more complete investigation. The ACC required the Governor to provide a “statement of information” under s 16 of the ACC Act setting out the basis of the payment and an explanation as to how it related to s 16B(4) of the NRBT Act. He stated that when he had received the statement he would be able to determine if any further steps should be taken to undertake a full investigation.
22. The Governor evidently replied on 23 September 2024, but his reply was not included in the appeal papers. The ACC wrote again to the Governor on 4 October requiring further information, including documentation. Again, the requirement was made under s 16 of the ACC Act.
23. Sections 15 and 16 of the ACC Act provide:
    

“15 Preliminary investigations

A preliminary investigation may be made for the purpose of assisting the Commissioner —

(a) to discover or identify conduct that might be made the subject of a more complete investigation under this Act; or

(b) to decide whether to make particular conduct the subject of a more complete investigation under this Act.

16 Power to obtain information

(1) For the purposes of an investigation the Commissioner may, by notice in writing served on a public authority or public official, require the authority or official to produce a statement of information. [Footnote 4: Amended by Act 6 of 2020]

(2) A notice under this section shall —

(a) specify or describe the information concerned;

(b) fix a time and date for compliance;

(c) specify the person to whom the production is to be made; and

(d) provide that the requirement may be satisfied by some other person acting on behalf of the public authority or public official.”

24. The documentation sought was provided. The ACC’s concern was expressed in his letter to the Governor of 11 October 2024:

“My concern is that in the minutes for the 13 June 2024 Board meeting, the record shows ‘The Directors also agreed on the bonus to be paid to staff to mark the record profit for the FY2024’

There is no further mention of this bonus based on profit, but in the 12 September 2024 minutes the basis for the bonus is shown as a ‘one-off 35^th anniversary commemorative payment to each staff of the Bank (subject to income tax) to commemorate its anniversary’

I need to understand why the bonus was reframed in this manner. You are aware that staff bonuses cannot be based on the profit made by the Bank. It is my understanding that no anniversary bonuses have been paid in the past, and that the Remuneration Policy does not make provision for bonuses except in terms of Clause 7 of the Policy. This clause is based on performance of a staff member. There is no provision for other bonuses.

My preliminary view is that the change in the description of the bonus is an ex post facto justification for the payment, which was clearly based on the bank profit, but then later described as an anniversary bonus when you became aware the profit based was illegal.”

25. The Governor responded on 1 November 2024. He said that the staff commemorative payment was a recognition of staff performance and incentive for future performance. He noted that the proposed payment was subject to legal clearance. He submitted that the chronology of events which we have summarised above disclosed no illegal conduct.

The Statement of Claim

26. The ACC sought and obtained leave to bring judicial review proceedings.
27. The statement of claim named the NRBT as the first defendants and its directors (including the Governor) as second defendant. It sought the following relief:

“(a) A declaration that the NRBT’s Bonus Decision is unlawful as it contravenes Section 16B(4) of the NRBT Act and constitutes a breach of trust and misfeasance in public office.

(b) An order of certiorari to quash the NRBT’s Bonus Decision.

(c) An order prohibiting the NRBT from paying bonuses to its employees in the future where those bonuses are based on the NRBT’s profits or revenue.

(d) An order for restitution, requiring the Second Defendants are personally liable for the misappropriated public funds and for any losses suffered by the NRBT as a consequence for [of] their actions.

(e) Costs of this action.

(f) Such further or other relief as the Court deems just and equitable.”

28. The ACC alleged that the decision to pay the staff bonus was unlawful and a misfeasance in public office (para 4).
29. Although the pleading does not plead all the material facts on which the ACC relies (for example it does not plead the Board’s resolution of 13 June 2024) it does plead that the directors’ justification shifted over time. It also pleads:

“16. Despite the Governor’s assertion that legal advice supported the legality of the payments, the timing of the consultation and the subsequent change in justification suggest an attempt to legitimise a decision already made in potential violation of the Defendants’ fiduciary duties and the NRBT Act.”

30. The ACC’s only pleaded basis for the allegation that the directors breached their fiduciary duty and acted dishonestly and in bad faith is that the payment of the staff bonuses was contrary to s 16B(4) of the NRBT Act and that:

“20. ... The shifting justifications for the bonus payments, the delayed legal consultation, and the attempts to reframe the bonuses as ‘staff recognition’ point to a deliberate effort to conceal the true nature of the payments and evade accountability.”

31. The ACC alleged:

“25. Knowledge or Reckless Indifference: The Commissioner contends that the Governor and Board members knew or ought to have known that paying bonuses linked to profits was unlawful. Section 16B(4) of the NRBT Act clearly prohibits such payments, potentially exposing the Defendants to personal liability for the resulting financial losses.

26. Seeking legal advice on this matter further supports the Commissioner’s argument that the Governor and Board members were, at the very least, aware of the potential for illegality. This suggests a knowing disregard for legal requirements and a deliberate attempt to circumvent legal restrictions. The timing and context of the legal consultation, as evidence in the sources, support an argument that the Defendants acted in bad faith, further strengthening the claim for personal liability.
27. Intention to Injure or Reckless Indifference: The Commissioner will argue that by proceeding with the Bonus Decision despite knowing, or being recklessly indifferent to, its illegality, the Governor and Board members acted with reckless indifference to the potential harm to the public interest and the proper administration of the NRBT.”
32. In para 21 of the statement of claim the ACC alleged that the staff bonuses were paid in contravention of s 16B(4) because:

“(a) The Bonus Decision involves the payment of remuneration to NRBT staff.

(b) The bonus payments are linked to the NRBT’s profits.”

33. This raises the issue whether s 16B(4) is contravened if the staff bonus payments are “linked to” or are “referable to” the NRBT’s profits, or something more is required to establish that the payments are “based on” the Bank’s profits. Mr Stephenson’s opinion was that more is required.
34. If the payments were not illegal under s 16B(4), no reasonable cause of action is disclosed. The ACC does not plead that the directors breached their fiduciary duty because the payment was contrary to any remuneration policy adopted by the Bank.
35. Section 20 of the NRBT Act provides:

“20 Personal immunity of directors, officers and employees [Footnote 61: Amended by Act 23 of 2014]

(1) No director, officer or employee of the Bank or any person including a person previously holding such positions, acting under direction of the Bank shall be personally liable for an act or default of the Bank done or omitted to be done in good faith and without gross negligence in the course of the operations of the Bank.

(2) The Bank shall indemnify any person indicated in the previous subsection against costs incurred in the defence of a legal action brought against such person in connection with the discharge or purported discharge of official functions within the scope of his employment or engagement under this Act, provided that no such indemnification shall apply if such person has been convicted of a crime arising out of the activities that are covered by such legal action.

36. The directors pleaded reliance on s 20. The ACC did not file a reply. He had already alleged that the directors had acted dishonestly and in bad faith. He did not plead that they were grossly negligent. The allegation that they acted in bad faith depends on the allegation that they knew that the staff bonus payments were illegal or were recklessly indifferent to whether they were illegal.
37. We return to this below in addressing the question whether any reasonable cause of action is disclosed.

Strike Out Application

38. The Interlocutory Application filed by the respondents sought only the striking out of material paragraphs of the statement of claim. It did not seek the summary dismissal of the proceedings.
39. Order 15 of the Supreme Court Rules under the heading “Summary Judgment” deals only with actions under the Companies Act, in admiralty, or for judicial review. It applies only to an application for summary judgment by a plaintiff.
40. Order 8 rule 8(1), under which the respondents moved, has been quoted above. It refers only to the striking out of pleadings. Order 8 rule 1(2) provides that no evidence is to be heard on a striking out application.
41. In this case extensive evidence was adduced.
42. The Supreme Court Rules do not separately and specifically provide for applications for summary dismissal in the circumstances of the present case. But the Court has inherent jurisdiction to dismiss summarily a claim which the plaintiff clearly cannot prove and is without a solid basis,
43. The power is to be exercised with great caution lest a viable cause of action is still born, and lest the proceedings be delayed and costs increased by an interlocutory application. It is usually better that proceedings be brought to an early trial. These reasons should not be understood as an encouragement for the bringing of an application for summary dismissal. As explained further below, the circumstances are exceptional.
44. The appellants did not seek an order for summary dismissal of the proceedings. Their interlocutory application partly complained about the adequacy of the pleading. The primary judge found (at [26]-[32] and [40]-[43]) that the statement of claim essentially made clear the case against the respondents and if further particulars were required, they could be sought.
45. We agree. If this had been the only ground of appeal, leave to appeal would have been refused.
46. But the appellants’ grounds of their application, and their submissions, went further.
47. Ground 6 of the interlocutory application asserted that the proceeding was an abuse of process, because the Commissioner was himself the litigant. As pleaded in the defence (para 9) and explained in the submissions on the appeal, this was said to contravene the principle established in Australia in R v Australian Broadcasting Tribunal; Ex parte Hardiman (1980) 144 CLR 13; [1980] HCA 13 at [54] that an administrative tribunal should not ordinarily take an active part in judicial proceedings, and where it does its submissions should be confined to issues concerning the tribunal’s powers and procedures. This contention was not developed before the primary judge. For the reasons below, it should be rejected.
48. Ground 7 was that the proceedings were an abuse of process because they were based on materials that were compulsorily produced. This was said to be contrary to ss 19(1) and 34(2) of the ACC Act.
49. In their written and oral submissions before the primary judge the respondents went further. They submitted that the ACC’s powers did not extend to instituting the proceedings.
50. The primary judge rejected these contentions. His Lordship was correct to do so, although not for the reasons he gave. His Lordship said (at [38]) that the Commissioner was “... especially empowered by sections 12, 13 and 21 of the Act to initiate proceedings”. He adopted the summary set out in the Commissioner’s submissions at paras 59-67 which are to be taken as incorporated in his ruling (at [97]).
51. Those paragraphs referred to ss 3, 12, 13, 16, 19(1), 21, 28(1), 34(2) and 86 of the ACC Act.

Grounds of Appeal

52. The grounds of appeal are diffuse. The first issue raised by grounds 1-4 is that the ACC did not have authority to institute the proceedings.
53. A second issue raised by grounds 3, 4, 5 and 6 is whether the proceedings were an abuse of process because the Commissioner used documents compulsorily produced pursuant to his investigation functions, contrary, it is said, to s 34 of the ACC Act.
54. If these grounds were established the proceedings should be dismissed.
55. Ground 7 challenges an order made on 10 February 2025 granting an interlocutory injunction restraining the Bank from “making any staff bonus payment not in compliance with the National Reserve Bank Act”.

Commissioner’s Power to Commence Proceedings

56. Section 3 is not a source of authority for the ACC to commence the proceedings. It directs the Commissioner to direct his attention to serious and systemic corrupt conduct and to take into account the responsibility of other authorities to seek to prevent corrupt conduct. It may be a constraint on the Commissioner’s powers. But it is unnecessary to decide that question. The appellants, rightly, do not rely on it as a constraint in this case.
57. Nor are sections 12, 16, 19(1), 28(1), 34(2) or 86 of the ACC Act germane to the issue.
58. The provisions relevant to this issue are ss 10, 13 and 21(1).
59. They provide:

“10 Principal Functions

(1) The function of the Commissioner shall be to investigate instances of alleged or suspected corrupt conduct referred to it by any person or authority or which has come to its attention whether by complaint or otherwise and to take such steps as may be necessary for the eradication or suppression of corrupt conduct.

(2) Without prejudice to the generality of subsection (1) it shall be the function of the Commissioner —

(a) to examine the practices and procedures of government ministries, departments and other public bodies in order to secure a revision of those practices and procedures which in the opinion of the Commissioner may lead to corrupt conduct and to advise the heads of such ministries, departments and other public bodies thereon;

(b) to instruct, advise, and assist any person or authority on ways in which corrupt conduct may be reduced or eliminated;

(c) to educate the public against the evils of corrupt conduct; and

(d) to enlist and foster public support in combating corrupt conduct

13 Incidental powers

The Commissioner has power to do all things necessary to be done for or in connection with, or reasonably incidental to, the exercise of his functions, and if there are any powers that have been granted to the Commissioner under this Act, it will not be considered restricted in the application of this section. [Footnote 3: Amended by Act 6 of 2020]

21 Injunctions

(1) The Commissioner, may apply for an injunction restraining any conduct in which a person (whether or not a public authority or public official) is engaging or in which such a person appears likely to engage, if the conduct is the subject of, or affects the subject of, an investigation.”

60. There are two limbs to s 10(1). The first is the function of conducting investigations into alleged or suspected corrupt conduct. The second is to “... take such steps as may be necessary for the eradication or suppression of corrupt conduct.”
61. The determination of what steps are “necessary for the ... suppression of corrupt conduct” is left to the Commissioner’s reasonable consideration.
62. “Corrupt conduct” is widely defined in ss 6 and 7. It includes any conduct of a public official that constitutes or involves the dishonest exercise of any of his official functions (s 6(1)(a)) or involves a breach of public trust (s 6(1)(b)(i)).
63. This is subject to s 7(2), which provides that conduct does not involve corrupt conduct unless it could constitute or involve amongst other things, a disciplinary offence. A “disciplinary offence” is defined to include any misconduct or neglect of duty or other matter that may constitute grounds for disciplinary action under any law (s 7(1)). The appellants do not contend that the matters alleged against the Bank or the directors would not constitute “corrupt conduct” as defined.
64. But it may be noted, that in the case of the directors, their conduct could only be “corrupt conduct” under s 6 if it were dishonest or involved a breach of public trust and was also a disciplinary offence that may constitute grounds for disciplinary action. The statement of claim does not allege available grounds for disciplinary action against the directors.
65. Section 13 gives the Commissioner power to do all necessary things for or in connection with, or reasonably incidental to any of the functions conferred on him. This is not limited to the powers of investigation under the first limb of s 10(1). It extends to the second limb of s 10(1) that gives the Commissioner power to take necessary steps for the eradication or suppression of corrupt conduct.
66. We have referred to ss 15 and 16 at [23] and to ss 10(1), 13 and 21 at [58] above.
67. They must be considered in context.
68. Section 11(1) provides:

“11 Co-operation with other agencies

(1) The Commissioner shall work in co-operation with law enforcement agencies including the Attorney General, the Auditor General, the Police Commander and such other persons and bodies as the Commissioner thinks appropriate.”

69. Division 2 is headed “Investigations”. This Division refers to the investigatory function of the Commissioner under the first limb of s 10(1).
70. Section 14 provides that the Commissioner may conduct an investigation on his own initiative, on a complaint, report or on a reference.
71. Section 15 has been quoted above and deals with preliminary investigations to decide whether a more complete investigation should be undertaken. This was the position first taken by the ACC.
72. Section 16 is a general power for the Commissioner to require the production of a statement or information “for the purposes of an investigation”. This is either for a preliminary, or a more complete, investigation.
73. Section 19(1)(b) abrogates claims for privilege which a public authority could have claimed in a court of law. It meant that the NRBT was required to produce to the ACC its request for advice from Mr Stephenson and the advice he gave.
74. Division 3 is headed “Compulsory Examination and Inquiries”. No compulsory examination or inquiry under Division 3 was conducted in this case. It is within Division 3 that s 34 is found on which the appellants relied.
75. Section 34(2) provides:

“34 Privilege of witnesses

...

(2) Evidence from a witness at a compulsory examination or public inquiry before the Commissioner is not admissible in evidence against the person in any civil or criminal proceedings or in any disciplinary proceedings.”

76. As the Commissioner rightly submitted, this provision was irrelevant, because no compulsory examination or public inquiry was conducted.
77. Part 3 is headed “Referral of Matters by Commissioner”. It is to be read with s 11(1) which has been quoted above at [68].
78. Section 44(1) provides:

“44 Referral

(1) The Commissioner may —

(a) at any stage of investigating a matter, refer the matter to any person or body considered by the Commissioner to be appropriate in the circumstances after appropriate consultation with that person or body;

(b) when referring a matter, recommend what action should be taken and the time within which it should be taken; and

(c) communicate any information which the Commissioner has obtained during the investigation of conduct connected with the matter.”

79. Section 45 provides:

“45 Report to Commissioner

The Commissioner may, when referring a matter under this Act, require the relevant authority to submit a report or reports in relation to the matter and direct the nature of the report and the time for its submission.”

80. Section 46 requires a relevant authority to comply with any requirement or direction of the Commissioner. It does not require the relevant authority to act on the Commissioner’s recommendation.
81. If the Commissioner is dissatisfied with how a relevant authority has responded, he may provide a report to the Minister (s 47).
82. Separate provisions are provided in relation to the Legislative Assembly’s referring a matter for investigation by the Commissioner (ss 49-53).
83. It is only with respect to such referrals and reports that s 52 provides:

“52 Report not to include findings of guilt or recommending prosecution

(1) The Commissioner shall not include in a report a statement as to —

(a) a finding or opinion that a specified person is guilty of committing or is about to commit a criminal offence or disciplinary offence; or

(b) a recommendation that a specified person be, or an opinion that a specified person should be, prosecuted for a criminal offence or disciplinary offence.

(2) A finding or opinion that a person has engaged, is engaging or is about to engage in a specified conduct that constitutes or involves or could constitute or involve corrupt conduct is not a finding or opinion that the person is guilty of or has committed, is committing or is about to commit a criminal offence or disciplinary offence.”

84. In declining to give a “minute exegisis” of the ACC Act the Lord Chief Justice adopted a summary of the Act at paras 59-67 of the Commissioner’s submissions (at [9]). His Lordship also said (at [38]) that the Commissioner is expressly empowered by ss 12, 13 and 21 of the Act to initiate proceedings.
85. As noted above, the Commissioner’s submissions adopted by the primary judge, referred to ss 3, 12, 13, 16, 19(1), 21, 28(1), 34(2), and 86.
86. Contrary to those submissions, the Commissioner was not mandated by s 3 to prosecute corruption-related offences.
87. Nor does s 12 provide authority to institute proceedings. Rather it preserves the Commissioner’s power to continue and complete an investigation and furnish reports, notwithstanding that court proceedings relating to the subject matter of the investigation have been instituted.
88. Sections 16, 19(1), 28, 34 and 86 are irrelevant to the present issue.
89. Section 21 authorised the Commissioner to apply for the injunction restraining the NRBT from paying future bonuses to its employees based on the NRBT’s profits or revenue as the conduct was the subject of his investigation.
90. The parties did not refer the primary judge to s 10(1) which is to be read with s 13.
91. As noted above, s 10(1) has two limbs. The first is the power to conduct investigations into alleged or suspected corrupt conduct. The second is “to take such steps as may be necessary for the eradication or suppression of corrupt conduct”.
92. Clearly it is the Commissioner who must decide what steps are necessary for the suppression of corrupt conduct. When read with the incidental power in s 13, if the Commissioner reasonably considered it was necessary to institute proceedings to suppress the alleged corrupt conduct in this case, he had the power to do so.
93. The principal flaw in the appellants’ written submissions is that they made no reference to the second limb of s 10(1). It must be acknowledged that neither the primary judge nor the ACC referred to that provision either. The appellants’ submissions assumed that the sole function of the ACC was to conduct investigations into alleged or suspected corrupt conduct and that the power under s 13 was to be construed accordingly.
94. Prior to the hearing we invited the parties to address the potential application of s 13 to the second limb of s 10(1). At the hearing Mr Stanton, who appeared with Mr Aho for the appellants, maintained his submission that the Commissioner’s only principal function was to investigate allegedly corrupt conduct. He submitted that the incidental power in s 13 had to be construed accordingly. That submission is untenable. Mr Stanton conceded that on his submission, the second limb of s10(1) is otiose. Contrary to his submission, s 10(2) does not suggest that the Commissioner’s only principal function is investigatory. Each of the matters listed in s 10(2) is addressed (although not exclusively) to the second limb of s 10(1). In any event, the functions listed in s 10(2) do not prejudice the generality of s 10(1).
95. The facts that the Commissioner also had power to conduct a further inquiry involving the compulsory examination of witnesses, and to refer the matter to the Attorney-General recommending that the Attorney bring proceedings on behalf of the Kingdom, did not constrain his power under s 13, when read with the second limb of s 10(1), to institute proceedings himself. The ACC Act does not expressly or impliedly provide that the obligation to co-operate with law enforcement agencies (s 11) and the power to refer the result of an investigation to a law enforcement agency with recommendations as to what steps should be taken (s 44), confines the Commissioner’s power to take necessary steps to suppress corrupt conduct including incidental powers for that purpose.
96. This is particularly so as s 13 expressly provides that the grant of other powers to the Commissioner under the Act does not restrict the application of s 13.
97. As noted above, the appellants submitted that the Commissioner had no such authority because it would be inconsistent with his role as investigator that he also be the prosecutor of a civil claim. It was said that this made the proceeding an abuse of process.
98. But this contention necessarily fails if, as we have found, s 10(1) read with s 13 does confer that authority.
99. The appellants rely on what is called the Hardiman principle (see [ 47] above).
100. What was said there is not relevant to this case. The Hardiman case concerned an administrative tribunal hearing a dispute between contesting parties. In that context, the tribunal should clearly not take the role of an active contradictor in judicial proceedings where its decision is challenged.
101. That is not this case. Because the Commissioner was not acting as a tribunal deciding issues between contesting parties, the Hardiman principle is not an implied limitation on the Commissioner’s powers. Because the second limb of s 10(1) when read with s 13 empowers the Commissioner to institute proceedings if he reasonably considers it necessary to do so, the Hardiman principle could not apply.
102. The appellants also rely on Gamage v Riashi [2025] NSWCA 84. There the NSW Court of Appeal held that the NSW Independent Commission Against Corruption did not have the power to commence criminal proceedings against a person who had been the subject of an adverse report, for possible offences the subject of the report.
103. The terms of the New South Wales Act and the Tongan Act are materially different. As Mr Stanton eventually conceded, the NSW Act did not confer on ICAC the function of taking necessary steps to suppress corrupt conduct (Gamage v Riashi at [20], [28]).
104. The NSW Act limited the definition of corrupt conduct, as applicable to the appellant in that case, to conduct that could constitute or involve the commission of an offence (at [22]). The NSW Act precluded ICAC from making a finding of guilt or recommending prosecution in its report. Section 52 of the ACC Act makes similar provision where the ACC Act provides a report to the Legislative Assembly. This is to minimise the possible prejudice in a jury trial if it were known that ICAC (or the ACC) had found that criminal conduct had taken place (Gamage v Riashi at [24]).
105. In this case there has been no report by the ACC. Section 52 has no application.
106. Subject to the caveat below, we conclude that the primary judge was correct in ruling that the ACC had authority to commence the proceedings.
107. In so concluding, we express no view as to whether the ACC could institute criminal proceedings for an alleged offence, even where he had not provided a report to the Legislative Assembly. That question does not arise on this appeal and may raise different or additional considerations.
108. The caveat concerns the monetary claim against the directors.
109. There is an issue (not raised below) whether the ACC’s authority under ss 10(1) and 13 extends to bringing such a claim.
110. It is arguable that the claim for monetary relief against the directors does not seek to suppress allegedly corrupt conduct. That relief was sought by the claims against the Bank for a declaration, certiorari and an injunction. It is arguable that the claim for monetary relief seeks redress for allegedly corrupt conduct rather than to suppress corrupt conduct. That may be outside the scope of s 10(1). As this question was not argued, we go no further than flagging it.

Scope of Proceedings for Judicial Review

111. The proceedings were brought as judicial review proceedings. Such proceedings are brought to review the legality rather than the merits of administrative law decisions.
112. Order 39 rule 1 of the Supreme Court Rules contemplates that other claims can be brought in judicial review proceedings. That is now the English position. Clause 12.8 of the Administrative Court Judicial Review Guide (UK) provides that the Administrative Court (a Division of the High Court of Justice) can provide monetary remedies if the claimant is seeking administrative law remedies and if the Court is satisfied that the claimant has a good cause of action for such a remedy.
113. The gateway to bringing claims for judicial review in Tonga is to obtain leave. We have reservations as to whether leave should have been given to the Commissioner to bring the claims against the directors for alleged breach of fiduciary duty and monetary relief.
114. The purpose of judicial review proceedings is to determine the lawfulness and validity of administrative decisions. Sometimes a finding of invalidity will inevitably result in a monetary remedy, for example where damages for false imprisonment are sought for an invalid detention. In such a case leave could well properly be given to join the claim for monetary relief to the challenge to the validity of the detention. But in the present case, where a finding of illegality would be but a necessary precursor to the claim against the directors, we think it would have been preferable for the grant of leave to have extended only to the claims for prerogative relief and injunction against the Bank. This issue was barely touched on in the appeal, and we need say no more about it, except to draw it to the Commissioner’s attention.
115. We would not dismiss the claim for monetary relief against the directors because it was brought in judicial review proceedings.
116. For the reasons below, the claim against the directors should be summarily dismissed on its merits, even if the claim against the Bank is not.

Abuse of Process – Documents produced under compulsion

117. As explained above, s 34(2) has no application because documents were not produced by a witness summoned to attend before the Commissioner at a compulsory examination or public inquiry.
118. It was therefore not an abuse of process for the Commissioner to use the documents produced under s 17 to institute the proceedings.

Conclusion on issues raised before the primary judge

119. For these reasons, we consider that the primary judge was correct in his conclusions on the issues raised before him.
     

Further issues on Appeal

120. Having considered the documents before the primary judge, we required the parties to provide submissions on the merits of the Commissioner’s claim.
121. As noted above the statement of claim alleged that because the staff bonus payments were “linked to” the Bank’s profits they contravened s 16B(4).
122. There is a clearly arguable case that the staff bonuses, or as they were later described, the commemorative payments, were “referable to” or “linked to” the record profits derived by the Bank. But no bonus payment was calculated in a way that was referable to the quantum of the profit. The bonuses were paid in a flat sum that was independent of the quantum of the profit. Moreover, in so far as they were linked to the profits earned by the Bank, they were determined retrospectively as a one-off payment.
123. The Commissioner’s helpful submissions identified the mischief s 16B (4) is intended to address. It is the danger that a prospective, or, he would say, a retrospective, incentive or reward that depends on the Bank’s revenue or profit, could affect the prudence, integrity or impartiality with which the Bank’s directors and staff approach their work
124. He submitted:

“International central banking frameworks consistently prohibit remuneration practices that compromise institutional independence or incentivize ultra vires conduct. Under Section 112 of the Reserve Bank of New Zealand Act 2021, the Bank must ensure that subsidiaries:

a. Perform functions efficiently and in the public interest.

b. Pay remuneration to directors only at rates determined by the Bank in accordance

with the fees framework or after consulting the Minister.

c. Chief executives’ terms and conditions must be agreed by the board and must

reflect public sector standards.

The Bank of England’s Prudential Regulation Authority (PRA), Sections 14; 15.2 and 15.4, mandates that remuneration policies must promote sound risk management and eliminate incentives for excessive risk-taking. Variable pay, including bonuses, must reflect long-term institutional performance and individual responsibilities, not short-term financial outcomes or profit generation.

Similarly, the European Central Bank’s Salary Structure Guidelines (Annex I to the Conditions of Employment) state that salary increases are based on a staff member’s contribution to ECB tasks relative to peers, explicitly avoiding links to profit metrics. This ensures that performance-based pay reflects institutional objectives and avoids conflicts of interest.

These standards affirm that central bank directors must act within statutory authority and fiduciary duty. Authorizing payments outside the scope of the enabling legislation—such as discretionary bonuses not grounded in institutional performance—may constitute a breach of duty and attract personal liability under provisions like Section 16B (4).”

125. As noted above, the Governor’s letter of 1 November 2024 (clearly authored by the Bank’s counsel) contains an admission that the “staff commemorative payment” was an incentive for future performance.
126. Nonetheless the payments in question in this case clearly do not fall within the mischief to which s16B (4) is directed. In whatever way the large profit was derived (presumably or at least partly through foreign exchange dealings) the payment of bonuses in flat amounts for different categories of staff could provide no incentive for the Bank’s employees to prefer their personal interests over the Bank’s obligations and charter. The Bank’s charter is to maintain internal and external monetary stability, to promote financial stability and a sound and efficient financial system, and subject to these objectives, to support macroeconomic stability and economic growth (National Reserve Bank of Tonga Act s4).
127. We do not attempt to redefine the language of s16B(4) to describe the metes and bounds of the words “based on”. It suffices to say that when applied to the circumstances of this case, having regard to the mischief the subsection is intended to address, the words are not synonymous with “linked to”, which is the pleaded allegation against the Bank.
128. Accordingly, we conclude that the statement of claim does not disclose a reasonable cause of action against the Bank.
129. We are conscious that we are deciding this question on an interlocutory application which did not raise the issue, which we have directed be treated an application for summary dismissal. The construction issue is clearly arguable and therefore not, on its face, appropriate for summary determination. But it involves a question of statutory construction on undisputed facts. Had the grant of leave been confined to the claim for judicial review of the Bank’s decision, as would have been preferable, the same question would have been argued on the same materials.
130. The Commissioner accepted that his claim against the directors depended on his establishing that the decision to pay the staff bonus (however described) was illegal. As we reject that contention, the claim against the directors should also be dismissed.
131. Even had we reached a different conclusion, we would have summarily dismissed the claim against the directors, including the Governor.
132. The Governor was clearly justified in seeking Mr Stephenson’s advice. The Commissioner neither pleaded any fact, nor adduced any evidence, that could establish that he acted improperly in doing so. The ACC’s contention was that the payment was so clearly illegal that the seeking of legal advice was an attempt to legitimise clearly illegal behaviour. But the payment was not clearly illegal. It was arguably illegal, which is why the Governor acted properly and prudently in seeking advice.
133. Mr Stephenson was not referred to the Board’s resolution of 13 June 2024 quoted at [10] above. But that is irrelevant to the gist of his advice. His advice accepted that there was a link between the payment of staff bonuses and the Bank’s profits, but that was insufficient to establish a contravention of s 16B(4). We agree.
134. Further, it is not plausible that the directors committed a “disciplinary offence” (as defined). As to the Governor, he sought and obtained independent legal advice on the issue which he was entitled to accept. The other directors were advised by the Governor’s board paper that the payments did not contravene s 16B(4).
135. The Commissioner’s contention that the payments clearly contravened the provision so that the directors must have known that it did, or were recklessly indifferent to whether it did, and so acted in bad faith, is untenable. The directors would be entitled to rely (as they have) on s 20 of the NRBT Act. Had the appellants sought summary dismissal of the proceedings on this ground, the proceedings ought to have been dismissed.
136. In oral submissions the Commissioner said that he would wish to cross-examine the directors and Mr Stephenson. But the proceedings are not akin to a compulsory examination. Unless the Commissioner had a sufficient ground for alleging bad faith against the directors the proceedings against them should not have been brought.
137. It would be wrong to put the Kingdom to further litigation expense for a claim that is doomed to fail.

Conclusion

138. For these reasons, the appeal should be allowed, the interlocutory injunction granted ex parte on 20 February 2025 should be discharged and the proceedings should be dismissed
139. Because the claim should not have been brought, because the limited grounds on which the strike out application was made have been dismissed, and because the grounds on which the appeal has been allowed were not raised by the appellants until they were raised by the Court, there should be no order as to costs either below or in this Court.
140. For these reasons we order:
     1. Appeal allowed.
     2. Order 2 made on 20 February 2025 and the orders made on 30 June 2025 be set aside.
     3. The proceedings be dismissed with no orders as to costs here or in the Court below.
        

Randerson J

White J

Dalton J