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Central Banking (Foreign Exchange and Gold) Regulations (Chapter 138), Re [1987] PGLawRp 549; [1987] PNGLR 433 (30 December 1987)

Papua New Guinea Law Reports - 1987

[1987] PNGLR 433 - SC Review No 5 of 1987; Re Central Banking (Foreign Exchange and Gold) Regulations (Ch138)�

[1987] PNGLR 433

SC346

PAPUA NEW GUINEA

[SUPREME COURT OF JUSTICE]

SUPREME COURT OF JUSTICE REVIEW NO 5 OF 1987 REVIEW PURSUANT TO CONSTITUTION SECTION 155(2)(B) APPLICATION BY PRINCIPAL LEGAL ADVISER RE CENTRAL BANKING (FOREIGN EXCHANGE AND GOLD) REGULATIONS (CH NO 138)

Waigani

Kidu CJ Kapi DCJ Amet J

25 August 1987

30 December 1987

BYLAWS AND REGULATIONS - Validity - Power to make regulations as specifically prescribed and as necessary or convenient to give effect to Act - Regulation within specific proscription not ultra vires - Central Banking Act (Ch No 138), ss 61, 70 - Central Banking (Foreign Exchange and Gold) Regulations, reg 33.

CRIMINAL LAW - Practice and procedure - Acquittal - What constitutes - Accused must plead to indictment before acquittal founded.

APPEAL - Judicial review - Jurisdiction - Criminal proceedings - Review sought by Principal Legal Adviser - Ruling on demurrer before plea taken - No acquittal - No appeal procedures available - Important question of law - Review procedure available - Constitution, s 155(2).

STATUTES - Interpretation - General principles - Constitutional requirements paramount - Constitution, ss 109(4), 158(2).

BANKS AND BANKING - Offences - Foreign exchange control - Validity of Regulations - Offence of sending foreign currency out of country - Regulation within power - Central Banking Act (Ch No 138), ss 61, 70 - Central Banking (Foreign Exchange and Gold) Regulations, reg 33.

The Central Banking Act (Ch No 138)(the Act), s 70, provides:

�The Head of State, acting on advice, may make regulations, not inconsistent with this Act, prescribing all matters that by this Act are required or permitted to be prescribed, or that are necessary or convenient to be prescribed for carrying out or giving effect to this Act or for the conduct of business by the Central Bank, and in particular for prescribing penalties or fines not exceeding K100.00 for offences against the regulations.�

Section 61 of the Act provides:

N2>�(1)��� Notwithstanding any other law but subject to this Act, the regulations may provide for or relate to:

(a)����� the control of foreign exchange; and

(b)����� the control of gold.

N2>(2)����� In particular, and without limiting the generality of Subsection (1), the regulations may relate to:

...

(d)����� the taking or sending out of the country of Papua New Guinea currency, foreign currency or gold; and

...

N2>(3)����� The regulations may:

(a)����� provide that an offence may be prosecuted either summarily or on indictment; and

(b)����� provide penalties for offences against the regulations, not exceeding:

(i)������ on summary conviction � a fine not exceeding K200.00 or imprisonment for a term not exceeding six months, and default penalties of fines not exceeding K10.00; and

(ii)����� on conviction on indictment a fine not exceeding K10,000.00 or imprisonment for a term not exceeding five years, and default penalties of fines not exceeding K500.00; and

...�

Regulation 33 of the Central Banking (Foreign Exchange and Gold) Regulations provided for penalties for failing to comply with the regulations in the terms of s 61(3)(b) of the Act.

On a demurrer to charges in the National Court of sending foreign currency out of the jurisdiction and which was heard and determined after the accused was arraigned and without any plea being taken, the trial judge ruled that reg 33 was invalid as being ultra vires s 70, and discharged the accused. On an application for judicial review brought pursuant to the Constitution, s 155(2), by the Principal Legal Adviser,

Held

N1>(1)����� The discharge of the accused from the indictment after the demurrer was upheld did not amount to an acquittal as there cannot be an acquittal unless an accused has pleaded to the indictment.

N1>(2)����� In the absence of an acquittal in criminal proceedings the State had no right of appeal under the Supreme Court Act (Ch No 37) which might be pursued and there being an important question of law for determination the procedure under s 155(2) of the Constitution was available to the Principal Legal Adviser without the need to meet any other prescribed criteria.

Avia Aihi v The State [1981] PNGLR 81, Avia Ahia v The State (No 2) [1982] PNGLR 44 and Danny Sunu v The State [1984] PNGLR 305, considered but not applied.

N1>(3)����� On a proper construction of the Central Banking Act, s 61 and s 70, reg 33 of the Central Banking (Foreign Exchange and Gold) Regulations was not invalid as being beyond power: there was no conflict between s 61 and s 70 of the Act: s 70 was to be read as providing a regulation making power for: (a) matters specifically prescribed or allowed to be prescribed by the Act, such as those matters prescribed in s 61(3); and (b) matters necessary or convenient to be prescribed for the carrying out of the Act ...

Carbines v Powell [1925] HCA 16; (1925) 36 CLR 88 and R v Toohey; Ex parte Northern Land Council [1981] HCA 74; (1981) 151 CLR 170, considered.

(Per curiam) In interpreting the statutes of Papua New Guinea the matters contained in s 109(4) and s 158(2) of the Constitution are to be given paramount consideration.

Cases Cited

Avia Aihi v The State [1981] PNGLR 81.

Avia Aihi v The State (No 2) [1982] PNGLR 44.

Carbines v Powell [1925] HCA 16; (1925) 36 CLR 88; 31 ALR 241.

Danny Sunu v The State [1984] PNGLR 305.

R v Toohey; Ex parte Northern Land Council [1981] HCA 74; (1981) 151 CLR 170; 56 ALJR 164; 38 ALR 439.

SCR No 4 of 1985; Omaro Garo v The Police [1985] PNGLR 320.

Judicial Review

This was an application for judicial review pursuant to s 155(2) of the Constitution made in relation to a ruling on the validity of regulations after arraignment but before any plea was taken on an indictment on charges of unlawfully sending foreign currency out of Papua New Guinea contrary to the Central Banking (Foreign Exchange of Gold) Regulations.

Counsel

B K C Thompson QC and G Toop, for the appellant.

R S O�Regan QC and I M Molloy, for the respondent.

Cur adv vult

30 December 1987

KIDU CJ KAPI DCJ AMET J: John Harcourt Woodward was charged with 20 counts of unlawfully sending foreign currency out of Papua New Guinea. The charges were laid under s 33(1) of the Central Banking (Foreign Exchange and Gold) Regulations (Ch No 138).

A demurrer to the charges was filed in the National Court before the matter went before Wilson J on 9 June 1987.

When the accused was arraigned his counsel, Mr Robberds QC, raised the demurrer and the accused never pleaded. The demurrer was argued and upheld and the accused discharged from the indictment. Wilson J upheld the following submissions advanced by Mr Robberds:

N2>�(a)��� Section 33(1) of the Central Banking (Foreign Exchange & Gold) Regulation was beyond power and void;

N2>(b)����� the Head of State, acting on advice, had no power to make Regulations which prescribed penalties of fines exceeding K100.00 for offences against the Regulations made under the Central Banking Act; and

N2>(c)����� The Head of State, acting on advice, had no power to make Regulations which prescribed a penalty of imprisonment for offences against the Regulations made under the Central Banking Act.�

Section 33(1) of the Regulations is as follows:

N2>�33.��� Penalties

(1)����� A person who commits an offence against or fails or refuses to comply with, any of the provisions of this Regulation is liable:

(a)����� on summary conviction � to a fine not exceeding K200.00 or imprisonment for a term not exceeding six months, and a default penalty of a fine not exceeding K10.00; and

(b)����� on conviction on indictment � to a fine not exceeding K10,000.00 or imprisonment for a term not exceeding five years, and a default penalty of a fine not exceeding K500.00.�

The Regulations were made pursuant to s 61 and s 70 of the Act:

N2>�s61.�� Regulations relating to foreign exchange and gold

(1)����� Notwithstanding any other law but subject to this Act, the regulations may provide for or relate to:

(a)����� the control of foreign exchange; and

(b)����� the control of gold.

(2)����� In particular, and without limiting the generality of Subsection (1), the regulations may relate to:

(a)����� the appointment of authorised dealers in foreign exchange and gold and their powers, rights, duties and responsibilities, and the rates at which they may enter into transactions in foreign exchange and gold; and

(b)����� the buying, selling, borrowing, lending or exchange of foreign currency or gold; and

(c)����� any dealing or transaction having the effect of a purchase, sale, borrowing, loan or exchange of foreign exchange or gold; and

(d)����� the taking or sending out of the country of Papua New Guinea currency, foreign currency or gold; and

(e)����� transactions in Papua New Guinea currency with, or on behalf of, persons resident outside the country; and

(f)����� requiring any person who has power to sell, or to procure the sale of, any foreign currency or gold to sell, or to procure the sale, of the currency or gold, in accordance with the regulations; and

(g)����� the taking, sending, transmission or transfer out of the country of prescribed securities, and other dealings with or transactions in prescribed securities; and

(h)����� the importation or exportation of goods.

(3)����� The regulations may:

(a)����� provide that an offence may be prosecuted either summarily or on indictment; and

(b)����� provide penalties for offences against the regulations, not exceeding:

N5>(i)������ on summary conviction � a fine not exceeding K200.00 or imprisonment for a term not exceeding six months, and default penalties of fines not exceeding K10.00; and

N5>(ii)����� on conviction on indictment � a fine not exceeding K10,000.00 or imprisonment for a term not exceeding five years, and default penalties of fines not exceeding K500.00; and

(c)����� empower a court to order the forfeiture of any Papua New Guinea currency, foreign currency, securities, goods or gold in respect of which an offence has been committed against the regulations made for the purposes of this section; and

(d)����� empower a court to order the sale to, or the vesting in, the Central Bank of foreign currency, gold or property retained or obtained in contravention of those regulations.�

N2>�s70.�� Regulations

The Head of State, acting on advice, may make regulations, not inconsistent with this Act, prescribing all matters that by this Act are required or permitted to be prescribed, or that are necessary or convenient to be prescribed for carrying out or giving effect to this Act or for the conduct of business by the Central Bank, and in particular for prescribing penalties of fines not exceeding K100.00 for offences against the regulations.�

Wilson J�s decision was as follows:

�I have come to the view that s 33 of the Regulations is beyond the power contained in s 70 of the Act. Section 70 of the Act is the source of the regulation making power vested by the Parliament in the Head of State, acting on advice. Section 61, while descriptive and indicative of the ambit of regulations which may be made to deal with matters specified in that section, is not of itself a source of the power to make such regulations, that power resides in the Head of State under s 70.

Section 70 does not include the making of regulations covering most of the matters contained in s 61. The power to penalise for offences involving the breach of the Regulations is prescribed by s 70 to limit such penalties to fines not exceeding K100. This is a limit on the source of the Regulation making power which in my view cannot be remedied by reading s 61 and s 70 together ...�

PRELIMINARY ISSUE

Mr O�Regan QC for Mr Woodward raised a preliminary issue and it was that this Court should not entertain this application for review made pursuant to s 155(2) of the Constitution as the applicant has not met the criteria for the invocation of this provision that this Court as enunciated in Avia Aihi v The State (1981) PNGLR 81; Avia Aihi v The State (No 2) [1982] PNGLR 44 and Danny Sunu v The State [1984] PNGLR 305.

In Avia Aihi and Danny Sunu, the applicants had failed to exercise their rights to appeal under the Supreme Court Act (Ch No 37). It was held that the review provisions in s 155(2) of the Constitution were not to be invoked unless an applicant showed sufficient reasons for the failure to use his or her right of appeal, exceptional circumstances as to why s 155(2) should be resorted to and also should show that the application had merits.

In this case the applicant, the State, had no other way to come to this Court except by way of s 155(2). Under the Supreme Court Act (Ch No 37) in a criminal case, the State can only come to this Court from the National Court pursuant to s 21 and s 26.

The accused (Mr Woodward) did apply for a question of law to be referred to this Court and the trial judge refused to refer such a question. So s 21 was not of any assistance to the State. And as the accused had not been acquitted s 26 was not available to the State. The discharge of the accused from the indictment after the demurrer was upheld, in our opinion, did not amount to an acquittal. As far as we are concerned there cannot be an acquittal unless an accused has pleaded to the indictment. In this case the demurrer was served on the State and then at the hearing, before the charges were read out, the demurrer was dealt with without the accused being arraigned and asked to plead.

In a case where a person or a party in a proceedings has no other way of coming before this Court in similar circumstances as in this case, s 155(2) is available without the criteria in Avia Aihi and Danny Sunu being first established. In this case, there is an important point of law to be determined and it is not without merit.

We dismiss the preliminary objection raised by Mr O�Regan.

Mr O�Regan submitted that after the ruling by Wilson J the State could have offered no evidence and after acquittal of Mr Woodward could have come to this Court under s 26 of the Supreme Court Act. The difficulty about this submission is that the ruling of Wilson J meant that there was no indictment. If there is no indictment how can the State offer no evidence?

Mr O�Regan also submitted that there should be no review under s 155(2) because such a review places his client (Mr Woodward) in continual jeopardy. This submission seems to be based on the premise that a criminal prosecution is a one sided affair ie the interest of the person accused is the only matter of importance. This is not so. A prosecution is embarked upon on behalf of the State which embodies the people of Papua New Guinea. Surely it is in the people�s interest that if there is cause to believe that the State�s laws have been breached every effort ought to be taken to ensure that if there is a breach the person or persons responsible should be dealt with as long as it is shown that the right of the persons accused are not in jeopardy and that there is no abuse of the processes of the court.

INTERPRETATION OF STATUTES

In the interpretation of statutes of this country there are some paramount considerations which must be borne in mind and these are contained in s 109(4) and s 158(2) of the Constitution:

N2>s109(4)�������� �Each law made by Parliament shall receive such fair, large and liberal construction and interpretation as will best ensure the attainment of the object of the law according to its true intent, meaning and spirit, and there is no presumption against extra-territoriality.�

N2>s158(2)�������� �In interpreting the law the courts shall give paramount consideration to the dispensation of justice.�

The learned trial judge said in his judgment that he considered, inter alia, s 109(4) but found nothing to enable him to remedy what he thought was a matter for legislative correction. With the greatest respect this view was the result of his Honour�s misinterpretation of s 70 and the brushing aside of the clear dictates of s 61.

His Honour also used the legislative history of the provision under consideration to conclude as he did. But it is our view that the history of a statutory provision cannot be used to over-ride the clear effect or meaning of the provision � ie clear intent of the Parliament.

SECTION 61

It is trite to point out that s 61 does not contain any words which can be taken to enable the Head of State on advice to make regulation. Section 70 is the regulation-making provision. But s 61 does in the clearest of terms, provide that regulations may be made on matters it sets out, by the Head of State on advice, including specific penalties. And all the Head of State on advice has to do is use s 70 to enact the regulations allowed by s 61.

There is one aspect of s 61 that seems to have escaped consideration in the National Court and that is that subs (3) is not made specifically �subject to the Act� as is subs (1) and subs (2). So although subs (3) must be read together with s 70 it does not have to be read subject to s 70. And in our opinion the reason is discernible � it is s 70 which must not make regulations inconsistent with s 61(3) as the latter has made provisions for specific regulations including ones relating to penalties for breaches of regulations concerning foreign exchange and gold.

The submission accepted by Wilson J and reiterated by counsel for Woodward in this Court is that s 70 cuts down what s 61(3) says specifically and in our view the acceptance of this submission renders s 61(3) meaningless and Parliament cannot be said to have gone mad and put this provision in the Act. As it is stated in s 109(4) of the Constitution, law made by the Parliament �... shall receive fair, large and liberal construction and interpretation as will ensure the attainment of the object of the law according to its true intent, meaning and spirit ...�. We consider that the object of s 61, its true intent and meaning are quite clear. A nation�s foreign exchange control and gold reserves are vital for its economy and s 61 was put in the Act to protect and control Papua New Guinea�s foreign exchange and gold reserves to stabilise and enhance its economy. So an interpretation of s 70 which renders s 61(3) inoperative is contrary to s 109(4) of the Constitution.

A proper reading of s 70 quite clearly shows that there is not a conflict between its provisions and provision of s 61(3). We consider that s 70, properly read, says the following:

�The Head of State on advice may make regulations which are not inconsistent with provisions of the Act:

N2>(a)����� prescribing all matters that the Act itself requires or allows to be prescribed; or

N2>(b)����� that are necessary or convenient to be prescribed for carrying out or giving effect to the Act or for the conduct of business of the Central Bank and in particular for prescribing not exceeding K100.00 for offences against the regulations.�

It is clear in our view that part (a) of our interpretation of s 70 enables the Head of State on advice to make regulations specifically provided for in the Act � such as s 61(3) � and the part (b) is a catchall provision which permits the Head of State on advice to make regulations not specifically mentioned mainly for ensuring that the Act�s operations and management are secured.

The construction of s 70 that we prefer is not new. In Australia, the jurisdiction from which we inherited the Central Banking Act, similar provisions have been construed in like manner. But before we go into some of these helpful authorities I mention a principle of interpretation not considered by the learned trial judge. It was quoted and applied in SCR No 4 of 1985: Omaro Garo v The Police [1985] PNGLR 320 at 322, by Kidu CJ:

�Lord Halsbury LC, in Commissioner for Special Purposes of the Income Tax v Pemsel [1891] AC 531 at 549 expressed the second of the two principles as follows:

�But I do not think it is competent for any court to proceed upon the assumption that the legislature has made a mistake. Whatever the real fact may be, I think a court of law is bound to proceed upon the assumption that the legislature is an ideal person that does not make mistakes. It must be assumed that it has intended what it has said, and I think any other view of the mode in which one must approach the interpretation of a statute, would give authority for an interpretation of the language of an Act of Parliament which would be attended with most serious consequences.� �

With the greatest of respect to his Honour the trial judge, his restrictive interpretation of s 70 operates against the principle of interpretation and is based on an apparent assumption on his part that the Parliament made a mistake. It is also apparent from what his Honour said at p 20 of his unnumbered judgment that he based his interpretation of s 70 and s 61(3) partly on instinct:

�The process of statutory interpretation is in my view two-fold. First, it is instinctive.�

We consider that instinctive construction of statutes is an unruly-horse. If such a canon of construction is accepted it would lead to construction of statutes at the whims of particular judges (or other judicial officers) and ignoring of provisions such as s 109(4) of the Constitution. The learned judge�s interpretation of s 70 and s 61(3) based on instinct partly led him to err.

We now return to s 70. As has been pointed out, there are two parts to the regulation making provision. The first part allows the Head of State on advice to make regulations �prescribing all matters that by this Act are required or permitted to be prescribed�. The Act, in s 61 thereof, does quite clearly allow the Head of State on advice to make regulations including penalties for breaches of such regulations.

The second part of s 70 allows regulations incidental to the administration of the Act, regulations for the effective administration of the provisions in the Act.

Provisions similar in wording to s 70 have been held to have these two distinct parts in Australia. We should point out that Australian authorities are of persuasive value only in our jurisdiction but they are of assistance when we interpret statutes which are similar as in this case.

In Carbines v Powell [1925] HCA 16; (1925) 36 CLR 88 the High Court of Australia had s 10 of the Wireless Telegraphy Act 1905 (Cth) before it to interpret:

�The Governor-General may make regulations, not inconsistent with this Act, prescribing all matters which by this Act are required or permitted to be prescribed or which are necessary or convenient to be prescribed for carrying out or giving effect to this Act.�

Isaacs J had this to say about s 10 at 91:

�There are in the Act, as in s 5 and s 6(2), express provisions as to prescribing certain matters. To these the first part of s 10 as to prescribing applies. The latter part of s 10 enables the Governor-General to frame all such regulations as in his discretion are either necessary or convenient for �carrying out� or �giving effect to� what Parliament itself had enacted ... To �give effect� to an Act is to enable its provisions to be effectively administered. There is little, if any, difference between the two expressions.�

In R v Toohey; Ex parte Northern Land Council [1981] HCA 74; (1981) 151 CLR 170 the High Court had before it s 165(1) of the Planning Act 1979 (NT) which gave the Administrator (of the Northern Territory) the power to make regulations, not inconsistent with the Act, �prescribing all matters required or permitted by this Act to be prescribed, or necessary or convenient to be prescribed for carrying out or giving effect to this Act�. Gibbs CJ had this to say about the provisions (at 181):

�The words from s 165(1) which are quoted above appear in the same or in a similar form in many statutes. Sometimes they appear with a comma after �prescribed� where it appears the second time, and that makes the construction of the provision a little more difficult. Where, as here, no comma appears in that position, there is no reason for regarding the phrase �for carrying out or giving effect to this Act� as qualifying �required or permitted by this Act to be prescribed�. If the Act requires or permits a matter to be prescribed, it would seem superfluous to consider whether that matter is prescribed for carrying out or giving effect to the Act.� (Our emphasis.)

Stephen J (at 201):

�That power [in s 165(1)] is confined to the prescription of matters �required� or �permitted� by the Act to be prescribed or �necessary� or �convenient� to be prescribed �for carrying out or giving effect to this Act�. This last phrase is said to qualify the whole grant of power, not merely its second limb, and because the regulation, being inutile, neither carries out nor gives effect to the Act it is beyond power.

The opening words of the grant of regulation-making power in s 165 are in a form long familiar in Commonwealth legislation. They seem in the past to have been understood as involving two distinct limbs, the concluding phrase, �for carrying out or giving effect to this Act�, being treated as forming part of the second limb only, as explanatory of what is �necessary� or �convenient� in the second limb and as inapplicable to �required� or �permitted� appearing in the first limb � Carbines v Powell [1925] HCA 16; (1925) 36 CLR 88; per Isaacs J; Broadcasting Co of Australia Pty Ltd v Commonwealth [1935] HCA 3; (1935) 52 CLR 52 per Rich J; and see Reade v Smith [1959] NZLR 996, per Turner J.�

The problem that might be seen is the last phrase: �and in particular for prescribing penalties of fines not exceeding K100 for offences against the regulations.� Mr O�Regan submmitted that �regulations� must mean all regulations made under the first and second limb of s 70. But it is clear to us that the phrase in question is part of the second limb of the provision and that these regulations must be those made pursuant to the second limb.

For the reasons we have given we allow the appeal and quash the order of the National Court and declare s 33 of the Central Banking (Foreign Exchange and Gold) Regulations to be valid.

Declaration accordingly

Lawyer for the appellant: Principal Legal Advisor.

Lawyers for the respondent: Beresford, Love, Francis & Co.