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Akia v Kaptigau [2019] PGNC 452; N8230 (18 December 2019)

N8230


PAPUA NEW GUINEA
[IN THE NATIONAL COURT OF JUSTICE]


HRA Nos. 426, 427, 428, 429, 430 & 431 OF 2019


GEORGE AKIA for and on behalf of himself
and 5 Others
Plaintiffs


AND
LEO KAPTIGAU
First Defendant


AND
MULAI NINIHILI - VUL
Second Defendant


AND
EPHRAIM WASEM
Third Respondent


AND
NATIONAL AIRPORT CORPORATION
Fourth Respondent

Waigani: Tamate, J
2019:18th December


PRACTICE AND PROCEDURE–Non-compliance with Section 7 of Attorney General Act – Whether Defendant (NAC) Statutory Body – Incorporated under Companies Act.


Facts

The plaintiff(s) are former employees of the Fourth Defendant in this proceedings. They are challenging their termination from employment with the Fourth Defendant through this HRA proceedings and are seeking enforcement of their rights pursuant to Section 57 of the Constitution.

They claim that their rights under Sections 32, 37, 41, 48, 51 and 59 of the Constitution have been breached.


Held:


(1) NAC is not a statutory or public body therefore not subjected to Section 7 (i) of the Attorney General Act 1995, therefore it does not require a brief out from the Attorney General to seek private or external legal representation.

(2) Objection to legal representation by Makap Lawyers is therefore refused.


(3) Parties to bear their own costs.


(4) Orders are abridged.


Cases Cited


Valu v Ngangan [2018] PGSC 62; SC1723
Ron Napitalai& PNG Ports Ltd v Casper Walace [2010] SC1016
Patrick Mauyau v Joseph Tupiri & National Airports Corporation [2015] N5985
Albert Sharm v Jean Kekedo [2018] N7291


Counsel:


George Akia, for himself &5 Other Plaintiffs
Ms. Doiwa, for the Defendant


RULING ON OBJECTION TO LEGAL REPRESENTATION


18th December, 2019


  1. TAMATE, J: This is a ruling on an objection by plaintiff(s) on the issue of legal representation by Ms. Doiwa of Makap Lawyers for the 4th defendant whereby the Plaintiffs argue that no authorization or brief out from the Attorney General pursuant to section 7 (i) of the Attorney Generals Act was obtained..

Preliminary Issue

  1. The plaintiff(s) have sought to move their application ex-parte for interim restraining orders pending the determination of the substantive case. They had filed a Notice of Motion seeking restraining orders against the Fourth Defendant from putting them off the payroll and further to stay their termination pending the hearing of this case.

Issues

  1. Whether or not Makap Lawyers or any other external law firm is required to obtain an express authorization from Attorney General to act for the National Airport Corporation?
  2. The Plaintiffs have each filed affidavits in support of their application which are similar in nature. They are all employees holding various positions namely:


Evidence


  1. There is no evidence provided by the applicants in support of their preliminary argument that NAC is a Statutory Body and is required by law under Section 7 of the Attorney General Act and Section 10 of the Public Moneys Management Regularization Act 2017 (PMMR Act, 2017) to obtain authorization or brief out from the Attorney General.


Submission by Plaintiffs

  1. Mr. Akia for the Applicants have only made submissions on law in support of their objection against legal representation of NAC by Makap Lawyers.
  2. They have submitted that the Fourth Defendant is the Airport Company established under Section 132 of the Civil Aviation Act, 2000 (CA Act) responsible for managing all national airports and aerodromes throughout Papua New Guinea. It is therefore a statutory or public body and is subject to these two legislations.
  3. Initially the functions of NAC were performed by Civil Aviation Authority (CAA). When CAA was broken up its functions were performed by three established entities namely:
  4. Plaintiffs submits that NAC is a statutory/public entity created by Civil Aviation Act, 2000 and is owned by the Government through their shareholding by Minister for Civil Aviation and Minister for Finance.
  5. It deals with public monies and makes revenue through its operations and makes payments to the Consolidated Revenue Fund. All monies made are public money.
  6. Public money includes: all money raised, appropriated, refunded, recovered, borrowed, held or controlled by a public body or statutory body or a person acting on behalf of the State, including all money received as a result of:
  7. It is a statutory body subjected to the Public Finances Management Act (PFMA) and the Public Money Management Regularization Act.
  8. Public Finances Management Act states that “a Statutory Body means a body, authority or instrumentality (corporate or unincorporated) established under an Act of Parliament or howsoever for governmental or official purposes.”
  9. He submitted that NAC is therefore a corporate body established under law for public purposes.
  10. Plaintiffs submit that according to Public Finances Management Act, NAC is a Statutory Body therefore all monies received, held, controlled or generated are deemed public money. Because the monies are public monies their expenditure must be guided by public law relating to use of public money/funds.
  11. As a result of these submissions, Plaintiffs submit that legal fees for any legal representation of NAC by private law firms must get the authorization or brief out by the Attorney General as required by Section 7 (i) of the Attorney General Act and Section 10 of the Public Money Management Regularization Act.
  12. Plaintiffs have referred to the case of Valu v Ngangan [2018] PGSC 62; SC1723 in support of the objection on the issue of representation is: “whether the Konedobu Petroleum Park Authority needs to comply with Section 7(i) of the Attorney General Act and Section 10 of the Public Money Management Regularization Act.

Submission by Defendants

  1. Ms. Doiwa for the Defendants has submitted that the Fourth Defendant is not a statutory or a public body therefore does not require a brief out from the Attorney General pursuant to Section 7(i) of the Attorney General Act.
  2. NAC was created out from Civil Aviation Authority as one of the three entities with specific functions. The other two being PNG Air Services Ltd and PNG Civil Aviation Safety Authority (PNG CASA).
  3. NAC is a company incorporated under the Companies Act and is not a public or statutory body. Its creation and existence is complied by the Civil Aviation Act 2000 through Sections 132(6) and 147A (9) and 147B.
  4. Section 147(B) of the Civil Aviation Act states “(i) The National Airports Corporation Ltd is a company incorporated under the Companies Act, 1997 pursuant to Section 132 of the Act.”
  5. The Defendants have relied on the case of Ron Napitalai & PNG Ports Ltd v Casper Walace [2010] SC1016 in support of their contention that NAC is not a statutory or public body.
  6. In that case the Supreme Court held that PNG Ports Ltd was not a public or government body because it was not created by statute but incorporated under Companies Act. It accepted the submission that PNG Ports Ltd is a company, governed by a Board of Directors and was incorporated as the successor company of the Harbours Board but a company in its own right.
  7. Ms. Doiwa submitted that the present case is similar in nature to the Ron Napitalai (Supra) therefore Court should rule in favour of the Fourth Defendant that it is not subject to Section 7(i) of the Attorney Generals Act or Section 10 of the Public Money Management Regularization Act, 2017.
  8. In strengthening its case the Defendants have also relied on the case of Patrick Mauyau v Joseph Tupiri & National Airports Corporation [2015] N5985.
  9. That case followed and adopted the ruling in the Ron Napitalai case that NAC is a company incorporated under the Companies Act. The Court there confirmed that NAC’s incorporation is enabled by Section 132 of the Civil Aviation Act, 2000 that provides the mandate for the Minister for Civil Aviation and Minister for Finance to incorporate a company under the Companies Act. The Court found that employees employed under the NAC find their rights under private law nature. The two following cases followed same application Albert Sharm v Jean Kekedo [2018] N7291.
  10. Ms Doiwa further submitted that NAC is not owned by the State through Kumul Consolidated Holdings Ltd (formerly IPBC). It is owned by the Ministers for Civil Aviation and Finance who represent the State’s interest. The creation of the NAC was to privatize the airports and aerodrome aspects of the former Civil Aviation Authority and eradicate the State’s control over aviation industry for efficient delivery of services and revenue generation and final independence of the airport company. The NAC as envisaged under Section 132 of Civil Aviation Act.
  11. NAC is controlled by an independent Board of Directors and not the State. Its employees are (both staff & management) all private employees employed under Contract by the Board and not the State.
  12. The issue is “whether NAC is a public or statutory body thereby is required to comply with Section 7(i) of the Attorney General Act and Section 10 of the Public Money Management Regularization Act?”

“Section 7(i) of the Attorney General Act, 1989
  1. Interpretation of “a public/statutory body is given under Section 2 of the Public Finances (Management) Act:
“public body” means –
(a) a body, authority or instrumentality (corporate or incorporate) established by or under an Act or a Constitutional Law; and
(b) a body, authority or instrumentality incorporated under the Companies Act 1997 where and to the extent that–
(i) the Memorandum and Articles of Association of that body, authority or instrumentality provide; or
(ii) an Act other than this Act provides,
that this Act shall apply to that body, authority or instrumentality,
other than–
(c) the Auditor-General or the Office of the Auditor-General; or
(d) the Privatization Commission established by the Privatization Act 1999;
(e) a body, authority or instrumentality incorporated under the Companies Act 1997 other than one to which Paragraph (b) relates.”
  1. Section 2 of the Public Money Management Regularization Act, 2017 provides:
(2) In this Act, “Trust Fund” shall not include Trust Account.”
  1. The definitions are same.
  2. The defendants submitted that NAC is not a public or statutory body therefore Public Finances (Management) Act and Public Money Management Regularization Act do not apply to NAC.
  3. Ms Doiwa for the defendants submitted that Supreme Court’s decision in Ron Napitalai & PNG Ports Ltd v Casper Wallace (Supra) is not affected by the enactment of Public Money Management Regularization Act in 2017. NAC has therefore never been considered as a public or statutory body under Public Finances (Management) Act.
  4. In her closing Ms Doiwa submitted that due to time constraints she was unable to produce a letter from Attorney General that cleared NAC that a brief out was not necessary as NAC is a company (She made an undertaking to file an affidavit with the letter from Attorney General to be attached).

Observations

  1. Upon completion of submissions I have made the following observation:
  2. The Plaintiffs strongly argued that NAC is a statutory/public body as it manages the airports/aerodromes on behalf of the Government of Papua New Guinea. It generates monies from its functions over the management and operations of the airports and aerodromes therefore whatever money it makes are public monies under the definitions given under Public Finances (Management) Act, 2017.
  3. They have argued that the Ministers responsible are Ministers of the State therefore NAC is a statutory/public body.
  4. Ms Doiwa on the other hand has maintained that NAC is a private entity registered under the Companies Act as a legal person. It is not a public/statutory body and not owned by the State. It does not get funding from the Secretary for Finance. It is run by a Board of Directors and is not subject to the control of the State.
  5. The Plaintiffs and Defendants had not provided any evidence to support any of their arguments. Most of what they have submitted on are hearsay and are also without supporting evidence.
  6. Ms Doiwa after submissions made an undertaking to file an affidavit with a letter from AG acknowledging NAC as a company incorporated under the Companies Act.

Affidavit by Company Secretary for NAC

  1. Upon filing an affidavit by a Ms Romata Geno (the Company Secretary of NAC) on 06th December 2019 she has provided some evidence on the issue of brief out and the status of NAC whether it is a public or a statutory body or a private entity. She further clarified that the Applicant/employees were each employed under contracts of employment by NAC through its Board of Directors and not by the State through its legislations relating to public servants or public bodies.
  2. However, their employments were terminated as follows:
  3. Ms. Romata further stated that NAC is not a public body. It is a company incorporated under the Companies Act and has not been subjected to the Public Finance (Management) Act 1995 nor the Public Money Management Regularization Act 2017 (PMMR Act). The monies it generates or receives from its operations are not public monies and are not required to be remitted to the Consolidated Revenue Fund. The Secretary for Finance has never directed NAC to comply with any requirements under the PFMA and PMMRA.
  4. She has provided a copy of a letter dated 26th September 2019 from the Attorney General that confirms NAC is a company registered and incorporated under the Companies Act therefore does not require any brief out pursuant to section 7(i) of the AG Act.

Submissions on the above Affidavit

  1. The parties were given the opportunity to make submissions on the affidavit of Ms Romata Geno and the letter from Attorney General to Kawat Lawyers which was copied to the NAC Company Secretary.
  2. Mr Akia submitted that the letter by Attorney General had given a brief out to Kawat Lawyers with certain instructions. AG again stated that in his opinion NAC is a company incorporated under the Companies Act and operates under its own constitution therefore does not require a brief out. However he further stated that it was a matter for the parties to get the Court’s interpretation on the issue.
  3. Mr. Akia submitted that in one of the paragraph of his letter AG has expressed his opinion that the NAC is a company incorporated under the Companies Act therefore does not require a brief out pursuant to Section 7(i) of the Attorney General Act. This is only his opinion and is not the law on the issue.
  4. Ms. Doiwa for the defendants submitted that the AG is the Principal Legal Advisor to the Government and his opinions and advice are of importance and has bearing on the matters that come before him.

Ruling

  1. I have considered the submissions and the provisions of the relevant legislations and case laws that have been referred to by both counsel and I am of the view that in the absence of any evidence by the applicants in support of their objection Court is not satisfied that the applicants have successfully proven its case on the objection. There is no evidence to show that the NAC has been funded under the National budget nor has it been paying revenue or monies generated from its operations into the consolidated revenue fund. There is no evidence on its operations as a public or statutory body.
  2. Furthermore, the Attorney General who is the Principal Legal Advisor to the Government of PNG had also through his expert opinion as a lawyer and the AG recognized that NAC is a company registered and incorporated under the Companies Act 1997. He has left the issue to the lawyers to bring before the Court for its interpretation.
  3. I am inclined to accept the submissions by Ms. Doiwa for the defendants that are been supported by evidence from the company secretary one Ms. Romata Geno who has the background knowledge of the 4th Defendant’s (NAC) operations and existence as a non-public or statutory body. In support of the Defendants’ case, two cases that they have referred to above clearly states that companies incorporated under the Companies Act are private companies therefore are not subjected to Section 7(i) of the AG Act and Section 10 of the Public Money Management Regularization Act.
  4. I will follow the approach taken in the Supreme Court case of Ron Napitali & PNG Ports Ltd (supra) where a similar situation arose where PNG Ports was a company incorporated under the Companies Act and was controlled by a Board of Directors. It has its own constitution. The situation in the present case is similar where NAC is incorporated under the Companies Act, has its own Constitution and is also controlled by the Board of Directors. Its employees are on contract and their employment does not come through the Public Service system.
  5. In the National Court case of Patrick Maiyau v Joseph Tupiri & National Airports Corporation (supra) the issue of section 7(i) AG Act arose in the judicial review case where the 4th defendant (NAC) was a party. The Court in that case also adopted the ruling in Ron Napitalai and found that NAC is a company incorporated under the Companies Act therefore is not subjected to Section 7 of AG Act.
  6. This is a clear indication per the above rulings that a company incorporated under the Companies Act is a private company and operates under its own constitution and under its Board of Directors. Although there may be some issue about two cabinet ministers being shareholders to this private company there is no evidence to show why this is so and whether they represent the Government in the operations and management of NAC.
  7. For the foregoing reasons I am not satisfied that Applicants’ have proven their objection, therefore I will refuse and dismiss their objection.

Orders of the Court

  1. The orders of the Court are as follows:

(1) The objection by Plaintiffs against Makap Lawyers acting for the 4th Defendant (NAC) in contravention of Section 7(i) of the AG Act is refused.

(2) Parties to bear their own costs

(3) Entry of this order is abridged.


Ruling accordingly.

George Akia- In Person for the Plaintiff/Applicant
Makap Lawyers: Lawyer for the Defendants

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