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Polye v O'Neill [2016] PGSC 65; SC1547 (1 November 2016)

SC1547

PAPUA NEW GUINEA
[IN THE SUPREME COURT OF JUSTICE]


SCC (OS) NO 1 OF 2016


IN THE MATTER OF AN APPLICATION
PURSUANT TO CONSTITUTION, SECTION 18(1)


HON DON POMB POLYE MP, LEADER OF THE OPPOSITION
Applicant


V


HON PETER O’NEILL MP, PRIME MINISTER
Respondent


Waigani: Salika DCJ, Cannings J, Kassman J

2016: 28th October, 1st November


CONSTITUTIONAL LAW – practice and procedure – application under Constitution, Section 18(1) (original interpretative jurisdiction of the Supreme Court) – declarations sought as to interpretation and application of provisions of the Constitution regarding authorisation and control by the National Parliament of raising of loans by the National Government: Sections 209 (parliamentary responsibility), 210 (executive initiative) –whether applicant has standing to make application.

The applicant filed an application in the Supreme Court under Section 18(1) of the Constitution seeking declarations as to the constitutionality of the actions of the Prime Minister and the National Executive Council, in authorising the borrowing of 1.239 billion Australian dollars from a foreign bank for the purpose of purchasing a 10.01% interest in Oil Search Ltd. He wishes to argue that the actions of the Prime Minister and the National Executive Council were unconstitutional, as they were taken without approval of the National Parliament, contrary to Section 209(1) of the Constitution. The Supreme Court Rules 2012 require that before an application under Section 18(1) of the Constitution can be heard, the Court should declare that the applicant has standing. The applicant requested the Court to declare that he has standing. The request was opposed by the respondent to the application, the Prime Minister, on two principal grounds. First, the application raises merely hypothetical issues as the loan has been fully repaid and the applicant is seeking only declarations as to unconstitutionality. Secondly, the applicant’s prior conduct raises serious doubt as to the genuineness of his motives, as he was a member of the National Executive Council when it approved the loan.


Held:


(1) The question of whether an applicant under Section 18(1) of the Constitution has standing is a matter at the discretion of the Supreme Court, to be exercised in accordance with the rules of the underlying law formulated in Re Petition of MT Somare [1981] PNGLR 265.

(2) The Somare rules as to standing may be described as:

(3) Applying the Somare rules to the facts of this case:

(4) As to (b), the issues are not hypothetical as they are based on real, not assumed, facts; and, though only declarations are sought, determination of the application has a practical utility, as granting or refusal of the declarations will clarify the law and procedure and the respective roles of the National Parliament and the National Executive in relation to overseas borrowing by the National Government.


(5) As to (c), the fact that the applicant was a member of the National Executive Council when it approved the loan proposal ought not be held against him, as it was apparent that he was opposed to the proposal.


(6) The applicant’s request for a declaration that he has standing was granted.


Cases cited:


The following cases are cited in the judgment:


Application by Ila Geno (2014) SC1313
Application by Sir Makena Geno (2015) SC1455
Namah v Kua (2014) SC1342
Namah v Pato (2014) SC1304
Re Petition of MT Somare [1981] PNGLR 265
The State v Central Provincial Government (2009) SC977


REQUEST


This was a request for a declaration that an applicant under Section 18(1) of the Constitution has standing to make the application.


Counsel:


L R Henao, for the Applicant
E P Asigau, for the Respondent


  1. BY THE COURT: The Leader of the Opposition, the Honourable Don Pomb Polye MP, requests that the Supreme Court declare that he has standing to make an application to the Court under Section 18(1) of the Constitution, seeking declarations as to the constitutionality of the actions, in 2014, of the Prime Minister and the National Executive Council in authorising the borrowing of 1.239 billion Australian dollars from a foreign bank, Union Bank of Switzerland (UBS), for the purpose of purchasing a 10.01% interest in Oil Search Ltd.
  2. The applicant wishes to argue that the actions of the Prime Minister and the National Executive Council were unconstitutional, as they were taken without approval of the National Parliament, contrary to Section 209(1) of the Constitution, which provides that the raising of loans by the National Government is subject to authorisation and control by the Parliament, in accordance with an Act of the Parliament, and that this made the loan agreement illegal and unenforceable.
  3. The Supreme Court Rules 2012 require that before an application under Section 18(1) of the Constitution can be heard, the Court should declare that the applicant has standing.
  4. The applicant’s request is opposed by the respondent to the application, the Prime Minister, the Honourable Peter O’Neill MP, on two principal grounds. First, the application raises merely hypothetical issues and has no practical utility as the loan has been fully repaid and the applicant is seeking only declarations as to unconstitutionality. Secondly, the applicant’s prior conduct raises serious doubt as to the genuineness of his motives, as he was a member of the National Executive Council when it approved the loan.

METHODOLOGY


  1. It was affirmed by the Supreme Court in Namah v Pato (2014) SC1304 (and followed in Application by Ila Geno (2014) SC1313, Namah v Kua (2014) SC1342 and Application by Sir Makena Geno (2015) SC1455) that the question of whether an applicant under Section 18(1) of the Constitution has standing is a matter at the discretion of the Supreme Court, to be exercised in accordance with the rules of the underlying law originally formulated in Re Petition of MT Somare [1981] PNGLR 265, which can be summarised as follows:
(a) the applicant will have standing if he or she has a sufficient interest in the matter, which will be demonstrated if the applicant:

(b) the application must raise significant (not trivial, vexatious, hypothetical or irrelevant) constitutional issues;

(c) the applicant must not be a mere busybody meddling in other people’s affairs and must not be engaged in litigation for some improper motive, e. g as a tactic of delay;

(d) the fact that there are other ways of having the constitutional issues determined by the Supreme Court does not mean that a person should be denied standing.

APPLYING THE SOMARE RULES TO THIS CASE


(a) Sufficient interest?
  1. The applicant is the holder of a public office. He is Leader of the Opposition and amongst the functions of that office are holding the Government of the day to account for its actions.
  2. The respondent concedes that the nature and functions of the office that he holds mean that he has a sufficient interest in the subject matter of the application. The concession is properly made and we are satisfied that the applicant has a sufficient interest.
(b) Significant constitutional issues?
  1. Mr Asigau, for the respondent, submitted that the constitutional issues that the applicant proposes to argue are not significant. They are merely hypothetical and academic. They have no practical utility as the loan has been fully repaid and the applicant is seeking only declarations as to unconstitutionality, no consequential relief is being sought. The respondent relies on an affidavit by the Treasury Secretary, Mr Daire Vele, who deposes that the USB loan was fully repaid in December 2014 and is no longer on the State’s balance sheet and that the State no longer holds a direct interest in Oil Search Ltd.
  2. We reject those submissions. We consider that the issues are not hypothetical as they are based on real, not assumed, facts. We note that only declarations are sought. No consequential orders are sought. If the application had been commenced in the National Court as conventional civil proceedings, this could well render the proceedings an abuse of process under the principles applied The State v Central Provincial Government (2009) SC977. However, we consider that determination of the application is likely to be of practical utility, as granting or refusal of the declarations will clarify the law and procedure and the respective roles of the National Parliament and the National Executive in relation to overseas borrowing by the National Government.
  3. We do not agree that Mr Vele’s affidavit shows that the applicant is simply raising academic issues. Mr Vele states that the USB loan has been fully repaid, but does not state who repaid the loan. He states that the loan does not appear on the State’s balance sheet. But does it appear on the balance sheet of another body, in which the State has a controlling interest? He states that the State no longer holds a direct interest in Oil Search Ltd. But does it hold an indirect interest?
  4. Our assessment is that there are significant and legitimate constitutional issues raised by the application. The second requirement is satisfied.
(c) Is the applicant a busybody or acting for an improper motive?
  1. The applicant cannot be labelled a busybody. He is not someone meddling in other people’s affairs that should be of no concern to him. He is the Leader of the Opposition, an office which is specifically recognised in the Constitution (Sections 26(1)(b)(application of Division 2), 176(4) (establishment of offices), 190(2)(c) (establishment of the Commission), 216A(2)(c) (the Salaries and Remuneration Commission) and 217(2)(c) (the Ombudsman Commission)). It is a legitimate role of the Leader of the Opposition to call the Prime Minister and the government of the day, to account, to answer to an allegation that they have committed the State to a substantial overseas borrowing in violation of constitutional requirements.
  2. As to the applicant’s motive, we consider that the fact that the applicant was a member of the National Executive Council when it approved the loan proposal ought not be held against him in assessment of his motive. The applicant deposes in his supporting affidavit that at a time when he was the Treasurer, the submission to authorise the USB loan was put to the National Executive Council by the respondent, the Prime Minister. He deposes that when he was requested by the Treasury Secretary, Mr Vele, to sign instruments to execute the USB loan agreement, he refused to sign, taking the view that “proper procedures and processes were not complied with and significantly, parliamentary approval was not obtained pursuant to Section 209 of the Constitution”. He deposes that the Prime Minister consequently sacked him as Treasurer. It appears that the applicant has always been concerned about the constitutionality of the USB loan. There is no evidence that his motives are other than genuine. The third requirement is satisfied.
(d) Other ways of determining the issues?
  1. There are a number authorities referred to in Section 19(3) of the Constitution which could have decided to make a special reference to the Supreme Court under Section 19(1) of the questions of constitutional interpretation and application that the applicant wants to raise. The fact that there is no evidence that the applicant approached any of these authorities to request that a special reference be filed, is of no consequence.

CONCLUSION


  1. Applying the four Somare rules to the facts of this case shows that:
(a) the applicant is the holder of a public office, the functions of which relate to the subject matter of the application, he therefore has a sufficient interest;

(b) he wishes to raise significant constitutional issues;

(c) he is not a mere busybody and he has no improper motive;

(d) though there is another way in which the issues could be agitated, that is not a good reason to refuse his request.
  1. All criteria that comprise the Somare rules support the exercise of discretion in the applicant’s favour. The applicant has standing and we will grant his request for a declaration to that effect. As the application was strongly opposed, costs will follow the event.

ORDER


(1) The applicant’s request is granted.

(2) It is declared that the applicant has standing to make the application under Section 18(1) of the Constitution.

(3) The respondent shall pay the applicant’s costs of the application for the request for a declaration as to standing, on a party-party basis, which shall, if not agreed, be taxed.

Judgment accordingly,

_____________________________________________________________


Henaos Lawyers : Lawyers for the applicant
Pacific Legal Group : Lawyers for the respondent


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