Sir Julius Chan v Investigating Authority into the Placer Pacific Limited Share Issue (Makeno Geno and Justice Kubulan Los) [1988] PNGLR 43

• Jurisdiction: Papua New Guinea
• Judge: Kapi DCJ, Cory J, Hinchliffe J
• Judgment Date: 29 April 1988
• Court: Supreme Court
• Judgement Number: SC350

Full Title: Sir Julius Chan v Investigating Authority into the Placer Pacific Limited Share Issue (Makeno Geno and Justice Kubulan Los) [1988] PNGLR 43

Supreme Court: Kapi DCJ, Cory J, Hinchliffe J

Judgment Delivered: 29 April 1988

PAPUA NEW GUINEA

[SUPREME COURT OF JUSTICE]

SIR JULIUS CHAN

V

INVESTIGATING AUTHORITY INTO THE PLACER PACIFIC LIMITED SHARE ISSUE (MAKENA GENO AND JUSTICE KUBULAN LOS)

Waigani

Kapi DCJ Cory Hinchliffe JJ

28-29 April 1988

STATE SERVICES — Ombudsman Commission — Other investigating authority — Powers of — Ombudsman Commission unable to conduct investigation — Appointment of investigating authority — Power to refer prosecution matter to Public Prosecutor — Constitution, ss 28 (1) (f), 29 (1) — Organic Law on Duties and Responsibilities of Leadership (Ch No 1), ss 19 (1) (2), 20 (4).

CONSTITUTIONAL LAW — Organic Laws — Construction — Ombudsman Commission unable to conduct investigation — Appointment of investigating authority — Power to refer prosecution matter to Public Prosecutor — Constitution, ss 28 (1) (f), 29 (1) — Organic Law on Duties and Responsibilities of Leadership (Ch No 1), ss 19 (1) (2), 20 (4).

Section 28 (1) (f) of the Constitution provides that an Organic Law should provide for:

"investigation by the Ombudsman Commission or other authority of cases of alleged or suspected misconduct in office, and confer on the Commission or other authority any powers that are necessary or convenient for that purpose".

Section 29 (1) provides that where the "Ombudsman Commission or other authority" referred to in s 28 (1) (f) is satisfied of a prima facie case of misconduct in office it shall refer the matter to the Public Prosecutor for prosecution.

The Organic Law on Duties and Responsibilities of Leadership (Ch No 1), s 19 (1), (the Organic Law) provides that where the Ombudsman Commission is itself unable for any reason to conduct an examination or investigation it may appoint one or more constitutional office holders to do so. Section 19 (2) provides that an "investigating authority appointed under s 19 (1) " has all the powers of the Commission, and s 20 (4) provides that if, after an investigation, the Commission is of the opinion that there is evidence of misconduct in office it shall refer the matter to Public Prosecutor for prosecution by him.

On a reference under s 18 (2) of the Constitution:

Held

(1) An investigating authority appointed under s 19 (1) of the Organic Law on Duties and Responsibilities of Leadership has power both under s 20 (4) of the Organic Law and under s 29 (1) of the Constitution to refer relevant matters to the Public Prosecutor for prosecution by him before the relevant tribunal.

(2) The Investigating Authority into the Placer Pacific Ltd Share Issue, being an investigating authority appointed under s 19 (1) of the Organic Law had power to refer for prosecution a matter being an alleged breach of s 6 of the Organic Law relating to conflict of duty and interest.

Reference

This was a reference by the National Court of questions relating to the interpretation or application of a Constitutional law, namely the Organic Law on Duties and Responsibilities of Leadership (Ch No 1), which arose in proceedings before it for a prosecution in breach of s 6 thereof.

Editor's Note

For further proceedings see Ref by Public Prosecutor; Re Chan at 260 infra.

Counsel

P Menzies and S Golledge, for the plaintiff.

B O Emos and D Hauka, for the respondents.

Cur adv vult

29 April 1988

KAPI DCJ: Placer Pacific Ltd, a foreign company, floated shares for sale in Papua New Guinea in 1986. Under the Organic Law on the Duties and Responsibilities of Leadership (Ch No 1), (hereinafter the Organic Law) leaders are prohibited from purchasing shares from foreign companies unless they obtain prior approval from the Ombudsman Commission.

Many leaders in Papua New Guinea bought shares from this company without the approval of the Commission. Included amongst the leaders who allegedly purchased shares were the Chief Ombudsman and another Commissioner. Because of the conflict of interest, the Ombudsman Commission appointed an Investigating Authority under s 19 (1) of the Organic Law to investigate all breaches of the Leadership Code.

At the completion of the investigation, amongst other things, the Investigating Authority referred Sir Julius Chan to the Public Prosecutor for prosecution under s 6 of the Organic Law. The authority charged:

"that on or about the months of July and August 1986, associates of yours, to wit, your wife, Lady Stella Chan, and your companies JST Pty Ltd, Chin Pak & Co Pty Ltd, Misimuk Distributors Pty Ltd, Vanmak Taby Pty Ltd and Island Helicopter Services Pty Ltd, in which you have a complete or substantially controlling sharehold, had an interest in a matter with which you had to deal in your official capacity, namely the allocation of shares to Papua New Guinea by the underwriters of the Placer Pacific Limited share float, the interest being the application for and purchase of shares in Placer Pacific Limited, and that you did in fact deal with the matter by:

(a) as the Minister responsible being directly in charge of the decision-making and policy implementation generally relating to the allocation of Placer Pacific Limited shares to Papua New Guinea and specifically:

(i) in obtaining from the underwriters a greater allocation of shares to PNG than they would otherwise have given, and

(ii) directing the Governor of the Bank of Papua New Guinea to relax the foreign exchange control rules to allow a greater transfer of funds out of PNG for the purpose of purchasing shares in Placer Pacific Limited, and

(b) determining and implementing policy in respect of the priority list for the allocation of shares amongst competing PNG applicants, and that you did not previously declare your, or your associates' interest, to NEC or Parliament as required, and thereby you breached s 6 of the Organic Law on the Duties and Responsibilities of Leadership, being guilty of a conflict of duty and...