Alleged improper borrowing of AUD1.239 billion loan, In re

• Jurisdiction: Papua New Guinea
• Judge: Salika DCJ, Mogish J, Cannings J, Kassman J, Higgins J
• Judgment Date: 30 March 2017
• Citation: (2017) SC1580
• Court: Supreme Court
• Year: 2017
• Judgement Number: SC1580

Full : SC REF No 5 of 2016; Reference pursuant to Constitution, Section 18(2), Re Alleged improper borrowing of AUD1.239 billion loan; Ombudsman Commission, Rigo Lua, Phoebe Sangetari, the Honourable Peter O’Neill MP, Prime Minister and the Honourable Ano Pala MP, Attorney-General (2017) SC1580

Supreme Court: Salika DCJ, Mogish J, Cannings J, Kassman J, Higgins J

Judgment Delivered: 30 March 2017

SC1580

PAPUA NEW GUINEA

[IN THE SUPREME COURT OF JUSTICE]

SC REF NO 5 OF 2016

REFERENCE PURSUANT TO CONSTITUTION, SECTION 18(2),

RE ALLEGED IMPROPER BORROWING

OF AUD1.239 BILLION LOAN

OMBUDSMAN COMMISSION

First Intervener

RIGO LUA

Second Intervener

PHOEBE SANGETARI

Third Intervener

THE HONOURABLE PETER O’NEILL MP, PRIME MINISTER

Fourth Intervener

THE HONOURABLE ANO PALA MP, ATTORNEY-GENERAL

Fifth Intervener

Waigani: Salika DCJ, Mogish J,

Cannings J, Kassman J, Higgins J

2017: 17 February, 30 March

CONSTITUTIONAL LAW – powers and functions of Ombudsman Commission– investigation of conduct of governmental bodies, officers and employees of governmental bodies etc – Constitution, Section 219(1)(a), Organic Law on the Ombudsman Commission, Section 13.

OFFICE OF PRIME MINISTER –Constitution, Section 142 – whether conduct of Prime Minister can be investigated under Organic Law on the Ombudsman Commission – whether conduct of Prime Minister can be subject of comment or findings when Ombudsman Commission publishes results of investigation.

OMBUDSMAN COMMISSION – procedures for investigation under Organic Law on the Ombudsman Commission – Section 17(1): requirement to inform “the responsible person” of intention to make investigation – whether Prime Minister is a “responsible person” for purposes of an investigation into alleged improper overseas borrowing by National Government – whether failure to inform a “responsible person” means Commission lacks jurisdiction to investigate and publish results of investigation regarding conduct of that person.

CONSTITUTIONAL INTERPRETATION – Constitution, Subdivision II.2.C – whether Ombudsman Commission has jurisdiction to make comments, in a report of an investigation, involving interpretation or application of provisions of Constitutional Laws – whether such comments offend against Constitution, Section 18 (original interpretative jurisdiction of the Supreme Court).

The National Court referred 11 questions of constitutional interpretation and application to the Supreme Court under Section 18(2) of the Constitution. The questions arose during court proceedings commenced by the Prime Minister against the Ombudsman Commission. The Prime Minister challenged the jurisdiction of the Ombudsman Commission regarding an investigation under the Organic Law on the Ombudsman Commission into the conduct of various governmental bodies and officers relating to an overseas bank loan obtained by the National Government and procurement of consultants, in so far as the investigation was in relation to his conduct. He also challenged the power of the Commission to distribute a provisional report of that investigation, which contained comments that he considered were adverse to and derogatory of him. He sought various declarations and orders, including a permanent injunction restraining the Commission from further investigating his conduct and publishing any further report of its investigation in relation to his conduct. The questions referred to the Supreme Court raised four general issues: (1) whether the Commission can investigate conduct of the Prime Minister under the Organic Law on the Ombudsman Commission (questions 1 to 4); (2) whether conduct of the Prime Minister can be the subject of comment or findings when the Commission publishes the results of an investigation under that Organic Law (question 5); (3) whether the Commission is obliged, before investigating conduct of the Prime Minister under the Organic Law on the Ombudsman Commission, to inform the Prime Minister of its intention to make the investigation (questions 6 to 10); (4) whether the Commission can in any report published by it under that Organic Law make comments involving interpretation or application of Constitutional Laws (question 11). Commission

Held:

(1) The Ombudsman Commission can investigate conduct of the Prime Minister under the Organic Law on the Ombudsman Commission as he is an “officer” of a “governmental body” for the purposes of Section 219(1)(a)(ii) of the Constitution and Section 13(b) of the Organic Law on the Ombudsman Commission.

(2) The conduct of the Prime Minister can be the subject of comment or findings when the Commission publishes the results of an investigation under the Organic Law on the Ombudsman Commission, as he is an officer of the National Government.

(3) The Ombudsman Commission is not obliged, before investigating a matter under the Organic Law on the Ombudsman Commission, to inform the Prime Minister of its intention to make the investigation unless he is the actual target of the investigation as he is not the permanent head of any governmental body, and therefore does not fall within the definition of “responsible person” provided by the Organic Law; and the Commission is only obliged to give notice to responsible persons, as defined by the Organic Law.

(4) The Ombudsman Commission can, in a report published under the Organic Law on the Ombudsman Commission, make comments involving interpretation or application of Constitutional Laws. It does not offend against Section 18(1) (original interpretative jurisdiction of the Supreme Court) of the Constitution by doing so. Section 18(1), which confers original jurisdiction on the Supreme Court to the exclusion of other courts as to any question relating to the interpretation or application of any provision of a Constitutional Law, is a restriction on the exercise of judicial power. It does not prevent other constitutional institutions such as the Ombudsman Commission from interpreting or applying Constitutional Laws when performing their functions, which are not judicial in nature.

Cases cited

The following cases are cited in the judgment:

Albert Karo v Ombudsman Commission [1995] PNGLR 547

Application by Herman Joseph Leahy (2006) SC855

Associated Provincial Picture Houses Ltd v Wednesbury Corporation [1948] 1 KB 223

Constitutional Reference No 1 of 1978 [1978] PNGLR 345

Denis Donohoe v Ombudsman Commission [1985] PNGLR 348

James Kond v National Development Bank Ltd (2015) SC1432

John Mua Nilkare v Ombudsman Commission [1999] PNGLR 333

Lucas-Smith & Ors v Coroner’s Court of the ACT & Ors [2009] ACTSC 40

Madang Timbers Ltd v Valentine Kambori (2009) SC1000

McGregor & Pearce v The Hon John Gallop & the Attorney-General of the ACT [2002] ACTSC 45

Peter O’Neill v Ombudsman Commission, Rigo A Lua & Phoebe Sangetari (2015) N5857

Re Moresby Northeast Election Petition; Patterson Lowa v Goasa Damena [1977] PNGLR 429

Reference by East Sepik Provincial Executive [2011] 2 PNGLR 126

Reference by Morobe Provincial Executive (2012) SC1202

S v DPP and Others [2007] ACTSC 100

SCR No 1 of 2008, Reference by the Ombudsman Commission re the Organic Law on Provincial Governments and Local-Level Governments (Amendment No 10) Law 2006 (2010) SC1058

SCR No 3 of 1982, In re the Commissioner of Correctional Services [1982] PNGLR 405

SCR No 5 of 1982, Berghuser v Aoae [1982] PNGLR 379

REFERENCE

This is the determination of questions of constitutional interpretation and application referred to the Supreme Court by the National Court under Section 18(2) of the Constitution.

Counsel:

V L Narokobi & M Efi, for the first, second & third Interveners

M M Varitimos QC & P Tabuchi, for the fourth Intervener

D Levy, for the fifth Intervener

30th March, 2017

1. BY THE COURT: This is the determination of 11 questions of constitutional interpretation and application referred to the Supreme Court by the National Court under Section 18(2) of the Constitution.

REFERENCE

2. On 19 July 2016 the National Court, constituted by the Honourable Justice Catherine Davani, referred the questions, which arose in proceedings before her Honour, OS No 15 of 2015. In those proceedings the Prime Minister, the Honourable Peter O’Neill MP, challenged the jurisdiction of the Ombudsman Commission regarding an investigation conducted under the Organic Law on the Ombudsman Commission in so far as the investigation related to his conduct. The subject of the investigation was the alleged improper borrowing of AUD1.239 billion from the Union Bank of Switzerland (UBS) by the National Government to purchase 149,390,244 shares in Oil Search Ltd and improper tender and procurement of consultants in relation to the borrowing.

3. The Prime Minister challenged the power of the Commission to distribute a provisional report of that investigation, which contained comments that he considered were adverse to and derogatory of him.

4. He sought various declarations and orders, including a permanent injunction restraining the Commission from further investigating his conduct and publishing any further report of its investigation.

5....