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National Court of Papua New Guinea |
N2470
PAPUA NEW GUINEA
[IN THE NATIONAL COURT OF JUSTICE IN MADANG]
OS 550 of 2001
MADANG PROVINCIAL GOVERNMENT
(Plaintiff)
AND:
CYRILLUS LOMAN
(First Defendant)
&
JACK NA’AG
(Second Defendant)
MADANG : SAWONG J.
2002 : 21ST OCTOBER
&
2003 : 18TH JULY
PARLIAMENT – Members of parliament – Pay and allowances – Salaries & Remuneration Commission – Power to recommend to Parliament salaries, allowances etc. - Not including power to take recovery action to recover allowances advanced – Constitution S. 216A – Salaries and Remuneration Commission Act, 1988, as amended to date, ss. 10, 11.
Facts:
The defendant was a member of the Madang Provincial Executive Council. The Madang Provincial Government purchased a motor vehicle for him using his motor vehicle allowance. Sometime later his membership of the Provincial Executive Council was terminated. The Provincial Government sued him to recover the money advanced in purchasing the vehicle.
HELD:
There was nothing in the Constitution nor the Act nor the determination which authorised the Provincial Government to recover the money it had advanced.
CASES CITED:
SCR 4 of 1980; Re Petition of Michael Thomas Somare [1981] PNGLR 265
Steamships Trading Co. Ltd v Minister for Lands & Physical Planning, Garamut Enterprises Ltd & Ralph Guise and Members of
the Papua New Guinea Land Board (Unreported Judgment of the National Court, N1959).
SCR 3 of 1988, Re Suspension of Parliamentary Salaries [1988] PNGLR 213.
Counsel:
S. ALBERIC, for the Plaintiff
18th July, 2003
DECISION
SAWONG J : The plaintiff filed proceedings in the District Court seeking certain declarations. On the 15th May, 2002 this Court ordered that the proceedings filed in the District Court be transferred to the National Court and that the pleadings filed in the District Court be adopted for the purposes of this proceedings.
There are several preliminary matters that need to be stated before I deal with the substantive issues for determination.
The first to note is that, both parties relied on affidavit evidence. None of the deponents were cross-examined. Secondly, the claim against Jack Na’ag the second defendant, has been discontinued. Consequently, this ruling relates only to the First Defendant.
Thirdly, Mr Wadau has objected to the reception into evidence of an affidavit by Jack Bagita sworn on the 15th October, 2002. I have considered the submissions that have been made in respect of that and I consider that it will be unjust to rely on that affidavit. Consequently, I would not accept that into evidence as it was filed after the pleadings had been closed and the parties were preparing to file written submissions. Further, no leave of the court had been obtained for that additional evidence to be called. Consequently, I reject that affidavit.
I now turn to the evidence and the substantive issues.
The plaintiff relies on the two affidavits of Jerry Manyir sworn on the 25th of March, 2002 and the second one sworn on the 24th of July, 2002 respectively. The defendant relies on his own affidavit sworn on the 8th of August, 2002.
The plaintiff relies on the two affidavits of Jerry Manyir which I have referred to above.
Jerry Manyir is the clerk of the Madang Provincial Assembly. In his affidavit he adopts an affidavit he has sworn on the 16th of August, 2001 and filed in the District Court on the 17th June, 2001 with some minor corrections. These affidavits are to be read together. The defendant was appointed as chairman and member of the Provincial Executive Council (PEC) 10 November, 1997 and his chairmanship was terminated on the 3rd November, 1998. He was entitled to receive a monthly vehicle allowance during that time. Upon his request the plaintiff paid an amount of K27,300.00 for a motor vehicle to be used by him. He annexes to his affidavit a letter from the Executive Officer to the Salaries and Remuneration Commission dated 9th of May, 2001. In that letter Mr Bagita sets out a number of pertinent points relating to whenever a vehicle advance is given. These are:
(a) only those entitled to a vehicle allowance under Determination G97–03 are eligible to be given an advance to buy a vehicle;
(b) the advance is to be paid directly to the supplier of the vehicle and not to the leader;
(c) the leader concerned becomes indebted to the Provincial Government in the amount of the advance;
(d) the advance is repaid out of the vehicle allowance each fortnight or each month until the advance is repaid in full;
(e) during the period of the advance the Provincial Government holds a lien over the vehicle, which means that in the event of the leader being unable to repay the advance, Provincial Government may re-possess the vehicle and sell it to recover any other amounts still outstanding;
(f) allowance ceases when the leader ceases to hold an office which entitles him to the allowance. Where this happens and the leader still has an outstanding advance, he has two options:
Option 1 - The leader keeps the vehicle and continues to repay the outstanding advance out of his own pocket; or
Option 2 - The Provincial Government which has a lien over the vehicle re-possesses the vehicle, and sells it to recover the outstanding advance.
Mr Bagita continues and says:
"The point that seems to be misunderstood by the former PEC members is that once they lose their positions in the PEC they automatically lose their transport entitlement under Determination G97–03. As ordinary assembly members they do not have a transport entitlement and so if they wish to continue to utilise the vehicles that were bought for them whilst being members of the PEC, then they must be prepared to pay for any outstanding advances on those vehicles out of their own pockets".
Annexed to that affidavit is a copy of SRC Determination G97–03. That document is headed "Transport Entitlement". It describes that it is a determination to provide inter alia transport allowances and advances for other leaders which includes members of the Provincial Executive Council (PEC). It provides:
GENERAL PROVISION
"1. Advances.
(a) Advances of allowances specified in the schedule may be made available by administering authorities for the purpose of purchasing and/or maintaining leader’s vehicles and boats, aircrafts or other approved conveyances provided that all such advances are made payable to the supplier of the goods or services concerned. Advances may not be made directly to a leader.
(b) The period of advance may not exceed 30 months or the unexpired portion of a leader’s term of office if this is less than 30 months. More than one advance may be made during a term of office".
The next affidavit of Jerry Minyir is of the 24th of July, 2002. In summary he confirms what he has said earlier. In so far as the first defendant is concerned, he deposes that the vehicle that had been purchased for him had been written off inferring that it had been involved in an accident and it was not possible to sell it to recover the outstanding monies.
The first defendant relies on his own affidavit sworn on the 8th of August, 2002. The affidavit can be summarised into two parts. The first part from paragraphs 1 to 5 relates to him not receiving his final entitlements. Those are not relevant in the present proceedings. The relevant paragraphs are paragraphs 6 to 11. In these paragraphs he confirms that he was entitled to receive a vehicle allowance or advance pursuant to the Determination made by the Salaries and Remuneration Commission under Schedule G97–3/4. He says in paragraph 9 that he did not sign any agreement or contract with the State or the Provincial Government to either return the vehicle or pay back the allowance to the State or the Provincial Government. In the event that his appointment as a member of the Provincial Executive Council was revoked He says that he was under no legal or equitable obligation to repay the advance that has been made by the Provincial Government in purchasing the vehicle for him.
Based on all the evidence the following facts are not in dispute. The first defendant was elected as President of a Local Level Government and he by virtue of that office became a member of the Madang Provincial Assembly. He was appointed as chairman and member of the PEC on the 10th of November, 1997. As a member of the PEC he was entitled to receive a motor vehicle allowance under Schedule G97–03/4 being a Determination made by the Salaries and Remuneration Commission, Determination dated 25th of March, 1997 (SRC Determination). The defendant elected to receive an advance the maximum allowance for 30 months which was calculated under Schedule G97–03/4 in which the vehicles were purchased by the Madang Provincial Government for the defendant. An amount of K27,300.00 was paid to the motor vehicle dealer on behalf of the defendant. His services as a chairman and member of the PEC was terminated on the 3rd of August, 1998. It was a requirement of the Determination that notional repayment would be made using the vehicle allowance and based on the vehicle allowance an amount of K7,920.00 was made as notional repayment. When he was dismissed there was a notional amount of K19,380.00 still outstanding.
ISSUES
There are three issues that arise for determination. These are:
SUBMISSIONS
Mr Alberic, counsel for the plaintiff submits that the plaintiff has locus-standi to bring this action. Mr Alberic submits that the strict common law rules on locus-standi had been watered down in this jurisdiction so that generally speaking a person who has "sufficient interest" and/or a person "who is aggrieved" may have locus-standi. The court has discretion, in appropriate cases, to recognise a person as having locus-standi. He relies on the Supreme Court decision in SCR 4 of 1980: Re Petition of Michael Thomas Somare [1981] PNGLR 265, Steamship Trading Co. Ltd v Minister for Lands & Physical Planning, Garamut Enterprises & Ralph Guise & Members of the PNG Land Board (Unreported Judgment of the National Court, dated 10th May, 2000, N1959). He submitted that on the principles set out in those cases there is little doubt that the plaintiff has standing to pursue recovery action. He submitted that the plaintiff implements the SRC Determination as it relates or applies to leaders at the Provincial Government level. He further submitted that the defendant has not at any stage disputed the fact that it was the plaintiff that advanced or paid the funds for the vehicle as it was required to do so. Yet he says that the plaintiff ought not or does not have any interest in the matter and that only the SRC or the Parliament is the correct body with standing to seek recovery. Mr Alberic submits that the SRC recommends and the Parliament sets the perimeters in accordance with the recommendations but it is the implementing agencies such as the plaintiff that are directly affected. He submitted that the evidence from Mr Bagita shows that, that is the correct position and that they have shown that the plaintiff has standing.
Mr Wadau, counsel for the defendant submitted that the plaintiff has no locus-standi to bring any action arising from the recommendations of the Commission nor the Salaries and Remuneration Act of 1988. He submitted that the Commission is empowered to make recommendations to the Parliament relating for "salaries, allowances and other benefits" and it is the Parliament that determines the "salaries, allowances and benefits" and that accordingly, the SRC Determination of 1997 is the property of Parliament. He submitted that neither the Constitution nor the Act gave any power to the plaintiff to bring legal actions or perform any administrative functions for and on behalf of the members of the Commission.
Mr Wadau submitted that neither the Act nor the Constitution nor the SRC Determination 1997 provides for any repayment of any advance that may have been paid to suppliers on behalf of leaders including Provincial Executive Council members under the 1997 Determination. He submitted that there is a gap in both the Act, the Constitution and the Determination and that gap is a matter for Parliament to fill it in. He relied on the Supreme Court decision in SCR 3 of 1988; Re Suspension of Parliamentary Salaries [1988] PNGLR 213.
His arguments may be summarised as follows. First, he submits that on that authority and the provisions of the Constitution, the Act and the Determination there is no legal basis authorising the plaintiff to take recovery action to recover any advances that may have been made to either the leader or a supplier. He submitted that therefore the plaintiff had no standing to bring the case.
Next he submits that there is no constitutional nor statutory nor any other authority or power to bring any action to recover any advances.
The issues posed involves the consideration of the provisions of the Constitution, the Salaries and Remuneration Commission Act of 1988 (the Act) as amended to date, and its recommendations contained its 18th report.
The Commission is established by s.216A (1) of the Constitution. It is thus a Constitutional Commission. Section 216A (2) describes the composition of the Commission. Section 216A (3) is relevant. It reads:
"(3) The Commission is responsible for recommending to the Parliament from time to time, at intervals determined by it –
(a) the salaries, allowances and benefits, financial and otherwise (including pensions and retirement benefits if they are not provided for by law other than this provision), for all or any members of the Parliament; and
(b) the salaries, allowances and benefits, financial and otherwise (including pensions or retirement benefits), for all or any members of Provincial Assemblies and members of Local level Governments; and
(c) the salaries, allowances and benefits, financial and otherwise (including pensions or retirement benefits if they are not provided for by law other than this provision) for all the judges; and
(d) the salaries, allowances and benefits, financial or otherwise (including pensions or retirement benefits if they are to provided for by law other than this provision) for all Constitutional Office-holders; and
(e) the salaries, allowances and benefits, financial and otherwise (including pensions or retirement benefits if they are not provided for by law other than this provision) for all Departmental Heads and the Heads of all bodies set up by statute for governmental or official purposes; and
(f) the salaries, allowances and benefits, financial and otherwise (including pensions or retirement benefits if they are not provided for by law other than this provision) for the heads of all bodies (including companies incorporated under any law) in which the National Government ahs a financial interest and which are declared by the Head of State, acting with, and in accordance with, the advice of the National Parliament to be bodies to which this provision applies; and
(g) that the Parliament considers, and approves or rescinds, any decision made by the Salaries and Conditions Monitoring Committee which the Commission, after consideration, is of the opinion should be referred to the Parliament".
Section 216A (3)(b) provides that the Commission is responsible for recommending to the National Parliament from time to time at intervals determined by it the "salaries, allowances and benefits, financial and otherwise" for all or any members of the Parliament, members of Provincial Assemblies and members of Local Level Governments and other persons and constitutional office-holders such as judges and constitutional office-holders.
Looking at s.216A in its entirety there is/or are no provision for repayments to be made. No provision has been made in the Constitution for any advances that may have been made to be repaid if the leader looses his or her position.
The scheme of arrangements is that the Commission will recommend to the Parliament from time to time at intervals determined by it these benefits. It is then up to Parliament to then determine these appropriate salaries, allowances and benefits, (financial and otherwise) of the members of Parliament, Provincial Assemblies, the judges and other constitutional office-holders in accordance with the recommendations of the Commission. Parliament may accept or reject but may not amend any recommendations of the Commission. See s.216A (5).
Section 216A (6) is an enabling provision which provides for an Act of Parliament to be made to make further provisions in respect of the Salaries and Remunerations for holders of different offices or levels of offices held by members of Parliament, members of the Provincial Assemblies, the judges and other constitutional office-holders and the powers and procedures of the Commission and generally in respect of it.
The next relevant law is the Act. It sets out the terms and conditions of employment of the members of the Commission, the establishment of a Commission Secretariat, the functions of the Secretariat, the procedures etc. of the meetings of the Commission and other relevant matters. In particular it sets out specific functions given to it to determine and fix salaries of the members of Parliament, Provincial Assembly members, the judges, other constitutional office-holders and so forth. For our present purposes the relevant provisions are set out in part 5 of the Act which deals with fixing of salaries, allowances etc. for members of Parliament, Provincial Assemblies etc.. The relevant provisions are s.10 and 11 of the Act. It is necessary to set out these provisions in full. Section 10 reads:
"10. Salaries, etc., of members of Parliament and Provincial Assemblies.
(1) Members of –
- (a) the Parliament; and
- (b) Provincial Assemblies,
shall be paid respectively such salaries, allowances and other benefits (financial and otherwise) as are fixed from time to time by the Parliament in accordance with recommendations received from the Commission.
(2) Salaries, allowances and other benefits (financial and otherwise) shall –
- (a) in the case of an elected member of the Parliament or of a Provincial Assembly – be reckoned from and including the day fixed for the return of the writ at his election; and
- (b) in the case of a nominated member of the Parliament or an appointed member of a Provincial Assembly – be reckoned from and including the day of his appointment.
(3) The salaries, allowances and other benefits (financial and otherwise) under this section for a member of the Parliament or of a Provincial Assembly are payable while the member holds office."
Section 10 (1) is an enabling provision under which the members of the National Parliament and Provincial Assemblies are to be paid their salaries, allowances and other benefits. These are to be fixed from time to time by the Parliament in accordance with the recommendations of the Commission.
Section 10 (2) sets out the dates on which the salaries, allowances etc. are to be paid. For the present purposes this is not relevant. Section 10 (3) provides that salaries, allowances and other benefits (financial and otherwise) under this section for a member of the Parliament or a Provincial Assembly are payable while the member holds office. The implication here is that, these salaries, allowances and other benefits are not payable if the member of Parliament or a member of a Provincial Assembly no longer holds office.
Section 11 is also relevant because it provides for additional salaries, allowances and other benefits such as (financial and otherwise) to be paid to the officers named in Section 11. In particular, it refers to additional salaries etc. to be paid to members of the Provincial Executive Council. Section 11 reads as follows:
"11. Allowances for Prime Minister, etc.
(1) Notwithstanding Section 10-
- (a) the Speaker; and
- (b) the Deputy Speaker; and
- (c) the Prime Minister; and
- (d) the Deputy Prime Minister; and
- (e) the Leader of the Opposition; and
- (f) the Deputy Leader of the Opposition; and
- (g) the Ministers; and
(ga) Vice-Ministers; and
(h) the Leader of a Minority Party (being a Party with at least 12 members in Parliament) recognized as such by the Speaker; and
(i) the Chairmen and members of Permanent Parliamentary Committees; and
(j) a former Prime Minister; and
(k) the Speaker of a Provincial Assembly; and
(l) the Head of a Provincial Executive; and
(m) the members of a Provincial Executive; and
(n) such other office-holders as are recommended by the Commission, may be paid such additional salaries, allowances and other benefits (financial and otherwise) as are fixed from time to time by the Parliament in accordance with recommendations received from the Commission.
(2) Additional salaries, allowances and other benefits (financial or otherwise) fixed in relation to an office specified in Subsection (1) shall be reckoned from and including the day the respective member of the Parliament or of a Provincial Assembly was appointed to that office and are payable while he holds that office".
Section 11 (1) authorises the Commission to fix and recommend to the Parliament additional salaries and allowances and other benefits (financial and otherwise) to be paid to those persons named in s.11 (1). This includes members of the Provincial Executive Council.
Section 11 (2) is an important provision in that it qualifies the additional salaries, allowances and other benefits to be paid which are specified in Subsection 1. It provides that those additional salaries, allowances and other benefits are to be paid or reckoned from and including the day the respective member of the Parliament or of a Provincial Assembly was appointed to that office and are payable while he holds that office. In my view this means that, for instance, where a member of the Provincial Assembly has been appointed as chairman and thus become a member of the Provincial Executive Council any additional salaries, allowances and other benefits would be reckoned from and including the day on which he was so appointed. Further, it means that those additional salaries, allowances and other benefits are payable whilst he holds office as a member of Provincial Executive Council. By necessary implication, in my view, if that person’s appointment as chairman and thus member of the Provincial Executive Council is revoked, he would not be entitled to those additional salaries allowances and other benefits.
In SCR 3 of 1988 the Supreme Court considered the provisions of the predecessor to the Salaries and Remuneration Commission Act namely the Parliamentary Salaries Tribunal and the Parliamentary Salaries Tribunal Act (Ch. No. 25). The facts of that case were that on the 14th of December, 1984 the Simbu Provincial Government was provisionally suspended by the National Executive Council under s.187E of the Constitution. This was five (5) months after the Writs for the 1984 provincial elections in Simbu were returned. Of the twenty-seven (27) members, sixteen (16) were new ones. The suspension was based on the Auditor General’s report of accounts of the Simbu Provincial Government for the fiscal year ending 31st December, 1982. The Parliamentary Salaries Tribunal purportedly acting under s.131 of the Constitution (now repealed by constitutional amendment No. 9 which came into operation on 1st September, 1988) made on 4th June, 1985 Determinations which included the following:
"13. Suspended Provincial Government.
(a) When a Provincial Government is suspended, the payment of salaries, allowances, etc. for members ... shall be terminated two months after the date of suspension.
(b) For Provincial Government currently under suspension the payment of salaries, allowances, etc. for members shall be terminated on 30th June, 1985."
As the Simbu Provincial Government was under suspension at the time of the above determination, member’s salaries, allowances and other benefits were terminated on 30th June, 1985. The Simbu Provincial Executive Council filed a reference to the Supreme Court and contended that the Tribunal had no power under s.131 (3) of the Constitution to terminate the "Salaries of members of any suspended Provincial Government". The issue in that case was whether the Tribunal had jurisdiction to suspend salaries of provincial members when a Provincial Government was suspended under s.187E of the Constitution.
The then Chief Justice Kidu after setting out the provisions of the previous s.131 (3) of the Constitution and s.12 (3) of the now repealed Parliamentary Salaries Tribunal Act, Chp. No. 25 said this at p. 214:
"In my opinion s.131 (3) was very strictly worded. It provided that the Tribunal was only empowered to fix salaries etc. Whether a member of a suspended Provincial Government should or should not be paid his or her salary is not fixing his or her salary. After the salary etc. was fixed or altered the Tribunal had performed its function. It had no power to determine matters which are not "salary, allowances, benefits, financial or otherwise. A decision that a provincial member could not be paid any salary etc. was beyond the powers of the Tribunal."
Kapi DCJ at p. 216 said:
"There is no dispute that the Tribunal had jurisdiction to fix salaries etc. under s.131 (1) of the Constitution and under s.12 (2) of the Parliamentary Salaries Tribunal Act. In fact the Tribunal had already done so in fixing salaries for members of Provincial Governments. The issue which has been raised by the amendments referred to earlier is whether the Tribunal have jurisdiction to suspend those salaries (which had been fixed) upon suspension of the Provincial Government. The power of suspension under s. 187E (1) of the Constitution is a disciplinary and a supervisory measure over the operation of the Provincial Government system. The question of whether the salaries should be suspended upon such a suspension, in my view is a Head of Power which is different from fixing salaries etc. under s.131 (1) of the Constitution and s.12 (2) of the Parliamentary Salaries Tribunal Act. In every disciplinary provision of this nature, a separate provision provides for either determination or the continuation of salaries upon suspension. This can be illustrated by references to the investigation of misconduct in office of the Chief Justice, judges, public prosecutor, public solicitor and the Chief Magistrate. Under s.182 (2) of the Constitution, the power to determine this is expressly given to the Head of State. Unless he so determines, the suspension shall be full pay. Similarly, the question of when a member ceases to receive salary upon ceasing to hold office is different from the question of fixing salaries. This particular issue in relation to Provincial Governments is addressed by s.12 (4) of the Parliamentary Salaries Tribunal Act. I find that the Constitutional Provisions and the Act had not addressed the issue of what happens to the salaries of members of Assemblies who are suspended under s.187E of the Constitution. In essence there is a gap on this question. It is now up to the Parliament to consider this issue and make appropriate amendments to the Constitution and the Act to address the issue. I find that the suspension of salaries as a result of suspension of a Provincial Government does not come within the terms of s.131 (1) of the Constitution and s.12 (2) of the Parliamentary Salaries Tribunal Act. I therefore find that Tribunal had no jurisdiction to determine the question of suspension of salaries upon a suspension of a Provincial Government under s.187E (1) of the Constitution."
The issues which has been raised by this case is whether the plaintiff has power to take any action legal or otherwise to recover any allowances and any other benefits, (financial and otherwise) that may have been advanced to a member of a Provincial Assembly and in particular a Provincial Executive Council member.
There is no dispute that the Commission was responsible for recommending to Parliament from time to time at intervals determined by it the "salaries, allowances and benefits (financial and otherwise)" for all or any members of the Provincial Assemblies and members of Local Level Governments. Sections 10 and 11 of the Act are consistent with the powers given to the Commission by the Constitution. In fact the Commission had already recommended to the Parliament in its determination the salaries, allowances etc. for members of Provincial Governments including Provincial Executive Council members.
I accept the submissions by Mr Wadau. Whilst the plaintiff may have been the administrating authority and had advanced the monies to purchase the motor vehicle for the defendant, there is no constitutional nor statutory basis for the plaintiff to take recovery action. In my view there is nothing in s.216A (3) of the Constitution and s. 10 (2) and of s. 11 (3) of the Act which empowers an administrating authority such as the plaintiff to take legal action to recover salaries or allowances that may have been advanced. Both the Constitution and the Act are silent on this issue.
Furthermore there is nothing in the Determination which authorises an administering authority to take any recovery action for any advances that may have been made.
If Parliament had intended that any advances given to a leader were to be recouped in the event of the leader no longer holding the office by virtue of which he was entitled to receive that advance, then it would have said so. In the absence of any expressed constitutional or statutory provision authorising such, I find that Parliament did not intend that such a cause would occur. I am of the view that there is a hiatus in the Law. It is now up to Parliament to fill that gap by making the necessary amendments to the Constitution and the Act to address this issue. I find therefore that the plaintiff has no standing to bring this action.
I find that the plaintiff has no power to bring any action legal or otherwise to recover any salaries, allowances or other benefits that may have been advanced to a member of the Provincial Executive Council.
For those reasons I would dismiss the claim and order that the plaintiff pay the costs of the defendant.
__________________________________________________________________
LAWYER FOR THE PLAINTIFF : MR. S. ALBERIC
LAWYER FOR THE DEFENDANT : YOUNG WADAU LAWYERS
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