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Marape v Paraka [2014] PGNC 118; N5740 (1 July 2014)

N5740


PAPUA NEW GUINEA
IN THE NATIONAL COURT OF JUSTICE


O.S. NO. 115 OF 2014


IN THE MATTER OF AN APPLICATION UNDER SECTIONS 63(4) AND OR 65(1) & (2) OF THE LAWYERS ACT 1986


BETWEEN:


HON. JAMES MARAPE, MP in his capacity as MINISTER FOR FINANCE
First Plaintiff


AND:


HON. PETER O'NEILL, MP in his capacity as PRIME MINISTER
Second Plaintiff


AND:


PAUL PARAKA trading as PAUL PARAKA LAWYERS
Defendant


Waigani: Kariko, J
2014: 17th, 18th, 25th, 27th June & 1st July


Cases cited:


Chief Collector of Taxes v Bougainville Copper Limited (2007) SC853
Chuan v Chin (2004) N2538
Craftworks Niugini Pty Ltd v Allan Mott (1997) SC 525
Grand Chief Sir Michael Somare v Ila Geno (2008) N3406
Grand Chief Sir Michael Thomas Somare v Chronox Manek, John Nero and Pheobe Sangetari as Ombudsman Commissioners and the Ombudsman Commission (2011) SC1108
Pius Nui v Mas Tanda (2004) N2765
Ramu Nico Management (MCC) Limited and Ors v Tarsie and Ors (2010) SC1075
Rimbink Pato v Anthony Manjin [1997] PNGLR 6
Robinson v National Airlines Commission [1983] PNGLR 478
Royal Thompson v Sylvester Kalaut (2011) N4265
Zachary Gelu v Sir Michael Somare MP (2008) N3526


Legislation:


Constitution
Lawyers Act 1986
National Court Rules


Counsel:


Mr R Leo, for the first plaintiff
Mrs T Twivey-Nonggorr, for the second plaintiff
Mr M Kongri, for the defendant
Mr M Varitimos Q.C., as amicus curiae (and representing the Police Force)


1st July, 2014


  1. KARIKO, J: These are separate applications by each plaintiff, Hon. James Marape, MP Minister for Finance and Hon. Peter O'Neill, MP Prime Minister, seeking an interim restraining order against the Police from arresting each of them. Before considering the applications, it is necessary to refer to the history of this matter.
  2. This proceeding relates to the alleged fraudulent payments in the years 2012 and 2013 of over K71million by the State through the Department of Finance for legal bills of Paul Paraka trading as Paul Paraka Lawyers.
  3. Based on a concern that substantial amounts had been paid by the State as legal fees and out-of- court settlements, Prime Minister O'Neill issued a Directive on 13th May 2013 instructing amongst other things that "...a High Level Investigation must be conducted into the legality of the payments and settlements. The investigation team should be made up of Taskforce Sweep and Police Fraud Squad, with the support of the Australian Federal Police and Interpol."

Police request to interview Mr Marape concern


  1. By letter dated 15th January 2014, the then Commissioner of Police Toami Kulunga invited Mr Marape for an interview in relation to the alleged fraudulent payment of legal bills to Paul Paraka Lawyers explaining that "Police through the work of the Task Force Sweep have analysed the information that was gathered and are of the opinion that there is evidence of criminality implicating yourself in the complaint, hence the need to speak to you."
  2. Through his lawyer, Mr Marape requested for the interview to be deferred until the determination of certain National Court proceedings that had emanated from steps taken by four policemen (not part of the Taskforce Team) allegedly at the behest of Hon. Leader of the Opposition Beldan Namah, to arrest a number of persons including Mr O'Neill and Mr Marape in relation to the payments to Paul Paraka Lawyers.
  3. In one of those proceedings (OS No. 10 of 2014) consent orders were entered into, the effect of which included the Police being restrained from arresting Mr O'Neill and Mr Marape pending determination of that proceeding.
  4. On 14th March 2014 Mr Marape filed this proceeding for himself and the State seeking amongst others, an order for the taxation of a total of 2,716 legal bills of costs charged by Paul Paraka Lawyers and claimed for legal work rendered to the State between 6th May 2003 and 30th October 2006. Other Orders sought in the originating summons are summarized as follows:
  5. Mr Marape also filed a notice of motion seeking an interim restraining order against the Police and the Taskforce Sweep Team from investigating him in relation to the payment of legal bills to Paul Paraka Lawyers. This application was not moved because of the interim orders issued in proceeding OS No. 10 of 2014.
  6. On 6 June 2014 OS No. 10 of 2014 was discontinued by consent of the parties resulting in the restraining orders being dissolved.
  7. Mr Marape then took steps to move his outstanding motion in this proceeding.

Police request to interview Mr O'Neill


  1. By letter dated 16th June 2014, the then Police Commissioner invited the Prime Minister for a formal interview. This letter reads:

"My dear Prime Minister


REQUEST FOR FORMAL RECORD OF INTERVIEW


With the greatest respect to yourself and your esteemed office, I refer to the above and request your attendance at the National Fraud and Anti-Corruption Directorate at Konedobu, National Capital District for a formal record of interview at 11.00am or 1.00pm on 16th June, 2014.


The interview relates to the allegations of fraudulent payments made to Paul Paraka Lawyers between February, 2012 (sic) and May 2013. The investigations were carried out at your request through a Prime Ministerial Directive issued under your hand dated 13th May, 2013.


Pursuant to the requirements of law, a warrant of arrest has been issued today, ordering police to arrest you. A copy of the warrant of arrest dated 12th June 2014 is enclosed herein for your reference. You would note that a warrant is a court order demanding police to effect your arrest.


It would help if you could make your way to the nominated time and place for a formal record of interview and answer questions that would be put to you formally.


Yours sincerely,

(Signed)

Toami Kulunga, Kt, OBE, DPS, QPM

Commissioner of Police"


  1. The Warrant of Arrest was issued based on an Information alleging the offence of official corruption under section 87(1) Criminal Code.
  2. The Prime Minister then filed an urgent application late on 16th June 2014 seeking ex parte orders to join this proceeding as a plaintiff and for the issue of an interim restraining order in the same terms as that sought by Mr Marape plus a stay of the Warrant of Arrest.
  3. I gave chamber directions for service of documents (including on the Police) before hearing the applications the next day, after I noted that the orders sought would impinge on the constitutional functions of the Police.

The interlocutory applications


  1. On 17th June 2014, I commenced hearing the applications. As preliminary matters, I made the following orders after submissions:
  2. The application by Mr O'Neill to join as a plaintiff was not opposed and was granted, and the hearing then proceeded on the applications of the plaintiffs for the interim restraining orders.
  3. During the course of submissions, counsel for Mr O'Neill sought leave to amend her client's application. Mrs Twivey-Nonggorr informed the Court that Mr O'Neill would only seek an interim restraining order against the Police from arresting him until determination of the substantive proceeding. This position was also adopted for Mr Marape by his counsel.
  4. The hearing of submissions were the subject of three adjournments, but were finally completed last Friday. On the last occasion, Mr Varitimos Q.C. appeared for the Police on "late instructions" but was still able to properly and fairly assist the Court.
  5. Most of the submissions focused on the question of whether the Court has should exercise its discretionary power to restrain the Police from effecting an arrest. The Court was concerned that an exercise of that power is prima facie an interference with the functions of the Police under section 197 Constitution. I will return to discuss this issue later.

Application for interim restraining order


  1. The established legal principles governing whether an interim injunction should be ordered are found in many cases including those cited by counsel; Chief Collector of Taxes v Bougainville Copper Limited (2007) SC853; Ramu Nico Management (MCC) Limited and Ors v Tarsie and Ors (2010) SC1075; Chuan v Chin (2004) N2538. The principles confirmed in the case of Chief Collector of Taxes v. Bougainville Copper Ltd (supra) and approved in many subsequent cases are that an applicant for an interim injunction must show that:
  2. The plaintiffs have each filed an appropriate undertaking as to damages and in my view the question of whether damages are an adequate remedy is not significant in this case. The issues remaining for my determination are whether there is a serious question to be tried and where does the balance of convenience lie.

Serious question to be tried


  1. In respect of the first consideration, the Court must be satisfied the issue to be tried is not a frivolous matter and the party seeking the injunction has good prospects of success in the proceeding; see Craftworks Niugini Pty Ltd v Allan Mott (1997) SC 525. In Robinson v National Airlines Commission [1983] PNGLR 478 Andrew, J stated:

"What the Plaintiff must prove is that he has a serious, not a speculative case which has a real possibility of ultimate success..."


Application for taxation


  1. This case substantively, is in essence an application for taxation to be ordered. The other orders sought become relevant if that application is granted. The taxation is sought pursuant to section 63(4) and/or sections 65(1) and 65(2) Lawyers Act 1986 and section 155(4) Constitution. The provisions under the Lawyers Act 1996 in relation to taxation of costs relevant to the present case are sections 62 – 65. Section 62 provides for the form of a bill of costs and the manner of delivery. Section 63(2) and 63(3) essentially allows 12 months from the delivery of a bill for taxation where a person charged with a bill (usually the client) has applied for taxation. After the 12 months have lapsed, the court will only make an order for taxation if there are special circumstances; section 63(4).

Application for taxation by a third party


  1. While it is usually lawyers or their clients who apply for taxation, a third party may also apply under circumstances described in section 65, and pertinent to the present case are:

65. Taxation on application of third parties, etc.


(1) Subject to Subsection (2), where a person other than the party chargeable with the bill for the purposes of Section 62 has paid, or is or was liable to pay, the bill to the lawyer or to the party chargeable with the bill, the person or his executor, administrator or assignee may apply to the court for an order for the taxation of the bill as if he were the party chargeable with the bill, and the Court may make the same order (if any) as it might have made if the application had been made by the party chargeable.


(2) Where the Court has no power to make an order except in special circumstances, the Court, in considering whether there are special circumstances sufficient to justify it in making an order, may take into account circumstances that affect the applicant but do not affect the party chargeable with the bill. (My underlining)


  1. A party to whom a bill of costs is charged is referred to as "a party chargeable with the bill" under the Lawyers Act 1986. As noted earlier, this is often the client. The subject bills of this proceeding were charged to the State as a client for legal work undertaken on the State's behalf by Paul Paraka Lawyers, and it has not been contended otherwise.
  2. The plaintiffs base their application for taxation first on section 63(4) because it is well over 12 months since the subject bills were delivered. Second, the plaintiffs rely on sections 65(1) and (2) and claim that they have the right to make the application because they were liable to pay the bills and special circumstances exist.

Standing under section 65(1)


  1. Mrs Twivey-Nonggorr submitted that section 65(1) Lawyers Act 1986 refers to persons who have an obligation to pay but are not actually the person paying, for example a trustee. She argued that the Minister for Finance has an obligation to pay a valid bill that has gone through the process (which I understood to refer to the administrative process or procedures within the relevant government departments for verifying, authorising and processing a bill for payment). In relation to the Prime Minister, she offered similar argument: That he is someone in the process obliged to pay a bill for services rendered to the State. Counsel for Mr Marape did not make any specific submissions on this point.
  2. Section 65(1) refers to "a person other than the party chargeable with the bill". The phrase "the party chargeable with the bill" refers to the person charged with the bill. In the present case that would mean the State. In my opinion, the term "liable" in section 65(1) necessarily means legally liable or legally responsible, that is liable or responsible by law. In my view, such liability may be pursuant to a court order; a principle of law; or by statute. On this interpretation, it is difficult to see how Mr O'Neill and Mr Marape are liable to pay the bills. They simply have not provided any evidence to show their legal liability. Their evidence falls far short of properly explaining the responsibility of each plaintiff in the administrative process of verifying, clearing, authorising and processing the payment of the legal bills for this Court to properly find any legal liability to pay legal bills.

Special circumstances


  1. Even if the plaintiffs are proper persons under section 65(1) to apply for taxation, they are required to establish "special circumstances" before this Court may order taxation. The plaintiffs argued that special circumstances exist as follows:

Failure to apply for taxation


  1. There are a total of 2,716 bills involved in the present matter, and there is evidence from copies of letters written to the then Secretary for Finance by the then Acting Solicitor-General John Kumura dated 19th, 24th and 26th January 2007 that the bills were delivered between 26th December 2006 and 23rd January 2007, over 7 years ago. The effect of the letters from John Kumara is that the bills were for legal services to the State based on proper instructions from the Attorney-General; that they were prepared in accordance with the Lawyers Act and the National Court Rules; that the costs charged were considered reasonable; that taxation of the bills was not required; and that the bills should be paid.
  2. There is no evidence before me that challenges the genuineness of the letters or the accuracy of their contents. It would appear from Mr Marape's affidavit that he had acted on these "clearance letters" until the Attorney-General Hon. Kerenga Kua by letter dated 18th October 2012 (copied also to Mr O'Neill) raised his suspicions regarding bills for K36.1million payable to Paul Paraka Lawyers that were then before Mr Marape for processing of payment.
  3. In his letter Mr Kua asked that the bills be forwarded to him as Attorney-General for proper verification and clearance by the Solicitor-General and for taxation if necessary. Mr Kua also advised Mr Marape to ask Paul Paraka Lawyers to provide relevant Brief-out Letters by the Attorney-General; itemized bills in taxable form; and details of other bills and their payment in the past 12 months. There is no evidence from Mr Marape that he complied with or responded to Mr Kua's requests.
  4. There is therefore no proper basis for the plaintiffs' contention that the Attorneys-General and the Solicitors-General in the last 7 years have failed to apply for taxation of the Paul Paraka legal bills.

Taxation as the only course to determine validity of the bills


  1. Both Mr Marape and Mr O'Neill strongly argue that taxation is the only way the validity of the bills can be determined. In my view, taxation of costs is an exercise to assess whether items have been properly charged on a bill of costs and whether the cost for each item is reasonable and not to determine whether a bill of costs is valid.
  2. In his letter Mr Kua provided advice as to how his Department could verify the genuineness of the bills, and if they were genuine, that they be taxed if necessary. He reminded both Mr O'Neill and Mr Marape that it is his Department, particularly through the Office of the Solicitor-General that deals with all legal bills of costs in the first instance, under current and existing practices.
  3. The plaintiffs have not contradicted the integrity of the process explained by Mr Kua. There is also no evidence that the bills requested by Mr Kua were sent to him or that he and the Solicitor-General failed to consider the bills.
  4. I am unable to accept the submission that taxation is the only way the validity of the bills can be determined. That question could be addressed administratively by relevant offices/officers in the Department of Justice and the Attorney-General and the Department of Finance working together to reconcile their respective records to ascertain if there were proper briefs-out from the Attorney-General; if the bills were in proper taxable form; if the costs charged were reasonable; and if taxation is required.

No criminality if bills are valid


  1. I am not persuaded by the submissions that the validity of the bills would mean that there could be no criminality in the payment of legitimate bills. It is not known at this stage what offence (if any) the Police will eventually charge the plaintiffs with. It would only be speculation then to say that the validity of the bills would have a bearing on the eventual charges. At this point in time, the only possible offence alleged is against Mr O'Neill for an offence under s.87(1) Criminal Code. That offence concerns official corruption and the provision is complex and contains a number of variable elements that may comprise an offence. In my view, the validity of the legal bills may or may not be material for a charge to be constituted under this section. I use this simple example: If a Department of Finance officer responsible for printing out the cheque for a valid bill asked for some payment from the supplier in order to raise the cheque that may amount to official corruption.

Findings re: special circumstances


  1. On the evidence, there does not appear to be any special circumstances, which I repeat is an essential requirement for this application for taxation.

Compliance with Order 22 Rule 47


  1. There is one further point that touches on the competency of the application for taxation. Order 22 Rule 47 National Court Rules states that an application for taxation under section 63 Lawyers Act 1986 shall have the bill to be taxed annexed to the application. To my mind, this is a mandatory requirement as to form that the plaintiffs have failed to comply with. None of the 2,716 bills to be taxed are annexed to the application for taxation.

Finding re: serious question to be tried


  1. It is my conclusion that there are no serious questions to be tried. I am of the opinion that the plaintiffs' application for taxation does not have good prospects of success or a real possibility of ultimate success on these requisites:
  2. As the plaintiffs have not satisfied this Court that there are serious questions to be tried in respect of their application for taxation, their motions for interim restraining orders should be refused.

Balance of convenience


  1. Notwithstanding my finding, I consider it important to discuss the issue of whether the grant of interim orders restraining the Police from arresting the plaintiffs would constitute the Court interfering with the constitutional functions of the Police.
  2. Section 197 Constitution reads:

" 197. Functions of the Police Force.


(1) The primary functions of the Police Force are, in accordance with the Constitutional Laws and Acts of the Parliament –


(a) to preserve peace and good order in the country; and


(b) to maintain and, as necessary, enforce the law in an impartial and objective manner.


(2) Insofar as it is a function of the Police Force to lay, prosecute or withdraw charges in respect of offences, the members of the Police Force are not subject to direction or control by any person outside the Force." (Underlining added).


  1. The Supreme Court (Sheehan, J, Sevua, J and Akuram, J) in the case of Rimbink Pato v Anthony Manjin [1997] PNGLR 6 decided that the Courts should not readily interfere with the Police in carrying out a criminal investigation and exercising their constitutional functions. In that case, the applicant argued against the discharge of a restraining order against the Police from arresting and investigating him in relation to alleged criminal offences arising from the 1997 National Elections in Enga. The Court held the balance of convenience did not favour the applicant whose rights in respect of a criminal prosecution are protected by the Constitution. Such a person could file appropriate court action to enforce those rights and seek damages for any injury to his reputation or defamation of his character. The balance of convenience instead favoured the Police in carrying out its criminal investigations.
  2. There have been a number of decisions in the National Court that have since followed the principle established in Rimbink Pato v Anthony Manjin (supra) and have developed it and applied it to other investigatory bodies established by law including the Ombudsman Commission, Commissions of Inquiry and the Lawyers Statutory Committee.
  3. In referring to those investigatory bodies whose function it is to carry out investigations into alleged or suspected criminal or other misconduct, Cannings, J in the case of Pius Nui v Mas Tanda (2004) N2765 expressed the following which I endorse:

"However, the Courts must be very cautious when dealing with any attempt to interfere with, disrupt, delay or thwart such investigations. This does not mean that there should never be judicial review of decisions made during an investigation or that the Court should never interfere by, for example, granting an interim injunction that puts an investigation on hold. However, it is clear that the Courts should be extremely cautious in entertaining such applications. Only in a blatant case of abuse of power or excess of jurisdiction should the Court contemplate disrupting an investigation.

.............................................................................................

Each case must be considered on its merits. However, it is only in a very clear case that the Court should consider ordering a halt to an investigation that is being conducted by a proper authority under the laws of Papua New Guinea." (My emphasis)


  1. His Honour re-affirmed the propositions in Zachary Gelu v Sir Michael Somare MP (2008) N3526. In Grand Chief Sir Michael Somare v Ila Geno (2008) N3406, Hartshorn, J stated the principles this way:

"It is not in the interests of justice or the public interest that lawful authorities should be prevented from carrying out their lawful investigations. Any such prevention should only occur in very clear cases of abuse. I am not satisfied on the evidence presently before the court that there is a clear case of abuse here. The balance of convenience to my mind, is not in favour of granting the injunctive relief sought." (My underlining)


  1. The Supreme Court (Salika, DCJ, Kirriwom, J and Kandakasi, J) in Grand Chief Sir Michael Thomas Somare v Chronox Manek, John Nero and Pheobe Sangetari as Ombudsman Commissioners and the Ombudsman Commission (2011) SC1108 after a discussion of the developments in the law since Rimbink Pato v Anthony Manjin (supra) expressed the opinion that the superior courts (the National and Supreme Courts) should not interfere with the investigation functions of an investigatory body established by law, without exception. The views expressed therein are in my view obiter dicta as the views did not decide the issues before that Court.
  2. Mr Varitimos in his forceful submissions urged this Court to follow the decision of Davani, J in Royal Thompson v Sylvester Kalaut (2011) N4265 which incidentally was delivered a fortnight before the hearing in Grand Chief Sir Michael Thomas Somare v Chronox Manek, John Nero and Pheobe Sangetari as Ombudsman Commissioners and the Ombudsman Commission (supra) and this may well explain why it was not referred to by the Supreme Court. Mr Varitimos correctly stressed that her Honour in her thorough and clear reasoning (that included discussion of a number of very pertinent overseas judgements) concluded that this Court has an inherent jurisdiction to stay a criminal proceeding but this power is to be exercised sparingly and in circumstances that amount to an abuse of the process of the court.
  3. On my reading of her Honour's judgement, she did not suggest that the principles in Pato's case as developed by National Court decisions such as Zachary Gelu v Sir Michael Somare MP (supra) were incorrect or inapplicable. In my respectful view, her Honour concerned herself mainly with the issue: Whether the Court has jurisdiction to stay a criminal proceeding, that is, a court proceeding? In the final analysis, it seems to me that perhaps there is no real distinction between the principles expressed in Pius Nui v Mas Tanda (supra) and endorsed in Grand Chief Sir Michael Somare v Ila Geno (supra) and the decision in Royal Thompson v Sylvester Kalaut (supra). I would therefore accept the argument by Mr Varitimos that this Court has the power to stay an arrest by the Police but only in the clearest case of abuse of power by the Police.
  4. Is there any clear abuse in this case? I find no such evidence of this. There is in fact no evidence that the current criminal investigations of the plaintiffs are the work of rogue policemen or that the investigations are politically-motivated as described by the Prime Minister in his affidavit.
  5. Although the validity of the Warrant of Arrest issued against the Prime Minister was not an issue in this hearing, it was argued that the Warrant was wrongly issued because no arrest can be made until after a formal interview, to accord with the rules of natural justice. This is a misconceived submission. The Police are entitled to arrest a suspect based on evidence they possess. This evidence may or may not include any statement from the suspect by way of a record of interview or otherwise. If the law requires that an alleged offender cannot be arrested without a warrant such as pursuant to section 87(2) Criminal Code, the Police must obtain the warrant before arresting the suspect. A formal interview is not a pre-condition to effecting an arrest of such a suspect.
  6. The plaintiffs submit that they are not seeking to restrain the Police form investigating including conducting interviews, but they be restrained from arresting the plaintiffs until determination of the substantive proceeding. I consider an arrest to be an integral part of the investigatory functions of the Police. To my mind, the amended restraining orders sought would still amount to interfering with Police functions.
  7. In my opinion therefore, there is a prima facie case that in the interests of justice or the public interest, the balance of convenience favours the refusal of the interim restraining order sought, as it is not in the interests of justice or the public interest that lawful investigatory authorities should be prevented from performing their functions. I note here however that the recently-appointed Acting Police Commissioner Geoffrey Vaki has deposed in his affidavits that he is agreeable to the interim restraining orders sought by the plaintiffs. In fact this has been his position since taking up his appointment on 16th June 2014. He believes that more work is required on the cases against the plaintiffs and that any arrest is not appropriate at this stage.
  8. The Police Commissioner has ultimate control of the Police Force. Section 198 Constitution states clearly that the superintendence and efficient organization of the police force is the responsibility of the Commissioner. Given that Commissioner Vaki, the person who controls the Police Force, the body sought to be restrained, consents to the restraining orders sought, the issue of balance of convenience may appear irrelevant in this instance.

Consent orders


  1. Should I nevertheless exercise this Court's discretion and endorse the proposed consent orders because of the position taken by Commissioner Vaki? I am not inclined to do so for these reasons:
  2. I should add that counsel for the plaintiffs and the Police submitted that there is a "rift" amongst the ranks of the Police Force caused by the officers involved in the criminal investigations of the plaintiffs. The Court was urged to endorse the consent orders to avoid likely civil unrest arising from the rift. I find this submission to be speculative and without proper evidentiary basis. Importantly though, I reiterate that the administration and control of the Police Force is vested in the Commissioner of Police under the Constitution. Administrative matters are for him to resolve and not this Court. The fact that the Commissioner agrees not to arrest the plaintiffs is a matter for him also. He does not need this Court's endorsement on how he should discharge his constitutional duties and functions.

Conclusion


  1. The motions by the plaintiffs for interim retraining orders are therefore dismissed. As the defendant did not offer any arguments in this hearing of the applications, I order that each party bears its own costs.

____________________________________________________
Leo Lawyers: Lawyer for the first plaintiff
Twivey Lawyers: Lawyer for the second plaintiff
Kombri Lawyers: Lawyer for the defendant
Sam Bonner Lawyers: Lawyer for the Police Force

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