IN THE COURT OF APPEAL OF
THE REPUBLIC OF VANUATU

APPELLATE JURISDICTION

CIVIL APPEAL CASES No.24 OF 2002
AND No.25 OF 2002

IN THE MATTER OF:
The Constitution of the Republic of
the Republic of Vanuatu

AND

IN THE MATTER OF:
Municipality Act [CAP.126]

AND

IN THE MATTER OF:
An application by Harry Vanva, Lesley Tari,
Ham Japeth, Avock Jack, Jean Delaveau,
Joe Narua, Roy Bong Sam Nathana and George Tabimal

BETWEEN

THE HONOURABLE MINISTER OF INTERNAL AFFAIRS
First Applicant

AND

MR. PAUL HAKWA,
COMMISSIONER OF LUGANVILLE MUNICIPAL COUNCIL
Second Applicant

AND

HARRY VANVA, LESLEY TARI,
HAM JAPETH, AVOCK JACK, JEAN DELAVEAU,
JOE NARUA, ROY BONG SAM NATHANA and GEORGE TABIMAL
Respondents

Coram: Chief Justice Vincent Lunabek
Justice Bruce Robertson
Justice John von Doussa
Justice Daniel Fatiaki
Justice Roger Coventry

Counsel: Mr. Saling Stephens for the Petitioner
Mr. Michael Edwards for the First Respondent
Mr. George Boar for the Second Respondent 

JUDGMENT

The first and second applicants seek extensions of time within which to lodge appeals against judgments and orders made in Civil Case No.56 of 2001 on 11th February 2002 and 12th June 2002. They also seek a stay of execution in respect of compensation orders made against them on 12th June 2002. 

The applications are a response to a Notice of Appeal (Civil Appeal 15 of 2002) filed by the respondents on 5th August 2002 against another judgment and orders made in Civil Case No.56 of 2001 on 2 July 2002. That Notice of Appeal came for hearing before the Court of Appeal in Luganville, Espiritu Santo on 22nd October 2002, but after a lengthy interchange between counsel for the parties and the bench on two separate days about issues which arise in the proceedings, the Notice of Appeal was withdrawn. The appeal was thereupon dismissed with costs.

To understand the present applications it is necessary to summarise the history of the proceedings in Civil Case No.56 of 2001 which had their genesis in a letter from the first applicant, (the Minister of Internal Affairs), to the Luganville Municipal Council (the Council) dated 19 October 2001. In that letter the Minister purported to “suspend the Council in accordance with section 61(3)(a)” of the Municipalities Act [CAP.126]. This purported suspension of the Council followed an inquiry and report directed by the Minister under s.61 of the Municipalities Act. The inquiry and report revealed a number of serious irregularities in aspects of the administration of the Council, including financial irregularities. The Minister by directive in writing required the Council to remedy the same within an appointed time.

Section 61(3) of the Municipalities Act provides:

“(3)	If a council fails to comply with the terms of a directive of the Minister made under subsection (2) or if the Minster, having appointed a person or persons to make an inquiry under subsection (1) considers it expedient so to do, the Minster may in addition to any other powers conferred upon him by the provisions of this Act-

(a)	suspend the exercise by the council of any of the powers conferred upon it by this or any other act for such period as he may think fit; or

(b)	dissolve the council and, in his discretion, appoint or direct the election of new councillors;

and during such period, or, as the case may be, pending the appointment or election of new councillors, confer upon any person the exercise of any powers so suspended or of the powers of the council so dissolved.”

The Minister by 19th October 2001 was satisfied that the council had failed to comply with all the directives that had been given. The Minister purported to suspend the Council from that day until 19 June 2002. Although his letter said that the Minister had “suspended the council”, the plain intent of the letter was pursuant to the statutory power to suspend the exercise by the council of all its powers. Shortly after the letter the Minister appointed the second respondent as Commissioner to exercise the powers of the council during the period of suspension.

Civil Case No.15 of 2002 was commenced by constitutional petition brought under section 218 of the Criminal Procedure Code [CAP.136] on 13 December 2001 by the Mayor and 8 of the 13 elected members of the Council. The respondents named were the Minister and the Commissioner. Whilst the proceedings were commenced by way of petition, which is an appropriate procedural vehicle for constitutional relief against the actions of the Minister, it is apparent that the proceedings were also intended to include a claim under the general law for additional relief. For these reasons the petitioners were also described in the proceedings as applicants, and they sought relief against the Commissioner as well as against the Minister. For convenience we shall refer to the petitioners/applicants in those proceedings simply as the petitioners. The petitioners pleaded that the Minister had purportedly suspended the offices of each of them; that the suspension occurred without the petitioners knowing what allegations had been made against them; that they were denied the opportunity to answer any allegations; that the actions of the Minister and of the Commissioner after his appointment were ultra vires and unlawful; and that the first and second respondents had committed breaches of the Constitution in that the fundamental right to the protection of the law and the right to freedom of assembly and association had been broken.

The petitioners claimed the following relief:

1.	That the time for hearing this petition be abridged pursuant to Order 64 Rule 5 of the Supreme Court rules.
2.	A declaration that the purported suspensions issued to the petitioners by the respondents on 19th October 2001 are null and void.
3.	The first and second respondents, their agents and/or their servants be and are to be injuncted from taking any further steps to dismiss the offices of the petitioners or making any further appointment of the Council pending the hearing of this matter or further order of the court.
4.	A declaration that the purported appointment of the second respondent was not done in accordance with the law, therefore was unlawful and invalid and of no effect.
5.	An order re-instating the petitioners and applicants herein to their previous offices within the Luganville Municipal Council.
6.	The award of compensation to the petitioners for breaching the petitioners’ constitutional rights in the sum to be assessed. 
7.	Such other relief as this Honourable Court deems just.
8.	Costs.

The petition was given a speedy hearing, and judgment was delivered by the primary judge on 11 February 2002. His Lordship found that the inquiry procedure which s.61 of the Municipalities Act requires to be followed before a directive is made under s.61(3) had been validly carried out. At para 10 of his reasons His Lordship found that “the Minister suspended the current Mayor and his council by letter dated 19 October 2001”, and at para 12 His Lordship said:

“(12)	There were no warnings given to the Mayor and his councillors by the Minister before suspension. This included the right to be heard as to why certain directives were not complied with and why certain actions were done without prior approval or authorization from appropriate persons in authority. The petitioners were entitled to natural justice. This is in essence a right to the protection of the law afforded by Article 5(1)(d) of the Constitution. I find that the respondents have breached the petitioners’ constitutional rights to protection of the laws by omitting to comply with the rules of natural justice.”

Upon this finding His Lordship said that there will be judgment for the petitioners. There then followed the formal orders of the Court. In the first three paragraphs of the formal orders His Lordship expressly declined to grant the relief claimed in paragraphs 2, 3 and 4 of the petition. Paragraph 4 of the orders reads:

“4.	There will be an Order awarded compensation to all the petitioners for breach of natural justice. Under Article 6(2) the petitioners are entitled to receive compensation which sums will be assessed later by the Court.”

A further hearing was held on 7 May 2002 to assess compensation payable under the above order. Substantial claims were made for each of the petitioners, ranging from 1,341,760 VT for ordinary members up to VT1,852,484 the Mayor. On 12 June 2002, His Lordship dismissed the claims in so far as they sought gratuity payments, monthly allowances, and 850,000 Vatu for each petitioner for distress and damages for reputation. However, His Lordship allowed the following claims in respect of council and working committee meetings together with interest saying:

“Further in my view their claims for interest of 12% per annum should be allowed and according I so order. This is to cover to a certain extent distress and suffering of the applicants. In summary I therefore allow as follows:

NAME
	
COUNCIL MEETING	
WORKING GROUP	
12% INTEREST	
TOTAL IN VATU	
(Mayor)
Harry Vanva	
 140,000	
 340,000	
 57,600	
 537,600	
(D. Mayor)
Joe Narua	
 98,000	
 238,000	
 40,320	
 376,320	

Jean Delaveau	
 70,000	
 188,000	
 30,960	
 288,960	

Ham Japeth	
 70,000	
 186,000	
 30,720	
 286,720	
George Tabimal	
 70,000	
 186,000	
 30,720	
 286,720	

Avock Jack	
 70,000	
 170,000	
 28,800	
 268,800	

Sam Nathana	
 70,000	
 170,000	 
 28,800	
 268,800	

Roy Bong	
 70,000	
 170,000	
 28,800	
 268,800	

TOTALS	
 658,000	
 1,648,000	
 276,720	
 2,582,720	

The formal order made by His Lordship was:

“That the respondents pay the applicants a total of Vatu 2,582,720 within 28 days of the date of this Order”.

The Minister’s letter of 19 October 2001 said that the purported suspension of the council was until 19 June 2002. On 27 June 2002, by an Ex Parte Summons (which was later heard inter partes) issued in the principal proceedings, the petitioners claimed the following:

“1.	An order re-instating the petitioners and applicants herein to their previous offices they hold within the Luganville Municipal Council.
2.	An order removing Mr. Paul Hakwa as current Commissioner for the Luganville Municipal Council. 
3.	The first and second respondents, their agents and/or their servants be and are to be injuncted from taking any further steps to dismiss the offices of the petitioners or making any further appointment to the Council.”

On 3rd July 2002, His Lordship dismissed each of these claims and awarded costs against the petitioners. His Lordship published reasons for his decision on 5th July 2002. On 5th August 2002, the petitioners filed a Notice of Appeal challenging the dismissal of the claims made in the Ex Parte Summons. It was that appeal which came for hearing in Luganville on 22nd October 2002. 

The reasons for decision published on 5th July 2002 recorded that on the hearing of the Ex Parte Summons counsel for the Minister informed the Court that there had been an extension of the Council’s suspension to allow the Commissioner to complete a report on his administration of the Council. Counsel for the Minister pointed out that the extension of the suspension could only be properly challenged through a judicial review process, and that the petitioners had not instituted such a proceeding.

His Lordship gave three reasons for dismissing the Ex Parte Summons. First, he said that the claim for re-instatement was premature. His Lordship referred to the order for compensation that had been made, payment of which was to occur within 28 days. That period had not expired. We are unable to see how that fact was relevant to the claim for relief which the petitioners sought to make in the Ex Parte Summons. However, neither the counsel in their written or oral submissions made any reference to this first reason, and it is not necessary that we make further reference to it. 

The second reason was that His Lordship considered that the application made in the Ex Parte Summons was misconceived. It was an application by only some of the councillors. His Lordship drew attention to s.3(2) of the Municipalities Act which provides that every council shall be a body corporate with perpetual succession and power to sue and be sued in its corporate name. The application was not brought by the Council. His Lordship referred to the decision of the in Durayappah v. Fernando [1967] 2 AC 337. In that case the Minister had dissolved a council and appointed a person as Commissioner to oversee its affairs for the time being. The former Mayor brought an action complaining about the dissolution. The Privy Council held that although there had been legal error by the Minister which made the decision voidable, it was voidable only at the instance of the council against whom the order was made. It was held that the former Mayor had no standing to complain and to seek relief independently of the council. 

The third reason given by His Lordship was that the orders sought in the Ex Parte Summons were the same orders which had been sought in the original petition. The claims for the removal of the second respondent as Commissioner, and for injunctions against the Minister and Commissioner had already been decided against the petitioners and were res judicata. His Lordship said the only live issue was that of re-instatement which was not dealt with in the judgment of 11 February 2002. However, for the reasons given in that judgment His Lordship considered the order for re-instatement should be refused, and added that in view of the compensation order that had since been made, the petitioners could not have it both ways. His Lordship concluded by saying that “the matter” now rests entirely on the discretion of the Minister.

The second and third grounds given by His Lordship for dismissing the Ex Parte Summons were discussed with counsel when the appeal against the decision came on for hearing. A number of significant issues were identified. We now describe and comment on these issues for the purpose of identifying the legal questions which they raise, but by our comments we do not intend to express any final view on the law. We do not do so as these questions have not been fully argued by counsel, and do not fall for decision at this stage.

(a)	It is not entirely clear whether in his judgment of 11 February 2002 His Lordship held that the Minister had acted lawfully and validly under s.61(3)(a) of the Municipalities Act but in doing so transgressed constitutional rights of the petitioners. The possible alternative interpretation of the judgment is that His Lordship held that the failure to give natural justice to the petitioners operated to render unlawful and invalid the Minister’s decision but that in his discretion His Lordship decided not to set aside the Minister’s decision, but to grant compensation to the petitioners. The construction that we tentatively place on the judgment is that His Lordship held the former situation to apply. We have come to this view because His Lordship in para 10 of the judgment made a finding, without qualification, that the Minister suspended the current Mayor and his council by letter dated 19 October 2001, and because without any reference to the exercise of discretion His Lordship declined to declare the purported suspension, and the appointment of the Commissioner, null and void.

If this construction of the judgment is correct, we presently have difficulty seeing how the valid exercise of executive power by the Minister under s.61(3)(a) could at the same time be in breach of constitutional rights which the Constitution vests in citizens of Vanuatu. In our opinion it is at the least strongly arguable that to uphold the validity of the Minister’s actions and at the same time to award compensation to the petitioners results in inconsistent orders that cannot be reconciled, and that the compensation order in favour of the petitioners should not have been made.

(b)	On the alternative construction of the judgment, if His Lordship declined to make the declarations and to grant injunctions in exercise of his discretion, a different problem arises. We shall assume for present purposes without deciding the question, that a breach of natural justice of the kind identified by His Lordship could constitute a breach of constitutional rights entitling the petitioners to a compensation order. On the assumption that the law permitted the compensation order to be made, a difficult question of causation must be answered. In assessing compensation it would be necessary to consider what would have happened had the petitioners been given notice of the grounds upon which the Minister intended to act, and the opportunity to respond. Unless the situation would have been different had these events occurred, the petitioners would fail to established that the breach of natural justice caused them any loss. The inquiry and report on which the Minister acted provided powerful evidence of serious financial irregularities involving members of Council. These irregularities included unlawful payments of money out of council funds to the petitioners. In these circumstances we think it is almost inevitable that even if the councillors had been given an opportunity to respond to the allegations, the Minister would still have acted in the way that he did. Moreover, the petitioners have not attempted by evidence to put forward a version of the facts which would explain away the matters of concern to the Minister. Without evidence of this kind, the petitioners would fail to establish an entitlement to compensation even if the law otherwise permitted such an award to be made. 

It the petitioners overcome this hurdle, it would then be necessary to consider the nature of the “sitting allowances” which councillors who attend meetings are entitled to receive under The Luganville Municipalities (Allowances) Order made on 5 June 2000. Our tentative view is that the allowances are intended to compensate councillors for taking time away from their other pursuits in life, and are not intended to be a form of remuneration or wage for work done at Council meetings. If this is the case, then the petitioners would not have any compensation entitlement for meetings which they did not in fact attend.

Finally on the topic of compensation, an interest payment of 12% in the present economic environment seems too high.

On either construction of the judgment, it is therefore difficult to justify the award for compensation. 

(c)	There are further difficulties with the compensation orders as they presently stand.

First, the order by its terms requires both the Minister and the Commissioner to pay compensation. There is no possible basis disclosed on the pleadings or evidence why the Commissioner should be liable for compensation. He was appointed by the Minister well after the events about which the petitioners' complain occurred. Further, the order made on 12 June 2002 purported to enter judgment for an aggregate sum of 2,582,720 Vatu. As the judgment is in respect of individual awards of compensation to each petitioner, there should have been separate awards in favour of each petitioner. In both these respects the orders made on 12 June 2002 require correction. 

(d)	The second ground upon which His Lordship dismissed the Summons on 3rd July 2002 was that the applications for re-instatement and injunctive relief made by the petitioners were misconceived because the proper applicant should have been the Council. In other words, the action was not properly constituted as necessary parties had not been joined. We think there is force in His Lordship’s view that proper parties were not before the Court. 

We consider that the Council was an essential party as the relief claimed concerned primarily the Council. The Commissioner of the Council was before the Court. However he was sued in his personal capacity and not as a representative of the Council. If the Council, through the Commissioner, refused to consent to be joined as a petitioner, the action could have been sufficiently constituted by the Council being named as a respondent.

His Lordship also made the pertinent point that not all councillors had been joined. In so far as the individual rights of councillors are concerned, all of them should have been joined. Those who refused to join in as petitioners or applicants could have been joined as respondents.

If His Lordship is correct about who were necessary parties, as we are tentatively disposed to think he was, the effect of this action being improperly constituted is that the declarations injunctions and the re-instatement order sought by the petitioners could not be made in or under the umbrella of Civil Case No.56 of 2001. There was a failure to have the remaining councillors as parties to that proceeding also.

(e)	The third reason which His Lordship gave for dismissing the Summons on 3rd July 2002 was that the claims for declarations and injunctions were res judicata. Further, re-instatement orders were refused for the same reasons that had been given in the original judgment, and because His Lordship said the petitioners could not have both compensation and re-instatement.

It is clear from His Lordship’s remarks that he considered that the relevant claims for declarations, injunctions and re-instatement were those made in the original petition concerning the period from 19 October 2001 to 19 June 2002. That was the subject matter of the petition and His Lordship was correct to hold that the issue of the Summons on 27 June 2002 within the same proceedings could not have the effect of extending the claims to cover a different period of time commencing on and after 19 June 2002. If the petitioners sought orders in respect of that period of time it was necessary for them to commence a fresh action. If a fresh action was commenced, new questions would arise concerning the validity of the Minister’s extension of the suspension first to the end of June 2002, and then indefinitely. Those questions could not be made the subject of the petition commenced months before these events occurred.

When His Lordship’s reasoning is so understood, his statement that the petitioners could not have both re-instatement and compensation is readily understandable.

It will be remembered that the Ex Parte Summons was issued on 27 June 2002, and His Lordship had disposed off the matter with final orders on 3rd July 2002. In the meantime, and unknown to His Lordship when he disposed off the Ex Parte Summons, on 1st July 2002 the Minister had suspended the Council indefinitely. In the face of that suspension (and unless and until it is declared by a Court to be invalid) the Court could not make the orders sought by the petitioners even in fresh proceedings properly constituted. The Court must give due respect to valid executive action, and not make orders that would operate inconsitently with it.

The issues raised by the judgments and orders in this matter are of fundamental importance to the administration of the Council and to the residents whose Local Government affairs it administers. As there are substantial reasons for questioning the legal basis for the first judgment and for the compensation orders, we consider extensions of time within which to appeal should be granted. It is not possible for papers and counsel to be prepared in time to argue the case in the present Court of Appeal sittings. The Appeal will have to be heard in the next Court of Appeal sittings, in the first part of 2003.

After this Court indicated that it was disposed to grant extensions of time for the Minister and the Commissioner to appeal, the petitioners sought to have their appeal against the dismissal of the Ex Parte Summons re-instated. To ensure all questions are before the Court when the appeals are argued we agree that this should happen.

Accordingly Civil Appeal No.15 of 2002 is re-instated, and the Order for costs against the petitioners is set aside. The Minister and the Commissioner are granted extensions of time to 15 November 2002 to appeal against the judgments of 11 February 2002 and 12 June 2002. All appeals are to be heard together.

In the meantime there will be an order staying enforcement of the compensation order made on 12 June 2002. There will also be an order staying all outstanding orders for costs that have been made in the proceedings.

The costs of the present applications for extension of time are reserved, and will be dealt with on the hearing of the substantive appeal. 

Finally we repeat what we said to all parties on a number of occasions during argument. It could be in the best interest of all parties that they agree that this Court should set aside all judgments and orders which have been made in Civil Case No.56 of 2001 to enable fresh proceedings to be issued. Those new proceedings could properly be constituted by joining all necessary parties and could put in issue all decisions of the Minister or the Commissioner about which there is dispute. This course of action would avoid further costs in the proposed appeals, and would enable the real issues in dispute to be heard sooner than the first Appeal Court sittings in 2003. The costs of all parties in Civil Case No.56 of 2002 could abide the outcome of the new proceedings, or be the subject of some other agreement between the parties. If the parties agree to this course, the Court of Appeal will arrange to make an order by consent at short notice so that the dispute can proceed to resolution without litigation complications. 

DATED at PORT-VILA, this 1st DAY of NOVEMBER 2002

BY THE COURT

Vincent LUNABEK CJ
Bruce ROBERTSON J
John von DOUSSA J
Daniel FATIAKI J
Roger COVENTRY J