High Court rules it cannot block spending

Last Updated on Monday, 16 February 2015, 22:41 by GxMedia

 Attorney General Anil Nandlall on Monday highlighted that the High Court has ruled that it cannot block government spending on programmes that have not been approved by the National Assembly.

Opposition Leader, David Granger had wanted the Constitutional Court to bar the administration from spending funds in that manner during this year.

Following is the Attorney General’s statement:

On the 11^th day of December, 2014, Mr. David Granger filed a general indorsed writ against Dr. Ashni Singh in his capacity as Minister of Finance, the Attorney General of Guyana and Mr. Raphael Trotman in his capacity as Speaker of the National Assembly. A number of reliefs were prayed for in the Indorsement of Claim.

An ex-parte application by way of affidavit was filed simultaneous with the said Writ of Summons in which the Applicant, Granger, prayed for a Conservatory Order “to stay all spending and/or any further spending by the first-named Defendant or other Ministers on programs disapproved or not authorized by the National Assembly until the hearing of the substantive action herein”. In the Court it was agreed by the parties that this application will not be heard ex-parte and it was thereof by consent converted into an inter-partes application. In the result, the Respondents were granted leave to file an Affidavit in Answer to the application and the Applicant was granted leave to file an Affidavit in Reply thereto. The next procedural step which was taken in the matter was that submissions were made by all sides.

 I must emphasize, therefore, that the only matter which was before the court was the application for a Conservatory Order. Nothing else. All the legal arguments presented by the Attorney General in person and by Mr. Ashton Chase, S.C for the Minister of Finance related and were confined to the only issue which was before the court and that was, whether or not the Conservatory Order should be granted.

The Conservatory Order was refused

 The Chief Justice (Ag) refused the application for the Conservatory Order. In so doing, he upheld the submissions of the Attorney General that the application for the Conservatory Order, because of the time that it was made, can only relate to spending for the year 2015 and therefore, the application for the Conservatory Order did not relate to spending for 2014. That in relation to spending for 2015, a financial year for which there has been no Appropriation Act, a combination of Article 219 of the Constitution and the Fiscal Management and Accountability Act 2003 expressly provide how moneys are to be spent for this period, for what purpose those moneys can be spent, and in what proportion, and the Court cannot interfere with the Government’s Constitutional authority to spend in accordance with this formula. The gravamen of the Chief Justice’s ruling is captured in the following seminal passage which appears at page 32 of his written ruling:

“As the learned Attorney-General correctly submitted, the court has no jurisdiction to prohibit or restrict the exercise of any authority conferred by the Constitution or an Act of Parliament since so to do would be to violate the doctrine of separation of power which indubitably inheres in the Constitution of Guyana. Only if the Respondents are acting or are likely to act ultra vires the power or authority conferred by or under the Constitution or by or under an Act of Parliament that a prohibitory order in the nature of a Conservatory Order can be issued against the Respondents…The Court cannot nullify or limit in any way, whether directly or indirectly, the effect of the application of the Constitution which it has sworn to uphold. It is absolute that there can be no judicial subversion of the Constitution directly, indirectly or consequentially.”

Another significant ground upon which the Conservatory Order was refused was, “If granted in the form as prayed for, it would be in effect an injunction against Government spending permitted by the Constitution and the Fiscal Management and Accountability Act…” (p34)

The final and decisive words of the Chief Justice in his ruling at page 36 read thus:  

“For the above reasons, the application for an interlocutory Conservatory Order cannot be granted in the circumstances of this case and accordingly refused.”

 

 

 

Obiter dicta pronouncements

That ought to have brought an end to the matter since that application was all that was before the Court. Unfortunately, the Chief Justice chose to express his views on a number of other matters which were not issues that were before him for determination. They are issues that will have to be determined at the hearing of the substantive action and only after pleadings have been filed and evidence led. These fundamental and mandatory procedural requirements did not take place. Indeed, no legal submissions were made either by the Attorney General or Mr. Ashton Chase, S.C on these matters. The reason is simple. They were not live issues before the court since they did not relate and were not relevant to the application for the Conservatory Order, which was the only application that was before the court. The pronouncements of the Chief Justice on these matters are, therefore, obiter dicta and are not binding aspects of the ruling. In short, they do not constitute the ratio decidendi, or the reasons for the ruling.

The Chief Justice embarked upon an examination and interpretation of Articles 217 and 218 (3) of the Constitution. Again, I emphasize that the only matter with which the court was seised at this point and time was whether or not a Conservatory Order should be granted in relation to spending for the year 2015, only Article 219 of the Constitution and the relevant provisions of the Fiscal Management and Accountability Act 2003 were relevant. In this factual matrix, Articles 217 and 218 have no relevance. The Chief Justice nevertheless examined them.

Article 217 of the Constitution provides:

“(1) No money shall be withdrawn from the Consolidated Fund except-

(a)    To meet the expenditure that is charged upon the Fund by this Constitution and by an Act of Parliament; or

(b)   Where the issue of those moneys has been authorized by an Appropriation Act; or

(c)    Where the issue of those moneys has been authorized under Article 219.”

Article 218 (3) of the Constitution provides:

“If, in respect of any financial year, it is found-

(a)    That the amount appropriated by the Appropriation Act for any purpose is insufficient or that a need has arisen for a purpose for which no amount has been appropriated by this Act; or

(b)   That any moneys have been expended for any purpose in excess of the amount appropriated for that purpose by the Appropriation Act or for which no money has been appropriated by that Act,

a Supplementary Estimate or, as the case may be, a Statement of Excess showing the sums required or spent shall be laid before the Assembly by the Minister responsible for finance or other Minister designated by the President.”

In interpreting Article 217 of the Constitution the Chief Justice noted that except where expenditures have been charged upon the Consolidated Fund by the Constitution or an Act of Parliament, moneys cannot be withdrawn from the Consolidated Fund without authorization by an Appropriation Act (except under Article 219).

As regards Article 218 (3) the Chief Justice found that there can be an avoidance of a breach of Article 217 by the utilization of a Supplementary Estimate. Fundamentally, he also found that a breach of Article 217 can be cured or remedied by utilizing a statement of excess as authorized by Article 218 (3). This mechanism he described as a “curative measure” to a violation of Article 217. Therefore, the Constitution itself provides a curative measure to remedy its violation.

However, and I dare say strangely, the Chief Justice then proceeds to draw a distinction between “advertent” and “inadvertent” expenditure for which Statements of Excess can be laid. He further pronounces that if the over expenditure or over withdrawal was “advertent” then it cannot be remedied by the curative aspect of Article 218 (3).

I respectfully part company with the learned Chief Justice on this aspect of his interpretation. Article 218 (3) in its width, ambit, and latitude makes no distinction between “advertent” and “inadvertent” expenditure or over withdrawal. Indeed no such or similar words of limitation are either expressed or can be implied in the language of Article 218 (3). Therefore, that restrictive interpretation runs afoul of the express language of Article 218 (3).

Previous Rulings

It is instructive to note that this was not the first time that the Chief Justice had cause to interpret Articles 217 and 218 (3) of the Constitution in this very context and for these very reasons. He did so in a 34 page written ruling dated 18^th July 2012, “preliminary ruling” in the “Budget Cut Case” filed by the Attorney General. He did so again in his twenty-one pages final ruling in the very case on the 29^th day January 2014. Importantly, between the time of the preliminary and final ruling the Minister of Finance, in almost identical circumstances, withdrew moneys not approved by the National Assembly and used the same and utilized Article 218 (3) to do so, laying Statements of Excess before the National Assembly in relation thereto in compliance with the said Article of the Constitution.

Role of the Minister of Finance

Another important factor which must be highlighted in this factual matrix is that the very lawyers who appeared in the instant case appeared in that case and advanced the identical, if not strikingly similar argumentations and objections. Indeed, in that case the Attorney General specifically prayed for an order that the Minister of Finance be at liberty to make the said withdrawals. The Chief Justice declined to make that order. In so doing, he cites Article 217 and reminds of the prohibition which it contains against spending without Parliamentary approval. Immediately following using the preposition “BUT”, he cites Article 218 (3) and sets out its provisions verbatim. Speaking of the role of the Minister in that provision he notes:

“The application of Article 218 (3) is premised on a finding of insufficiency of an appropriated amount for a stated purpose or of no amount for a purpose for which a need has arisen and which has received no appropriation or a finding of an excess of spending for a stated purpose or for a purpose which has received no appropriation. Article 218 (3) enables the Minister of Finance to lay before the Assembly a Supplementary Estimate of expenditure or statement of excess spending for its approval on the basis of a finding of insufficient funding, no funding, or overspending.” (page 29).

In conclusion, the learned Chief Justice then proceeded to make the following pivotal observations

 “It is not for this Court to substitute itself for the Minister of Finance. It is he who must make the pre-requisite “finding” under Article 218 (3) of the Constitution and it is he who must be “satisfied” under Article 220 (1) and section 41 (3) of the Fiscal Management and Accountability Act 2003 and not the Court.

Since the court cannot substitute itself for the Minister for the purposes of Article 218 (3) and Articles 220 (1) and section 41 (3) of the Fiscal Management and Accountability Act 2003, the court must decline to order any interim relief in relation to reductions or cute to those line items to which the Appropriation Act applies.

Even if those cuts and reductions were constitutional but have resulted in insufficiency, it is the Minister and not the Court in whose hands remedial action lies. The court cannot usurp the constitutional functions of the executive Minister just as the National Assembly cannot usurp the constitutional function of the executive Minister.” (page 32)

It is these words of the very Chief Justice by which the Government guided itself in the manner in which it acted. In short, The Minister of Finance made “the finding of insufficiency” under Article 218 (3) and acted, as the Chief Justice opined.

As I stated above, all that has been determined in the case thus far, is the application for the Conservatory Order. That application was rejected as misconceived and accordingly dismissed. Government awaits the hearing and determination of the substantive action where the opportunity will be provided for its legal advisers to present arguments on the issues which are the subject of the obiter dicta remarks of the Honorable Chief Justice.

End