Court name
High Court General Division
Case number
163 of 2008
Case name
Ex Parte Mhango & Ors.; In Re: S v Minister of Finance & Anor.
Law report citations
Media neutral citation
[2009] MWHC 2
Judge
Chikopa J

IN THE HIGH COURT OF MALAWI

 

MZUZU DISTRICT REGISTRY

 

MISCELLANEOUS CIVIL CAUSE NO. 163 OF 2008

 

 

BETWEEN

 

THE STATE

 

-AND-

 

MINISTER OF FINANCE FIRST RESPONDENT

 

SECRETARY TO THE TREASURY THIRD RESPONDENT

 

 

EXPARTE: Hon. Bazuka Mhango MP First Applicant

Hon Friday Jumbe MP Second Appellant

Hon Joseph Njovuyalema MP Third Appellant

Hon NGA Ntafu MP Fourth Appellant

Hon BJ Mpinganjira MP Fifth Applicant

Hon Pisho Nkhwazi Sixth Applicant

 

[Suing on their own behalf and on behalf of and representing all Members of Parliament except Ministers]

 

 

CORAM: THE HON. MR. JUSTICE L P CHIKOPA

Mr. W Kita of Counsel for the Applicant.

Mr. M. Kachule Senior State Advocate for the Respondents

Zimba Bondo/Msiska [Mrs.] Court Clerk

 

Place and Date of Hearing: Mzuzu, 17th December 2008, 7th January, 2009 and 16th February 2009.

 

Date of Ruling: 5th March, 2009

 

RULING

 

 

INTRODUCTION

The facts of this dispute are not much in dispute. The Applicants are as at this date bona fide Members of Parliament. They have brought this action on their own behalf and on behalf of all Members of Parliament except those that are Ministers [we assume they speak here of Cabinet Ministers and not for instance ministers of the Church].

It is clear from the affidavits that the National Assembly, its Committee[s] and the Parliamentary Service Commission [PSC] had been engaged in the exercise of reviewing terms and conditions of service for Members of Parliament. One of the new terms that came out of such review was that each Member of Parliament who was not a cabinet minister should get 500 litres of automobile fuel per month for as long as he/she was such a member. Believing there was general consensus on this matter the administrative wing of the National Assembly i.e. the Clerk of Parliament’s office included in the budget estimates for the year 2008 to 2009 this item. It was budgeted at K100000.00 per month per Member of Parliament. This was in view of the fact that the estimated cost of 500 litres of fuel then was approximately K98000.00. See especially paragraph 18(b) of the second respondent’s affidavit in opposition. The fuel allowance estimates were included in the Appropriation Bill for the fiscal year 2008 to 2009 presented by the first respondent for debate in the National Assembly. The said Bill was duly passed, assented to and became the Appropriation Act for the fiscal year July 2008 to June 2009. The fuel allowance was included in the Appropriation Act of 2008. The sum of K13900000.00 per month was estimated to cover fuel allowances for Members of Parliament for the fiscal year July 2008 to June 2009.

By a letter dated September 15th, 2008 the Ministry of Finance wrote the Clerk of Parliament [COP] in inter alia the following terms:

 

SECRETARY TO THE TREASURY’

‘15th, September, 2008

 

The Clerk of Parliament

National Assembly

Private Bag B362

Capital City

Lilongwe 3.

 

FUEL ALLOWANCE FOR MEMBERS OF PARLIAMENT

 

I would like to draw your attention to the above mentioned matter.

I am informed that the Parliamentary Service Commission agreed to award fuel allowance to Members of Parliament and that this was factored in the budget.

I am directed to inform you that this condition and any other condition that was agreed by the Parliamentary Service Commission but was not expressly agreed by the Minister of Finance in writing as required by the Public Finance Management Act, should not and must be implemented until the Minister agrees to this in writing.

I wish therefore to advise that this allowance should not be implemented unless approved by this office.

 

R P Mwadiwa

SECRETARY TO THE TREASURY” [sic]

 

This letter was most likely not personally signed by the Secretary to the Treasury [ST]. But that and the letter’s capacity for a contrary interpretation notwithstanding, the parties hereto understood this letter to mean that the Respondents had decided not to disburse funds for the 500 litre per month fuel allowance for Members of Parliament provided for in the Appropriation Act. The applicants, obviously not amused with such a development, have brought the present proceedings seeking to judicially review the Respondents’ decision ‘refusing to disburse to the applicants and to all Members of Parliament a monthly fuel allowance (500 litres per month) as recommended by the Parliamentary Service Commission and as subsequently included in national budget estimates approved by cabinet , presented to the National Assembly by the Minister of Finance and as passed by the National Assembly and provided for in the Appropriation Act, 2008’. [Sic]

 

They seek:

 

a. A declaration that the said administrative decision by the respondent is unlawful;

b. A declaration that the said administrative decision by the Respondents is procedurally unfair, is not justifiable in relation to the reasons given and is in breach of the Applicant’s legitimate expectations;

  1. A like order to certiorari quashing the decision of the Respondents;

  2. A like order to mandamus compelling the Respondents to disburse to the Applicants and all Members of Parliament, money for their fuel allowance, provision for which was made in the Appropriation Act, 2008 from the 1st July 2008 to the date of judgment and up until the expiry of their terms of office;

  3. Further or other relief;

  4. An order for costs; [Sic]

 

The Respondents do not deny that a review of the terms and conditions of service for Members of Parliament was done. They also do not deny that one of the consequences of such review was the introduction of the 500 litres of automobile fuel per month per member fuel allowance. They admit that the fuel allowance was factored into the 2008 to 2009 budget estimates, into the Appropriation Bill presented to the National Assembly by the Minister of Finance [MOF] and later enacted as part of the Appropriation Act of 2008. They however still deny that the fuel allowance is payable. They contend firstly that the PSC is not mandated to determine terms and conditions of service for Members of Parliament. It only has the power to receive and consider recommendations in respect thereof. The fuel allowance having been, in their view, determined by the PSC could not have been validly determined. It is therefore not payable. Secondly the respondents contend that the fuel allowance can not be paid out unless and until the MOF has in writing expressly sanctioned such payment. That no such written sanction having been granted herein the ST has no mandate to pay out the fuel allowance. Thirdly the respondents argued that the mere inclusion of the fuel allowance and the allocation of funds therefor in the Appropriation Act of 2008 does not create a legitimate expectation that funds will be disbursed will actually be disbursed in respect thereof. Neither does it oblige the ST and/or the Ministry of Finance to disburse funds in respect thereof. In the respondents’ view whether or not an item will be funded depends at the end of the day on the discretion of the MOF and the ST. Fourthly and fifthly it was argued that the matter of the fuel allowance is not justiciable and is prematurely before the courts.

 

THE ISSUES AND THE COURT’S DETERMINATION THEREOF

The Applicants seek the implementation, in so far as it concerns the payment of fuel allowance, of the Appropriation Act of 2008. Accordingly they seek a quashing of the respondents’ decision refusing to disburse funds for the respondents’ fuel allowance on the grounds that the same is unlawful, procedurally unfair, not justifiable in relation to the grounds given and is in breach of the applicants’ legitimate expectations. The respondents while not challenging the validity of the Appropriation Act maintain that the fuel allowance is not payable. Considering the facts and arguments before us in the light of the applicable law it appears to us that there are two sets of issues to be considered. Those raised by the applicants and those raised by the respondents. About the former we should determine whether the respondents’ decision:

 

  1. is unlawful;

  2. is procedurally unfair;

  3. is not justifiable in relation to the reasons given; and

  4. is in breach of the applicants’ legitimate expectations.

 

Regarding the latter we should consider:

 

  1. firstly whether or not the matter before us is justiciable;

  2. secondly whether or not this matter is prematurely before us;

  3. thirdly whether or not the fuel allowance is a validly determined term and/or condition of service for Members of Parliament. Specifically whether it was necessary that it receives the consent of the MOF/ST/Cabinet, if yes whether such consents were granted and lastly whether it was made by the appropriate authority;

  4. fourthly whether the written consent of the MOF is necessary before funds for fuel allowances can be disbursed. If yes whether such consent was ever given; and

  5. fifthly whether the mere inclusion of an item in the Appropriation Act creates a duty on the part of the ST and/or the MOF to disburse funds in respect thereof. In the alternative whether it creates a legitimate expectation that the disbursement will be made. Does, as the respondents allege, the ST and/or the MOF have a discretion whether or not to disburse? Depending on the answers we get to the above questions we might have to consider the remedies prayed for herein.

 

JUSTICIABILITY

The respondents argued that the applicants’ claim is not justiciable. This because it raises issues of resource allocation and policy which the courts are ill-equipped to deal with. Various cases were cited in support of such contention. In Council of Service Unions [it should be Council for the Civil Service Unions] v Minister of the Civil Service [it should be Minister for the Civil Service] [1985] AC 374 at 411 [the Civil Service case] Lord Diplock said a matter will not be justiciable if:

 

‘ ….. the reasons for the decision maker taking one course rather than another do not normally involve questions to which, if disputed, the judicial process is adapted to provide the right answer, by which I mean that the kind of evidence that is admissible under judicial procedures and the way in which it has to be adduced tend to exclude from the attention of the court competing policy considerations which, if the executive discretion is to be wisely exercised, need to be weighed against one another, a balancing exercise which judges by their upbringing and experience are ill-equipped to perform’. [Sic]

 

R v Criminal Injuries Compensation Board [1995] 1 ALL ER 870 held that decisions about the allocation of resources, or a balancing of competing claims on the public purse and the allocation of economic resources are matters which the courts are ill-equipped to deal with.

In Ministry of Finance ex-parte SGS Malawi Limited Miscellaneous Civil Cause Number 40 of 2003 Mwaungulu J expressed the view that matters involving socioeconomic policy and competing policy considerations are clearly not justiciable.

The respondents think that this case is about the allocation and disbursement of scarce financial resources. On the basis of the above case law the respondents argued these are not matters for the courts. Allocation and disbursement of funds does not depend merely on the fact that an item is provided for in the Appropriation Act. It also depends on economic policy, cash flows, revenue collection levels and donor funding inflows. These are matters best left to the discretion of those best qualified to handle them in this case the respondents. This discretion should not, according to the respondents, be subject to review by the courts.

The applicants think that this matter is justiciable. To them the question before this court is not resource allocation between competing state agencies. It is also not about policy. It is not even about whether the government should fund this or that activity. It is instead about the implementation of an Act of Parliament and whether the respondents are acting within the Constitution/the law in refusing to implement parts of the Appropriation Act. The case of R v Secretary of State for the Home Department ex parte Fire Brigade’s Union [1995] 2 AC 513 [also found at [1995] 2ALL ER 244] was cited. The question was whether a Minister’s discretion as to the date on which an Act was to come into effect was judicially reviewable. The Minister argued, just like our respondents, that the Minister’s discretion was not reviewable it being about matters of policy which the courts are ill-equipped to handle. The House of Lords disagreed. The applicants suggest that we be guided by this case and not those cited by the respondents. They think this case is on all fours with the instant case. It is also decide later than the cases cited by the respondents. It must be taken to have overruled them.

We had occasion to take a brief excursus into justiciability as it has developed under English law and even our own. It is clear both parties have a point. In the fifteenth’s edition of De Smith’s, Woolf’s and Jowell’s Judicial Review of Administrative Action at page 18 the learned authors say:

 

courts are not institutionally suited to engage in the task of weighing utilitarian calculations of social, economic or political preference. These tasks are best suited to institutions in the political arena. Nevertheless, despite the important limitation on their capacity, courts are able, and indeed obliged, to require the observance of those principles that govern lawful public decision making. In so doing they seek to reinforce representative government, not to oppose it – and to promote, not to undermine, the inherent features of a democracy’. [Sic]

 

The learned authors are clearly but unwittingly batting for both sides to this argument. It is their view however that a decision is not justiciable i.e. not reviewable if it will necessitate the court evaluating social and economic policy or allocating scarce resources among competing claims [see the Civil Service case] unless in so doing the court will be shying away from its duty to insist on the observance of those principles that govern lawful public decision making. On the other hand Lord Upjohn said in Padfield v Minister of Agriculture Fisheries and Food [1968] AC 997 [Padfield’s case]that no statutory power is any longer inherently unreviewable. Saying in other words that all executive decisions are reviewable ie justiciable. At page 1060 His Lordship said that not even an Act of Parliament can limit the courts’ power to ensure that the executive exercises its powers lawfully. It was in the spirit of such thoughts, we believe, that Lord Browne-Wilkinson thought he could review, in the Fire Brigades Union case, the Minister’s discretion as to when to bring into force a statute.

Back home this very court in Wallace Chiume & Others v AFORD, Chakufwa Chihana & Another Civil Cause Number 108 of 2005 [High Court Mzuzu Registry, unreported] and Hassan Hilale Ajinga v United Democratic Front Civil Cause Number 2466 of 2008 [High Court, Principal Registry, unreported] reiterated the fact that courts have little capacity to deal with matters of inter alia policy. Such matters, we thought, should be left to those best suited to deal with them namely the people’s elected representatives and their permanent advisors i.e. the civil servants. We would therefore be the first to wash our hands off this case if it raised issues only of policy or required this court to evaluate socioeconomic policy or allocate scarce economic resources.

The above notwithstanding and while the Constitution implores us to have due regard, when interpreting our Constitution, to current norms of public international law and comparable foreign case law [see section 11(2)(c) of the Constitution] such case law must be considered in the context of the current Malawian legal landscape. We have a written Constitution which the English jurisdiction [the origin of most of our case law] does not. We have Constitutional Supremacy while the English have Parliamentary Supremacy. And whereas in the English jurisdiction judicial review and justiciability are probably matters of conventions, custom and practices developed over the years by judges in Malawi they are matters shaped by the Constitution. section 103(2) of the Constitution and the case of The State v The President of the Republic of Malawi, the Minister of Finance and the Secretary to the Treasury ex parte the Malawi Law Society Constitutional Case Number 6 of 2006 [being Miscellaneous Cause Number 165 of 2006 unreported] [the Judges’s case] make it clear that the Judiciary has jurisdiction over all issues of a judicial nature. It also the exclusive authority to decide whether an issue is within its competence or not. Section 5 of the Constitution allows the courts to invalidate an act of government or a law for being inconsistent with the Constitution. In thus Friday Anderson Jumbe & Humphrey Chimpando Mvula v Attorney General Constitutional Case Number 1 of 2005 the Constitutional Court invalidated section 25B [3] of the Corrupt Practices Act for being inconsistent with the constitutionally guaranteed right to a fair trial. In the Judges’ case the applicants successfully challenged the Executive’s refusal to implement a compensation package for the Judiciary determined by the National Assembly. The bottom line is that it is for this court to decide whether or not the matter before us is justiciable. In accordance with such mandate we have no doubt whatsoever that this case in not about resource allocation. It is also not about socioeconomic policy. It is about the legality of the respondents’ decision not to disburse funds for fuel allowances after the same had been provided for in the Appropriation Act of 2008. It is also about whether the respondents’ conduct is in breach of the applicants’ right to administrative justice as provided for in section 43 of the Constitution. Courts are the only judges of the legality, constitutionality or otherwise of the respondents’ decision complained of herein. It is our most considered opinion that the matter before us is, in so far it is about the legality and constitutionality of the respondents’ decision, a justiciable matter. We shall proceed to hear and determine it. We would if we proceeded otherwise be running away from our obligation to insist on the observance of those principles that govern lawful public decision making.

 

PREMATURITY

The sum total of the respondents’ argument is that this matter is prematurely before the courts. That a chance should have been given for consultations between the applicants and the respondents. This in the view of the respondents is in keeping with section 13(1) of the Constitution which advocates for peaceful settlement of disputes through negotiations and mediation. The respondents even suggested that but for a lack of sobriety this matter need not have been the subject of litigation. See pages 18 and 19 of the respondents’ submissions and also paragraphs 16 and 17 of the second respondent’s affidavit in opposition.

The applicants contend the opposite. In their view the respondents have already made a decision that the fuel allowance is not payable. They can not now turn around and claim that the applicants are prematurely before the courts when all the applicants have done is litigate that same decision. If it was the respondents’ intention that this matter be resolved minus litigation the respondents should have worded FJ4 differently. FJ4 would for instance have solicited the applicants’ input in view of the respondents’ intention to defer withhold disbursement of the fuel allowances. The respondents erred, if their intention was to discuss the matter, in making a final decision and then hoping that the applicants will come to discuss the very matter they had decided to finality. Unless of course they were talking of an appeal which is not the case in this matter.

 

We could not find section 13(1) in the Constitution. Unless of course we were looking at the wrong edition thereof. We however want to resolve this matter without resorting to pedantry. The respondents’ use of the words negotiations and mediation can only mean they had section 13(l) in mind. We will proceed accordingly. However we proceed there is no denying the fact that MOF decided not to pay the fuel allowances. This decision has been communicated to the applicants courtesy of Exhibit PJ4. The reason advanced therefor is that MOF has not agreed in writing that the fuel allowances be paid. Was Exhibit PJ4 inviting the applicants or their Vote Holder i.e. COP to discussions whether or not the fuel allowances should be paid? The answer is in the negative. That letter was not inviting anyone to any discussion. It was communicating a decision or directive whose legality is the subject of these proceedings. Can the respondents now suggest that this matter is prematurely before the courts? The answer is also in the negative. If the respondents wanted negotiations and mediation they would have worded Exhibit PJ4 differently. They would not have presented the applicants with a fait accompli. They would have called for the applicants’ views on the proposed deferment, or scrapping altogether, of the fuel allowance. As matters are the respondents can not now accuse the applicants of rushing to the courts and not giving mediation and negotiations a chance. This matter is not prematurely before the courts.

IS THE FUEL ALLOWANCE A VALIDLY DETERMINED TERM AND CONDITION OF SERVICE FOR MEMBERS OF PARLIAMENT?

The thinking is that the fuel allowances can only be payable if the answer is yes. The applicants answer the above question in the positive. The fuel allowance was approved by the PSC and the National Assembly. It was approved by cabinet. It was included by the MOF in the 2008 to 2009 budget estimates. It was presented to the National Assembly by the MOF, and enacted as part of Appropriation Act 2008.

The respondents say no. Firstly because the fuel allowance was neither approved by the MOF nor the cabinet. Secondly because it was determined by the PSC which is not the body mandated to determine terms and conditions of service for Members of Parliament.

 

Is The Consent Of The Minister Of Finance The Cabinet Or The Secretary To The Treasury Necessary To Determine Terms And Conditions Of Service Of Members Of Parliament?

The respondents argue that as a term and condition of service for Members of Parliament the fuel allowance is null and void for not having been sanctioned by the MOF/ST/Cabinet. We asked the respondents’ Counsel whether he could point to specific legislation supporting the view that Parliamentary terms and conditions of service require the sanction of the MOF. He could not. And the reason is perhaps not difficult to come by. In the same way that section 11(g) says that the PSC should only receive and consider recommendations for Parliamentary terms and conditions of service it does not say that PSC should receive and consider such recommendations subject to the sanction of MOF or the ST or indeed the Cabinet. Neither does it also say that whichever institution determines Parliamentary terms and conditions of service should do so subject to the consent of the ST or MOF or the Cabinet.

The respondents also argued that because the MOF has overall control over matters of state finance we should infer from a purposive interpretation of the Constitution that terms and conditions of service for Members of Parliament should be sanctioned by, if not the MOF then at least by the Executive Branch of government before they become effectual. That if we interpreted the law any other way the National Assembly would have the power to decide its own terms and conditions of service which is not only financially imprudent but also against the doctrine of separation of powers. There would be no one to check the National Assembly. An example, by way of contrast, was given of the terms and conditions of service for Judicial Officers which are determined by the National Assembly. See section 114(1) of the Constitution and the Judges’ case. We do not disagree that the courts should always adopt a purposive approach when interpreting of the Constitution. In fact the court’s duty is to give the Constitution a generous, broad and purposive interpretation as opposed to a legalistic, pedantic and restrictive one. One that as much as possible avoids absurdities. See Fred Nseula v Attorney General & Malawi Congress Party MSCA Civil Appeal Number 32 of 1997 [unreported], Attorney General v Dr Mapopa Chipeta MSCA Civil Appeal Number 33 of 1994 [unreported] and the Judges’ case. Having said that we feel there is and should be a difference between giving the Constitution a generous, purposive and broad interpretation and reading into it altogether new terms or terms that are not there, need not be there or ones that serve no useful purpose except perhaps to introduce needless mischief.

Parliamentary Standing Order Number 162 provides in paragraph (i) that the functions of the Public Appointments of Parliament [PAC] include;

 

Determining and recommending to the House the conditions of service for Members of the Assembly’. [Sic]

 

If there is any need for the terms and conditions to be consented to such consent must only be that of PSC, PAC and the National Assembly itself. There is therefore no need to infer ministerial or treasury consents from anywhere. Or to read such consents into the Constitution. If such [the need to have ministerial or Treasury consents] were the wish of the people of Malawi the framers of our Constitution would have had express provision to that effect in the Constitution or some other legislation. That they did not do so can only mean they wanted the terms and conditions of service for Members of Parliament to be determined without the consent of the MOF, ST or cabinet. And for the courts to read into the Constitution such consents would be tantamount to usurping the legislative function of Parliament under the thin disguise of constitutional interpretation. And that we will not encourage much less be part of.

The respondents also argued that allowing Parliamentary Terms and conditions to be determined without the consent of the MOF/ST or cabinet would be allowing the National Assembly to determine its own compensation package, financially imprudent and against the doctrine of separation of powers. Nothing in our view can be further from the truth. In fact to so argue is to deliberately misunderstand the process by which Parliamentary terms and conditions of service are actually determined. Take the one in issue as an example. It was discussed and approved in the PSC and PAC both of which are all party bodies. They therefore accommodate diverse and opposing views. It was also taken to the Cabinet. Cabinet is in the Executive Branch of government. Its perspective will not necessarily be that of the Legislature. In fact, and due to political party affiliation, its views are in practice diametrically opposite those of the Legislature. More than that cabinet has the whole civil service with its immense expertise in matters inter alia financial behind it. The civil service must have advised cabinet appropriately. It then went through the Ministry of Finance specifically the Treasury before it was presented by the MOF as part of an Appropriation Bill in the National Assembly. The MOF, Treasury and the Ministry of Finance are within the Executive. They must also be taken to have subjected the terms and conditions to appropriate scrutiny. the National Assembly also has an all party membership and therefore a diversity of views. It should have subjected the fuel allowance to scrutiny before endorsing it.

The above process is geared towards taking care of any financial imprudence of the respondents have in mind. It should also lay to rest any fears that not reading ministerial or treasury consents into the process of determining Parliamentary terms and conditions or service turns the process into a one branch affair or is a breach of the doctrine of separation of powers. The truth is that the Executive has an input. Through government ministers at cabinet level and the Treasury at Ministry of Finance. In the National Assembly, the PSC and the PAC the Executive has input through legislators that sympathize with government policy positions. Any other interested party or citizen e.g. civil society etc can also have their views on legislative compensation heard if they want. They can seek an audience with PAC or get their legislator to espouse their views on the floor of the House. Any which way you look at the matter the conclusions are inescapable. Firstly the law does not require the consents of the MOF, the ST or Cabinet in determining Parliamentary terms and conditions of service. Secondly the law already provides for a system of consents namely that of PSC, PAC and the National Assembly which were complied with and are not in issue in this case. Thirdly there is no need to infer from the Constitution any ministerial or treasury consents in relation to Parliamentary terms and condition of service. The current system has adequate inbuilt safeguards and checks and balances. Cynics will, and for good reason, say ‘but Members of Parliament will always vote together when it comes to their compensation packages! That is not a legal problem. It is a political problem. It must be resolved politically by in the main electing members who will not sacrifice the national interest at the altar of self or sectarian interest. See the Ajinga and Wallace Chiume cases.

 

If Such Consents Are Necessary Were They In Fact Ever Given?

This question assumes that the consents of the MOF, Cabinet and the ST are necessary before Parliamentary terms and conditions of service can be regarded as validly determined which is not the case. We thought we should for argument’s sake and for the sake of putting matters properly to bed answer the above question anyway. And the historical context of this matter provides the answer.

The PSC and PAC discussed the fuel allowance. It was approved. That is why the fuel allowance found itself in Cabinet and beyond. The first respondent sits in Cabinet. He would have sworn an affidavit to that effect if Cabinet did not approve the fuel allowance. That he did not can only mean that it actually was approved. The second respondent deponed in paragraphs 9 and 10 of his affidavit herein that neither Cabinet nor the MOF approved the fuel allowance. They only approved the budget’s framework which does not entail going into the budget’s minute details. We hesitate to suggest that the second respondent is being economical with the truth but we can not fail to say that if Cabinet or MOF did not approve the fuel allowance the first respondent would have deponed thus. But on a very serious note we think, with respect, that the second respondent is most likely being disingenuous. This framework that Cabinet considered and approved did it exclude the fuel allowances? The answer is obviously that such framework included the fuel allowance. If Cabinet of its own volition did not go into the budget item by item with the result that it did not specifically consider the fuel allowance can it lie in Cabinet’s mouth or that of its principal financial advisor to say ‘but we never approved the fuel allowances’? We think not. The fuel allowance was then included in the annual budget estimates by the Ministry of Finance and Treasury. Could it have been so included if Treasury, MOF or the Ministry of Finance did not agree with them on one or other basis? The answer is in the negative. They were in the estimates because the Ministry, MOF and Treasury agreed with them. The fuel allowance was also part of the Appropriation Bill presented in the National Assembly by no less a personage than the MOF himself. Could the MOF have laid the fuel allowance before the House if he had reservations about it? The answer is no. Then the Bill became the Appropriation Act 2008. Did the National Assembly or the President object to the fuel allowance? The answer is again no. The totality of the facts before us shows, clearly in our view, that if the consent of the MOF, the ST or Cabinet was a precondition to the fuel allowance becoming a Parliamentary term and condition of service then such consents were in fact given. Or put differently such consents were not withheld which is much the same as the immediately foregoing conclusion.

It was also suggested in paragraph 12 of the second respondent’s affidavit that the MOF was not consulted about the fuel allowance. It can not be true. The fuel allowance was set before cabinet of which the MOF is part. It was also before the Treasury and the Ministry of Finance both of which are under the MOF’s direct control. The MOF was free to comment on the fuel allowance as he thought fit at cabinet, Treasury or Ministry level. If indeed he did not, which at the very least sounds strange, can MOF now turn around and claim that he was not consulted. No he can not. And that explains most likely why he did not swear an affidavit to that effect. The conclusion is that he was in fact consulted.

 

Is The Parliamentary Service Commission Mandated To Determine Parliamentary Terms And Conditions Of Service?

The respondents answer in the negative. And we agree with them. Under section 11(g) of the Parliamentary Service Act the PSC has the power only to receive and consider recommendations. Not to determine the terms and conditions of service themselves. Having said so we should hasten to say that it is not the applicants’ argument that the PSC is the determining authority. Rather it is that the PSC considered and approved the fuel allowance as per their mandate under section 11(g). We also agree with them. We have hereinbefore referred to Parliamentary Standing Order 162(i). It provides that the PAC has the power to determine and recommend to the House Parliamentary terms and conditions of service. Clearly and the wording of the Standing Order notwithstanding PAC is also not the final determining authority. It is the National Assembly itself. So that a term and condition of service does not become valid and effectual unless and until it has been approved by the National Assembly itself. In the instant case the fuel allowance was considered by PSC/PAC. It was adopted by the National Assembly in July 2007.

To answer the question above the PSC is not mandated to determine terms and conditions of service for Members of parliament. Only to receive and consider recommendations. However it is equally true that it is not the applicants’ contention that the term and condition in issue in this case was determined by the PSC. It is that it was received, considered and approved by PSC before being validly determined as a Parliamentary term and condition of service by the House itself as by law required.

If we might therefore wind up debate on the question whether or not the fuel allowance is a validly determined Parliamentary term and condition of service the answer is in the positive.

 

IS BY LAW THE MINISTER OF FINANCE’S WRITTEN CONSENT NECESSARY BEFORE THE SECRETARY TO THE TREASURY CAN DISBURSE FUNDS FOR FUEL ALLOWANCES? IF YES WAS SUCH CONSENT GIVEN?

The respondents answer the first question in the positive. The second in the negative. They place reliance on section 26 of the Public Finance Management Act. We reproduce the section in full.

 

upon an Appropriation Bill receiving the assent of the President, the Secretary to the Treasury shall make funds available to the respective votes according to the cash flow forecasts agreed between the head of the entity responsible for the Vote and the Secretary to the Treasury, and if agreement cannot be reached, as approved by the Minister’. [Sic]

 

The respondents argue that the above section requires that the MOF gives his written consent before funds can be disbursed into various votes. In paragraphs 15 and 23 of his affidavit the second respondent argues that he cannot pay the fuel allowances unless they have been approved in writing by the MOF. That as long as there is no such consent he has no legal mandate to ‘disburse funds for the said allowances’.

Respect the respondents have misapprehended the law. According to section 173 of the Constitution funds can only be drawn from the Consolidated Fund with the consent/authority of at the very least the National Assembly. According to section 23 of the PFMA public funds can only be expended if authorized by an Appropriation Act. Not the ST. Not the MOF. Section 26 on the other hand obliges the ST to ‘make funds available to the respective votes’. He has no discretion as to whether or not to pay. The only input he has is with respect to the cash flow. This he has to agree with the head of the entity responsible for the Vote. If he cannot agree with such head then and only then can he have recourse to the MOF. But the MOF’s responsibility is not as to whether or not the funds should be disbursed but only as to the cashflow. And the reason the cash flow is subject to agreement is simple enough in our view. The amount to be disbursed is subject to the ravages of inflation and therefore price fluctuations. In some instances, like the present one, the number of payees is not constant. Members resign, get dismissed, decease indeed some become cabinet ministers and cease to be eligible to receive fuel allowances. There will therefore always be the need for the ST and the Vote holder to agree on how much exactly is due. But because the ST must discuss and agree cashflows with the Vote holder subject to an appeal to the MOF does not mean that the MOF must give his consent before funds can be disbursed to a vote. Interpreting the law thus would be equal to granting the MOF powers he does not by law have. Much more importantly in our view it would in effect give the MOF the power not only to amend an Act of Parliament i.e. the Appropriation Act but also the power, effectively, to authorize the drawing of funds from the Consolidated Fund which powers only the National Assembly has. See sections 66(1)(a) and 173 of the Constitution.

The conclusion is that there is no legal requirement that the MOF consents in writing or otherwise before funds for the fuel allowance are disbursed. There is no need that we answer the second question.

 

DOES THE INCLUSION OF AN ITEM IN THE APPROPRIATION ACT OBLIGE THE MINISTER OF FINANCE AND/OR THE SECRETARY TO THE TREASURY TO DISBURSE FUNDS IN RESPECT THEREOF? IN THE ALTERNATIVE DOES THE SECRETARY TO THE TREASURY HAVE DISCRETION WHETHER OR NOT TO MAKE SUCH DISBURSEMENT?

The applicants contend that the respondents are obliged to make funds available for all items included in an Appropriation Act. They have no discretion to exercise in the matter. This is in accordance with sections 173, 175 and 176 of the Constitution as read with sections 2, 3, 4, 23 and 26 of the Public Finance Management Act [PFMA].

The respondents hold the opposite view. In their opinion not all items in the Appropriation Act will be financed. Whether or not they will actually be financed depends on the availability of funds which is itself influenced by the quantum of revenue collected, donor support inflows and other economic variables such as inflation, recession and the rising costs of various imports. The Appropriation Act does not therefore create obligations. It provides only for estimates of expenditure and revenue which may or may not be met depending on the above listed factors. It is misleading according to paragraph 2.8 of the respondents’ submissions for the applicants to contend that ‘the MOF and the ST does not have the discretion in the allocation of funds to various votes’. Such a conclusion would lead to absurdities. One of them would be a multiplicity of suits due to the respondents’ inability to fund as a result of the problems we have listed above. The respondents also argued at page 15 of their submissions that they have, depending on the situation on the ground, discretion to decide which part of the Appropriation Act to implement. That in practice they are required to do no more than try their best to disburse funds in respect of all votes provided for in the Appropriation Act. Citing the case of R v Bristol Corporation ex parte Handy [1974] 1 WLR 498 they argued:

 

provisions in statutes or the constitution which appear to cast duties on public authorities may in fact leave discretion to the authority as to how it should fulfill its duties. Furthermore duties that appear unqualified may be interpreted by the court as duties to make reasonable efforts or best endeavors’. [Sic]

 

In our view whether or not the Appropriation Act creates obligations and whether or not the respondents have a discretion in the implementation of the Appropriation Act does not depend on whether the particular item is included in such Act or not. Rather it depends on what the relevant legislation provides for. In that regard we would do well to learn from how the South African courts have dealt with the enforcement of social economic rights for instance. The popular belief has always been that implementation/enforcement should be cautious in view of resource constraints. In Minister of Health & 8 Others v Treatment Action Group [TAG] & Others CCT 8/02, Soobramaney v Minister of Health of Kwazulu Natal 1998(1) SA 765 (CC) and Government of the Republic of South Africa & Others 2001(1) SA 46 (CC) the South African Constitutional Court while accepting that resource constraints were a valid consideration held that the State was obliged to comply with all positive obligations imposed on it by the Constitution. Accordingly the court said whereas the South African constitution did not confer on the citizenry an entitlement to demand and get development, housing [shelter] etc it nevertheless obliged the State to create a reasonable environment in which the citizenry can access housing, medical care, education, development etc. Coming back to the instant case the question we should be asking is what exactly are the Respondents’ obligations under the appropriation process? Do they implement the Appropriation Act to the letter? Do they have the liberty i.e. discretion to choose what to implement and how? If the answer be yes is there a set procedure for exercising such liberty?

Section 173 of the Constitution provides that no money shall be drawn from the Consolidated Fund except as authorized by the Constitution, an Act or a Resolution made in accordance with section 177 of the Constitution.

Section 23 of the PFMA on the other hand provides inter alia that:

(1) Subject to section 178 of the Constitution no public money shall be expended unless the expenditure has been authorized by an Appropriation Act in accordance with subsection (2) or is a statutory expenditure’.

 

Section 26 of the PFMA, which we have quoted above, provides that the ST shall upon the Appropriation Bill receiving the assent of the President make available funds to the respective votes in accordance with agreed cashflow forecasts.

Reading section 173 of the Constitution together with sections 23 and 26 of the PFMA it is clear that the authority to withdraw and spend public funds derives under the Constitution from the National Assembly/Parliament. The duty that is imposed on the ST/MOF is not in our view just to spend or withdraw as authorized by the National Assembly/Parliament but also the duty not to decide not to spend. If the ST/MOF could by themselves decide not to spend they would in our view be as guilty of spending without authority as a government that actually spent public money without appropriate sanction. Further we must remember that the authority to draw and spend public funds is expressed via an Act of Parliament or a Resolution of the National Assembly. Under section 66 of the Constitution it is only the National Assembly that can amend or repeal an Act of Parliament. Similarly only the National Assembly can repeal or amend its own resolution. Allowing the ST/MOF the power not to fund would be equal to not only allowing them to draw or spend public funds other than as authorized by the National Assembly which is unlawful but also permitting them to effectively amend or repeal the Appropriation Act or Resolution that authorized the expenditure. That would be also unlawful. Only the Legislature that can lawfully do so.

The question might be asked but ‘what is the ST/MOF to do for instance when there are for one reason or the other insufficient funds to cater for all items in the Appropriation Act’? Firstly let us make it clear that the respondents have not in any way suggested that are no funds to pay for the fuel allowances. They just believe, wrongly as it turns out, that the MOF has to consent in writing before such funds can be released. Secondly section 177 provides:

 

(1) 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 expenditure for a purpose for which no amount has been appropriated by the Appropriation Act; or

b. that any moneys have been expended for any purpose in excess of the amount (if any) appropriated for that purpose by the Appropriation Act, a supplementary estimate showing the sums required or spent shall be laid before the National Assembly and the heads of any such expenditure shall be included in a Supplementary Appropriation Bill or in a motion or motions approving such expenditure.

 

(2) where any supplementary expenditure has been approved in a financial year by a resolution of the National Assembly under subsection (1), a Supplementary Appropriation Bill shall be introduced in the National Assembly as soon as practicable after the commencement of the financial year next following, providing for the appropriation of the sums so approved’.

 

Where there are insufficient funds the ST/MOF must advise the Executive to table most likely after term budget reviews a Supplementary Appropriation Bill, Resolution or motion authorizing them to provide for unbudgeted for expenditure, spend in excess of the Appropriation Act or to regularize any excess expenditure. This is in order to uphold the principle that all expenditure of public funds must be authorized by the National Assembly. The same thinking must apply mutatis mutandis with respect to the decision not to spend as approved by the Appropriation Act. In our view once the National Assembly has approved the annual expenditure plan a duty is imposed on the ST/MOF to disburse funds in respect of such plan. If there is any compelling reason not to do so an appropriate amendment to that effect has to be made by the National Assembly to the Appropriation Act. The role of the respondents is only to bring to the attention of the powers that be the need to effect the said amendment or pass the resolution or motion.

 

The answer to the question does the inclusion of an item in the Appropriation Act oblige the ST/MOF to disburse in respect thereof the answer is in the positive. To the question does the ST/MOF have any discretion whether or not to disburse funds the answer is in the negative. To interpret the law otherwise would allow the ST/MOF to draw and spend public funds without the consent of the Legislature without at the same time having to amend the Appropriation Act. It would make nonsense of the whole budgeting process. The Appropriation Act would be passed today and the next day mandateless persons would literally throw it out of their windows. It would also allow unelected persons i.e. the ST, public servants and sometimes even the MOF to masquerade as the National Assembly.

It was argued that holding that the Appropriation Act imposes a duty to provide funds would lead to a multiplicity of actions. Maybe. The solution however is not to give illegal legislative powers to the ST or the MOF. Or to pretend that the Appropriation Act does not impose any obligations on the ST/MOF to provide funds for budgeted for items. It is to insist that the MOF/ST always abide by the law in this case the Appropriation Act. That way they will not issue dubious directions that seek to amend the Appropriation Act or arrogate to themselves powers they clearly do not have. They will instead refer matters back to the National Assembly every time they feel there is need to depart from the Appropriation Act so that the necessary amendments can be done. That would not only eradicate the need for suits it would also make for open, transparent and accountable governance. In point of fact we want to believe that we would not be sitting over this matter if the respondents had taken the simple step of taking the fuel allowance back to those that have the powers to amend the Appropriation Act for their necessary action.

 

DOES THE INCLUSION OF AN ITEM IN THE APPROPRIATION ACT CREATE LEGITIMATE EXPECTATIONS THAT A DISBURSEMENT IN RESPECT THEREOF WILL BE MADE? IF THE ANSWER BE IN THE POSITIVE WAS THERE IN THE INSTANT CASE A BREACH OF SUCH EXPECTATION?

The respondents say no. The Appropriation Act is a mere estimation which may be changed at any one time depending on factors like inflation, recession reduced revenues or reduced donor funding. It can not therefore be that the applicants or indeed anyone would expect that whatever is included in the Appropriation Act will come to pass.

The applicants say yes. The fuel allowance is a validly determined term and condition of service. It was included in the budget estimates and the Appropriation Act. The applicants feel they are within their rights to expect it to be funded.

We are much of the applicants’ mind. The government by an Act of Parliament sets out its expenditure plan. It is reasonable in our view for one to expect the government to stick to that plan otherwise why make it. It is also reasonable to expect government where it is unable for whatever reason to stick by such plan to go back to the National Assembly and seek, as per law mandated, a change in such expenditure plan. Where no such change is mooted and none authorized by the National Assembly or where there are no lawful reasons advanced for change there is indeed a legitimate expectation that the item will be funded. See Lord Diplock’s sentiments in the Civil Service case.

In the instant case we are talking about a validly determined term and condition of service authorized for funding by the Appropriation Act 2008. The applicants have a right to legitimately expect that funds will be disbursed in respect thereof especially in view of the facts that there are no lawful reasons advanced for nondisbursement and also because there has been no amendment to the Appropriation Act 2008. The failure to fund and pay the fuel allowance amounted to a breach of such legitimate expectations.

 

IS THE RESPONDENTS’ DECISION UNLAWFUL?

In the Civil Service case Lord Diplock said:

 

By illegality I mean that the decision maker must understand correctly the law that regulates his decision making power and give effect to it’.

 

The respondents’ arguments in support of the legality of their decision not to pay are multifaceted. Firstly the respondents think that the fuel allowance was not a validly determined term and condition of service. Secondly that the MOF has not agreed in writing to funds being disbursed in respect thereof. We have already determined that the fuel allowance is a validly determined term and condition of service. We have also determined that disbursement of funds in respect thereof did not at law require the MOF’s sanction written or otherwise. In so far as therefore the respondents’ decision was premised on their erroneous belief that the fuel allowance was not a validly determined term and condition of service or that the MOF had to sanction it in writing the said decision cannot be legal. It is actually unlawful. The respondents failed to correctly understand the law regulating their decision making power.

 

IS THE RESPONDENTS’ DECISION PROCEDURALLY UNFAIR?

We discussed procedural fairness in Mwandenga v Secretary for Health and Population Miscellaneous Civil Cause Number 9 of 2003 [High Court, Mzuzu Registry unreported].

The decision complained of herein concerns disbursement of funds for a validly determined term and condition of service. The respondents have not suggested that they heard the applicants before making the decision. The reasons given for the decision are without legal backing. The matter was also not taken back to the National Assembly for it to, as required by law, sanction any amendment of the Appropriation Act 2008. This is a matter that affected the applicants’ welfare and legitimate expectations. The applicants were entitled in our view not only to a hearing but also to propriety of procedure. The applicants were not heard. The matter was also not taken back to the National Assembly as discussed above. The respondents’ decision is clearly procedurally affair.

 

IS THE RESPONDENTS’ DECISION JUSTIFIABLE IN RELATION TO THE REASONS GIVEN?

In the Mwandenga case we said the decision maker should be able to justify their decision in terms of the reasons given. The reason given should not in other words be a sham reason.

The reason given in FJ4 is that the disbursement is subject to the express consent in writing the MOF. It can not be a justifiable reason. The consent of the MOF is not a condition precedent legal or otherwise for stopping the disbursement of funds. The reason given in other words cannot justify the decision taken.

We should point out for purposes of clarity that the failure to pay was not as a result of a lack of funds. It was the mistaken belief that MOF had to expressly and in writing consent to the disbursement before the allowances were payable.

 

IS THE RESPONDENTS’DECISION IN BREACH OF THE APPLICANTS’ LEGITIMATE EXPECTATIONS?

We have discussed this issue above. Suffice it to say that once the fuel allowance became a validly determined term and condition of service and was included in the Appropriation Act a legitimate expectation was created in the applicant’s minds that they will be paid. Ministerial decisions of doubtful legality can never be allowed to take away that which an Act of Parliament has vested. The respondents’ decision does indeed breach the applicants’ legitimate expectations.

 

CONCLUSIONS

We conclude from our discussion above that the respondents’ decision is unlawful, procedurally unfair, not justifiable in relation to the reasons given and a breach of the applicants’ legitimate expectations.

 

 

RELIEFS SOUGHT

The Applicants sought the following reliefs:

 

  1. a declaration that the said administrative decision by the Respondents is unlawful;

  2. a declaration that the said administrative decision by the Respondents is procedurally unfair, is not justifiable in relation to the reasons given and is in breach of the Applicants’ legitimate expectations;

  3. a like order to certiorari quashing the decisions of the Respondents;

  4. a like order to mandamus compelling the Respondents to disburse to the Applicants and all Members of Parliament, money for their fuel allowance, provision for which was made in the Appropriation Act, 2008 from the 1st July 2008 to the date of judgment and up until the expiry of their terms of office;

  5. further or other relief; and

  6. And order for costs’.

 

A Declaration That the Respondents’ Administrative Decision Is Unlawful

The declaration is granted. We have shown above that the respondents’ decision was without legal backing.

 

A Declaration That the Said Administrative Decision Is Procedurally Unfair, Not Justifiable In Relation To the Reasons Given and Is In Breach of the Applicants’ Legitimate Expectations

We have found above that the decision in issue is indeed procedurally unfair. The appellants should have been heard before any adverse decision was made in respect of the fuel allowances. The decision not to pay was also not for MOF/ST to make. The matter should have been taken back to the National Assembly for an appropriate amendment to the Appropriation Act. The decision is also not justifiable in relation to the reasons given. The respondents assumed that MOF had to give his consent before the allowances could be paid. He has no such power. The decision is also in breach of the applicants’ legitimate expectations. Being a validly determined term and condition of service and part of the Appropriation Act there was the legitimate expectation on the applicants’ part that the same will be paid. A failure to pay without the sanction of the Legislature or lawful cause amounts to a breach of the applicants’ legitimate expectations. A declaration is therefore granted to the effect that the respondents’ decision is procedurally unfair, not justifiable in relation to the reasons given and is in breach of the applicants’ legitimate expectations.

 

An Order of Mandamus

The applicants want us to make an order compelling the Respondents to disburse the allowances.

The respondents think mandamus is not appropriate. In their view an order of mandamus should only issue where the public body is under a specific duty to do an act. It must never be granted where the effect thereof is to force a public body to exercise discretion in a particular fashion. The case of R v Secretary of State for Trade and Industry ex parte Lonrho [1989] 2 AC 309 was cited. The Respondents suggested that we should instead consider issuing declarations which they will consider complying with in view of their obligations under the PFMA.

The basic law for remedies is section 41(3) of the Constitution. Thereunder every litigant is entitled to an effective remedy. Coming to the instant case we can only grant an order of mandamus if in our view that is the effective remedy in the circumstances of this case. Our debates above have concluded that the Appropriation Act imposes a duty on the ST/MOF to make funds available for specified budget lines subject to agreed cashflows. To that end it would not be correct, if we granted an order of mandamus, to suggest that we would thereby be forcing the respondents to exercise discretion in a particular fashion.

On the other hand the respondents have decided in blatant breach of the law and administrative propriety not to do their lawful duty. Not because there are no funds to meet the expense but because they stubbornly insist on exercising powers and discretions they do not have namely that such disbursement is preconditioned on their consent. Should we, as the respondents suggest send this matter back to them with a smattering of declarations and hope that the respondents will do the needful namely pay the fuel allowances? We think not. This is a case in which there is a clear duty imposed by statute on the respondents. We doubt though whether we will have given the applicants an effective remedy if we proceeded in the fashion suggested by the respondents. So ordering would put the applicants in a situation where they would have to literally beg the respondents to honor their obligations under the law which they have so far refused to do with some level of impunity if we should say. An effective remedy in the instant case is one that will put the applicants in the same position they would have been had the respondents complied with the law. The position they would have been had the allowances been paid from July 1, 2008 to date. Accordingly a like order to mandamus is granted to the applicants compelling the respondents to disburse to the Applicants and all Members of Parliament except those that are cabinet ministers the cash equivalent of 500 litres of fuel per month commencing July 1, 2008 to the date of this judgment and thereafter up until the expiry of each member’s term of office.

Some clarification is in order though. The cost of 500litres fuel was estimated at about K100000.00. The cost of fuel has since fluctuated. It will most likely continue to fluctuate. Whatever we order should however ensure that the applicants get their due pound of flesh ie the 500 litres of fuel per month. Accordingly and to avoid unnecessarily splintering and thereby complicating the award we think we shall be fair to all involved if we ordered that the cost of fuel to be used in calculating the amount due to the applicants is the cost per litre of diesel fuel prevailing on the date of this ruling. That will take into account the fuel cost fluctuations past and present. For payments after the date of this ruling they shall be calculated on the basis of the cost of diesel fuel prevailing on the date of payment. Since the fuel allowances are not for Members of Parliament who are also cabinet ministers they will not be paid in respect of periods when a member also served as a cabinet minister. For those members who have since ceased for whatever reason to be members they will be paid in respect of the period from July 1, 2008 to when they ceased to be Members of Parliament.

 

COSTS

These are in the discretion of the court. We grant them to the Applicants. To quote the respondents with a little bit of sobriety of thought we doubt whether it would have been necessary to have this matter litigated.

 

Pronounced in Open Court this 5th day of March, 2009 at Mzuzu.

 

 

 

 

L P Chikopa

JUDGE