CJ rules $4.5b gov’t spending violated constitution

-but dismisses Granger case for conservatory order

Acting Chief Justice Ian Chang yesterday found that controversial expenditure last year of $4.5b by the government was unconstitutional but refused an application made by opposition leader David Granger for a conservatory order to stop “unauthorised” expenditure.

Justice Chang noted that Granger’s case pertained to spending in the year 2014, which has already elapsed, whereas expenditure in 2015 is governed by specific constitutional provisions.

Justice Chang’s ruling would amount to a victory for the government as Granger’s intention was to shackle spending this year in light of the prorogation of Parliament.

Justice Chang, however, found that government’s controversial expenditure of $4.5b last year ran afoul of constitutional strictures. That finding could provide the opposition with grounds at a later date for holding government officials accountable over this spending. It was this spending which provided the impetus for the AFC’s motion of no-confidence against the government and which in turn triggered the prorogation of Parliament.

Justice Chang also cited defects in the opposition case, including the fact that final orders sought by Granger were declaratory while the conservatory order being sought was more severe – a prohibitory and enforceable order. Based on the CJ’s ruling, it would appear that if Granger had brought his case much earlier last year the prospect of securing a restraint against government spending would have been greater.

The expenditure of the $4.5b was made known via a financial paper in June last year.

Justice Chang said too that the order was not only misconceived but if the application was granted in its present form, it would be an injunction against government spending and not a conservatory order against non-approved spending.

Granger had filed a constitutional action last December in which he made an application for a conservatory order to stay all spending or any further spending by the Minister of Finance or other ministers designated by the president on programmes which were disapproved or not authorised by the National Assembly until the hearing and determination of the substantive action.

His application was the result of concerns raised by the opposition about government spending public monies without any parliamentary scrutiny after Parliament was suspended by President Donald Ramotar on November 10, 2014.

Granger was listed as the plaintiff in the case while Finance Minister Dr Ashni Singh, Attorney General Anil Nandlall and Speaker Raphael Trotman were named as the defendants.

Granger’s lead attorney Basil Williams told reporters shortly after yesterday’s ruling that his interpretation of the ruling is that Justice Chang has found the government spending of the $4.5b was unconstitutional. “In other words, once Parliament disapproves something the government cannot lawfully spend it,” he said, adding that on the point of the conservatory order, Justice Chang has ruled that he could not apply this issue in 2015 because the constitutional provisions allowed expenditure for the first four months.

 

No jurisdiction

 

Towards the end of his 36-page decision, Justice Chang outlined the basis upon which he refused to grant the conservatory order. He cited Article 217 of the constitution, which prohibits spending without authorisation and Article 218 (3), which provides a mechanism to avoid a breach of Article 217 by using a supplementary provision or a statement of excess to cure any breach.

Justice Chang agreed with the arguments of Nandlall that 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 powers which indubitably inheres in the Constitution of Guyana.”

According to Justice Chang, it is only if the respondents are acting or are likely to act ultra vires the power conferred by or under the Constitution or Act of Parliament that a prohibitory order in the nature of a conservatory order can be issued against the respondents.

He said that under Article 219 (1), Parliament enacted the Financial Management and Accountability Act 2003, which empowered the Minister of Finance to authorise the limited withdrawal of monies in 2015 from the Consolidated Fund for the sole purpose of meeting expenditure necessary to carry out the services of the government until the expiration of four months from the commencement of that financial year or the coming into operation of the Act, whichever is earlier.

He said that acting under Article 220 (1) Parliament also made provisions for the establishment of a contingencies fund which authorises the Minister to make limited advances from the fund if he is satisfied that there is an “urgent” need for expenditure for which no other provision exists.

Justice Chang contended that the defendants being in breach of the prohibition contained in Article 217 (1) (b) by the expenditure of $4.5b unauthorised by the Appropriation Act of 2014 “is not a proper basis for fear that they will exceed the limits of their authority (in 2015) to spend money conferred by Article 219 (3) or the provisions in the Financial Management and Accountability Act 2003.

Pointing out the conservatory order being asked for by Granger is aimed at prohibiting spending or further spending, he said that the power of the Minister to authorise expenditure from the Consolidated or Contingency Funds “is restricted not by the programmes disapproved or not approved by the Assembly in 2014 for which there was no authorisation… but rather by the limitations contained in Article 219 (3) of the constitution and in the provisions of the Financial Management and Accountability Act.”

He said as a result even though expenditure for most of the disapproved programmes for 2014, being not for public service or for services of the government “would still not be authorised by Article 219 (3) or the provisions of the Financial Management and Accountability Act 2003, the application for a conservatory order in the form that it is prayed for is misconceived and must be dismissed.”

Pertaining to spending this year, Justice Chang said that the court “cannot nullify or limit in any way, whether directly or indirectly, the effect of the application of the Constitution which it was sworn to uphold.”

He also made the point that another reason which disinclines the court from granting the conservatory order is that it would be anomalous and irrational for the court to grant such “until the hearing and determination of this action” when no final enforceable order has been sought by Granger. He said that the final remedies prayed for in the substantive action are all declaratory in nature and substance. A conservatory order is a prohibitory and enforceable order.

He added that a substantive action might not be determined before an Appropriation Act for the financial year 2015 has been enacted and future events might obviate the need for a Conservatory order until the hearing and determination of the substantive action.

“The court cannot lose sight of the fact that all the final orders sought are declaratory in nature and relate to the past financial year of 2014. A conservatory order must now (in 2015) relate strictly to future constitutional or statutory spending excesses and not past excesses of the Appropriation Act 2014,” he said.

He added that if the conservatory order is granted in the form prayed for “it would in effect be an injunction against government spending (though limited) permitted by the Constitution and the Financial Management and Accountability Act rather than a conservatory order against no approved spending for the past financial year 2014 – a classic case of the grant of an injunction masked as a conservatory order.”

Williams told reporters that the judge could not grant a conservatory order for 2014, while noting that when the case was filed in 2014 it was on the basis that the Finance Minister spent $4.5b and “we thought that they were going to spend the balance of the $37b… as we enter in 2015 they can spend for the first four months but only at one twelfth of last year’s estimates.”

“It is a good decision for us because it tells you that the Minister of Finance cannot override the decision of the parliament when expenditure has not been approved,” he said.

Meanwhile, Nandlall, in an invited comment, said that from his brief reading of the judgment he has concluded that no case was made out for a conservatory order to be granted and as such it was not. He said that the court has found that there was no basis on which Granger can make such an application on the grounds that the constitution prescribes how spending is to be done during this period and that the court would be “usurping the functions, the provisions of the Constitution that it took an oath to uphold if it were to interfere with the constitutionally prescribed mechanism for spending during this period.”

He stated too that the court also found that Article 217 has been violated and that 218 allows for a curative mechanism to employ to cure the violation of Article 217. The mechanism, a statement of excess, he said, was employed by the Minister of Finance. He added too that the judgment also said that the court had no power to pronounce upon whether there is any other remedy besides a statement of excess and that it is Parliament that has to determine whether it wanted to impose any other remedy.

He said that the government’s position from the inception was that Article 218 (3) provides the mechanism for the statement of excess to be used. However, Justice Chang’s ruling did say that the statement of excess should pertain to inadvertent spending and not advertent spending. The $4.5b was advertently spent by the government.

Besides the order, Granger had also asked the court to grant several declaratory orders. Nandlall explained that by “consent” all the parties agreed that since the matter only raises questions of law that the entirety of the case would be determined. He said that the entirety of the case to be determined was whether or not the conservatory order would be granted.

“The government is not in doubt about the limitations which the constitution imposes in respect of its ability to spend during a period where there is no appropriation act…there is a limitation within which the government must spend and that limitation is one twelfth of the budget approved in the preceding year,” he said.

Among other things, Granger had sought declarations that Finance Minister Singh had unlawfully spent monies he detailed in Financial Paper 1 of 2014 and that Singh and other ministers could not lawfully authorise the spending of monies on programmes that had been disapproved by the National Assembly.

 

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