Supreme Court issues declaration on legal status of main points in Tongasat case

'Oku 'i lalo ha fakamatala faka-Tonga

The Supreme Court has issued a declaration regarding the long running legal battle over the Tongan government’s payment to Tongasat of millions of dollars of Chinese money.

As Kaniva Tonga reported last month, the Supreme Court ruled in favour of ‘Akilisi Pohiva and the Public Service Association who had fought a five year battle against Tongasat over what it claimed were illegal payments to the company.

The Supreme Court ruled that the payment of the money to tens of  millions of dollars of Chinese money to Princess Pilolevu’s satellite company was illegal.

Lord Chief Justice Paulsen has now issued a declaration on the legal status of the  main points of the claims made in the court case.

The judge said a declaratory judgment was a formal  statement  by  a court  pronouncing  upon the existence or non-existence of a legal state of affairs.

He said the remedy of a declaration of rights was ordinarily granted as final relief in a proceeding. It was intended to state the rights of the parties with respect to a particular matter with precision and in a binding way.

Lord Chief Justice Paulsen declared his agreement with the following points raised by Dr Rodney Harrison, QC, on behalf of the Public service association and ‘Akilisi Pohiva:

“The first tranche payment of US$24.45 million in aid  grant funds  received by the first defendant (the Kingdom) from  the People’s Republic of China on  September 4, 2008 (the first tranche payment) was a ‘grant’ and accordingly ‘public money’ within the  meaning  of  the Public  Finance  Management  Act,” the judge said.

“Following its receipt by the Kingdom, US$20,985,667 of the first tranche payment was paid to or for the benefit of Tongasat pursuant to a purported agreement between the then Prime Minister of Tonga, Dr Feleti Sevele  and Tongasat.

“The payment of US$20,985,667 of the first tranche payment to or for the benefit of Tongasat was expended in breach of section 9 of the PFMA and accordingly unlawful and invalid.

“To the extent that the first tranche payment was expended to satisfy pre-existing liabilities of Tongasat that expenditure was in breach of section 30 of the PFMA and accordingly unlawful and invalid.

“The purported agreement between the then Prime Minister and Tongasat  was in breach  of the PFMA and  in excess of  Dr Sevele’s lawful powers and authority as Prime Minister and accordingly unlawful  and invalid.

“Tongasat was not entitled to payment of the first tranche payment or any part thereof under either the Agency Agreement or the Agency Termination Agreement.

“The second tranche payment of US$25.450 million in aid grant funds received by the Kingdom from the People’s Republic of China on June 9, 2011 (the second tranche payment) was a ‘grant’ and accordingly ‘public money’ within the meaning of the PFMA.

“Following its receipt by the Kingdom, the second tranche payment was paid in its entirety to or for the benefit of Tongasat pursuant to a purported agreement between the then Prime Minister of Tonga, Dr Feleti Sevele and Tongasat.

“The payment of the second tranche payment in its entirety to or for the benefit of Tongasat was expended in breach of section 9 of the PFMA and accordingly unlawful and invalid.

“To the extent that the first tranche payment was expended to satisfy pre-existing liabilities of Tongasat that expenditure was in breach of section 30 of the PFMA and accordingly unlawful and invalid.

“The purported agreement between the then Prime Minister and Tongasat  referred to in para 8 above was both in breach of the PFMA  and  in excess of  Dr Sevele’ s lawful powers and authority as Prime Minister and accordingly unlawful and invalid.

“Tongasat was not entitled to payment of the second tranche payment or any part thereof under either the Agency Agreement or the Agency Termination Agreement.”

The main points

  • The Supreme Court has issued a declaration regarding the long running legal battle over the Tongan government’s payment to Tongasat of millions of dollars of Chinese money.
  • As Kaniva Tonga reported last month, the Supreme Court ruled in favour of ‘Akilisi Pohiva and the Public Service Association which had fought a five year battle against Tongasat over what it claimed were illegal payments to the company.
  • The Supreme Court ruled that the payment of the money to tens of millions of dollars of Chinese money to Princess Pilolevu’s satellite company was illegal.

For more information

Tongasat case “of national importance” says judge as he declares payments were illegal

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