Abrogation of the Fiji Constitution on 10 April 2009 and related events
Fiji Court of Appeal ruling and abrogation
1. On Thursday 9 April the Fiji Court of Appeal, in litigation brought by deposed Prime Minister Laisenia Qarase, ruled that the Bainimarama government's December 2006 takeover of executive power in Fiji was unlawful. The following day, in a direct response to this, the President of Fiji declared the Fiji Constitution abrogated (ie terminated) and a "new legal order" in place. He also declared that:
(a) he would from this point rule as head of state by Decree
(b) all judicial appointments (including those of judges at all levels and magistrates of the Magistrates Court) were immediately terminated and he would be calling for applications from qualified persons to apply/re-apply for appointment to judicial offices
(c) he would appoint a new Interim Government
(d) the fundamental rights and freedoms set out in the Constitution would be re-legislated into existence
(e) all existing laws (including Promulgations by the Bainimarama government) would be declared still to be on foot (unless specific ones are declared otherwise)
(f) work would now begin on electoral and other reforms leading to elections no later than September 2014
(g) his actions had the support of the security forces and they would maintain law and order.
2. On 11 April, the President appointed Commodore Bainimarama Prime Minister under the new legal order. All previously serving Ministers were also re-appointed.
3. Certain important public office-holders appointed under the Constitution appear also to have been dismissed. They include the Governor of the Reserve Bank of Fiji and the Director of Public Prosecutions.
4. As of the date of this Legal Alert, seven new Decrees had been issued, covering the abrogation, the office of the President, the continuance of existing laws, judicial appointments, revenue and expenditure, state services and citizenship. These are largely to replace legislation that previously existed in the now-abrogated Constitution. Legislation appears now to be delivered in the form of Decrees (as opposed to the “Promulgations” that laws were called after the December 2006 military coup).
Devaluation and tightening exchange control
5. On Wednesday 15 April the Fiji dollar (which is regulated by exchange control) was devalued by 20%. The Fiji dollar is now officially traded at approximately USD0.45. Exchange control regulations governing the outward flow of funds have been further tightened.
How it works from here
6. Clearly, serious constitutional questions arise from the President’s actions. This must include how any laws or decisions under the "new legal order" may be interpreted or recognised in future. This is not a matter we can predict. This advice is practically rather than constitutionally oriented, in terms of how business will practically be done from this point until any other significant development affecting the "new legal order".
7. The intended legal effect of the President's actions is to "wipe the legal slate clean and start again", in much the same way as Sitiveni Rabuka's successful military coups of 1987 did. Rabuka also abrogated the (previous 1970) Constitution and established a "new legal order" (leading eventually to a new 1990 Constitution, later amended to become the 1997 Constitution, under which the current President held office).
8. If the Constitution is dead, that does not mean that existing laws also disappear. The Constitution is the "supreme law". It prescribes certain things (particularly in respect of fundamental rights and freedoms, Parliament, Cabinet government and the judiciary). Any law inconsistent with the Constitution is unlawful - so if there is no Constitution, there can be no law that breaches it (although depending on developments it is possible that if a new decree breaches fundamental freedoms such a law may still be challenged).
Specific implications and consequences
9. Assuming that the President's latest actions are sustained and supported by the institutions of the State, the following implications and consequences are likely:
Business of government
(a) now that all Ministers of the Bainimarama Government have been re-appointed, they effectively continue in office and will be delegated the President’s authority to make laws and executive decisions as previously
(b) the laws which have been applied by the Bainimarama Government in the last 28 months (including those made before and December 2006) will continue to apply
(c) the prescriptions and constraints of the Constitution no longer apply. Therefore, for example, the requirement to hold elections, the make-up of Parliament, qualifications for Constitutional offices (such as the Director of Public Prosecutions, the Auditor-General, the Supervisor of Elections, the Public Service Commission and the Judicial Services Commission) no longer apply. The Government can make its own laws on these matters.
The courts
(d) there are currently no judges. New ones must be appointed (or previous ones re-appointed, if they apply and if their applications are successful). Therefore:
(i) there are no courts until these appointments are made
(ii) if there are any court cases part-heard or awaiting decision and any judge(s) hearing those cases are not re-appointed, there will be difficulties around finishing those hearings or getting judgments from those judges. Normally judges who cease to hold office have a transitional period in which to finish writing judgments on cases they have presided over. It is not clear what will happen to these cases. If such judges do not get this opportunity the cases may have to be re-heard. If judges who held office until last week are re-appointed, presumably they will finish off the cases on which they have started.
We assume priority will be given to ensuring that some sort of functioning judiciary is put in place quickly.
Taxation
(e) if existing laws are all declared still to be on foot, no changes in the amounts or mode of taxation will change. Assuming judges are appointed quickly there will be the usual recourse to the courts to resolve tax disputes (under the "old legal order" the tribunal positions in the specialist tax courts (Court of Review, VAT Tribunal) were vacant anyway so perhaps this is no change!). See (g) below on double tax treaty issues.
Provisions of the Constitution which may be missed
(f) the following provisions of the (now-abrogated) Constitution have specific implications for business and their absence may cause concern:
(i) fundamental rights and freedoms (Chapter 2) - including rights to life, liberty, free association, free speech, rights of access to independent courts and tribunals and protection against unfair deprivation of property by the State
(ii) Chapter 12 (Revenue and Expenditure) governing how Government lawfully collects revenue and spends money (including contracting with third parties). These appear now to have been substantially re-enacted by Decree.
Further Decrees may restore these matters under the "new legal order" in an attempt to give comfort to the business and investment community.
International issues
Double tax arrangements would not at first sight appear to be directly affected, but any cross-border issues with material tax implications relying on double tax treaties should be carefully scrutinised for practical effects.
Reciprocal enforcement of judgment rights, again, would not appear to be directly affected - but any party seeking to enforce a Fiji judgment in an overseas court may be vulnerable to legal argument based on these events.
Conclusion
10. Matters are fluid and may change rapidly. It appears that the Bainimarama Government will now largely continue, but under a different legal framework. In one sense, then, it may be "business as usual" but a great many matters are potentially left uncertain.
Disclaimer
The information and opinions in this Legal Alert are for general information purposes only. They are not intended as specific legal or other professional advice and should not be relied upon or treated as a substitute for specific advice. Munro Leys can accept no responsibility for any loss arising from reliance on the general information contained in this Legal Alert.
