Fiji pensioners' battle strikes new legal defining point

Monday, 1 August 2011, 2:58 pm
Article: Pacific Media Centre

Fiji’s system of law and justice is at a historically defining point with the Burness/Shameem case against the Fiji National Provident Fund (FNPF).

For months, FNPF has mounted an expensive and extensive public campaign (media and public meetings) to justify reducing pension rates to not just future pensioners, but also to existing pensioners (two quite separate policy changes).

FNPF and its paid consultants have presented numerous scenarios, powerpoints, and media releases throughout Fiji – all pointing to planned reductions of future pensions.

Most recently, they have claimed that they will reduce existing pensions of only some 1200 or so people earning higher dollar pensions above some “poverty line”.

The Burness/Shameem lawsuit is seeking justice for current pensioners, by asking the Fiji courts to stop FNPF from implementing its plan to reduce existing pensions, on the grounds that such action would negate Burness’s basic human rights.

A simple case to understand and adjudicate on, you might have thought.

Decree-caused nightmare
But it is a nightmare, even for an educated lay person, to read through (a) the submission by ShameemLaw for pensioner David Burness and (b) the judgment so far by Judge Hettiarchchi – it is a nightmare caused largely by the debilitating demonic presence of the military decrees.

While this case is important for FNPF pensioners, it is far more important for the Fiji economy as a whole, because the planned FNPF action strikes at the heart of private property and legal contracts, both of which are at the core of all business transactions in Fiji and globally.

The Burness/ShameemLaw case should therefore be of great interest to Fiji’s business interests, Chambers of Commerce, Employers’ Federation and all investors in Fiji (not that any of them would support the case financially).

The resolution of this case will be a defining moment for Fiji’s system of laws and justice.

Basic human right to justice
Every decent civilised society tries to ensure that each and every citizen is able to ask for, and receive justice in their disputes, based on the rule of law, and increasingly in recent years, by appealing to the United Nations Declarations of Basic Human Rights.

The 2010 Report of the NZ Human Rights Commission on Human Rights in NZ, written without any legalistic jargon, stated clearly that (p. 89)

1. the law must be accessible, intelligible, clear and predictable;

2. fundamental human rights must be protected;

3. civil disputes should be resolved without prohibitive cost and in a timely fashion;

4. Ministers and public officers at all levels must exercise the powers conferred on them reasonably, in good faith, for the purpose for which the powers were conferred and without exceeding the limits of such powers; and

5. adjudicative procedures provided by the state should be fair.

Judge for yourselves how the current case against FNPF will be assessed according to these sensible principles.

The ShameemLaw arguments
ShameemLaw very reasonably asked for relief from the courts: a declaration that the Applicants’s (Burness’) pension not be reduced; declarations that the proposed review was a breach of the contract and that the FNPF plan to reduce the pension of the Applicant would constitute a breach of his human rights; and that the review of the FNPF Act be postponed until there had been a Commission of Inquiry in the planned review (also sought of the courts).

ShameemLaw cautiously noted:

“Of course the Constitution of 1997 has again been abrogated (it is said) and there are many Decrees in place now to emphasize this time and again so clearly the Constitutional Redress application process is not available to an applicant. …. It is not an abuse of the Court process for the Applicant, David Burness, to make his application in this way since all other procedural avenues for human rights redress, previously provided by the Constitution, are closed to him.”

[I add the word “cautiously”, because Dr Shaista Shameem (with Neel Shivam) had also fought the Chandrika Prasad case in which Anthony Gates (what irony!) had ruled that the attempted 2000 abrogation of the 1997 Constitution by Bainimarama was in fact invalid. Might that one day be the case with the 2009 purported abrogation?].

ShameemLaw reassured the judge that “the applicant David Burness has no desire to challenge the revocation of the 1997 Constitution by his application. He wants to claim his right to a pension pursuant to the Human Rights Commission Decree”.

As ShameemLaw pointed out, Article 8 of the Universal Declaration of Human Rights states clearly: “Everyone has the right to an effective remedy by the competent national tribunals for acts violating fundamental rights granted him by the constitution or by law.”

And Article 10: states: “Everyone is entitled in full equality to a fair and public hearing by an independent and impartial tribunal, in the determination of his rights and obligations…”.

All quite reasonable, one would have thought: a citizen with a just grievance against FNPF, appealing to the Courts for a fair ruling, even within the constraints of an allegedly abrogated Constitution and restrictive Military Decrees.

But the FNPF and Regime lawyers (D. Sharma and S. Sharma) claimed that the Burness application “discloses no reasonable cause of action…; is scandalous, frivolous or vexatious; or may prejudice, embarrass or delay the fair trial of the action; or is otherwise an abuse of the process of the court”.

What? Our pensioners’ and tax-payers’ money is being used to pay lawyers to offer this contemptuous “clutch at a straw” in order to defend FNPF’s unjust plans to hurt pensioners’ interests? Where is the good faith of FNPF’s public officers, the FNPF board and their lawyers in this very genuine case?

What Judge Hettiarachchi said
The Hettiarachchi judgment, while perhaps clear to the legal profession, has many surprising statements (surprising to pensioners) implying that there is no solid evidence that the FNPF is planning to reduce pensions and harm the interests of pensioners, including that of Burness.

Paragraph 8: Upon perusal of the affidavit and its annexes, I am unable to satisfy myself of any probable basis on which the human rights of the Applicant could be violated by any reforms that could be introduced to the FNPF.

Paragraph 9: The applicant has even failed to present adequate material explaining how his human rights will be violated by any reforms that could be introduced to the FNPF.

Paragraph 15: ... the applicant merely relied on a statement of the CEO of FNPF. It is further alleged that by the proposed reforms to the FNPF, the applicant’s pension would be reduced by 64 percent.

Paragraph 16: It is not stated the source from which the applicant got this information.

Paragraphs 22 and 23: The Applicant has manifestly failed to establish that there is a serious question to be tried… and therefore I strike out the applicant’s application for an injunction.

Reading this, many pensioners will be tearing out whatever little hair they have left on their heads, or at least scratching their bald heads.

Who in Fiji has not heard and read the massive public campaigns by FNPF on TV, radio, newspapers, public meetings, all stating that current pension rates were not sustainable and would be reduced; and that existing pensions were allegedly “unfair” and needed to be also reduced? Why indeed would FNPF bother to appear in court and waste their time with expensive lawyers to oppose a motion trying to stop it from reducing pensions, if FNPF had no intention of reducing pensions?

An ordinary person in the position of the learned Judge might simply have asked FNPF, there and then in the courts:

What is the nature of the reforms that you are planning and you have been publicising for six months? Why have you not told the public exactly what you are planning to do?. Is it correct that you intend to reduce the annuities of some pensioners, including that of David Burness who is here in court today before me, seeking justice? Why are you not giving the public all the reports that outline what is happening to the FNPF’s sustainability, etc. etc. etc.

But no doubt in the legal world, the learned Judge can only “judge” on the basis of what is placed before him, not what is out there in the media, and even flooding the public eye.

Justice Hettiarchchi instead pointed out (Paragraph 36): “The applicant has not observed the correct procedure laid down in the High Court Rules whilst filing his applications for injunction and the substantive action.”

To his great credit (one must not under-estimate the implicit pressures on him to just throw the case out), Justice Hettiarchchi concluded: “However, I am not inclined to decide the fate of this action purely on technical and procedural grounds” because of its “significant national importance.”

He reminded ShameemLaw (Paragraph 48): “The exact nature of the proposed reforms, its effect on the applicant’s pension benefit, to what extent that the general public are allowed to submit their views on the proposed review, and the procedure which is followed by the FNPF board are of paramount importance to this action, but the applicant has failed to tender sufficient evidence with regard to the abovementioned facts.”

Justice Hettiarchchi very fairly conceded (Paragraph 49): “Given that the matter is of national importance, I am of the view that the Applicant should be granted an opportunity to rectify his procedural and technical errors in the pleadings.”

The judge granted the applicant (Burness/ShameemLaw) 21 days to rectify procedural errors and file proper pleadings together with the necessary and relevant documentary evidence. The respondents were granted further 14 days to file their response.

Need to focus on property, contract rights?
Globally, the business world does not give a jot for the “general human rights” of ordinary people, especially those who cannot afford smart lawyers. But they do care about property rights and the sanctity of legal contracts, at the heart of the business world.

It is extremely important therefore to get the full moral support and interest of the business and investor community, by ensuring that the legal case against FNPF highlights also the legitimate property rights of the FNPF pensioners and the “sanctity of their lawful contracts” with FNPF.

Article 17 of the Universal Declaration of Human Rights says “Everyone has the right to own property” and “no one shall be arbitrarily deprived of his property”. And by all relevant criteria, FNPF annuities and pensions are property, guaranteed by a contract.

When pensioners reached 55, they were required by the FNPF management (and FNPF Act) to sign Form 9-OP and to declare whether they would take a pension (single or joint) or they would take a lump sum, or some mixture of lump sum, joint or single pension. [Pensioners, you can download Form 9-OP from the FNPF web-site, in case you have forgotten what it looks like].

On Form 9-OP, the FNPF informs the retiree that if he chooses to take the pension options, he will receive exactly this or that annuity (annual sum of money in dollars, and exactly this or that precise percentage of his final balance) payable for his lifetime (single pension) and the lifetime of his last surviving partner (in the case of the lower double pension). These percentages were was set by Parliament originally at 25 percent, and by another Act of Parliament in 1998, gradually reduced to 15 percent currently.

Through the 9-OP Form, FNPF sternly warns “Once you have made you (sic) choice it is final and cannot afterwards be changed or revoked.”

In other words, the die is cast for you, the pensioner. You have entered a legal contract which cannot be changed in any way, by you. But apparently, FNPF thinks that it can breach this contract.

Form 9-OP warns that if the retiree does not notify the FNPF within 2 months of receiving that offer, “it shall be deemed that you have opted to take the full lump sum and a lump sum payment will be processed. This cannot be changed or revoked later”.

Two conclusions follow from this offer in Form 9-OP. First, it was the FNPF which offered and promised clearly the exact benefits which the pensioners would receive for the rest of their life (the pensioner’s “consideration”) in return for leaving their savings with the FNPF (FNPF’s “consideration”).

Second, the FNPF recognized that the savings of the retiree were his personal property to be taken either as a lump sum, or as an explicitly defined annuity until death of the beneficiary, or some combination of both.

FNPF is a corporate body bound by contracts
How horrifying for pensioners who have worked all their lives and been legally forced by the laws of Fiji to deposit their life savings with FNPF, to hear in court the FNPF lawyer (Davenesh Sharma) arguing that “there is no legal entity such as the name of Fiji National Provident Fund, so the proceedings against this non-existent body is unsustainable” (as stated in the judgment).

[Let us hope that Davenesh Sharma (former president of the Fiji Law Society) was merely amusing himself with the semantics or clutching at straws, and not seriously attempting to use this argument to scuttle justice for old age pensioners in order to be seen to earn his hefty lawyers’ fees.]

Because Article 4 of the FNPF Act states clearly that the FNPF board shall be a body corporate and shall, by the name of “The Fiji National Provident Fund Board”, have perpetual succession and a common seal …. The Board may sue and be sued in its corporate name and may enter into contracts.

Legal texts universally point out (eg google “Mark Radcliffe and Diane Brinson”) that a contract is formed when one party (the “offeror”) makes an offer which is accepted by the other party (the “offeree”) usually with some mutual promises and consideration involved.

Here, a legal corporate body (FNPF) made a clear explicit offer to the retirees that should they choose the pension option (whether single, joint or combination) and leave their savings with the FNPF (FNPF’s consideration), they would receive in return an annuity (expressed explicitly in dollars as a fixed percentage of their final balance) until they (or their nominated partner) died.

What could be clearer than this contract.

Nowhere in the contract (the 9-OP form) is there any clause (in large or fine print) which warns the pensioners that their pension rate may be changed in the future by the FNPF Board for whatever reason.

Despite the implicit allegations by FNPF lawyers, nowhere in the FNPF Acts is there any reference whatsoever to the Board’s powers to vary the annuity rate, already offered to and accepted by pensioners, and approved by Parliament.

In law it is fundamental that if one party meets its contractual obligations (the pensioner left his savings with the FNPF) and the other party doesn’t (“breaches the contract”), the nonbreaching party is entitled to receive relief through the courts.

Which is precisely what the Burness/ShameemLaw case is trying to do through Fiji’s courts.

Three breaches of the FNPF Act by the board
Pensioners have reasoned rationally with FNPF management and the FNPF board till they (the pensioners) are black and blue in the face. The FNPF management and board have not budged one inch. They certainly are not resigning as has been suggested to them as the honorable thing to do.

I suggest that the learned Judge’s advice that “…the procedure which is followed by the FNPF Board are of paramount importance to this action” be taken literally to examine more closely whether the FNPF Board has been and is currently following the letter and spirit of the law embedded in the FNPF Act.

Perhaps the legal battle also needs to be taken to the FNPF Board members who can personally now be sued if they are failing in their duties as trustees of the FNPF board.

Specifically, each of the FNPF board members and collectively, may be charged for three breaches of the FNPF Act.

Breach 1 (pointed out previously):
The board refuses to take advantage of Section 10 which clearly states that “If the fund is, at any time, unable to pay any sum which is required to be paid under the provisions of this Act, the sum required shall be advanced to the fund by the government and the fund shall, as soon as practicable, repay to the government the sums so advanced”.

What? The FNPF board does not want to ask government to lend money to FNPF to cover possible shortfalls in the future, while they have been happy to lend whatever to Government at the preferential interest rates for forty years?

Breach 2:
Section 8 of the FNPF Act requires the board to declare a rate of interest to be paid to members’ credit, “not less than 2 1/2 per cent per annum” provided that “no rate of interest exceeding 2 1/2 per cent per annum shall be so declared, unless, in the opinion of the board, the ability of the fund to meet all payments required to be paid under this Act is not endangered by the declaration of such rate.”

The FNPF is currently planning to reduce pension rates for future pensioners and existing pensioners, alleging that current pension rates are unsustainable, and even alleging that these pension rates have been known to be unsustainable for more than a decade. Yet, year after year, the FNPF board has declared a rate of interest higher than 2 ½ percent (including this year as well at 5 ½ percent) to be credited to members’ funds.

The FNPF board refuses to follow the FNPF Act which very specifically asks it to not declare a rate of interest above 2 ½ percent if the fund is not sustainable.

While refusing to do what it is specifically required to do by the FNPF Act, the FNPF board is attempting to do what is nowhere authorised in the FNPF Act, namely to reduce existing annuities contracted to existing pensioners or their beneficiaries. How ridiculous.

Breach 3:
Section 12 B of the FNPF Act which outlines the duties to be exercised by the Board as Trustees require that the Board must abide by all rules and principles of law which impose any duty on a trustee exercising a power of investment including all rules and principles which impose (a) any duty to exercise the. powers of a trustee in the best interests of all beneficiaries of the trust; (b) any duty to act impartially towards beneficiaries and between different classes of beneficiaries;

The FNPF Act are currently stating that they will not reduce the existing pensions of some 89 percent of pensioners whose pensions are allegedly “below the poverty line”, but they will reduce those of the other 11percent earning higher pensions.

Where in the FNPF Act is there any mention of a “poverty line” to be used to determine differential annuity rates for pensioners? Which part of the FNPF Act authorizes the FNPF Board to reduce the pension of one group of pensioners who are allegedly “above some poverty line”, which is moreover to be decided by themselves?

At no place in the contract agreement with pensioners (Form 9-OP) did the FNPF ever indicate that in future, they might treat low income and high income pensioners differently.

Should FNPF go ahead with their plan to reduce existing pensions, not only would they be breaching their contract with pensioners, but it would be a clear breach of Section 12 B of the FNPF Act which requires them “to act impartially towards beneficiaries and between different classes of beneficiaries”.

In the NZ Human Rights Commissions legal principles outlined at the beginning of this article Principle No 4 insisted that “Ministers and public officers must exercise the powers conferred on them reasonably, in good faith, for the purpose for which the powers were conferred and without exceeding the limits of such powers”. That is certainly not the case here with the FNPF board and the FNPF management.

Pensioners need to seriously ask, should there be a separate legal case mounted against the directors of the FNPF board for breach of their duties as trustees under the FNPF Act.

Pensioners need to set up a trust fund to which all pensioners can contribute to cover any costs being incurred in the Burness/ShameemLaw case. Such cases should not be fought on “pro bono” bases.

Perhaps Transparency International also, with its focus on good governance by boards, should scrutinize the FNPF board for its next international report on Fiji.

Future judgment and the lurking “decrees”
Pensioners need to read for themselves that the Hettiarchchi Judgment has paragraph after paragraph which suggests that any decrees by the President may not be contradicted by any judgment in this FNPF case.

Paragraph 29: “Any person can apply to the High Court for redress for the contravention of his or her human right”subject to the proviso that “no proceeding which seeks to question or challenge the legality or validity of the Fiji Constitution Amendment Act 1997 Revocation Decree 2009, or such other Decrees made or may be made by the President, shall be brought before the High Court.”

The judge observed that while the lawyers for FNPF/Khaiyum argued that the Burness/Shameem should have filed for a “judicial review”, the judge held that “under the Administration of Decree 2009, even the judicial review is not permitted if it challenges the Fiji Constitution Amendment Act 997 Revocation Decree 2009 (Decree no. 1) Act 2009 and such other decrees made or as may be made by the President”.

Paragraph 45: “Whether it is human rights application or otherwise, it is explicit that the applicant by his substantive action is purporting to prevent an amendment being made to the FNPF Act. Since section 3 and 4 of the Administration of Justice Act 2009 expressly preclude court from entertaining or hearing any application including judicial review challenging the validity of a decree made by the President, it is incumbent on the applicant to justify the grounds upon which he instituted this action.”

Paragraph 46. Therefore if the applicant intends to challenge the validity or legality of a decree he cannot do it even by way of judicial review.

Paragraph 47: The determination of issues, broadly described as political, relying on the exercise of non-judicial power, or adopting an executive or legislative character are normally non-justiciable issues and will fall outside of the jurisdiction of the courts. Therefore the applicant must show that he is pursuing purely a human rights application, which warrants further material from the applicant as well as from the Respondents to determine the correct nature of this application.

Paragraph 50. Moreover this application contains characteristics of legislative issues to a certain extent. What will that mean?

The eventual judgment will be a land-mark decision – whether the courts will uphold the basic human rights to personal property and the sanctity of contracts, or conclude that these must also be subservient to any decree that the military regime will give the President to sign.

Why are military regime and Attorney-General co-respondents?
The Burness/ShameemLaw case is essentially a pensioner’s case directed at the FNPF board, not at the military regime.

It is a basic principle of good governance by any statutory board, that once appointed by the government, the board must be left totally independent to govern the institution according to its charters and regulations, and fight its legal battles.

It is anomalous therefore that there are lawyers representing the military regime and military Attorney-General as co-respondents in the Burness/ShameemLaw case against FNPF.

Is this yet more evidence that the military regime wishes to do all that is possible to ensure that FNPF has cash to keep lending to government at the lowest interest rates possible.

In any case, it is good that the military regime and military Attorney-General are co-respondents in the case.

Because it will not be the FNPF which will be changing the FNPF Act, but the military regime changing the FNPF Act by military decree to give FNPF some semblance of legality in reducing the pensions of Burness and the thousand or so others.

Protecting human rights under military decrees
While the laws of civilised countries are largely grounded in democratic parliamentary processes or common law developed over centuries by a consistent judiciary, legal cases in Fiji are now waged under the shadows of the 2006 military coup and its decrees.

A large part of the pressure to reduce FNPF pension is due to the 2006 coup which was supported by illegally appointed presidents signing illegal military decrees thereby undermining investor confidence, reducing economic growth and the creation of new jobs and incomes, destroying the value of several large FNPF investments, and thereby constraining FNPF revenues.

Reading the ShameemLaw submission and the judgment by Justice Hettiarchchi, it is clear that the protection of human rights in Fiji has been made incredibly difficult for all parties, because of the purported 2009 abrogation of the 1997 Constitution, and the restrictive military decrees signed by military presidents.

Those waging the case against FNPF have been totally frustrated by the media censorship and biases which has allowed the FNPF and military regime misrepresentations to be thrust down the public’s throats, while the pensioners’ voices have been largely censored. This media censorship persists because every month, an illegal president keeps signing the Public Emergency Decree.

The ShameemLaw submission is clearly concerned that their legal case will come to naught, if the military regime and the military Attorney-General go ahead in the meantime, to issue another military decree, signed by the military president, to change the FNPF Act to allow the board to reduce pensions, and to declare that the courts cannot hear any challenge to that.

The judge would have to abide by that, as he is in no position to challenge the entire legal edifice that has been created by the military regime.

What a sad irony therefore, that pensioners and their lawyer feel that if their legal case fails, their only recourse will be to appeal to the same president to call for an independent Commission of Inquiry.

Truly, the trials and tribulations of pensioners seeking justice in Fiji are full of ironies.

The ShameemLaw case against FNPF is focused on basic human rights. But Article 19 of the Universal Declaration of Human Rights also says: “Everyone has the right to freedom of opinion and expression; this right includes freedom to hold opinions without interference and to seek, receive and impart information and ideas through any media and regardless of frontiers”.

Yet Fiji has stood by and idly watched its basic human right of freedom of speech trashed for more than a year and currently.

In the current FNPF case, other basic human rights such as personal property of pensioners, and the sanctity of their lawful contracts with FNPF, are under the microscope.

The coming judgment for Fiji’s pensioners will be a historical defining point for Fiji’s system of law and justice.

These are the personal views of Professor Wadan Narsey, not those of the University of the South Pacific where he is employed as professor of economics. He is currently on leave in Japan.

© Scoop Media