POWER PROFILES
The Treasurers Back Story Part II: A Showdown with Judge Brian Brunton
During his tenure at the National and Supreme Court, Justice Brian Brunton earned a reputation for his integrity, forensic analysis and lucid decisions. These qualities were on display when he confronted a company owned and managed by a man recently appointed the country’s new Treasurer, Ian Ling-Stuckey.
The year was 1990, and the National Capital District Interim Commission (NCDIC) was litigating against a Ministerial decision to rezone and lease a prime plot of Port Moresby land near Tabari Place Boroko, to the company Crusoe Pty Ltd.
NCDIC had earmarked the land for a public car park.
According to Judge Brunton, Crusoe Pty Ltd was owned by Richard Wong and Ian Ling-Stuckey. In his affidavit Ling-Stuckey describes himself as ‘a director and major shareholder in Crusoe Pty Ltd’.
Back in 1988 Crusoe Pty Ltd initially asked the Town Planning Board to rezone the Boroko land. It rejected the application, noting the plot had been earmarked for an important public purpose.
Crusoe Pty Ltd appealed to the Lands Minister, Kala Swokin. The Minister granted the appeal and the land was rezoned. The Minister then illegally exempted the land from public tender. Less than two months later the Land Board approved the state lease to Crusoe Pty Ltd.
According to the National Court Crusoe got this prime state lease for the sum of K100.
Justice Brunton noted with concern, evidence that Ling-Stuckey enjoyed a close personal relationship with the Land Minister’s office.
Before we jump into this major land transaction described by the presiding Judge as ‘suspicious’, it is critical to keep in mind Crusoe Pty Ltd’s major shareholder and director is a man who now has his hands on the country’s finances. This is also the same individual slammed in a 2009 Constitutional and Law Reform Commission report. The report claims during his time as New Ireland Governor Ling-Stuckey developed an elaborate patronage scheme, through an allegedly illegal process known as the Limus Structure. This scathing report was covered last week by PNGi.
Judge Brunton’s decision sheds yet more light on the type of practices that got Ian Ling-Stuckey to where he is today. They do not bode well for the nation’s fiscal future.
Highly Irregular Circumstances
When delivering his judgement, Justice Brunton made a special point of underlining the close relationship between Ling-Stuckey and the Land Minister’s Office, noting: ‘There was evidence before me that the Minister, or his staff, had a close relationship with Mr Ling-Stuckey , close enough to have him appointed as a member of both the Land Board and the Town Planning Board, and eventually as Deputy Chairman of the Town Planning Board’.
This might ordinarily be an unremarkable comment. However, when the Minister illegally overrides a Town Planning Board decision, and illegally circumvents public tender, the closeness between these parties raises serious questions.
The land at the centre of this controversy is Lot 29 Section 26, Reke Street, Boroko.
It was initially zoned ‘special purpose’ – the land was meant to be used for a proposed public-car park.
Lot 29 had been earmarked for this purpose since 1962.
In 1983 the NCDIC applied to the Land Board for a special purpose lease over Lot 29 so construction could begin. When the Land Board failed to respond, they followed up on this application with a letter to the Lands Secretary in 1985, noting their request to the Land Board.
Judge Brunton observes of the Land Board, it ‘did not respond to an application lawfully submitted by the NCDIC, and it took no action to preserve the interests of the public, or the interests of the NCDIC. The failure of the Board to acknowledge the concerns of the NCDIC, and its applications was, at best, quite negligent’.
Several years later Ling-Stuckey and Crusoe Pty Ltd would find the Land Board much quicker on its feet. But first the company would have to apply for the land to be rezoned.
On 21 September 1988, Ian Ling-Stuckey – our current Treasurer – made a submission to the Town Planning Board, on behalf of Crusoe Pty Ltd. He requested that Lot 29 be rezoned from special use to commercial use.
The application was rejected. The Town Planning Board noted the land had been earmarked for a public car park.
Crusoe appealed to the Minister. According to Judge Brunton ‘this appeal was constituted by a one-page letter, with no grounds of substance offered in support to the appeal’.
Lack of substance was no barrier to success.
Judge Brunton observes: ‘On 21 October 1988, the Minister for Lands, without any notification either to the Town Planning Board, the NCDIC, or any other interested party, upheld Crusoe’s appeal from the Town Planning Board and re-zoned Lot 29 for commercial use’.
Crusoe and Ling-Stuckey then entered phase two of their plan. According to Justice Brunton ‘the next step that Crusoe took to secure title to Lot 29 was to approach the Minister and to get him to make an order not to allocate the lot by public tender. Lot 29 was to be allocated without advertising’.
Crusoe Pty Ltd was successful, the Minister exempted the land from public tender.
On 24 October 1988 Crusoe applied for a state lease over Lot 29, as the only applicant.
Judge Brunton notes the alarming lack of a business case: ‘The documentation for a project that was supposed to cost between K4.5 and K5 million was sparse. Indeed, it lacked details and contained no description of how the proposed building was to make a profit, who would occupy it, and what the cash-flows were likely to be’.
Again this lack of substance was no barrier to success.
At a Land Board meeting on 7 December 1988, just over a month after the application was made, the Land Board unanimously agreed to recommend the granting of Lot 29 to Crusoe. An NCDIC official was present at the Land Board meeting and objected to the application, noting the land was reserved for a public car park. Their objection was overruled by the Board.
Two days later the NCDIC wrote to the Land Board asking them to defer its decision, noting serious irregularities in the prior re-zoning process.
In a twist, on 13 December 1988, the Minister in fact appointed Ian Ling-Stuckey to the Land Board.
Then during February 1989, the NCDIC initiated legal action. It aimed to reverse the decisions to rezone Lot 29 and lease it to Crusoe Pty Ltd. Adding weight to the NCDIC’s claim, on 9 February 1989 the Town Planning Board sent a letter of protest to the Minister for Lands, arguing that rezoning the lot to commercial was not in the public interest.
Judge Brunton notes shortly after on 4 August 1989, Ian Ling-Stuckey enjoyed another fortunate appointment. He was made a member of the Town Planning Board by the Lands Minister. On 17 October 1989 he was promoted to Deputy Chairman of the Town Planning Board, less than a year after the very same Board had rejected his rezoning application.
Judge Brunton Declares Award Illegal
In his decision, Justice Brunton points to a range of illegalities and suspicious decisions.
First, he notes, the Land Minister’s decision to grant Crusoe Pty Ltd’s request to rezone the land from special purpose to commercial was illegal. There was, he argues, a failure to notify interested parties, as required under the Town Planning Act.
Judge Brunton also questions the grounds on which the Minister overruled the Town Planning Board’s original decision denying a rezoning request. He observes: ‘The grounds of Crusoe’s appeal were very thin. In essence the grounds were that Crusoe is a nationally-owned company and that Crusoe has the capability to erect an office block’.
Further suspicious circumstances were pointed to by Justice Brunton: ‘Another aspect of the appeal which generates unease is the speed it went through’. After originally being knocked back by the Town Planning Board, Crusoe Pty Ltd managed to get the land rezoned and a Land Board decision recommending it for a state lease, in less than two months. Brunton J observes:
It is a matter of public notoriety that the Lands Department is known for its delays. There is a need for Ministers, senior public servants and those who sit on statutory boards, or have discretions to exercise, to be open and fair, and to conduct their business in such a way as to defend their well-earned reputations. There was evidence before me that the Minister, or his staff, had a close relationship with Mr Ling-Stuckey, close enough to have him appointed as a member of both the Land Board and the Town Planning Board, and eventually as Deputy Chairman of the Town Planning Board.
Brunton J then turned his mind to the Minister’s decision to exempt the land from public tender. Under the Land Act the Minister must have a ‘special reason’ to circumvent this important requirement designed to guard against corruption and ensure the state receives a fair market price. In this case, Brunton J observes:
The evidence before me about the Minister’s reasons for exempting Lot 29 from tender was meagre. It consisted of a single paragraph in the minutes of the Land Board, annexure A to the affidavit of Mr Samuel Manikot, Chairman of the Land Board, which recommended that the lease be granted. That paragraph read: “Crusoe Pty Ltd is a nationally owned Company. The company proposed to erect eight level complex [sic] to accommodate offices, retail and accommodation space and sufficient levels of car park areas for general public use. In viewing the above the land was exempted.” Can these be special reasons? There must be many nationally-owned companies in the real estate development business. What was the special reason given for them not to compete in a public tender? There was no reason given.
Brunton J adds, ‘there was no evidence before me that Crusoe paid anything more than the K100 application fee for a commercial lease … it was a miserable decision. There was no competition’.
Miserable perhaps for Papua New Guinea, great though for Crusoe Pty Ltd and its major shareholder, Ian Ling-Stuckey. Except for one fact, it was illegal, and Judge Brunton declared the award to Crusoe Pty Ltd void.
A question should now be asked, in light of this and many other public records documenting the Treasurer’s prior conduct – such as the Constitutional and Law Reform Commission report. Was Prime Minister’s Marape decision to appoint Ling-Stuckey Treasurer a ‘miserable’ one?