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Constitutional law – Supreme
Court - invoking the original
jurisdiction - Interpretation -
Enforcement of the 1992
Constitution - Appropriate
orders and directions – Capacity
– Banking - Corporate Governance
Directive – Statutory powers -
Order of perpetual injunction
-Whether or not the said
directives were to be laid
before parliament- Whether or
not failure to comply with this
provision
of the Constitution
renders the directives
unconstitutional, and null and
void. - Articles 2(1) and 130 of
the 1992 Constitution - sections
56 and 92(1) of the Banks and
Specialised Deposit-Taking
Institutions Act 2016 (Act 930)
HEADNOTES
The Plaintiff says that it is a
company limited by guarantee and
as such brings this action in
the capacity of a person under
Articles
2(1) and 130 of the 1992
Constitution of the Republic
of Ghana, and this suit wass
provoked
by
a “document
of
the 1st Defendant dated in
December 2018 and
titled; “Explanatory Notes on
the Revised Corporate Governance
Directive issued in December
2018” and the "Corporate
Governance Directive of 2018 The
1st Defendant issued a directive
described as the Banking
Business Corporate Governance
Directive in March 2018,
pursuant to
sections
56 and 92(1) of the Banks and
Specialised Deposit-Taking
Institutions Act 2016 (Act 930)
hereinafter referred to as
Act 930.
According to Plaintiff’s
Statement of Case, the 1st
Defendant subsequently issued
transitional provisions to the
banking industry in July 2018,
aimed at operationalizing the
directive of March 2018 and
ensuring full compliance with
the directive by 31st December,
2018.
The
Plaintiff says that due to
concerns raised by various
stakeholders affected by the
directives, the 1st Defendant
revised the March 2018
directives and issued the 27th
December 2018 directives
which
are the subject-matter of the
instant suit. The Plaintiff is
of the view that ”the directives
of 27th December 2018, which
were made pursuant to Sections
56 and 92 of Act 930, are
legislative instruments that is
to be precise, rules and
regulations within the
intendment of Article 11(1)(c)
of the 1992 Constitution and
therefore ought to be
promulgated in accordance with
Article 11(7) of the 1992
Constitution of the Republic of
Ghana and as a result, could
only come into force upon being
laid before parliament for a
period of 21 sitting days and
published in the gazette on the
day it was laid before
parliament.”
HELD
Adopting
the Plaintiff’s argument would
send all acts under the powers
of the 1st Defendant contained
in these sections to Parliament,
which we do not believe would be
the intention of the framers of
the 1992 Constitution. The 1st
Defendant, when issuing
directives, which are
administrative and not
legislative, is therefore not
intended to send the directives
to Parliament under Article
11(7) of the 1992 Constitution.
For the above reasons, we have
come to the conclusion that the
1st Defendant’s directives are
not ‘Orders, Rules or
Regulations’ within the meaning
of Article 11(1)(c), there is a
certain level of absurdity or
repugnancy in making every
executive or administrative
action take the nature of a
legislative function. It could
not have been the intention of
the framers of the constitution
who created the 1st Defendant,
to subject the internal workings
and the regulatory
responsibility of the 1st
Defendant to the constant
supervision of Parliament,
thereby introducing the danger
of slowing and grinding the work
done by the 1st Defendant to a
gradual halt. Finding in favour
of the Plaintiff would subject
the 1st Defendant to
undue parliamentary oversight,
thereby upsetting the necessary
independence of the 1st
Defendant. The system of
separation of powers ingrained
in Ghanaian constitutionalism,
and regulatory functions of
specified institutions within
the 1992 Constitution would be
undermined. We are therefore of
the considered view that on a
true and proper construction of
Article 11(1)(c), the
directives and rules in question
issued by the 1st Defendant do
not fall under the ambit of the
said article. This action ought
to fail.
STATUTES REFERRED TO IN JUDGMENT
1992 Constitution
Banks and Specialised
Deposit-Taking Institutions Act
2016 (Act 930)
Interpretation Act, 2009 (Act
792)
Bank of Ghana Act, 2002 (Act
612)
Legal Profession Act (Act 32)
CASES REFERRED TO IN JUDGMENT
Republic v. Special Tribunal; Ex
Parte Akosah [1980] GLR 592
Dynamic Youth of Ghana v. Ofori
Atta (Writ No. J1/04/2018
judgment dated 5th May, 2020
Republic v. Special Tribunal; Ex
parte Akosah [1980] GLR 592
Prof. Kweku Asare v. The
Attorney General & General Legal
Council (J1/1/2016 Judgment
dated 22nd June 2017)
Republic v. Minister for
Interior; Ex Parte Bombelli
[1984-86] 1 GLR 204
Opremreh v. Electoral Commission
of Ghana & Attorney General
[2011] 2 SCGLR 1159
Osei-Akoto v. Attorney-General
[2012] 2 SCGLR 1295
Gregory Afoko v. Attorney
General suit no J1/8/19 19/06/19
Arthur Yates & Co. Pty. Ltd. v.
The Vegetable Seeds Committee
(1945) 72 CLR 37
BOOKS REFERRED TO IN JUDGMENT
Memorandum on the Proposals for
a Constitution for Ghana, 1968
Wade’s Administrative Law (6th
Edition) at pages 847-848
DELIVERING THE LEADING JUDGMENT
KULENDI JSC:-
COUNSEL
THADDEUS SORY WITH HIM SEAN POKU
AND NANA BOAKYE MENSAH-BONSU FOR
THE PLAINTIFF.
ACE ANAN ANKOMAH FOR THE 1ST
DEFENDANT.
ALFRED TUAH-YEBOAH (DEPUTY
ATTORNEY-GENERAL) WITH HIM GRACE
EWOAL (MRS.) (CHIEF STATE
ATTORNEY), YVONNE OBUABISA
(DEPUTY PUBLIC PROSECUTOR) AND
REGINALD NII ODOI (ASSISTANT
STATE ATTORNEY)FOR THE 2ND
DEFENDANT .
______________________________________________________________________
JUDGMENT
______________________________________________________________________
KULENDI JSC:-
INTRODUCTION
Before
us is
a writ invoking the original
jurisdiction of this Court
brought by the Plaintiff seeking
the
interpretation and the
enforcement of the 1992
Constitution, and
appropriate orders and
directions to give effect to
any orders made.
CAPACITY
The Plaintiff says that it is a
company limited by guarantee and
as such brings this action in
the capacity of a person under
Articles 2(1) and 130 of the
1992 Constitution of the
Republic of Ghana.
BACKGROUND
According to averments
made by
the Plaintiff,
specifically at page 3 of its
Statement of Case,
this suit
is provoked
by
a “document
of
the 1st Defendant dated in
December 2018 and
titled; “Explanatory Notes on
the Revised Corporate Governance
Directive issued in December
2018” and the "Corporate
Governance Directive of 2018.”
These Documents,
and not “document”,
are
referred to by the Plaintiff
as “the
directives”
and while the Plaintiff says
that both the explanatory notes
and the Corporate Governance
Directive of 2018 are marked as
exhibit 1, it appears that only
the Corporate Governance
Directive of 2018 is exhibited
and marked as Exhibit
1.
The 1st Defendant issued a
directive described as the
Banking Business Corporate
Governance Directive in March
2018, pursuant to sections 56
and 92(1) of the Banks and
Specialised Deposit-Taking
Institutions Act 2016 (Act 930)
hereinafter referred to as Act
930.
According to Plaintiff’s
Statement of Case, the 1st
Defendant subsequently issued
transitional provisions to the
banking industry in July 2018,
aimed at operationalizing the
directive of March 2018 and
ensuring full compliance with
the directive by 31st December,
2018.
The Plaintiff says that due to
concerns raised by various
stakeholders affected by the
directives, the 1st Defendant
revised the March 2018
directives and issued the 27th
December 2018 directives
which
are the subject-matter of the
instant suit.
GROUNDS FOR
APPLICATION
The Plaintiff is of the view
that ”the directives of 27th
December 2018, which were made
pursuant to Sections 56 and 92
of Act 930, are legislative
instruments that is to be
precise, rules and regulations
within the intendment of Article
11(1)(c) of the 1992
Constitution and therefore ought
to be promulgated in accordance
with Article 11(7) of the 1992
Constitution of the Republic of
Ghana and as a result, could
only come into force upon being
laid before parliament for a
period of 21 sitting days and
published in the gazette on the
day it was laid before
parliament.”
The
Plaintiff contends that
the
failure
of the 1st Defendant
to
comply with this provision
of the Constitution
renders the directives
unconstitutional, and for that
matter, null and void.
RELIEFS SOUGHT
The Plaintiff is
the
reliefs reproduced
verbatim below:
I.
A declaration that upon a true
and proper interpretation of
article 11 clauses (1) (c) and
(7) of the 1992 Constitution of
the Republic of Ghana, to the
extent The Bank of Ghana
(BOG) Corporate Governance
Directive - December 2018
On The Tenure For Managing
Directors/Chief Executive
Officers, Board Chairs And
Non-Executive Directors Of
Regulated Financial Institutions
was made pursuant to the
provisions of sections 56 and
92(1) of the Banks and
Specialised Deposit-Taking
Institutions Act 2016 (Act 930),
the
said directive
are
rules and/or regulations within
the meaning of Article 11
clauses (1)(c) and (7) of the
1992 Constitution of the
Republic of Ghana.
II.
A declaration that to the extent
The Bank of Ghana (BOG)
Corporate Governance Directive -
December 2018
On The Tenure For Managing
Directors/Chief Executive
Officers, Board Chairs And
Non-Executive Directors Of
Regulated Financial Institutions
are rules and/or regulations
made within the meaning of
Article 11 clauses (1)(c) and
(7) of the 1992 Constitution,
the said directive ought to have
been laid in Parliament,
published in the Gazette on the
day it was laid before
Parliament, and could only come
into force at the expiration of
twenty one sitting days after
being so laid unless Parliament
annuls the said directive by
votes of not less than
two-thirds majority of
Parliament before the expiry
of the said twenty one days.
III.
A declaration that to the extent
The Bank of Ghana (BOG)
Corporate Governance Directive -
December 2018
On The Tenure For Managing
Directors/Chief Executive
Officers, Board Chairs And
Non-Executive Directors Of
Regulated Financial Institutions
was not laid in Parliament and
published in the Gazette on the
day it was laid before
Parliament, to come into force
at the expiration of twenty-one
sitting days after being so laid
unless Parliament [annuls
the said directive by votes of
not less than two-thirds
majority of Parliament before
the expiry of the said twenty
one days]
the
said directive was made in
violation and/or contravention
of the provisions of article 11
clause 7 of the 1992
Constitution of the Republic of
Ghana.
IV.
A declaration that to the extent
The Bank of Ghana (BOG)
Corporate Governance Directive -
December 2018
On The Tenure For Managing
Directors/Chief Executive
Officers Board Chairs and
Non-Executive Directors of
Regulated Financial Institutions
was made in violation and/or
contravention of article 11
clause 7 of the 1992
Constitution of the Republic of
Ghana, the said directive is
null, void and of no effect.
V.
An order
of perpetual injunction
restraining 1st Defendant [The
Bank of Ghana] from or in any
way enforcing the said
Bank of Ghana (BOG) Corporate
Governance Directive - December
2018
On The Tenure For Managing
Directors/Chief Executive
Officers, Board Chairs and
Non-Executive Directors of
Regulated Financial Institutions
against Plaintiff and/or all
persons affected by the said
directive as same is
unconstitutional, null, void and
of no effect.
CASE OF THE PLAINTIFF
It is the case of the
Plaintiff
that since they are seeking an
interpretation of the
Constitution, the
original
jurisdiction of this Court
is that which ought to be
invoked
for the resolution of this
dispute. Citing the case of
Republic v. Special Tribunal; Ex
Parte Akosah [1980] GLR 592,
the Plaintiff makes the point
that where the words of a
constitutional provision are
imprecise or unclear, the
original jurisdiction of the
Supreme Court of the Republic of
Ghana arises to resolve the
imprecision and give meaning to
the words of the constitution.
Supporting that point, the
Plaintiff quoted the dictum of
my esteemed colleague Amegatcher
JSC in the case of
Dynamic Youth of Ghana v. Ofori
Atta (Writ No. J1/04/2018
judgment dated 5th May, 2020),
reproduced below:
“... the
latter provoked
the formulation of a roadmap by
the then Court of Appeal
performing the functions of the
Supreme Court some forty years
ago to guide parties and
practitioners think through the
issues before them thoroughly
before appearing in the apex
court to seek an interpretation.
That was the case of
Republic v. Special Tribunal; Ex
parte Akosah [1980] GLR 592.
In that case, the roadmap was
set out for triggering the
interpretative jurisdiction of
the Supreme Court under the 1979
Constitution. At Page 605, Anin
JA, speaking on behalf of the
Court, stated that the original,
interpretative jurisdiction of
the Supreme Court would be
invoked where under the
following
[sic]:
“(a) the words of the provision
are imprecise or unclear or
ambiguous. Put another way, it
arises if one party invites the
court to declare that the words
of the article have a
double-meaning or are obscure or
else mean something different
from or more than what they say;
(b) rival meanings have been
placed by the litigants on the
words of any provision of the
Constitution;
(c) there is a conflict in the
meaning and effect of two or
more articles of the
Constitution, and the question
is raised as to which provision
shall prevail;
(d) on the face of the
provisions, there is a conflict
between the operation of
particular institutions set up
under the Constitution, and
thereby raising problems of
enforcement and interpretation.”
It is the Plaintiff’s contention
that the 1st Defendant’s
directive is a rule or
regulation under article
11(1)(c) and therefore per
article 11(7) should have
been laid before
Parliament
for 21 days before coming into
force as law. The Plaintiff is
therefore asking this Court for
an interpretation or a
determination of the true nature
of the directive issued by the
1st Defendant.
In
other words, the Plaintiff is
asking this Court to make a
determination as to whether or
not the directive is a “rule or
regulation” under article
11(1)(c).
The Plaintiff also
argues
that the directives are rules
and regulations under article
11(1)(c) and therefore it is
seeking the enforcement of
article 11(7) by this Court.
The Parties
identify
two issues that
arise from the facts of this
case which I shall reproduce in
full below, and then proceed to
address as follows:
I.
Whether or not upon a true and
proper interpretation of Article
11 clause 1(c) and 7 of the 1992
Constitution The Bank of
Ghana (BOG) Corporate Governance
Directive - December 2018
On The Tenure For Managing
Directors/Chief Executive
Officers, Board Chairs And
Non-Executive Directors Of
Regulated Financial Institutions
made pursuant to the provisions
of section 56 and 92(1) of the
Banks and Specialised
Deposit-Taking Institutions Act
2016 (Act 930) are rules and/or
regulations within the meaning
of article 11(1)(c) of the 1992
Constitution of the Republic of
Ghana.
II.
Whether or not the 1st Defendant
in issuing its directives titled
“The Bank of Ghana (BOG)
Corporate Governance Directive -
December 2018
On The Tenure For Managing
Directors/Chief Executive
Officers, Board Chairs And
Non-Executive Directors Of
Regulated Financial Institutions”
pursuant to the provisions of
sections 56 and 92(1) ought to
have complied with the
provisions of article 11(7) of
the 1992 Constitution.
The Plaintiff argues that the
main question that arises with
regard to the
first
issue
is “...the nature of the rules
and directives which the 1st
Defendant is empowered to make
pursuant to sections 56 and
92 of Act 930”
The Plaintiff reproduces
section 56 of Act 930 and
says that there is no ambiguity
in that statutory provision. The
Plaintiff submits that the only
way the 1st Defendant is allowed
to regulate the issues that it
is mandated to regulate under
section 56 is by rules.
The Plaintiff reproduces section
92(1) and 92(2) of the Act 930
and says that the heading alone
of section 92 “makes it clear”
that section 92 differs from
section 56 in the sense that
section 92 is for regulation via
directives and section 56 is for
regulation via rules.
The Plaintiff avers that the
heading hints at the fact that
there is a difference between
the nature and manner of
exercising the powers conferred
on the 1st Defendant by Act 930
under section 56 and
under section 92. The
Plaintiff further avers that
upon a comparative analysis of
these two sections, one would
come to find that the matters to
be regulated under section 56
and under section 92 differ.
The Plaintiff further
contextualises the nature of
‘rules’ and ‘directives’ by
saying that they are both
manifestations of the exercise
of the 1st Defendant’s
statutory
powers under Act 930
which govern how the 1st
Defendant sets standards of
practice for the banking and
non-bank financial industry in
the country.
The Plaintiff
refers to
paragraph 731 of the
Memorandum on the Proposals for
a Constitution for Ghana, 1968
which states that no parliament,
no matter how well intentioned
or well resourced, can carry out
all its legislative duties, and
therefore there is the need to
give “Ministers”
some discretionary legislative
powers under acts of Parliament.
The said paragraph refers to
these legislative powers as
delegated legislation.
The Plaintiff says that the
Interpretation Act, 2009 (Act
792) refers to such
legislation as statutory
instruments, which are defined
in section 1 of that Act
as instruments made under a
power conferred by an Act of
Parliament. The Plaintiff
concludes by saying that the
definition of statutory
instruments under Act 792
leads to the conclusion that
directives or rules under Act
930 put out by the 1st
Defendant are statutory
instruments.
The Plaintiff quotes the
definition of an instrument
under section 1 of Act 792
and says that since these
directives and rules issued by
the 1st Defendant are not an
order made or warrant issued by
a Court, the rules and
directives put out by the 1st
Defendant are statutory
instruments. In conclusion, the
Plaintiff submits that due to
the arguments canvassed above,
the rules and directives put out
by the 1st Defendant under Act
930 are “rules and regulations”
under Article 11(1)(c) of the
1992 Constitution.
The Plaintiff says the
second issue “flows from” the
determination of the preceding
issue. Under this issue,
the
plaintiff submits that the
directives at issue in the
instant case are not mere
administrative fiats but possess
the force of law and are
therefore enforceable.
The Plaintiff
refers to
the case of
Prof.
Kweku Asare v. The Attorney
General & General Legal Council
(J1/1/2016 Judgment dated 22nd
June 2017) and
argues
that to the extent that the
rules and directives put out by
the 1st Defendant under Act 930
are rules and regulations under
Article 11(1)(c) of the
Constitution, the promulgation
of these rules and directives is
governed by Article 11(7) of the
1992 Constitution. The Plaintiff
cites Asare (supra) and
the case of
Republic v. Minister for
Interior; Ex Parte Bombelli
[1984-86] 1 GLR 204 to
support this argument.
The Plaintiff
evokes
the purpose of the rule
contained in Article 11(7)
saying
that “it is not for mere
sophistication and fanciful
delights” that the framers of
the constitution put that
provision in place.
CASE
OF 1ST DEFENDANT
The 1st Defendant on the other
hand submits that the directive
at issue in this case is not a
‘rule or regulation’
in terms of
Article 11 of the Constitution
and therefore there was no
obligation to follow the
procedure under Article 11(7).
The 1st Defendant
argues
that
while there is no explicit
separate definition of “Orders,
Rules, and Regulations”, it is
instructive to note that
whenever the Constitution uses
those terms, it capitalises
them, meaning that they are
terms of art. The 1st Defendant
avers
that the Constitution then
appears to define or narrow the
application of the terms by
qualifying them as ‘made by a
person or authority under a
power conferred by this
Constitution or any other law’.
The 1st Defendant says that this
means that “in order to
qualify under article 11,
the Constitution or other
statute must expressly provide
that it is a law-making power
that is being vested under the
Constitution or the statute.”
(emphasis added)
Without this express provision,
the 1st Defendant
postulates,
every power donated under the
Constitution or Statute, whether
administrative or executive,
would
require compliance with
Article 11(7). The 1st
Defendant further argues that
this is not the intention of the
framers of the constitution. The
1st Defendant refers to
the case of
Opremreh v. Electoral Commission
of Ghana & Attorney General
[2011] 2 SCGLR 1159 to
buttress this argument.
The 1st Defendant also
referred
to the case of
Osei-Akoto v. Attorney-General
[2012] 2 SCGLR 1295
where this Court held that an
executive order was not an
‘order, rule or regulation’
under Article 11(1)(c)
which had to be promulgated in
the manner mandated in
Article 11(7), saying that
in that case, this Court cited
with approval, the decision in
the Bombelli case (supra)
in which, according to the 1st
Defendant, this Court held that
“even if an instrument is
‘statutory’, the enactment
procedure under the Constitution
(specifically under article
11(7)) would not apply unless
that instrument is legislative
in nature.”
The 1st Defendant
further
contends
that “there is therefore no
question” that if a body is
exercising an “executive act”,
there is no obligation to comply
with article 11(7). The 1st
Defendant cites the unreported
case of
Gregory Afoko v. Attorney
General suit no J1/8/19 19/06/19
in support of this
argument.
In this case, this
Court was called upon to
determine whether the power of
the Attorney-General to enter a
nolle prosequi under
section 54(1) of Act 30 had
to satisfy the requirements of
Article 296(c) and
Article 11(7) of the
Constitution. This Court
held
that there was no need for the
Attorney-General to comply with
Article 11(7)
since the Attorney-General was
exercising an executive and not
a legislative power.
The 1st Defendant
also
argues that a legislative power
is one used to lay down the law
for people in general, whereas
administrative power is used to
lay down the law for them or to
apply the law to them in some
particular situation. The 1st
Defendant contends
that the directive in issue is
based on an already existing law
of general application i.e. Act
930, and is going to regulate
the behaviour of a specified
group of people, and is
consequently different from
instruments contemplated
by Article 11.
The 1st Defendant
cites
the Australian case of
Arthur
Yates & Co. Pty. Ltd. v. The
Vegetable Seeds Committee (1945)
72 CLR 37 to
differentiate between
legislative acts and
administrative acts,
quoting
the dictum of Latham CJ
as follows:
“The distinction between
legislative and administrative
acts is one which is easy to
state in general terms, but
which is sometimes difficult to
apply. The distinction between
making a law and administering a
law made by some other authority
is quite clear in many cases. A
parliament passes a Lands Act,
and a Lands Department
administers the Act by putting
it into operation. But where a
law gives power to some person
or body to give directions in
order to put the law into
operation, it is not always a
simple matter to apply the
distinction.
Persons using the highways must
obey the directions of traffic
constables and they may be
punished for failing to do so.
But no one could say that the
constable makes a law when he
stops traffic or moves it
forward. A military officer may
give orders to soldiers under
his command, an employer may
give ‘lawful orders’ to his
employee, a court may give
directions to parties in
relation to proceedings before
it. None of these orders or
directions are laws, though
disobedience to any of them
produces legal consequences.”
The 1st Defendant adds that just
because section 56 of Act 930
gives the power to the 1st
Defendant to prescribe rules
(with a
lowercase
‘r’), it does not mean that
these are the Rules (with a
capital ‘r’) contemplated by the
framers of the constitution
under Article 11.
The 1st Defendant also espouses
the view that even though there
is no ambiguity or obscurity in
the provisions of Article 11,
it is helpful to look at the
Memorandum to the Interpretation
Act, 2009 (Act 792) as
section 10(2)(b) of that Act
implores interpreters to do.
Specifically, the 1st Defendant
urged that
attention be paid to the part of
the Memorandum which
states:
“There are other instruments not
mentioned under Article 11 of
The Constitution, such as
bye-laws and proclamations. The
express mention of the Orders,
Regulations, and Rules excludes,
by necessary implication, the
other statutory instruments or
statutory documents not so
mentioned. These instruments,
therefore, do not fall within
the ambit of Article 11.”
The 1st Defendant also makes the
point that Section 1 of the
Interpretation Act
distinguishes between a
“Statutory Document” and a
“Statutory Instrument”
and that while
both documents are made under an
authority conferred by an Act, a
Statutory Document is not made
under a subsidiary or
subordinate legislative power.
It
cites
the Osei Akoto case
(supra) and argues
that even if the directives
herein were statutory
instruments, they are not of a
legislative nature and therefore
not subject to the requirements
under Article 11(7).
The 1st Defendant refers to
Article 183 of the 1992
Constitution and says that
the
Constitution
established the 1st Defendant as
an independent regulator of the
financial industry in Ghana and
therefore it
is
not subject to the control of
anyone.
The 1st Defendant argues that
Parliament is
clear
in the Bank
of Ghana Act, 2002 (Act 612),
as to
which
of its functions or acts require
compliance
with Article 11(7).
It
cites Sections 4(2) and 66 of
Act 612 as examples of
provisions that specify the
legislative nature of some of
its powers. Similarly, the 1st
Defendant says that in Act 930,
where Parliament requires
it to
use subsidiary or subordinate
legislation which would require
compliance with Article 11(7),
it so specifies such as
in
section 115 of Act 930. On
the other hand, section
16(1)(g) of Act 930,
according to the 1st
Defendant, is
an example of a provision that
uses the term
“regulations”
which is not subject to
the procedure under Article
11.
The 1st Defendant
contends that a judicial
endorsement of
the interpretation
of
Article 11(7) being urged by
the Plaintiff, would
result in
Parliament micromanaging
the work of the 1st Defendant,
an outcome which was
not the intention of the framers
of the Constitution.
The 1st Defendant then sets out
some
provisions contained in
the Directive
of December 2018
and
argues
that they comply with its
mandate to issue directives
as
administrative acts.
The 1st Defendant distinguishes
its December 2018
Directives
from the rule made by the
General Legal Council in the
Asare case (supra)
and argues that
the latter was
expressly required by the
Legal
Profession Act (Act 32)
to be made by a Legislative
Instrument. Besides, the rule
was
made to override
a statutory provision. In
contrast,
in Act 930 there
is no requirement that the
December 2018 Directives be made
by way of a Legislative
Instrument, and further, that
the Directives
do not affect any matters
which are already the subject of
a statutory instrument.
The 1st Defendant concludes the
Plaintiff is urging an overly
expansive interpretation of
Article 11
which
would “melt down the regulatory
work of” the 1st Defendant and
“grind down the work of
Parliament in a way that the
Constitution does not
anticipate” and prays
the Court to reject the
Plaintiff’s case.
CASE OF
THE 2ND DEFENDANT
The 2nd Defendant says that the
purpose of delegated legislation
is that “while Parliament
deals directly with general
principles, the body empowered
to make subordinate or delegated
legislation is given the
opportunity to declare what
parliament itself would have
laid down had its mind been
directed to the precise
circumstances.”
The 2nd Defendant argues that
though the 1992 Constitution
does not define what ‘Orders,
Rules and Regulations’ are, the
jurisprudence of ‘the Superior
Court’ is that in order to
constitute an Order, Rule or
Regulation under the ambit of
Article 11(1)(c), the
instrument must be legislative
in nature.
The 2nd Defendant generally
repeats
the argument of the 1st
Defendant and cites
the Osei-Akoto case
(supra), among others.
The 2nd Defendant in paragraph
38 of its Statement of Case
argues
that not all statutory
instruments are legislative in
character and that the mere fact
that an instrument is statutory
in nature does not mean that it
was intended to fall under
Article 11(1)(c).
The 2nd Defendant
contends
that such an interpretation of
the Constitution is in line with
the provisions of Sections
10(4)(c) & (d) of the
Interpretation Act, 2009 (Act
729) which mandate Courts to
interpret the Constitution and
other laws in a manner that
allows for the creative
development of the laws of Ghana
and avoids technicalities and
recourse to niceties of form and
language which defeat the
purpose and spirit of the
Constitution and the laws of
Ghana.
The 2nd Defendant
further argues
that the interpretation that not
all statutory instruments are of
legislative character is one
that has been applied in other
Commonwealth
jurisdictions,
such as
Australia. The 2nd Defendant
also states
that the directive does not seek
to change the law but rather
applies existing law already
prescribed
in Act 930. The 2nd Defendant
gives examples in Act 930 where
it acknowledges
that the procedure under
Article 11(7) ought to be
followed due to the legislative
character of the imperative
contained therein, such as
Section 155 of Act 930.
The
2nd Defendant concludes
that Article 11(7) makes
it mandatory for subsidiary
legislation to be laid down
before Parliament and published
in the Gazette on the day it is
laid before Parliament. This,
the 2nd Defendant says, is to
afford Parliament some form of
control over subsidiary
legislation. However,
it is
erroneous, in the opinion
of the 2nd Defendant, to
consider the Directives
of December 2018
to be
subsidiary legislation.
It
therefore submits that on a true
and proper interpretation of the
1992 Constitution, the
provisions of Article 11(7)
do not apply to the directives
issued by the 1st Defendant in
December 2018.
LAW AND ANALYSIS
At issue in this case is the
nature of the directives made by
the 1st Defendant entitled
The Bank of Ghana (BOG)
Corporate Governance Directive -
December 2018
On The Tenure For Managing
Directors/Chief Executive
Officers, Board Chairs and
Non-Executive Directors of
Regulated Financial Institutions
made pursuant to the provisions
of sections 56 and 92(1) of
the Banks and Specialised
Deposit-Taking Institutions Act
2016 (Act 930). We commence
with the first issue.
ISSUE I
The Plaintiff has urged this
Court to find that the
directives at issue are Orders,
Rules or Regulations in the
Article 11(1)(c) sense and
therefore
required
to comply with the provisions of
Article 11(7).
The
pathway to resolving this issue
is an analysis of
the said provisions
of
the 1992 Constitution,
together with
sections 56 and 92(1) and (2)
of Act 930,
all of which provisions I shall
reproduce below:
Article 11(1)(c) -
(1) The laws of Ghana shall
comprise-
(c) any Orders, Rules and
Regulations made by any person
or authority under a power
conferred by this Constitution.
Article 11(7) -
(7) Any Order, Rule or
Regulation made by a person or
authority under a power
conferred by this Constitution
or any other law shall -
(a) be laid before
Parliament;
(b) be published in the Gazette
on the day it is laid before
Parliament; and
(c) come into force at the
expiration of twenty-one sitting
days after being so laid unless
Parliament, before the
expiration of the twenty-one
days, annuls the Order, Rule or
Regulation by the votes of not
less than two thirds of all the
members of Parliament
Section
56.
Corporate governance
The Bank of Ghana may prescribe
rules regarding any matter of
corporate governance of a bank,
specialised deposit-taking
institution or financial holding
company that the Bank of Ghana
considers necessary or
appropriate to
(a) ensure prudent operation,
including matters relating to
the scope and nature of the
duties of directors of a bank,
specialised deposit-taking
institution or financial holding
company;
(b) the requirements for audit
and other specific committees of
the Board;
(c) the responsibilities of key
management personnel;
(d) risk management;
(e) internal audit;
and
(f) internal controls and
compliance.
Section
92. Directives
(1)
The Bank may issue
directives to banks, specialised
deposit- taking institutions or
financial holding companies
generally or to a class or
classes of banks, specialised
deposit-taking institutions or
financial holding companies
where the Bank of Ghana is
satisfied that
(a) it is necessary to secure
the proper management of a bank,
specialised deposit-taking
institution or financial holding
company generally;
(b) it is necessary to prevent
the affairs of banks,
specialised deposit-taking
institutions or financial
holding companies being
conducted in a manner
detrimental to the interest of
depositors and other
stakeholders or prejudicial to
the interests of the banks or
specialised deposit-taking
institutions or financial
holding companies;
(c) it is necessary to maintain
the overall stability of the
financial system in the country;
or
(d) it is necessary to give full
effect to the provisions of this
Act.
(2) Without limiting subsection
(1) the Bank of Ghana may issue
directives
(a) to provide for
(i) the licensing of banks and
specialised deposit taking
institutions;
(ii) the minimum level of
capital for banks, specialised
deposit-taking institutions and
financial holding companies;
(iii) the prescription of
prudential norms on asset
quality, bad debt and
write-offs;
(iv) the liquidity reserve
requirements and net open
position requirements;
(v) the computation of on-going
capital adequacy requirements
for banks, specialised
deposit-taking institutions and
financial holding companies;
(vi) the lending limits on
credits extended to insiders;
(vii) the limitations for
advances or credit facilities to
a
single borrower;
(viii) the rules and regulations
against the use of banks,
specialised deposit-taking
institutions and financial
holding companies for money
laundering, terrorist financing
and the financing of
proliferation of weapons of mass
destruction;
(ix)the classification of
entities as banks or specialised
deposit-taking institutions for
the purposes of this Act;
(x) the reporting requirements
to the Bank of Ghana;
(xi) the issue, form and content
of advertisements for
deposits;
(xii) consumer protection
principles, rules and require-
ments and their enforcement; and
(xiii) anything required under
or authorised by this Act to be
provided for by directives;
(b) to address specific
characteristics of specialised
deposit taking institutions to
modify the application of a
provision of this Act to a
specialised deposit-taking
institution; or
(c) to exempt a specialised
deposit-taking institution or
specific categories of
specialised deposit-taking
institution from the application
of a provision of this Act.
WHAT IS THE NATURE OF AN ORDER,
RULE OR REGULATION UNDER ARTICLE
11?
Before proceeding to answer this
question, I think it is
necessary to note that while
Article 11(1)(c) talks about
Orders, Rules and Regulations
made by any person or authority
under a power conferred by
this Constitution,
Article 11(7) talks about
Orders, Rules and Regulations
made by a person or authority
under a power conferred by
this Constitution or any
other law. It is
intriguing
that neither party brought up
this difference between the two
provisions, which would have
invoked this Court’s
jurisdiction to interpret the
Constitution where there is
seemingly a conflict between two
of its provisions, as was
envisaged by Anin JA in the
ex Parte Akosah case (supra).
I believe this is worthy of note
because in searching for or
establishing the nature of an
Order, Rule or Regulation, the
first place to look for answers
to this question is in
Article 11 itself. The first
thing one ought to note is that
the article says that these
Orders, Rules and Regulations
are made by a power granted a
person or authority,
either under a power
given by the constitution, or
under a power given by any other
law. It then begs the question
of
whether the fact that the
Constitution or any other law
has granted a person or
authority the power to make
rules, means that every single
rule that that power or
authority seeks to enact must be
brought before Parliament for
twenty one days and published in
the Gazette the day it was
brought before Parliament?
The Plaintiff seems to think so.
In arguing for this point, the
Plaintiff at paragraph 18 of
its
statement of case refers
to
paragraph 731 of the
Memorandum on the Proposals for
a Constitution for Ghana, 1968
which states as follows:
“Exercise of Discretionary Power
731. Experience has shown that
it is practically impossible for
any Parliament however
well-intentioned to carry out
all its legislative duties
properly. It has thus become the
fashion for discretionary power
to be given to Ministers
(emphasis mine) under Acts of
Parliament for certain things to
be done, usually of an
administrative nature. This
is often referred to as
delegated legislation.”
Counsel for the Plaintiff goes
on to argue “From the above,
the body of rules by which the
business of government is
usually carried on is known as
delegated legislation”,
ignoring the fact that the 1st
Defendant is neither a minister
nor a ministry and therefore not
covered by this particular
reference to the Memorandum
on the Proposals for a
Constitution for Ghana, 1968.
The remainder of the Plaintiff’s
argument that is built on this
premise therefore requires us to
make one too far an inferential
leap — that is, to accept that
something that the Plaintiff has
defined as applicable to
Ministers should apply
mutatis mutandis to
institutions such as the 1st
Defendant. We are
therefore of the view
that this gap in
the
Plaintiff’s reasoning renders
the Plaintiff’s argument
short of a conclusion that the
1st Defendant’s directives are
‘Orders, Rules and Regulations’
under Article 11.
That
notwithstanding,
when a Plaintiff invokes the
original jurisdiction of this
Court in a matter of
constitutional interpretation,
while he is required by law to
submit a statement of case to
support his action, he has no
burden to establish one way or
another what the correct
constitutional interpretation of
a provision in the constitution
is. Even if he is unable to
convince the Court of his
position on the constitutional
provision, the Court is
constitutionally
mandated to examine the
provision comprehensively and
come out with a conclusive
interpretation of the law which
itself will become law.
As a result, even though I am of
the belief that the Plaintiff
has been unable to establish its
case, this Court remains under
an obligation to pronounce on
the issue of interpretation as
well as perform its
constitutional duty to enforce
the constitution.
A question that should be asked
at this point to get to the
bottom of the nature of the
directive in question is,
“is every requirement created by
any person or authority with
power granted them by law,
required to be promulgated in
the manner contemplated under
Article 11(7)?”
In
our considered
view, surely the answer to this
question is no, for a number of
reasons. In more general terms,
doing so would severely slow
down the already slow-paced
manner in which Parliament
works, inundating the body with
Legislative Instruments which,
although it is not to debate and
pass, it still has the
mandate
to consider and interject. This
will undermine
the
purpose of giving powers to
persons and authorities to make
administrative decisions.
In more specific terms, ruling
that the 1st Defendant is
required to present
requirements, regulations and
directives it uses to regulate
and administer the financial
sector of this country to
Parliament,
undermines the independent
nature of the 1st Defendant
while placing unnecessary
fetters on the efficiency with
which the 1st Defendant can work
and take steps to create an
enabling financial and economic
environment. This is the
“mischief” for which these rules
are in place and for which these
powers have been granted to the
1st Defendant.
The
1st Defendant is a body
entrusted with the object of
maintaining price stability and
secure management of economic
policy with a view to create
growth of the economy to create
opportunity for the people of
Ghana and has been granted
independence to do per
section 3 of the Bank of Ghana
Act, 2002, (Act 612).
This is not to say that no
requirement created by
any person or authority with
power granted them by law, is
required to be promulgated in
the manner contemplated under
Article 11(7). Far from
that. There are situations where
a person or a body is required
to comply with the said article.
The first scenario is when the
Constitution provides the power
to make subsidiary legislation
to a person or a body. These are
rules required by the
Constitution to be made by
Constitutional Instrument.
Article 297 describes a
“Constitutional Instrument” as “means
an instrument made under a power
conferred by this constitution”
- using and matching the
language found in Article
11(1)(c) as opposed to in
Article 11(7).
Examples of these may be found
in Article 203(2), which
empowers the Police Council to
make regulations for the
performance of its functions
under the Constitution,
Article 69(8) which empowers
the Rules of Court Committee to
make rules governing the
practice and procedure for the
tribunal or medical board
convened to look into the
removal of the President for
medical reasons, and Article
167 which gives the National
Media Commission the power to
make regulations to govern its
functions
(See also Article 65 on
Presidential Election
Regulations and
Article 158(2) on the
setting of the terms and
conditions of employees of the
Courts).
The second scenario is where the
power is conferred by a law that
is not the Constitution, which
law grants that
person or authority the power to
make a regulation or rule and
states that the person or
authority must proceed by way of
a statutory instrument. At this
point it is worthy to note that
neither Section 56 nor
Section 92 of Act 930
require the 1st Defendant to
proceed by way of a statutory
instrument.
As a matter of fact, Section
92(3) of Act 930 gives the
1st Defendant the power to amend
directives it issues “as it
deems fit” lending more
credence to the view that the
1st Defendant need not proceed
by way of the procedure
contained in Article 11(7)
to enact directives.
The third scenario is one which
was raised in the Asare
case (supra), which is where the
person or authority given a
power is seeking to change the
law. It is trite that if a law
is made by Parliament, it cannot
be changed by fiat, or by a
person or authority. However, if
that law was enacted by way of a
statutory instrument, the person
or authority is obligated to
proceed by a statutory
instrument in order to amend it.
In the Asare case (supra),
Gbadegbe JSC stated as
follows:
“It is observed that when
administrative bodies which have
been endowed with discretion
under statutes to regulate a
system that they are authorised
to put in place have done so in
the first instant by a
legislative instrument, then
when there are changed
circumstances ... the correct
thing to do ... is to take
advantage of the constitutional
provisions contained in Article
297(b) and (d) to amend, or
revoke the existing legislation
and substitute it with a new
one.
For ease of reference, Article
297(b) and (d) are reproduced
below;
297. In this Constitution and in
any other law -
(b) where a power is conferred
or a duty is imposed, the power
may be exercised and the duty
shall be performed, from time to
time, as occasion requires;
(d) where a power is conferred
to make any constitutional or
statutory instrument, regulation
or rule or pass any resolution
or give any direction, the power
shall be construed as including
the power, exercisable in the
same manner, to amend or to
revoke the constitutional or
statutory instrument,
regulation, rules or resolution
or direction as the case may be
(emphasis mine);
That being said, it is not all
statutory instruments that are
required to conform with the
provision under Article 11(7).
The fourth scenario would be a
situation where the statutory
instrument is not legislative in
character. A statutory
instrument may be administrative
or executive in character as
opposed to being legislative in
character.
The 1st Defendant in its
statement of case
referred
to the learned authors of
Wade’s
Administrative Law (6th Edition)
at pages 847-848 which
distinguishes between
legislative power and
administrative power. To recap
the thoughts expressed therein
in other words, an
administrative power is one that
is used to lay down the law or
apply the law in particular
situations, whereas legislative
power is the power to lay down
the law for people in general.
The Directive
at issue in this case was to
apply the already existing law
or lay down the law when it
comes to corporate
governance of the Banks,
necessitated by the recent
financial sector crisis that our
country has emerged from. It
does not create laws that are of
general application and
therefore is an administrative
(or executive) act and not a
legislative act.
An example of an administrative
act can be found in the Afoko
case (supra).
When it comes specifically to
the 1st Defendant’s functions
under law, it is also
instructive to examine in detail
the parent Acts of Parliament
which governs these regulations
for direction as to when such
subordinate legislation is
subject to Parliamentary
oversight, and when it is not.
In their Statement of Case, the
1st Defendant outlines some
examples of such cases which we
reproduce with approval below.
On page 16 of the Statement of
Case, the 1st Defendant states
as follows:
“Further, in Act 612, Parliament
was clear on which aspects of
1st Defendant’s functions are
‘legislative’ in nature and
would require the passage of a
legislative instrument. In
sections 4(2) and 66, Parliament
states clearly, the only
instances where 1st Defendant’s
Board or the Minister For
finance would be exercising
powers under Article 11, for
which the legislative process
would be required. Section 4(2)
provides as follows:
The Board may, by legislative
instrument, authorise a person
to exercise the power of the
Bank to regulate and supervise
non-banking financial
institutions.
And section 66 provides that:
The Minister may, after
consultations with the Board, by
legislative instrument, make
Regulations that are necessary
to give effect to this Act.
Thus, it is clear that it is
only in instances where 1st
Defendant wants to authorise a
person to exercise some of its
functions to regulate and
supervise non-banking financial
institution (sic) and when it is
necessary to make regulations to
give effect to the Act, that 1st
Defendant would be exercising a
legislative function, and would
require (sic) to comply with
article 11(7).
My Lords, Act 930 also provides
the exact instances where
subordinate or subsidiary
legislative powers may be
exercised. In section 155,
Parliament sets out when a
legislative instrument would be
required as follows
Regulations
(1)
The Minister may, in
consultation with the Bank of
Ghana, by legislative
instrument, make Regulations
prescribing or making provision
for anything which under this
Act may be prescribed or
provided for by Regulations.
(2)
Without limiting
subsection (1), the Minister may
make Regulations to provide -
(a)
for the payment of fees
and charges under this Act; and
(b)
generally for the
effective implementation of this
Act
My Lords it is instructive that
the Act provides that it is the
Minister who is mandated to make
the Regulations, which are
legislative in consultation with
1st Defendant. Clearly, 1st
Defendant is not expected to
prepare regulations or make
legislation in exercising its
inherent regulatory functions
under Article 183, Act 613 and
Act 930.
We are in agreement with these
views presented by Counsel for
the 1st Defendant and we are of
the view that he correctly
explains that Act 930
distinguishes between
“Regulations” and “directives”.
The references to several parts
of the Act which show that these
two are different from each
other, such as Section 9(g),
Section 16(g), Section
87(1)(c)(ii), Section 102(1)(a),
Section 103(1) & (2) is on
point.
Adopting the Plaintiff’s
argument would send all acts
under the powers of the 1st
Defendant contained in these
sections to Parliament, which we
do not believe would be the
intention of the framers of the
1992 Constitution. The 1st
Defendant, when issuing
directives, which are
administrative and not
legislative, is therefore not
intended to send the directives
to Parliament under Article
11(7) of the 1992 Constitution.
For the above reasons,
we
have come to the conclusion that
the 1st Defendant’s directives
are not ‘Orders, Rules or
Regulations’ within the meaning
of Article 11(1)(c).
ISSUE II
Having resolved issue
‘I’
in the negative, it follows by
deduction that the 1st Defendant
was under no obligation to
comply with the provisions of
Article 11(7) in issuing
its Directives of December 2018
and for that matter, any other
directives of that nature.
We are of the considered opinion
that the
directives issued by the 1st
Defendant are administrative
actions that the 1st Defendant
is charged with the
responsibility of crafting and
given the power to issue.
A ruling to the contrary
would subject the
administratively regulatory
functions of the 1st Defendant,
to Parliament, and caused a
fossilized approach to what may
only require an administrative
and regulatory mechanism to
correct a peculiar situation
within the financial sector.
Additionally,
there is
a certain level of absurdity or
repugnancy in making every
executive or administrative
action take the nature of a
legislative function. It could
not have been the intention of
the framers of the constitution
who created the 1st Defendant,
to subject the internal workings
and the regulatory
responsibility of the 1st
Defendant to the constant
supervision of Parliament,
thereby introducing the danger
of slowing and grinding the work
done by the 1st Defendant to a
gradual halt. Finding in favour
of the Plaintiff would subject
the 1st Defendant to
undue parliamentary oversight,
thereby upsetting the necessary
independence of the 1st
Defendant. The system of
separation of powers ingrained
in Ghanaian constitutionalism,
and regulatory functions of
specified institutions within
the 1992 Constitution would be
undermined.
We are
therefore of the considered view
that on a true and proper
construction of Article
11(1)(c), the directives and
rules in question issued by the
1st Defendant do not fall under
the ambit of the said article.
This action ought to fail.
E. Y. KULENDI
(JUSTICE OF THE SUPREME COURT)
V. J. M. DOTSE
(JUSTICE OF THE SUPREME COURT)
S. K. MARFUL-SAU
(JUSTICE OF THE SUPREME COURT)
A. M. A. DORDZIE (MRS.)
(JUSTICE OF THE SUPREME COURT)
M. OWUSU (MS.)
(JUSTICE OF THE SUPREME COURT)
G. TORKORNOO (MRS.)
(JUSTICE OF THE SUPREME COURT)
PROF. H. J. A. N. MENSA-BONSU
(MRS.)
(JUSTICE
OF THE SUPREME COURT)
COUNSEL
THADDEUS SORY WITH HIM SEAN POKU
AND NANA BOAKYE MENSAH-BONSU FOR
THE PLAINTIFF.
ACE ANAN ANKOMAH FOR THE 1ST
DEFENDANT.
ALFRED TUAH-YEBOAH (DEPUTY
ATTORNEY-GENERAL) WITH HIM GRACE
EWOAL (MRS.) (CHIEF STATE
ATTORNEY), YVONNE OBUABISA
(DEPUTY PUBLIC PROSECUTOR) AND
REGINALD NII ODOI (ASSISTANT
STATE ATTORNEY)FOR THE 2ND
DEFENDANT .
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