The National Reserve Bank of Tonga has been prohibited from publicly disseminating their directions, contained in a letter sent to the Tonga Development Bank on 17 May and 20 May, which was allegedly leaked in a radio broadcast.

Among other things, the TDB is claiming possible damage to the reputations of the CEO Mrs Emeline Tuita and TDB Board Chairman Mr. Penisimani Vea.

The Supreme Court of Tonga, Civil Jurisdiction, has granted the Tonga Development Bank (the Plaintiff/Applicant) leave for a judicial review.

Mr Justice Cooper on 21 June ordered that: “Until further order, the defendants, their servants and agents are prohibited from disseminating the material that forms the content of the directives in the correspondence sent by National Reserve Bank of Tonga 17 May and 20 May 2024.”

The application for leave to start judicial review was made by the Tonga Development Bank and Emeline Tuita (the applicants) on 28 May, against Tatafu Moeaki and the National Reserve Bank of Tonga (the respondents).

The judge, in his orders, allowed the Applicant seven days to file a Writ and Statement of Claim.

Then within seven days of the writ being issued the Applicant is to serve the Respondent with, a) ex parte application for leave; b) the affidavits filed in support; c) the Writ and Statement of Claim; and d) this Order.

The Parties had 14 days liberty to apply. 

The orders also stated that if the intended relief was pursued by the Applicants, it must be done inter partes.

Costs are reserved until the determination of this action, ordered the judge.

Reasons

The judgment stated that the application for judicial review was made in regards of three directives, set out in two letters sent on 17 and 20 May 2024, from Mr. Tatafu Moeaki, the Governor of the National Reserve Bank of Tonga (NRBT). 

“Those letters were sent to Tonga Development Bank issuing three directives now complained of...”

“The application for judicial review makes a number of complaints.”

"Breach of natural justice is argued as one of the grounds for judicial review in respect of each issued directive. 

“Other claims have been made. For the purposes of this ruling it is not necessary for me to consider them all," stated the Judge.

Reserve Bank

The judge said that the regulatory role of NRBT, as set out the National Reserve Bank of Tonga Act, make it quite clear it functions as a public body. “Particularly by virtue of section 4(1) the principal objectives of the Bank shall be to maintain internal and external monetary stability.”

“The annexed correspondence demonstrates the Governor and NRBT repeatedly set out concerns about the way TDB was being run. The correspondence from 12 December 2023 right through to 14 May 2024 was aimed at ensuring NRBT dutifully fulfilled its regulatory role.

“But, before the issuing of the directives, there was no warning those measures would be put in place should the compliance, NRBT required from TDB, not be implemented.

“Accordingly, I am sure that the Plaintiffs have established an arguable case that natural justice was not followed in the making of the last two directives. 

“From the foregoing, prima facie it would appear to follow that a right enjoyed by an incorporated body ought also to be afforded such safeguards under the aegis of natural justice.

“I therefore also conclude there is a tenable argument natural justice was not followed in making the first directive either,” stated Justice Cooper

He said the Court would require to have the application for the ancillary orders heard inter partes.

TDB Shareholders

“It is noteworthy that amongst the material before me is a copy of the correspondence sent by his Eminence Cardinal Mafi, letter dated on 1 May 2024, which sets out, in clear terms, the view of the National Retirement Benefits Fund (NRBF) Board of Directors. They raise concerns about the management and running of TDB. The NRBF is a shareholder of TDB.

“As with the defendants, the views of the shareholders of TDB may be important in assessing the balance of convenience test in assessing an application for interim injunctive relief,” the Judge stated.

Application for injunction

He noted that the application is that NRBT, its servants and agents normally do not disseminate the contents of the directives letters at all.

An affidavit of Penisimani Vea, dated 27 May 2024, was filed 28 May 2024, and set out how he heard a radio broadcast which disclosed the contents of those letters on the radio program. Mr. Vea was told by the broadcaster that the NRBT had provided the presenter·with a copy.

“It is complained that this has: caused distress for those concerned, it breached NRBT's duty under section 18 National Reserve Bank of Tonga Act which imposes a duty of ‘secrecy’ in respect of the bank's affairs and it breaches section 19 Banking Act that requires NRBT to maintain public confidence in the operation of the financial system.”

The judge stated that effectively what is being applied for is an ex parte interim injunction.

“I conclude there is a real prospect of success in the application for judicial review; there was no warning before the issuance of the directives that step would be contemplated. That of itself can quite properly be argued to be a breach of natural justice.”

In addition, he considered a number of factors including:

• The possible damage to the reputations of the Mrs. Tuita and Mr. Vea
• There might be unwarranted speculation caused by the discussion on the media of the directives
• That there appears to be prima facie, no harm caused to the defendants in imposing such interim order.

“In weighing these factors, I conclude that the possible harm to the plaintiffs and the apparent lack of harm to the defendants persuades me it would be in the best interests to consider granting this application.

There has been demonstrated a real prospect of success, I note the undertaking as to damages made by Mr. Vea,” stated the judge.

Counsel for the Applicants was Ms Teimumu Tapueluelu.