How Do I Appeal a Licensing Decision of the Securities Commission in Papua New Guinea?

Division 1 of Part III of the Capital Market Act 2015 gives the Securities Commission wide power to refuse, condition, vary, suspend and revoke capital market licences. Section 56 provides the remedy. It is short, strict and, as the trustee of the Pacific Balance Fund discovered in 2023, unforgiving of delay. See revocation and suspension.

The appeal under section 56

Three features stand out. The appeal lies only against decisions “under this division”, that is, Division 1 (sections 34 to 57): grant, refusal, conditions, variation, revocation, suspension, restriction and surrender. The time limit is 14 days from notification. And the Court’s options are the three listed; in Melanesian Trustee Services Ltd v Securities Commission [2023] PGNC 356, Anis J read section 56(2) as giving “limited but express options”, though consequential orders remain available.

Section 56(4) requires the Court to “take into account the interest of investors or public interest”. The unit holders whose money is at stake weigh in the balance.

The decision takes effect immediately

Filing an appeal does nothing to the decision. A revoked licence stays revoked and, under section 48(10), the holder is deemed unlicensed from that date. The only way to hold the position is an order restraining the Commission “from effecting its decision”, sought before the decision is carried out.

What the 2023 case decided about stays

Melanesian Trustee Services Ltd (MTSL) had its licence revoked twice in 2023. Its first appeal succeeded on 18 August 2023: the Court set the revocation aside, restored the licence and directed the Commission to decide again after considering MTSL’s response. When the Commission revoked the licence a second time on 25 September 2023 and appointed an interim trustee, MTSL appealed again and applied for a stay “pursuant to section 56(3)” together with an injunction under the National Court Rules.

Anis J held the stay application “fatally flawed and misconceived”. In summary: appeals under section 56 are a special category in which the interests of investors and the public are paramount; the mode prescribed by section 56(3) is an application for interim injunctive relief restraining the Commission from giving effect to its decision pending the appeal; section 56 does not permit a general or blanket stay; a stay and an injunction are conceptually different, applying Kalinoe v Paraka (2010) SC1024; having invoked section 56, the appellant could not rely on other sources such as the National Court Rules; and, even treated as an application for interim restraining orders, the Commission’s decision had already been effected on issue, so the event to be restrained had passed. The Court acknowledged that section 56(3) “makes it difficult for an aggrieved party to react”, but found good reasons in the Act for that strictness. See the 2023 case.

Review by the Commission

Section 453 of the Capital Market Act allows the Commission to “review its own decision … upon an application made by any person who is aggrieved”, within 30 days of notification (section 454). The Securities Commission Act 2015, as amended by the Securities Commission (Amendment) Act 2023, now provides in section 111 for review by the Commission’s Board within 30 days of notification, with the case-stated procedure in section 114(3) to (6) applying. Review is an alternative to appeal, not a precondition, and nothing in section 56 extends the 14 days while a review is pending.

Appeal on a question of law

Section 114 of the Securities Commission Act, as amended, allows a person dissatisfied with the outcome of a section 111 review as “erroneous on a point of law” to appeal to the National Court by case stated on a question of law only, lodging a notice of appeal with the Commission within 14 days and the case within a further 14 days. Section 112 declares the Commission’s decisions otherwise final. For licensing decisions, section 56 is the specific provision and the natural route.

Judicial review

Judicial review under Order 16 of the National Court Rules remains available in principle for decisions outside section 56, or where the complaint is jurisdictional, such as whether the decision-maker lawfully held office. That was the issue in Oil Search Ltd v Tongayu [2021] PGNC 22, where the Court also faced objections that the matter should have been a statutory appeal. Where a statutory appeal exists and is in time, courts generally expect it to be used. See challenging Commission decisions.