COA dismisses SM's motion

THE Commission on Audit (COA) dismissed the motion for reconsideration (MR) filed by SM Prime Holdings Inc. (SMPHI) pertaining to the COA’s approval of the deed of conditional sale and contract of lease entered into by the Negros Occidental government and Ayala Land Inc. (ALI), involving the seven-hectare Capitol prime properties.

A copy of the COA’s decision dated August 14 furnished to the media on Thursday stated that: “SMPHI failed to present valid and categorical arguments sufficient to overturn the findings of the Commission.”

The decision, which was affirmed with finality, was signed by COA chairperson Ma. Gracia Pulido-Tan, and commissioners Heide Mendoza and Rowena Guanzon. Gov. Alfredo Marañon, for his part, said “at least it is over and it proved that we are right and what we are doing is according to the law.”

ALI and SMPHI had engaged in a legal battle over the Capitol properties. The governor said his office will furnish the Regional Trial Court handling the case filed by SM against the provincial government, with the COA dismissal ruling. In its MR, SMPHI argued that COA went beyond its power in adjudicating on the issues pending before the courts, and that, COA should defer action on the approval of the DCS and COL to be consistent with the principle of “judicial courtesy,” as explained in the case of “Republic of the Philippines vs. Sandiganbayan.”

Beyond reglementary period, ruling on the merits

In its opposition to the MR filed by SMPHI, the Provincial Government contended that the MR of SMPHI was filed beyond the 30-day reglementary period enunciated under Section 3, Rule 64 of the Rules of Court.

It further argued that COA has the primary, original and exclusive jurisdiction to adjudicate on the issues contained in the request of the Provincial Government of Negros Occidental, and thus, prayed that the MR be dismissed for lack of merit.

COA, in its discussion, stated that as shown on the records, SMPHI’s MR was received by the COA secretariat on November 13, 2012 beyond the 30-day period for filing of the MR as provided by law which ended November 3, 2012. However, COA still opted to discuss the merits of the case in the interest of justice and fair play, the documents showed.

In its discussion, it further said the arguments advanced by SMPHI in its MR were already disposed of and ruled upon by COA on its decision dated September 21, 2012. It further said that “contrary to the claim of SMPHI, this commission believes that its authority to decide on the issues pending before the courts is amply supported by law and jurisprudence”.

It added that COA's decision which approved the request of PGNO for disposal of its properties, clearly explained and laid down the basis of this commission to act on the said request. It further pointed out that the authority of COA to adjudicate on the issues pending before the courts is well-founded in the case of “Rosito Bagunu vs. Francisco Aggabao and Rosenda Acerit” where the Supreme Court (SC) stated that “when an administrative body or agency is conferred quasi-judicial functions, all controversies relating to the subject matter pertaining to its specialization are deemed to be included within its jurisdiction since the law does not sanction a split jurisdiction.”

Doctrine of primary jurisdiction

The SC further stated that “in recent years, it has been the jurisprudential trend to apply the doctrine of primary jurisdiction to cases involving matters that demand the special competence of administrative agencies even if the question involved is also judicial in character.”

COA, on its decision, further explained that the above-cited ruling of the SC characterized the scenario where a claim is originally cognizable in the courts and the administrative body. It demonstrates the situation where enforcement of the claim requires the resolution of issues which under a regulatory scheme, have been placed within the special competence of an administrative body.

In such case, the judicial process is suspended pending referral of such issues to the administrative body for its review. Parenthetically, the SC had ruled that the regular courts “are utterly without power and authority to exercise concurrently such jurisdiction.” It also stressed that “long lines of cases establish the basic rule that the courts will not interfere in matters which are addressed to the sound discretion of government agencies entrusted with the regulation of activities coming under the special technical knowledge and training of such agencies.”

It also said that the above-cited case clearly belies the contentions raised by SMPHI that COA went beyond its power in adjudicating on issues pending before the courts; instead, the said rulings of the SC clearly support the action taken by this Commission in adjudicating the request for the approval of the disposal of the PGNO’s property.