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NTN Pty Ltd v State [1986] PGNC 41; [1986] PNGLR 167; N555 (21 August 1986)

N555

PAPUA NEW GUINEA
[NATIONAL COURT OF JUSTICE]

NTN PTY LIMITED AND NBN LIMITED

V

THE STATE

Waigani
Kidu CJ
12-13 August 1986
21 August 1986

BYLAWS AND REGULATIONS - Validity of the regulations - Regulatory power - Whether prohibitory power included - Regulation invalid - Radiocommunications Act (Ch No 152), s 14 - Radiocommunications (Television) Regulation 1986.

STATUTES - Interpretation - Regulatory power - Whether prohibitory power included - Regulation invalid - Radiocommunications Act (Ch No 152), s 14 - Radiocommunications (Television) Regulation 1986.

CONTRACTS - Condition precedent - Effect of compliance with - Contract to be subject to regulating legislation - Absence of legislation not affecting rights under contract.

The Radiocommunications Act (Ch No 152), s 14, provides that regulations may be made under the Act for:

"(a) prescribing the conditions under which apparatus will be accepted for licensing purposes; and

(b) providing for examinations for persons wishing to operate apparatus and for the issue, cancellation or suspension of Certificates of Competency; and

(c) providing for the control of any apparatus or other equipment that causes or is likely to cause interference to the working of radiocommunication and other services; and

(d) prescribing penalties of fines not exceeding K1,000 for offences against the regulations."

By agreement dated 25 May 1985, made between the State and NTN Pty Ltd cl 4.2 provided:

"Transmission shall commence in Port Moresby within one year from the date upon which the condition precedents to this Agreement have been met..."

Clause 11 of the agreement provided:

"In pursuance of the State's objective to introduce television in Papua New Guinea in an orderly and regulated manner as evidenced by the State's intention to introduce legislation and make regulations, the State shall use its best endeavours to ensure that commercial cable television and commercial satellite television is controlled and regulated on a similar basis to broadcast television."

The conditions precedent were fulfilled by 13 June 1986 and NTN Pty Ltd notified its intention to commence broadcasting in July 1986.

Following a change in Government, the Radiocommunications (Television) Regulation 1986 was signed by the Head of State and came into operation on 10 July 1986. The effect of the Regulation was to prohibit absolutely television broadcasting in Papua New Guinea until after 31 January 1988.

On a summons seeking declarations as to the effect of the Agreement, the validity of the Regulation and an injunction to restrain any breach of the Agreement:

Held

(1) Properly construed the Agreement required NTN Pty Ltd to commence transmission within twelve months of its compliance with the conditions precedent in cl 3 thereof.

(2) On a proper construction of the Agreement the right to commence transmission on compliance with the conditions precedent was subject to regulating legislation to be enacted, but the lack or absence of such regulating legislation did not affect the right of NTN Pty Ltd to broadcast.

Downey v Pryor [1960] HCA 49; (1960) 103 CLR 353 at 362, adopted and applied.

(3) Properly construed the regulation making power under the Radiocommunications Act (Ch No 152), s 14, was a power to regulate and restrict and in the absence of a specific power to prohibit, did not include power to prohibit.

Municipal Corporation of the City of Toronto v Virgo [1895] UKLawRpAC 46; [1896] AC 88, considered and applied.

(4) Accordingly, the Radiocommunications (Television) Regulation 1986, being prohibitory, was invalid as being beyond power.

(5) (Obiter) Alternatively the Radiocommunications (Television) Regulation 1986, was invalid as being beyond power because it purported to abrogate private contractual rights which was not a subject matter within the regulation making power.

(6) In the circumstances, NTN Pty Ltd was entitled to an injunction restraining the State from undermining any rights which it had acquired under the Agreement.

Cases Cited

Co-operative Brick Co Pty Ltd, The v The Mayor etc of the City of Hawthorn [1909] ArgusLawRp 99; (1909) 9 CLR 301.
Downey v Pryor [1960] HCA 49; (1960) 103 CLR 353.
Shanahan v Scott [1957] HCA 4; (1957) 96 CLR 245.
Swan Hill, The Shire President, Councillors and Ratepayers of the Shire of v Bradbury [1937] HCA 15; (1937) 56 CLR 746.
Toronto, Municipal Corporation of the City of v Virgo [1895] UKLawRpAC 46; [1896] AC 88.
Utah Construction and Engineering Pty Ltd v Janos Pataky [1966] AC 629.

Summons

This was an originating summons in which the plaintiffs sought declarations as to the effect of a contract with the State, as to the validity of the Radiocommunications (Television) Regulation 1986 and an injunction restraining the State from acting contrary to the Agreement.

Editor's Note

An appeal has been lodged.

Counsel

R O'Regan QC and I Molloy, for the plaintiffs.
M Priestley and O Emos, for the defendant/State.
Cur adv vult

21 August 1986

KIDU CJ: By originating summons the plaintiffs ask for the following orders:

1. A declaration that upon true construction of an Agreement dated 25 May 1985 made between the plaintiffs and the defendant the plaintiffs are not in breach of the said Agreement, and in particular Clauses 4.4 and 23.2 thereof, by commencing transmission of television in the absence of regulating legislation.

2. A declaration that the Radiocommunications (Television) Regulation 1986 is void and of no effect.

3. An order for an injunction that the defendant be restrained whether by itself or by its servants or agents or otherwise howsoever from causing, procuring or allowing any act or omission inconsistent with the plaintiffs rights under the said Agreement.

The Agreement in this case is entitled "Project Agreement" and its preamble states in very clear terms that the State wanted a commercial television station to be established in Papua New Guinea. The first plaintiffs had submitted a proposal to the State, which as evidenced by the Agreement, the State had accepted.

After the Agreement was signed on 25 May 1985 the first plaintiff proceeded to comply with cl 3 of the Agreement (cl 3 consists of the Condition Precedent to the Agreement) and it is common ground between the parties that cl 3 of the Agreement was complied with by the plaintiffs in June 1986. It is also common ground between the parties that the condition precedent mentioned in cl 4.2 of the Agreement is contained in cl 3 thereof.

In April 1986 the defendant was informed that the first plaintiff intended to commence broadcasting in July 1986. There was no adverse reaction, at least on evidence before me, from the defendant. In fact earlier in the year, on 10 January 1986 the General Manager of the first plaintiff (Mr Finlay) had met with the Minister for Post and Telecommunications (the Hon Gabriel Ramoi, MP). What transpired was recorded by Mrs Finlay:

"NOTES OF MEETING WITH MINISTER GABRIEL RAMOI HELD AT ANGAU HOUSE ON 10 JANUARY 1986

General Manager summarised position to date and pointed out need for response from government as we were anxious to proceed and could not do so without some measure of comfort.

Minister assured us we were in a position to continue with the project. Acknowledged that government recognises we have a binding agreement with the State and said the government does not want to see agreements broken.

The Minister said likely legislation would be ready by about the middle of the year. General Manager reminded him we had always welcomed the prospect of legislation. Minister noted that the importance of the legislation would be that it would mean a uniform approach to all licensees (or would-be licensees).

Re Media Niugini — Minister said that on taking office he was faced with situation where two companies had licences but there was no uniformity of conditions between the two leaving inconsistencies in the television situation.

General Manager agreed with this view stating that in the absence of legislation any other potential licensee should have to undergo the same procedures which were required of us. In particular he emphasised the need for another licensee to show that not only would it be viable but also that two companies could survive. General Manager said that after our three-year review of performance there would be an indication whether the market could support two companies.

Minister agreed with the proposition that Media Niugini's technical licences were a long way short of a "licence" for a full television service. He went further stating that the circumstances in which Media Niugini got its licences were "somewhat questionable". He noted for example that NTN's licence cost K5,000 whereas theirs cost only K10. Minister said PTC Board had been asked to impose conditions on their licence and seek more information.

Minister raised the matter of the Parry Guarantee. Advised would be forthcoming. Minister assured us that the PTC bearer tender would be let.

General Manager advised Minister that PTC Board had refused to renew our licences. Minister agreed there was no reason why these could not be renewed.

Re satellite — General Manager reminded Minister we had given expression of interest to PTC."

Mr Finlay wrote to the Minister:

"NTN PTY LIMITED PO BOX 4782, BOROKO

January 14, 1986

Hon. Gabriel Ramoi, MP,

Minister for Post and Telecommunication,

Ministry of Post and Telecommunication,

Angau Centre,

Angau Drive,

Boroko

By hand

Dear Minister,

We refer to our meeting with you of the 10th January 1986. As we understand it you have completed your review of the television agreement. From our discussions we note the following:

• The State recognises that NTN has a binding agreement with the State and that the project may continue.

• Legislation may be brought forward in about the middle of the year. The legislation which is contemplated is consistent with the agreement.

• PTC has issued licences to both NTN and Media Niugini. However, Media Niugini has not been required to satisfy conditions similar to those negotiated between the State and NTN. The Government believes in a uniform approach to all licensees and will require Media. Niugini to satisfy those conditions.

• Media Niugini's technical licences do not give them a ‘licence' to broadcast a television service.

• The PTC Board is to ask Media Niugini to show why its licences should not be revoked. In the meantime, several conditions have been placed on its licences. Media Niugini has been asked to explain the nature of its shareholding and the source of its funds etc.

• PTC will let a tender for its bearers on schedule in accordance with the PTC agreement provided the Parry Corporation provides the necessary guarantees.

• NTN has written to the PTC Board seeking to have its licences renewed. These expired on 1 January 1986. The State has no objection to the renewal of the licences.

• NTN is interested in using any PNG satellite.

• There appear to be no matters about our agreement with the State with which the Government is likely to have any difficulty.

We thank you for the opportunity of meeting with you. Certainly, we are encouraged by the Government's attitude to the project. On this basis, senior technical staff and their families begin to arrive in Papua New Guinea in January and the company will commence recruitment of Papua New Guineans for training in television. We look forward to working with you and your Department in developing Papua New Guinea's first television service.

Yours faithfully,

NTN Pty Limited

Murray Finlay

General Manager"

It must be emphasised that what these affidavits state are uncontested and I accept them as stating the truth of what they express. These documents very lucidly show that the State intended to introduce legislation to regulate television by the middle of 1986 and there was no suggestion at that time that NTN could not commence transmission before the legislation was in force.

On 26 June 1986 the lawyers for NTN wrote to the Secretary of the Prime Minister's Department in the following terms:

"By hand

The Secretary

Department of the Prime Minister,

Waigani.

Dear Sir

Commercial Cable Television

We refer to the Project Agreement dated 25 May 1985 between the State and our client, NTN Pty Limited. In particular, we refer you to Clause 11 of the Project Agreement which provides as follows:

‘11. Satellite and Cable Television

In pursuance of the State's objective to introduce television in Papua New Guinea in an orderly and regulated manner as evidenced by the State's intention to introduce legislation and make regulations, the State shall use its best endeavours to ensure that commercial cable television and commercial satellite television are controlled and regulated on a similar basis to broadcast television.'

Commercial cable television has been of little importance to NTN since the Project Agreement was executed. However, as NTN will be broadcasting in Port Moresby within the next few weeks, commercial cable television becomes a matter of significant concern.

The State has contracted to use its best endeavours to ensure that commercial cable television is controlled and regulated on a similar basis to broadcast television. As our client has not yet been provided with the terms of reference of the Public Inquiry into television, our client is unaware as to whether or not the term of reference of that Inquiry will extend to cable television. Would you please advise as to whether or not cable television will be dealt with by the Public Inquiry.

Whilst it may be that cable television will be controlled on a similar basis to broadcast television after the conclusion of the Public Inquiry and the introduction of legislation, that position does not apply for the time being. Broadcast television is controlled and regulated pursuant to the Project Agreement. Cable television is not so controlled as can be seen from the provisions of the Project Agreement as follows:

1. NTN has been required to construct studios involving significant capital expenditure. Cable operators currently run their service with very little capital expenditure.

2. NTN is required to meet certain local content and advertising standards. Cable operators have no such obligation and program overseas television services and very little PNG content. Even that content is not produced by the operator.

3. NTN has been required to obtain broadcasting licences. We are instructed that cable television in Port Moresby is currently operated without any permit and in contravention of the Post and Telegraph Act. Further transmission quality is significantly lower than that required of NTN.

4. NTN has been required to infuse significant investment in the project and guarantee the involvement of Papua New Guineans. No such obligation applies to cable operators.

NTN is not privy to all relevant matters concerning commercial cable operations in Port Moresby. Thus, there may be additional matters which show the dissimilarity of treatment of cable operators compared to broadcast television. The State would be entitled to such information and no doubt, inquiries can be made by the State in this regard.

In any event, NTN respectfully requests you to advise in respect of steps taken by the State to ensure that commercial cable television is being controlled on a similar basis to broadcast television. Moreover, we respectfully request that you confirm that to the extent that commercial cable television had not been regulated on such a basis, that such regulations will be enforced no later than 15 July 1986.

We appreciate that under current legislation, part of the responsibility for regulation of commercial cable television falls to PTC. On this basis, we have copied this letter to PTC.

Yours faithfully,

BERESFORD LOVE FRANCIS & COMPANY

T J Glenn

CC: Post and Telecommunication Corporation."

It is to be noted from the above letter that NTN accepted the position that television broadcasting was controlled by the Project Agreement and pointed out that cable television was not subject to control. I also note here that NTN was aware that the State had embarked upon an inquiry into television.

The letter to the Secretary of the Prime Minister's Department was replied to by the Prime Minister himself. I reproduce this letter in toto as well as the contents are crucial in this case. It was dated 8 July 1986 and states:

"By hand

The Secretary

NTN Pty Limited

PO Box 4782

Boroko

Dear Sir,

RE: TELEVISION POLICY

The letter from your lawyers, Beresford Love Francis & Co delivered to my secretary of 26/6/86 on the subject of commercial cable television is timely.

As you will be aware the Project Agreement dated 25 May 1985 between your company and the State was based on the assumption that legislation would be passed to control and regulate both broadcast and cable television in Papua New Guinea. Clauses 4.4 and 11 (which you set out in your letter) specifically refer to such legislation.

The previous Government did not introduce any such legislation. As you know, my Government, by NEC decision of 20/2/86 has authorised the Post and Telecommunication Corporation to establish a Public Inquiry to investigate and recommend on a number of topics, which will need to be the subject of such legislation.

Until the Committee of Inquiry has reported, and its recommendations have been considered by the Government and policy determined, the legislation contemplated by the Project Agreement would be premature.

My Government is of the view that to allow television broadcasting (including the continuation or expansion of existing cable television systems) in Papua New Guinea until its policy has been formulated and legislation passed, would be detrimental to the development of Papua New Guinea's economic and social structure. I note that clause 23.2 of the Project Agreement obliges your company to co-operate with the State in this area. I accordingly request its co-operation.

My Government is further of the view that if your company were to commence television broadcasting in the absence of legislation regulation broadcast television (including the absence of any regulations dealing with programmes, advertising, time and material standards), then your company would be in breach of clause 4.4 of the Project Agreement.

The State accepts your company has the right to establish a commercial television operation in Papua New Guinea, and any legislation or regulations passed by the Government will preserve both that right and your company's contractual rights under the Project Agreement.

My Government is not prepared to allow television to be introduced into Papua New Guinea in a haphazard and uncontrolled fashion. Accordingly, I seek your company's assurance that it will not commence television broadcasting until such time as the controlling legislation and regulations contemplated by the Project Agreement have been enacted.

If such an assurance from your company is not received by me, the State will be obliged to protect its position.

Yours faithfully,

PAIAS WINTI MP

Prime Minister"

It appears that unbeknown to NTN the Government had, per the Minister for Post and Telecommunications, prepared a submission to advise the Head of State to make a Regulation to stop NTN from transmitting. The Statutory Paper (exhibit "B") is dated 9 July 1986, a day after the Prime Minister's letter to NTN. On 10 July 1986 the paper was considered and the decision to advise the Head of State was made and conveyed the same day. The Regulation — the Radiocommunications (Television) Regulation 1986 (Statutory Instrument No 7 of 1986) — was signed by the Head of State and came into operation the same day. It provides, inter alia, as follows:

"2. Prohibition on Television Broadcasting

(1) The operation of a television station in Papua New Guinea shall be an unauthorised broadcast for the purposes of the Act.

(2) Subject to Section 4 no person shall establish erect or maintain a television station in Papua New Guinea.

3. Board not to Issue Licences

No licence shall be issued by the Board for the establishment, erection, maintenance or operation of a television station except as provided by Section 4.

4. Current Licensees

A licensee holding a valid licence at the date of the coming into operation of this Regulation granted by the Board under Section 6 of the Act shall, subject to Section 2(1), continue to hold that licence on the terms and conditions on which it was granted and may from time to time apply to the Board for renewal of such licence.

5. Position of State and NTN Pty Limited

Except in the case of a breach of Section 2(1) or an unauthorised broadcast or offence in terms of Sections 8, 9 and 11 of the Act, the respective rights and obligations of the Parties to the Project Agreement are not affected by this Regulation.

6. Expiry

This Regulation shall expire and cease to have effect on the 31 January 1988, unless earlier revoked.

7. Application of Radiocommunications Regulation (Chapter 152).

The Radiocommunications Regulation (Chapter 152) shall be read subject to the provisions of this Regulation, and in the event of any inconsistency between the provisions of this Regulation and the provisions of the Radiocommunications Regulation (Chapter 152), the provisions of this Regulation shall prevail."

From the foregoing correspondence and documents it is abundantly clear that the State had decided to have the Inquiry go ahead and have its recommendations eventually considered and legislation regulating television enacted thereafter. It is also to be noted that on the material before me the State had no intention of allowing the NTN to transmit/broadcast before such legislation was enacted.

The Project Agreement was entered into by the State when the Executive Arm of Government was headed by another Prime Minister. The Government under the present Prime Minister has decided to postpone NTN's television transmission. I point out this because I have formed a strong suspicion from the material before me that if the Government had not changed, NTN would not be in the situation it is today. It has become all too frequent for major changes to occur when a new Government comes to power in this country. Be that as it may the situation is that parties to the Agreement have drawn swords, as it were, and have decided to do battle in the Courts of Justice.

1. Submission that NTN would not be in breach of the Agreement if it commences transmission

This submission is based on cl 4.2 of the Agreement, which is as follows:

"4.2 Commencement of Transmission

Transmission shall commence in Port Moresby within one year from the date upon which the condition precedents to this Agreement have been met ..." etc.

As has already been pointed out the defendant concedes that the "condition precedents" are stated in cl 3 of the Agreement and were all fulfilled by 13 June 1986. So it would appear that according to cl 4.2 NTN must commence transmission within a year of that date. Despite what appear to be the clear dictates of cl 4.2 the defendant submits that the clause must be read subject to cll 4.4 and 23.2 of the Agreement, which provides:

"4.4 Operation omf the Television Station

The Company shall programme not less than five (5) hours commercial television daily. The Company shall programme material in accordance with legislation regulating broadcast television and in accordance with programme, advertising and time and material standard made pursuant to that legislation.

The said standards shall provide inter alia:

(i) that the Company broadcast a minimum of 20% local content over the first 3 years of broadcasting including a minimum of 15% local content over the first year of broadcasting;

(ii) that advertising be limited to a maximum of 10 minutes per hour of programming provided that this limitation shall be assessed on a weekly basis so as to permit averaging of the limitation."

"23.2 Promotion of PNG Development

The Company shall:

(a) afford at all times full consideration to the aspirations and welfare of the people of Papua New Guinea and to the development of the nation; and

(b) will co-operate with the State in promoting the growth and development of the Papua New Guinea economic and social structure."

It is at once apparent that the State's submission is based on the Prime Minister's assertions contained in his letter to NTN of 8 July 1986. Dr Priestley for the State further submits that cl 11 of the Agreement supports the State's intention that NTN was to commence transmitting only after specific legislation on television was in operation. Clause 11 says:

"11. Satellite and Cable Television

In pursuance of the State's objective to introduce television in Papua New Guinea in an orderly and regulated manner as evidenced by the State's intention to introduce legislation and make regulations, the State shall use its best endeavours to ensure that commercial cable television and commercial satellite television is controlled and regulated on a similar basis to broadcast television."

NTN says that it understands that its right to commence transmissions after complying with cl 3 of the Agreement is subject to regulating legislation(s) but it did not bank on the possibility that the State would introduce legislation of prohibitive nature (as Statutory Instrument No 7 of 1986).

I am astounded that the State, after entering into a contract which is very clearly worded, would now renege on it. In my view cl 4.2 of the Project Agreement is so clear that there cannot be any doubt as to what is means — it means that NTN is obliged to commence transmission within twelve months of its compliance with cl 3 of the Agreement. To read cl 4.2 any other way would be violating clear language. There is no doubt that cl 4.2 was not made subject to any other provision of the Agreement. It is intriguing, therefore, that the State wants this Court to impose restrictions on what it says in clear terms.
'
There is therefore absolutely no justification for saying that cl 4.2 must be read subject to cl 4.4 of the Agreement. I consider that if the parties had intended cl 4.2 to be subject to cl 4.4 they would have said so in the Agreement. It is abundantly clear from the Agreement that legislation would be enacted to regulate television but I re-iterate that it was not the agreement of the parties, at least from my reading of the whole Agreement, that NTN could not commence transmission before such legislation was in effect. The plaintiffs cited Downey v Pryor [1960] HCA 49; (1960) 103 CLR 353 in support of its submission that the legislation did not constitute a condition precedent to the right of NTN to transmit. This was a case where the Local Government Act 1919 (NSW) provided in s 215 thereof that "Any elector may at the Council's office inspect the books of account and the report of the auditor or of the inspector of local government accounts without fee as prescribed" but no method of inspection was prescribed. Pryor, the Town Clerk of the Blue Mountains City Council, did not allow Downey, a voter, to take notes from a book of accounts which he inspected. Later Woodward (Deputy Town Clerk) and Hunt (Treasurer), did not allow Downey to inspect the same book of accounts. The High Court held that the prescription of a method of inspection was not necessary to complete the right to inspect granted by the Act and that, until the method of inspection was prescribed a voter was entitled to exercise the right in any appropriate manner.

Kitto J, at 362 of the report said:

"In my opinion the provision made by s 215 is of the latter description. The broad intention clearly appears that a council's books of the kinds referred to shall be open to inspection by the electors. To the Executive is committed the responsibility of regulating the right of inspection, by making such provisions by ordinance as may seem proper. But there is no definable category of matters to be covered by ordinance, and the section can hardly mean that provided some aspect of inspection, however insignificant, is governed by a prescribing ordinance the right exists, and, save on that one aspect, is exercisable at large, but that unless there is some prescription there is no right of inspection at all. The view seems much sounder that the function of the expression ‘as prescribed' is to link an authority which the section intends by its own immediate operation to confer on electors with the power elsewhere entrusted to the Executive to regulate the exercise of that authority. The availability of a council's books for inspection by electors is so potentially important a feature of the system of local government which the Act sets up that nothing but the clearest language could justify the conclusion that Parliament intended that the Executive not only might decide whether and how the right of inspection should be regulated but might by preferring silence, deny to the section all operation."

I see no reason why that case cannot be applied to the facts of this case. In this case, by virtue of the Agreement, NTN has the right to commence broadcast in Port Moresby now that it has complied with all condition precedents. This right is subject to regulating legislation to be enacted. The lack or absence of such legislation does not affect the right of NTN to broadcast.

The second order sought by the plaintiffs is that the Radiocommunications (Television) Regulation 1986 — which is reproduced earlier in this judgment — is invalid for the reason that it is contrary to the Radiocommunications Act (Ch No 152). The submission is that the Regulation prohibits rather than prescribes or regulates. This submission is based on the general rule that the power to regulate or prescribe does not include the power to prohibit.

As can be seen from ss 2, 5, and 6 of the Regulation, it is an offence to broadcast television until after 31 January 1988. So even though NTN has a licence granted by the PTC Board under s 6 of the Radiocommunications Act, this Regulation prohibits it from exercising its right to broadcast until after 31 January 1988.

The preamble to the Radiocommunications Act says that the Act was enacted:

(a) to authorise the Government to establish, maintain and operate radiocommunication stations; and

(b) to permit the operation of radiocommunication stations under licence; and

(c) to regulate the use of radiocommunications generally.

It is to be noted that radiocommunication includes television broadcasting and radiocommunication stations includes television stations.

It is apparent from the preamble to the Act that there is no permission given to the regulation making authority to totally prohibit the establishment of either radiocommunication stations or radiocommunications generally. The authority in the Act is to regulate and restrict rather than prohibit.

The specific provision in the Act which enables the Head of State on advice to make regulations is s 14 and this provision reads as follows:

"The Head of State, acting on advice, may make regulations, not inconsistent with this Act, prescribing all matters that by this Act are required or permitted to be prescribed, or that are necessary or convenient to be prescribed, for carrying out or giving effect to this Act, and in particular for:

(a) prescribing the conditions under which apparatus will be accepted for licensing purposes; and

(b) providing for examinations for persons wishing to operate apparatus and for the issue, cancellation or suspension of Certificates of Competency; and

(d) providing for the control of any apparatus or other equipment that causes or is likely to cause interference to the working of radiocommunication and other services; and

(e) prescribing penalties of fines not exceeding K1000 for offences against the regulations."

It is at once clear as well that s 14 of the Act on the face of it does not authorise the Head of State on advice to make regulations prohibiting either setting up of radiocommunication stations or radiocommunications generally. It does not, in particular, enable the Head of State to enact regulations stopping people or companies who hold licences to establish stations or broadcast.

When an Act of Parliament authorises an authority to make regulations or rules of bylaws then the authority must act within the powers given to it. If it goes beyond those powers then it exercises powers that are not given to it by the relevant Act of Parliament. The Constitution of Papua New Guinea says this in s 10 thereof.

"Construction of Written Laws

All written laws (other than this Constitution) shall be read and construed subject to:

(a) in any case — this Constitution; and

(b) in the case of Acts of the Parliament — any relevant Organic Laws; and

(c) in the case of adopted laws or subordinate legislative enactments — the Organic Laws and the laws by or under which they were enacted or made,

and so as not to exceed the authority to make them properly given, to the intent that where any such law would, but for this section, have been in excess of the authority so given it shall nevertheless be a valid law to the extent to which it is not in excess of that authority."

The authorities cited by the plaintiff relate to the use of different words in enabling Acts of Parliament. For instance some of these cases relate to the use of words "regulating and controlling" and others relate to "regulating and restraining" and there are others which relate to wordings similar to those found in s 14 of the Radiocommunications Act. But in all these cases the general proposition is the same. And that is that unless a specific power is given to the regulation-making body to prohibit, then it cannot do so. The cases cited in support of the proposition by the plaintiff are: The Co-operative Brick Co Pty Ltd v The Mayor etc of the City of Hawthorn [1909] ArgusLawRp 99; (1909) 9 CLR 301; Municipal Corporation of the City of Toronto v Virgo [1895] UKLawRpAC 46; [1896] AC 88; The Shire President, Councillors and Ratepayers of the Shire of Swan Hill v Bradbury [1937] HCA 15; (1937) 56 CLR 746; Shanahan v Scott [1957] HCA 4; (1957) 96 CLR 245 and Utah Construction and Engineering Pty Ltd v Janos Pataky [1966] AC 629.

It is not my intention to go through all these cases but one of them will do to state the proposition and that is the case of the Municipal Corporation of the City of Toronto v Virgo. In that case the Municipal Act of Ontario provided, inter alia, that (at 91):

"The Council of any county, city and town separated from the county for municipal purposes, may pass by-laws for the following purposes:— for licensing, regulating and governing hawkers or petty chapmen, and other persons carrying on petty trades etc."

A municipal bylaw was passed prohibiting hawkers from plying their trade in an important part of the municipality. It was held by the Privy Council that a statutory power conferred on municipal councils to make bylaws for regulating and governing a trade does not in the absence of an express power of prohibition, authorise the making it unlawful to carry on a lawful trade in a lawful manner.

The decision of the Privy Council was delivered by Lord Davey and, at 93, the Privy Council said:

"It appears to their Lordships that the real question is whether under a power to pass bylaws ‘for regulating and governing' hawkers, &c, the council may prohibit hawkers from plying their trade at all in a substantial and important portion of the city no question of any apprehended nuisance being raised. It was contended that the bylaw was ultra vires, and also in restraint of trade and unreasonable. The two questions run very much into each other, and in the view which their Lordships take it is not necessary to consider the second question separately.

No doubt the regulation and governance of a trade may involve the imposition of restrictions on its exercise both as to time and to a certain extent as to place where such restrictions are in the opinion of the public authority necessary to prevent a nuisance or for the maintenance of order. But their Lordships think there is marked distinction to be drawn between the prohibition or prevention of a trade and the regulation or governance of it, and indeed a power to regulate and govern seems to imply the continued existence of that which is to be regulated or governed. An examination of other sections of the Act confirms their Lordships' view, for it shows that when the Legislature intended to give power to prevent or prohibit it did so by express words.

Their Lordships refer (amongst others) to s 489, subss 25, 26, 28, 29, 44, 46, 51 and s 496, subss 3, 13, 14, and 15. The language of these subsections — ‘preventing or regulating'; ‘preventing or regulating and licensing' — tends to shew that the framers of the Act did not intend to include a power to prevent or prohibit in a power to regulate or govern. Several cases in the English and Canadian reports were referred to in illustration of the respondent's argument. None of these cases are direct authorities, because the statutes from which authority was derived to make the bylaws there in question were framed in terms different from the statute now under consideration. But through all these cases the general principle may be traced, that a municipal power of regulation or of making bylaws for good government, without express words of prohibition, does not authorise the making it unlawful to carry on a lawful trade in a lawful manner."

The general law stated in all these authorities supports the proposition advanced by the plaintiff. It is clear from the wording of s 14 of the Radiocommunications Act that the power given to the Head of State on advice to make regulations does not include the power to prohibit a person or a company which has been given a licence under s 6 of the Radiocommunications Act to establish a television station and also to broadcast.

The other submissions in relation to the validity or otherwise of the Regulation were that the Regulation was beyond the power of the Head of State because it purports to abrogate private contractual rights and that is not a subject matter which is covered by the regulation-making power under s 14 of the Radiocommunications Act. And another submission in relation to the Regulation was that the Regulation was ultra vires because it was made for an improper purpose. In view of my view that the Regulation is invalid as it is contrary to the Act, it is not really necessary for me to go into these other submissions. Suffice it to say that if I had dismissed the first submissions in relation to the Regulation, then I would have held that the Regulation was invalid as it purported to abrogate private contractual rights, which was not a matter that s 14 allows the Head of State to make regulations about.

I consider that the whole Regulation must fall for each provision in it is interrelated to the other provisions. As was submitted by the lawyer for the plaintiff, without s 2 and s 5 thereof the rest of the Regulation would be meaningless. Counsel for the defendant advanced the argument based on s 10 and s 25(3) of the Constitution. As far as I am concerned these provisions together with the National Goals and Direction Principles contained in the preamble to the Constitution are in the nature of aids in interpretation of the Constitution and other laws. I do not consider that they were meant to be used to validate a law which is clearly invalid, as is the case here.

The third order sought by the plaintiffs is that they be granted an injunction preventing the State from doing anything that might jeopardise any rights they have under the Agreement. It must be stated here that the terms of the injunction sought are wide indeed. I say this because it would not be proper for this Court to grant an injunction restraining the State from making laws which an Act of Parliament allows it to enact, nor would it be proper for this Court to restrain the Parliament indirectly by restraining the State from enacting legislation on television. Subject to that, the facts of the case quite clearly show that if the plaintiffs are entitled to relief then they are entitled to have an injunction restraining the State from doing any act which would undermine any rights that the plaintiffs have under the Agreement. I consider that it is a proper case for an injunction to be granted.

From the foregoing it is the decision of the Court to grant the two declarations sought by the plaintiffs and subject to the comments about the law making powers of the Executive and the Parliament I grant an injunction restraining the State and its servants and agents, from doing anything which might jeopardise any rights the plaintiffs have under the Agreement of 25 May 1985.

By consent these orders are made with costs on a solicitor/client basis — to be taxed — and I certify two overseas counsel.

Orders accordingly

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Lawyer for the plaintiff: Beresford Love Francis & Company.
Lawyer for the defendant: State Solicitor.