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Telepage Pty Ltd v Post & Telecommunication Corporation Act (Ch 394) [1987] PGNC 3; N605 (25 March 1987)

Unreported National Court Decisions

N605

PAPUA NEW GUINEA

[NATIONAL COURT OF JUSTICE]

OS 1 OF 1987

OS 1A OF 1987
BETWEEN: TELEPAGE PTY LTD
PLAINTIFF
AND POST & TELECOMMUNICATIONS CORPORATION
DEFENDANT
IN THE MATTER OF AN APPLICATION BY TELEPAGE PTY LTD
AND THE POST AND TELECOMMUNICATIONS CORPORATION ACT (CH. NO. 394)

Waigani

Kapi DCJ
23-25 March 1987

DECLARATORY ORDER - Paging services - Breach of contract - onus on the plaintiff.

MANDAMUS - PABX matters - Duty to determine - application - Board of PTC.

DECLARATORY ORDER - two way mobile trunking service - non renewal of permit - on the grounds of breach of condition - application of principles of natural justice.

DECLARATORY ORDER - Telephone Cabling License - revocation of authority to do cabling work - on grounds of unauthorized activities - application of principles of natural justice.

MANDAMUS - Harmony Telephones - Duty to determine application - Board of PTC - consideration of policy.

DECLARATORY ORDER - Invalidity of Radio Communications Regulations (ch 152) - principles relating to repeal of regulation by virtue of repeal of Act under which regulation made - inconsistency between an Act and regulations made under it.

Held

(1) The plaintiff failed to prove that there was a breach of contract in relation to provision of paging services.

(2) Evaluation by PTC to enter paging services is not a breach of s 5(d)(iii) of the Post & Telecommunication Act (ch 394).

(3) There is no breach of s 58 of the Public Finances (Management) Act 1986 (35 of 86). No contract has yet been concluded between defendant and PNG Paging. This may be complied with when such a contract is concluded.

(4) The defendant is under a duty to consider an application for approval under s 71 of the Post & Telegraph Act (ch 150).

(5) The defendant is entitled to defer the determination of an application under s 71 of the Post & Telegraph Act (ch 150) on the grounds that there is a review of policy.

(6) There is a statutory right to apply for a renewal of a permit under Radio Communications Regulations (ch 152).

(7) Radio Communications Regulations (ch 152) impliedly does not allow the application of principles of natural justice on renewal of permits.

(8) There is no provision under the Post & Telegraph Act (ch 150) which either impliedly or expressly prevents the application of the principles of natural justice. Principles of natural justice are applicable when considering revocation of authority to erect and maintain telegraph lines.

(9) The plaintiff was notified of the alleged unauthorized activities and was given an opportunity to respond to them before a final decision was made to revoke the authority to erect and maintain telegraph lines under Post & Telegraphs Act (ch 150).

(10) A person has a right to apply for approval of apparatus under Post & Telegraph Act (ch 150). There is a duty on the defendant to make a decision.

(11) The defective Harmony telephones were modified by the plaintiff in accordance with the instructions of the manufacturer and found to be acceptable. The defendant failed to determine the application on this new information. This amounts to no consideration. An order for mandamus will be granted to order the defendant to consider the modified phones.

(12) The power of making regulations under the Radio Communications Act (ch 152) has not been repealed. Radio Communications Regulations (ch 152) have not been repealed by Post & Telecommunication Corporation (Consequential Amendments) Act 1982.

(13) Post & Telecommunication Corporation (Consequential Amendments) Act 1982 has amended s 6 of the Radio Communications Act (ch 152) by giving the power to grant license to the defendant and not the Minister. This is inconsistent with the Radio Communications Regulations (ch 152) which authorizes the Minister to grant licence. These provisions are invalid to that extent.

Cases Referred To

Murphyores Incorporated Pty Ltd v The Commonwealth [1976/77] 136 CLR 1.

Reg. Anderson; Ex parte Ipec-Air Pty Ltd [1964/65] [1965] HCA 27; 113 CLR 177.

British Oxygen Co. v Board of Trade [1970] UKHL 4; [1971] AC 610.

R v Gaming Board; Ex parte Benaim [1970] EWCA Civ 7; [1970] 2 QB 417.

F.A.I. Insurances Ltd v Winneke [1982/83] [1982] HCA 26; 151 CLR 342.

Perre Brothers v Citrus Organization Committee [1975] 10 SASR 555.

Regina v Barnsley Metropolitan Borough Council; Ex parte Hook [1976] 1 WLR 1052.

Watson v Winch [1916] 1 KB 688.

Legislation

Post & Telecommunication Act (ch 394).

Public Finances (Management) Act 1986 (35 of 86).

Post & Telegraph Act (ch 150).

Radio Communications Act (ch 150).

Radio Communications Regulations (ch 152).

Constitution of Papua New Guinea (ch 1).

Post & Telecommunication Corporation (Consequential Amendments) Act 1982 (7 of 82).

Radio Communications Amendment Act 1983 (63 of 83).

Counsel

I. Molloy with J. Sheppard for Plaintiff

J. Priestly with W. Stollery for Defendant

Cur.adv.vult.

31 July 1987

KAPI DCJ: The plaintiff is a company incorporated in Papua New Guinea and carries on business providing such services as radio paging, voice messaging, mobile two-way radios and a public facsimile bureau. It commenced trading on 1 February 1985.

The paging service enables a person to communicate by carrying a small portable radio receiver called a "pager". A person may communicate through this pager even though he is out of reach of the telephone. In a letter dated 10 August 1984, PTC granted approval for the plaintiff to provide a wide area of paging service in Port Moresby and Lae. In July 1985, another company trading under the name of Papua New Guinea Paging also commenced similar services. These are the only two companies providing these services to date. As at 9 February 1987, the plaintiff had 108 subscribers to the paging service.

In December 1985, PTC granted four permits for purposes of operating a two-way mobile trunking system. Three permits were granted for stations operated by the New Zealand High Commission and one permit was granted to the plaintiff for a repeater station. These permits were granted to the plaintiff for purposes of experimenting with the two-way mobile trunking system. This is a communication system which is designed to enable persons to communicate between mobile and the base. This system may have access to the PTC telephone network. This, however, is only an incidental advantage. The plaintiff also proposes to establish a mobile telephone service in the future. This will enable persons to communicate from mobile to land based telephones in the PTC network.

On 5 May 1986, PTC registered Telepage as an approved Telephone Cabling Contractor. PTC has established a register of registered cabling contractors to ensure that only PTC approved contractors carry out permanent telephone cabling of multi-tenanted buildings. This is a means used by PTC to control the standard of large scale telephone cabling work carried out by private contractors.

In mid 1986, the plaintiff purchased about 1,000 Harmonic Telephones which were manufactured by Northern Telecom in Northern Ireland. The phones were originally purchased by PTC but were found to be defective. PTC proposed to return all the defective phones to the manufacturer. However, an arrangement was reached between Northern Telecom and Telepage to sell the defective phones to Telepage and then to enable Telepage to repair or to modify these phones in accordance with the instructions from Northern Telecom. The defective phones were accordingly sold to Telepage and they have carried out modifications to some of these phones and has made application to PTC for type approval of these phones.

The plaintiff is also interested in providing a PABX Rental and Maintenance Services in Papua New Guinea. This is a private automatic branch exchange system. It is used in an office with numerous telephones. It is also connected to the public telephone network. In connection with this service, the plaintiff has acquired a Mitel SX-10 machine made in New Zealand. The system is ascribed to be extremely compact and reliable, electronic telephone communication system. It is controlled by computer. It is not necessary to describe in detail the features of the machine.

Disputes have arisen over the provision of these services. I will deal with each of the issues separately in the same manner as were dealt with by counsel during the hearing.

PAGING SERVICES

The plaintiff commenced trading in paging services in accordance with the terms of an approval granted by PTC in a letter dated 10 August 1984. Approval was granted by PTC to operate such services in Port Moresby and Lae. The important terms of this approval are as follows:

"Approval is hereby granted to operate such a service in Port Moresby and Lae until further notice. You should, however, be aware that the Corporation reserves the right to withdraw this approval, at any time in the future, and to assume sole control of wide area paging services in this country. Should such a cause of action be contemplated, you may be rest assured that ample notice would be given.

This approval should not be construed as an exclusive permit to operate wide area paging services in Port Moresby and Lae. The Corporation may from time to time grant approval to other organizations to operate identical or similar services.

This approval is subject to your acceptance of the scale of charges attached hereto."

In a letter dated 2 February 1987, by PTC to Mr L Anderson of the Prime Minister's Department, Protocol Section, PTC expressed an intention to enter into paging services itself and that it would take over certain equipment from Papua New Guinea Paging and would be installed in three months time from the date of the letter to commence the services. No such notice of intention to provide services was given to the plaintiff. However, the plaintiff became aware of this letter to Mr Anderson. The plaintiff alleges that there is a breach of contract by PTC in that:

(a) It was agreed that it would take four to five years before the plaintiff recovers the cost of installing and operating such service. That PTC had no intention of going into these services during this period.

(b) If PTC decided to enter into this service itself, it was agreed that the plaintiff should be given twelve months notice.

The onus is on the plaintiff to show that there was such a contract and that the defendant is in breach of the contract. The plaintiff alleges that there were discussions between Mr Kelson, a Director of the plaintiff company and Mr Von Hagen, who was at that time the General Manager of Telecommunications Branch. It is alleged that the terms of the agreement were discussed and approval was given by a letter dated 10 August 1984. Mr Kelson swore an affidavit and also gave evidence to support the plaintiff's case. The evidence of the terms of such an agreement is to be found in the letter of approval by PTC. In cross-examination, Mr Kelson agreed that the terms of the discussions he had with Mr Von Hagen, are reflected in the letter. The terms of the approval evidenced by this letter are the following:

(1) Approval given until further notice.

(2) The Corporation reserves the right to withdraw the approval at any time in the future and assume sole control of paging services.

(3) But if such a takeover is intended, PTC would give reasonable or ample notice.

(4) The approval is not a monopoly; that PTC may grant approval to other private companies.

(5) The approval was subject to a scale of charges provided by PTC.

The evidence given by Mr Kelson is not reflected in the terms of the letter of approval. The right of the Corporation to withdraw the approval at any time in the future is inconsistent with any agreement that the plaintiff would have at least four to five years in which to recoup the cost of their equipment. Also the terms of the agreement recorded in the letter suggest that ample notice would be given, if PTC decided to withdraw its approval and take over the provision of the service itself. This does not prevent any approval which may be given to another company which may be a competitor with the plaintiff. This also does not prevent any decision by PTC itself, without having to withdraw approvals of the plaintiff's services, to enter into providing these services and compete. It is clear from the terms of the letter to the plaintiff that the approval to them was not construed as an exclusive permit to provide services in Port Moresby and Lae. If the terms of the letter of approval dated 10 August 1984, recorded the discussions with Mr Kelson wrongly, then it was up to him to correct or point out the proper terms of the approval. This, he has not done and that he has agreed that this letter reflects the discussions he had with Mr Von Hagen and he does not give any explanation why the terms which he alleged were the terms of the approval, were not recorded in this letter. I find on the balance of probabilities that there was no such agreement as alleged by the plaintiff. I also find that the intention by PTC to go into these services is not a breach of the terms of the approval contained in the letter of 10 August 1984. It is clear that at the time of the approval, PTC made it quite clear that other companies could be given approval to operate such services and indeed PNG Paging has been approved as another company to provide these services. The plaintiff took no action to prevent the operation of services by this company. The proposal by PTC to enter into providing these services is in itself not a breach of the terms of the approval. There is no agreement for PTC to give such notice if it decides to compete with the plaintiff. This is not a breach of a contract and the intention by PTC to enter into the services must be attacked on other grounds.

The second ground upon which the plaintiff attacks the decision by PTC to provide paging services is that such a decision is ultra vires the Post & Telecommunications Act (ch 394). The relevant sections are s 4(a) and 5(d)(iii). The plaintiff alleges that the decision by PTC to enter into these services has been taken without any regard to the cost of running such a service or without any investigation carried out into whether, or not, there is a demand for such services. PTC is a statutory corporation which is set up by the Post & Telecommunication Act (ch 394). Its functions are enumerated by s 4. I have no doubt that if the Corporation entered into any activity which is outside the scope of s 4 of the Act, the courts would review the decision of the Board. There is no complaint that the Board has undertaken any function outside s 4 of the Act. What has been raised in this case is under s 5(d)(iii) which is in the following terms:

"5. Objectives

In carrying out its functions under s 4 the Corporation shall pursue the following objectives ...

(d) to be a responsible corporate citizen by:

(iii) refraining from providing services which are not justified by reasons of high cost or limited demand."

As I have pointed out before, the decision by PTC to provide paging services clearly comes within its functions under s 4(a) of the Act. The question is; can it be said that PTC has pursued the objective of being a responsible corporate citizen by refraining from providing services which are not justified by reasons of high cost or limited demand? In 1983, PTC examined the question of an area wide paging system for Port Moresby. In a report prepared by R E Parks dated 20 September 1983, it was concluded that a detailed market survey would be required to ascertain the market size, rental charges and financial returns available in providing such a service. It would appear that in 1984, PTC refrained from entering into this service. This would explain the approval of the plaintiff company to enter into this service. According to the evidence of Mr Elias, PTC has expressed a new intention to provide this service. It appears from the Board decision that an intention has been expressed to provide these services by either taking over PNG Paging or buying certain equipment from it. The Board Meeting Minutes show that the Managing Director has been directed to obtain information from PNG Paging so that a cost benefit or analysis can be undertaken, if PTC decides to proceed with this option. According to Mr Elias, the Marketing and Customs Department Manager, Mr Simpson, has been given the task of investigating the economical viability of providing a service. To date, this survey has not been completed and it is difficult to speculate as to what its findings would be. No contract has yet been entered into between PNG Paging and PTC. I have concluded from all these evidence that the Corporation has given consideration to s 5(d)(iii) of the Act. It cannot be said at this point in time that PTC has not been responsible in directing its mind to this particular issue.

The plaintiff submits that there is little demand in this area. In brief, the evidence given on behalf of the plaintiff is that the plaintiff and another company, PNG Paging, are providing these services at the moment. Mr Kelson, who gave evidence on behalf of the plaintiff was unable to give full details of the services provided by PNG Paging. As far as the plaintiff is concerned, they now have 108 subscribers and the demand in Port Moresby is about 600 pagers. Mr Kelson concludes from this that there is no room for a further operator to operate paging services. He stated that if PTC entered this service, the plaintiff company would decrease in profits. I could not be satisfied from Mr Kelson's evidence that if PTC entered this service, it would run the service at a high cost. What Mr Kelson is afraid of is that if PTC entered this service, the plaintiff may lose its profits. By this argument, it appears that it would have a monopoly in the service and that PTC should be prevented from entering the service. It is interesting that the plaintiff does not say this of other services provided by the PNG Paging Service. It is not a strong point to argue that because there are two companies which are already operating; therefore leaving very little room for PTC Service to enter because of very limited market demand. It is clear from the evidence that the Board is presently negotiating with PNG Paging either to take over their services or buy certain equipment. If this option is taken, the argument is weakened. It is clear from the evidence that there is enough demand both in Port Moresby and Lae to have enabled the plaintiff and the PNG Paging Service to operate. There is also evidence that these services would be provided to other centres throughout Papua New Guinea. If PTC entered this service and ran its operations efficiently, as the plaintiff does, it may run a service with a profitable return. The only effect this might have is the one expressed by Mr Kelson, that is, it may compete with the plaintiff and would reduce or decrease its profits. In my view, that is a different matter. That is providing competition. I am not satisfied that the market for these services has stabilized to the extent that there would be no room for PTC to enter the service. As I have said earlier, this is a matter which PTC is now assessing before it actually provides the service.

The next ground upon which the plaintiff relies on attacking the decision of the Board of PTC to enter into the services is that it has decided to buy certain equipment from PNG Paging without complying with s 58 of the Public Finances (Management) Act 1986 (No 35 of 1986) by not calling for a tender or by not certifying that invitation of tenders is impracticable or inexpedient.

As I have pointed out earlier, the Board of PTC has decided to investigate the possibility of buying certain equipment from PNG Paging in order to enter the paging services. The Minutes of the Board which have been tendered in this respect, simply reflect that the Managing Director should investigate the matter with the company concerned and then report back to the Board. Also on cross-examination of witnesses called by the Corporation, it is clear that at the present moment, the Board or the Corporation is investigating its economic viability and that to date no firm commitments or no contract has been entered into between PTC and PNG Paging. It would appear that this matter has been raised prematurely because, firstly, no contract has been entered into; but secondly, under s 58(2) of the Act, a public body may certify that invitation of tenders is impracticable or inerpedient. The Board may yet certify any such contract to buy equipment in the future. I would not grant this application.

PABX MATTERS

Under s 70 of the Post & Telegraph Act (ch 150) the Board has the exclusive privilege of erecting and maintaining telegraph lines. Telegraph line is defined under the Act to include:

(a) any casing, coating, tube, tunnel or pipe enclosing; and

(b) any post, mast or pier supporting the wire or cable and any apparatus connected with it for transmitting messages or communications by means of electricity.

Under s 71 of the Act, the Board may authorize any other person to erect and maintain telegraphic lines.

In a letter dated 28 April 1986, the plaintiff made an application to PTC -

(a) to be approved as a PABX contractor; and

(b) for type approval for the supply of SX-10 PABX machines.

In a letter dated 7 July 1986, the Customer Equipment Branch advised the plaintiff that the matter of PABX equipment for type approval would not be considered until the question of a licence as PABX contractor was resolved. In the meantime, the plaintiff was required to supply further technical information and this was provided by the plaintiff in a letter dated 28 May 1986.

It appears from evidence that other contractors have applied for approval. It also appears from evidence that there are three existing contractors supplying PABX machines. They are Ericssons, Phillips, TMC and STC. These contracts according to the evidence of Mr Jerram, were approved prior to Independence. It is clear from the evidence that PTC took action internally to consider the question of approving new contractors. In a memo dated 19 June 1986, Mr Jerram raised the question of the review of PABX contractors. Same concern has also been raised by the Executive Manager of Engineering Operations, Headquarters, on approving new contractors. The matter is also being considered by the Board and the review of policy on PABX matters was investigated by Mr Banks who was a Consultant to PTC. As things presently stand, PTC Board is presently investigating the new policy on new contractors. Until this is done, no new contractors would be approved. It appears that the plaintiff was advised of this in a letter dated 2 February 1987. The letter which Mr Kelson has ignored.

The plaintiff seeks an order for mandamus to direct PTC to make a decision on the application for approval. It has been submitted by counsel for PTC that the plaintiff has no statutory right to apply for authority. Therefore, there is no statutory duty on the part of PTC to consider the application. He submitted that s 71 simply enables PTC, which has the exclusive authority or privilege to erect and maintain telegraphic lines, to depart from such privilege and at its own discretion authorized any other person to perform the work. Counsel for the plaintiff has submitted to the contrary that the plaintiff has a statutory right to apply and PTC is bound to consider the application and give an answer. Similar arguments were raised under s 9 of the Customs (Prohibited Exports) Regulations made under Customs Act (1901-1973) (Commonwealth). This provision was considered in Murphyores Incorporated Pty Ltd v The Commonwealth [1976/77] 136 CLR 1. The argument was put this way at p 27:

"The Customs (Prohibited Exports) Regulations make no provision for the making of applications for approval for exportation of goods. This circumstance, together with the form of reg. 9, is relied upon to support the submission that the regulation creates no duty to consider and determine an application for approval to export. The regulation, it will be noted, prohibits exportation unless a written approval issues and is produced to the Collector."

Mr Justice Mason, on the same page quoted a passage from Reg. v Anderson; Ex parte Ipec-Air Pty Ltd [1964/1965] [1965] HCA 27; 113 CLR 177:

"It is a general principle of law, applied many times in this Court and not questioned by anyone in the present case, that a discretion allowed by statute to the holder of an office is intended to be exercised according to the rules of reason and justice, not according to private opinion; according to law, and not humour, and within those limits within which an honest man, competent to discharge the duties of his office, ought to confine himself: Sharp v Wakefield (1). The courts, while claiming no authority in themselves to dictate the decision that ought to be made in the exercise of such a discretion in a given case, are yet duty bound to declare invalid a purported exercise of the discretion where the proper limits have not been observed. Even then a court does not direct that the discretion be exercised in a particular manner not expressly required by law, but confines itself to commanding the officer by writ of mandamus to perform his duty by exercising the discretion according to law."

He goes on at p 18:

"This statement, in my view, correctly and authoritatively expresses the principle which should be implied to a power to approve exportation conferred in the form in which regulation 9 is expressed.

It is not to the point to say that the regulation makes no provision for the making of applications and still less that it does not explicitly impose on the minister a duty to determine applications. The existence of the discretion attracts the principle of construction enunciated by Kitto J. It is implicit in what has been said that the existence of the discretion implies the existence of a duty to determine any application that is made."

In the present case, s 71 of the Act gives discretion to PTC on such conditions as it deems fit to authorize other persons to erect and maintain telegraphic lines. I would adopt the reasoning in the passage referred to above and apply it here. I find that there is a duty on the Board to determine any application that comes before it.

The next question that arises is whether the Board has determined the application. Counsel for the plaintiff has submitted that PTC refused to make a decision. Counsel for PTC has submitted that it has considered the application and has deferred the application until it has come up with a new policy on awarding PABX contractors. In the present case, no approval has been given to the plaintiff either as a PABX contractor or type approval for Mitel SX-10 PABX system. PTC at the moment has received other applications as PABX contractors and they have all been deferred until PTC has reviewed its policy. The Board adopted this view after considering a recommendation by a Mr Banks, a Consultant to PTC. Mr Banks has suggested also the review of the existing contractors. He suggests, for example, a consideration of direct billing of customers for maintenance by PABX supplier reviewing of quarterly payments; review of policies so as to give PTC an advantage commercially. With respect to the future policy review, Mr Banks strongly suggests that PTC enters into the supply of PABXs in the light of these recommendations. It was recommended that policies on use of private networks, conditions for lease lines between PABXs and inter-connection would be reviewed. The Board has accepted these recommendations and has undertaken a review on the policy. This was communicated to the plaintiff by the Managing Director of PTC in a letter dated 2 February 1987. It appears from the evidence that PTC has made every endeavours to hear the application by the plaintiff. In response to the application for type approval by the plaintiff, Mr Jerram the Manager for Customer Equipment Branch in a letter dated 27 May 1986, advised the plaintiff that the matter has been referred to senior PTC management and asked for further technical information to be provided. The Managing Director in a letter dated 2 February 1987, informed the plaintiff that PTC PABX policy is currently under review and the details of the new policy should be available within two months. He was advised to proceed with the application then. It cannot be said that PTC has not heard the application or that it will not hear it in the future. In fact, PTC has received all information sent to it by the plaintiff and has indicated it will hear its application when the policy has been finalized. I do not think that there is any significance in the fact that the application with the cheque was returned. The point is PTC cannot consider the application now until the policy is reviewed. In essence, the consideration of the application has been deferred to a future date. There is nothing wrong with that. See British Oxygen Co. v Board of Trade [1970] UKHL 4; [1971] AC 610. I would not grant the order for mandamus in this respect.

TWO-WAY MOBILE TRUNKING SERVICE

Under s 6 of the Radio Communications Act (ch 152), the Board may grant licences to establish, maintain and operate stations and apparatus for the purposes of transmitting and receiving radio communications. Any person who wishes to be granted a licence or a permit may apply in accordance with s 10 of the Radio Communications Regulations (ch 152). Also under s 28 of the Regulations, it is also necessary to seek approval of apparatus to be used. In 1985, the plaintiff in association with Lynns, a relative company of the plaintiff, decided they would design and set up an experimental two-way mobile trunking system. In November 1985, the New Zealand High Commission at Waigani indicated an interest to have an experimental two-way mobile trunking system installed to enable mobile radio communications between its fleet of vehicles with a base station at the High Commission building and the High Commissioner's residence. On the basis of this agreement, applications were made for permits to establish a mobile station. A fourth permit was granted to Telepage, the plaintiff, to establish a repeater station. Type approval for equipment to operate the system were also granted by PTC. Type approval was also given for mobile radio equipment for the mobile telephone system which is different from the mobile trunking system. This approval was given in anticipation that the plaintiff would also be setting up such a service in the future. The permits granted to operate these stations were granted until the 2 June 1986, for three channel trunking systems for evaluation. All the permits expired on that date. An application was made by the plaintiff as well as on behalf of the New Zealand High Commissioner to renew or extend the permits but his application was refused. The New Zealand High Commissioner has not made an application for review of this decision by PTC and I can only consider the application by the plaintiff in relation to the refusal to extend the permit for the repeater station. The renewal was refused in a letter dated 8 September 1986. No complaint is made about this refusal. Plaintiff applied again in December and in a letter dated 16 December 1986, he was refused again on the basis that there was breach of conditions in the earlier permit. It is alleged that the plaintiff breached the conditions of the permit issued to it by using equipment to make connection with the PTC network, which was not authorized by PTC. The equipment referred to in this letter is the equipment for making connections for the use of a mobile telephone system as distinct from a mobile trunking system. Approval for this equipment was given by PTC in a letter dated 30 October 1985. A condition to this approval was that the equipment shall be disconnected from the switch network upon cessation of the evaluation trials. It is alleged by PTC that the plaintiff made connections to this equipment to the PTC network which enabled the New Zealand High Commissioner to make two calls to the residence, to his wife and to the secretary in the office. The allegation is that equipment was connected for purposes of providing services to the New Zealand High Commissioner. This, it is alleged was in breach of the type approval and for evaluation of this equipment. However, Mr Kelson in his affidavit explains that they had approval to connect the equipment to the PTC network for purposes of evaluation and trials. He states that it must have been during this trials that the High Commissioner must have dialled through the PTC network. There is no other suggestion that the New Zealand High Commissioner dialled and was successful through the PTC network on other occasions. The plaintiff argues that he was not given an opportunity to be heard on this allegation and therefore, there is a denial of natural justice.

Counsel for the plaintiff relies on a passage from De Smith in Judicial Review of Administrative Action 3rd Edition p 223:

"Non-renewal of an existing licence is usually a more serious matter than refusal to grant a licence in the first place. Unless the licensee has already been given to understand when he was granted the licence that renewal is not to be expected, non-renewal may seriously upset his plans, cause him economic loss and perhaps cast a slur on his reputation. It may therefore be right to imply a duty to hear before a decision not to renew when there is a legitimate expectation of renewal, even though no such duty is implied in the making of the original decision to grant or refuse the licence."

This passage deals with one of the fundamental principles of natural justice, that is the right to be heard. Section 59(2) of the Constitution states:

"The minimum requirement of natural justice is the duty to act fairly and, in principle, to be seen to act fairly."

Under s 60 of the Constitution, the responsibility is placed upon the judiciary to develop these principles as part of the underlying law. In R v Gaming Board Ex parte Benaim [1970] EWCA Civ 7; [1970] 2 QB 417, Lord Denning said:

"It is not possible to lay down rigid rules as to when the principles of natural justice are to apply; nor as to their scope and extent. Everything depends on the subject matter."

When dealing with the question of renewal of a licence, Mason J (as he then was) in F.A.I. Insurances Limited v Winneke [1982/83] [1982] HCA 26; 151 CLR 342 at 362, after having discussed the question of renewal of licences said:

"Our starting point then is that an applicant for renewal of a licence generally has a legitimate expectation that his licence will be renewed when the statutory power is entrusted to a statutory authority. Does the appellant here have a similar legitimate expectation that its approval will be renewed? The answer to this question depends on the nature and effect of the statutory power, the circumstances of its exercise and the fact that the power is reposed in the Governor in Council."

Chief Justice in dealing with the question said at p 348:

"The first, and most important, question that arises is whether the Governor in Council for the State of Victoria, when deciding whether to renew an approval previously granted to a company for the purpose of s 72(a) of the Workers Compensation Act [1958] (Vict.) is subject to the requirements of the rules of natural justice. Such an approval entitles the company to issue the policies of insurance mentioned in that section; the refusal to renew an approval has the result that the company may no longer accept any premiums or carry on any insurance business against liability in relation to workers' compensation to which employers are subject under the Act. It is obvious that a company may, in reliance on an approval, set up an insurance business, or expand its existing business into another field of insurance, and that the refusal to renew an approval will mean that the business, or part of the business, of the insurer must immediately come to an end. A company does not set up a business of insurance in the expectation that it will last for only one year - that would be quite inconsistent with the nature of a business of insurance. The natural expectation is that the business will continue indefinitely, so long as it is properly conducted and proves successful. It is apparent that the refusal to renew an approval may have a seriously adverse effect on a company which was previously an approved insurer. In these circumstances, a company which becomes an approved insurer has a legitimate expectation that its approval will be renewed unless some good reason exists for refusing to renew it. It would not be fair to deprive a company of the ability to carry on its business without revealing the reason for doing so, and, if the reason is one related to some alleged misconduct or deficiency in the conduct of the company's affairs, without allowing the company a full and fair opportunity of placing before the authority making the decision its case against the existence of the alleged misconduct or deficiency. I have recently set out my views as to the application of the rules of natural justice in Salemi v MacKeller [No.2] [1977] HCA 26; [1977] 137 CLR 396 and Bread Manufacturers of New South Wales v Evans [1981] HCA 69; [1981] 56 ALJR 89. In accordance with the views that I have there expressed, I regard it as clear that, in circumstances such as the present, the exercise of the power to grant or refuse a renewal of an approval will be subject to the common law rule whose effect is that a company that would be affected by a refusal to grant a renewal should be given an opportunity to be heard before a decision is made, unless that rule is either excluded by the Act on its proper construction, or is rendered inapplicable by the fact that the power is vested in the Governor in Council."

The same rational of decision also appears in Perre Brothers v Citrus Organization Committee [1975] 10 SASR 555. These cases set out the principles of natural justice and the circumstances in which they may apply in relation to renewal of licence.

Counsel for PTC has submitted that the plaintiff has no right for renewal because this was a permit and there is no statutory right under the regulations to renew a permit. Under the Radio Communications Act, there is provision for granting of licences. However, under the provisions of the Radio Communications Regulations (ch 152) the regulations distinguish a licence and a permit. A licence may be granted under s 6 and pursuant to s 7 they are for a period of twelve months and renewable for further twelve months. Under s 9 of the Regulations, provision is made for a permit. It seems to me that the only difference between a licence and a permit is that whereas a licence is granted for a period of twelve months and renewable for the same period, permits are used where approval is sought only for a short period. Section (9)(3) states that the provisions of this regulation relating to licences apply to permits. Except for the period and the non-payment of fees provisions relating to permits, all the other provisions apply to both. Therefore, the argument by counsel for PTC must fail.

With respect to renewals, s 17 of the Regulations is relevant. It reads:

"The Board, in its decision, may refuse to grant or renew a licence."

Can it be said that the provisions of the Act and Regulations preclude the application of the principle of natural justice, that is, a right of hearing before a grant or renewal of a licence. The provision itself is not very helpful. However, the Regulations do have regard to the question of a right of a hearing. Under s 13 of the Regulations, the Board in its discretion by written notice to the licensee may vary or revoke the conditions of a licence or impose conditions or additional conditions. Subsection 2 specifically provides that before such action is taken, the Board shall give notice of intention to do so to the licensee and give the licensee an opportunity to make written submissions or representations. A similar provision is to be found in s 15 of the Regulations dealing with suspension or revocation of licences. These provisions of course also apply to permits by virtue of s 9 (3) of the Regulations. There is, however, an absence of such a provision to give notice to any party who may apply to be granted or renew a licence. It would appear that absence of such an equivalent provision with respect to refusal of permits and renewals is significant. This is an implied intention that principles of natural justice do not apply insofar as they relate to notice and opportunity to be given to parties who apply for licence or renewal of licence.

With respect to type approval of equipment imported by the plaintiff for purposes of a mobile telephone service, the approval given by PTC in a letter dated 30 October 1985, made it quite clear that this was only for purposes of a joint technical evaluation and that this was not a type approval for the plaintiff to supply this equipment in Papua New Guinea and it was specifically pointed out that there would be no advertisement of the equipment for sale and specifically pointed out that this was approved specifically for evaluation purposes and that it was to be disconnected from the network upon the cessation of the evaluation trials. It is clear from the conditions of approval that the plaintiff could not have expected to renew the approval or even expect to market the equipment in Papua New Guinea. The approval was given strictly for the evaluation.

TELEPHONE CABLING LICENCE

Under s 70 of the Post & Telegraph Act (ch 150), the Board has the exclusive privilege of erecting and maintaining telegraph lines. Under s 71 of the Act, the Board may authorize any other persons to erect and maintain telegraph lines. No regulations have been made under the Act concerning this authority by the Board. An internal procedure has been worked out by the Board for purposes of granting authority to such persons. The practice that has been adopted by the Board has been to register persons who may be authorized to erect and maintain telegraph lines. It appears that when such a person has been approved or authorized, he's granted a certificate of registration. Under s 71 of the Act, this can simply be called an authority given by the Board and may be given on conditions.

Keyco Electrical Pty Limited, another company which has been authorized by PTC to carry out telephone cabling did telephone cabling work on a Fairfax building. Subsequent to the cabling work by Keyco Electrical Pty Limited, the owners of the Fairfax apartments building entered into an agreement with the plaintiff to supply and fit a total of 37 PTC approval telephones to the eighteen apartments. Before entering into this service, the plaintiff sought approval from PTC to connect these telephones as the registration as a telephone cabling authority did not authorize them to do so. In a letter dated 20 June 1986, Mr Kamara, the Deputy Managing Director of PTC granted an interim authority to make these telephone connections. The plaintiff connected the phones in accordance with this interim authority. After the telephones had been connected in accordance with the interim authority, another letter dated 24 June 1986, by Mr Kamara advised the plaintiff that he had wrongly given the interim authority and that only the Board has the authority to give such approval. It would appear from this that the plaintiff had proceeded under a mistaken approval by PTC. This is something for which the plaintiff could not be blamed. However, as a result of this further advice from the Deputy Manager, the plaintiff then engaged a lawyer to advise him on his position. This resulted in correspondence between the plaintiff's lawyers and PTC. The plaintiff was advised on 3 July 1986, in a letter addressed to its lawyers, and the last paragraph of this letter read:

"In view of recent unauthorized activities undertaken by your client company, the Board has further resolved to withdraw the building cabling licence issued in favour of your client on or about the 5th of May 1986."

The plaintiff by par 7A of the Originating Summons claims for a declaration that the revocation by PTC of the plaintiff's registration as a telephone cabling contractor was null and void. They rely on the breach of principles of natural justice by PTC. It is submitted that the PTC should have given notice to the plaintiff and afforded him an opportunity to reply to any allegations before proceeding to revoke the authority. The principles of natural justice are set out under s 59 of the Constitution. I have already discussed the principles earlier in my judgment. There are no rigid rules as to when the principles of natural justice apply and to their scope and extent. In Regina v Barnsley Metropolitan Borough Council Ex parte Hook [1976] 1 WLR 1052, the Court of Appeal was dealing with a case in which a licence to trade in a market was cancelled by the Local Authority. In dealing with this matter, Lord Denning having dealt with the common law position of the stallholder states on p 1057:

"It is a right conferred on him by the common law under which, so long as he pays the stallage, he is entitled to have his stall there; and that right cannot be determined without just cause. I agree that he has to have the permission of the marketholder to start with. But once he has it and has set up his stall there, then so long as he pays the stallage, he has a right to keep it there. It is not to be taken away except for just cause and then only in accordance with the provisions of natural justice. I do not mind whether the marketholder is exercising a judicial or an administrative function. A stallholder counts on this right in order to enable him to earn his living. It is not to be taken away except for just cause and in accord with natural justice."

Lord Justice Scarman on p 1058 said:

"This is a serious matter, because what has been done is to revoke an existing licence, a licence which enabled its holder to earn his living. The late Professor S.A. De Smith, in Judicial Review of Administrative Action, 3rd ed. (1973), p 197 described very well the gravity of such a step. He said:

"Non-renewal of an existing licence is usually a more serious matter than refusal to grant a licence in the first place. Unless the licensee has already been given to understand when he was granted the licence that renewal is not to be expected, non-renewal may seriously upset his plans, cause him economic loss and perhaps cast a slur on his reputation. It may therefore be right to imply a duty to hear before a decision not to renew when there is a legitimate expectation of renewal, even though no such duty is implied in the making of the original decision to grant or refuse the licence."

"The author is there dealing with non-renewal but everything that he says about non-renewal applies with even greater force to revocation."

In the present case, PTC has proposed to cancel the registration on an alleged misconduct on the part of the plaintiff, that is, that he made telephone connections without authority from PTC. This of course has serious implications. Firstly, it raises the reputation of the plaintiff but also affects his business of erecting and maintaining telegraph lines. Having regard to the authorities and the circumstances of the present case, the power of revocation by PTC is subject to the principles of natural justice, that is to say that the plaintiff is entitled to be informed of the details of alleged unauthorized activities and then given an opportunity to make representations before it before a decision is made. The question is, whether, the Post & Telegraphs Act (ch 150) excludes the requirement of the principles of natural justice. There is no provision under the Act as well as under the Regulations concerning the question of natural justice. This is to be contrasted with the requirements of principles of natural justice provided for under Radio Communications Regulations (ch 152). There is nothing in the Post & Telegraphs Act (ch 150) which would exclude the application of the principles of natural justice and I find that there is no provision in the Act which excludes the application of these principles. In the instant case, two reports appeared to have played a major part in influencing PTC in concluding that the plaintiff had been engaged in unauthorized activities. First, it is alleged that the plaintiff has made telephone connections at the Fairfax apartments and secondly, a report by STC that the plaintiff has installed Northern Telecom phones at the Wormald International Office at Hohola. The question is, did PTC give notice of these allegations to the plaintiff? It appears from the evidence that the complaint about connecting telephones at the Fairfax apartments was raised by Mr Brown of the Building Caping and Consultancy Customer Services Branch in a telex dated 10 June 1986. Infact, the plaintiff responded in a letter dated 11 June 1986, and did not give a detailed explanation except to suggest that PTC should confer with its Deputy General Manager and the Executive Manager, Marketing, for further details. The report by STC which was contained in a letter dated 27 May 1986, addressed to the Managing Director of PTC, was brought to the attention of the plaintiff and on 29 May 1986, in a letter addressed to PTC made its submissions in writing. In cross-examination, Mr Kelson agreed that he was made aware of the contents of these complaints. I therefore, find that the plaintiff was notified of the nature of the complaints against him and he had the opportunity of replying to those complaints. Before the decision by the Board, this decision was notified in a letter sent to the plaintiff's lawyers dated 3 July 1986. It would appear that PTC Board reconsidered the matter and still decided in the exercise of its discretion not to reinstate the registration. Notification of this latter decision is contained in a letter dated 8 September 1986. I do not find that there was breach of natural justice.

HARMONY TELEPHONES

PTC purchased approximately about over a thousand Harmony DMTF sets from Northern Telecom. These telephones were found to be defective and after satisfactory arrangements between the parties, PTC proposed to send all the defective telephones back to the manufacturers. In the meantime, the plaintiff made arrangements with the manufacturers to purchase these defective telephones as well as make modifications in accordance with the manufacturer's instructions to about four or six of these telephones. In an application dated 11 November 1986, the plaintiff made application to the Marketing & Customer Services Department of PTC for type approval of these telephones. PTC in a letter dated 19 November 1986, indicated that they would be willing to examine a random sample from the entire stock of all the modified telephones. The plaintiff was unwilling to do this and insisted that the sample of four to six units be tested and type approval given and then at a later date would modify the rest of the telephones. PTC indicated by a letter dated 6 January 1987, that it is unlikely that approval would be granted for these units unless they are all repaired and represented by the manufacturer, Northern Telecom. It is clear that PTC has considered as a matter of policy that they would not consider these units unless the phones are repaired and represented by the manufacturer.

There is no specific provision for approving equipment for purposes of Post & Telegraphs Act (ch 150). However, by construction of s 70 of the Act, PTC Board has exclusive privilege of erecting and maintaining telegraphs which means it would have implied authority to approve apparatus for purposes of connection to the lines or wires for transmitting messages. As I have held previously in relation to the PABX matters, there is discretion in the Board to authorize any person to market and service certain apparatus. Where a person applies for such approval, there is a duty on the Board to make a decision. Has the PTC Board considered the application? Originally, it had indicated to the plaintiff that it would be willing to consider the application if it had a random testing of all the telephones which were modified. By a letter dated 6 January 1987, the Managing Director of PTC has indicated a policy that the defective telephones would not be reconsidered unless they were repaired and represented by the manufacturer. And by returning the cheques, it appeared that PTC has rejected the application with the policy stated in the letter. This is not a case of not deciding at all. It is clear from the letter referred to above that PTC has already decided in accordance with the stated reason that it would not grant approval to these telephones unless they were represented by the manufacturer. During the argument in British Oxygen Company v. Board of Trade [1970] UKHL 4; [1971] AC 610 at 625, Lord Reid referred to a passage in the judgment of Bankes LJ:

"There are on the one hand cases where a tribunal in the honest exercise of its discretion has adopted a policy, and, without refusing to hear an applicant, intimates to him what its policy is, and that after hearing him it will in accordance with its policy decide against him, unless there is something exceptional in his case. I think counsel for the applicants would admit that, if the policy has been adopted for reasons which the tribunal may legitimately entertain, no objection could be taken to such a course. On the other hand there are cases where a tribunal has passed a rule, or come to a determination, not to hear any application of a particular character by whomsoever made. There is a wide distinction to be drawn between these two classes."

Lord Reid continues:

"I see nothing wrong with that. But the circumstances in which discretions are exercised vary enormously and that passage cannot be applied literally in every case. The general rule is that anyone who has to exercise a statutory discretion must not "shut his ears to an application" (to adapt from Bankers LJ on p 183). I do not think there is any great difference between a policy and a rule. There may be cases where an officer or authority ought to listen to a substantial argument reasonably presented urging a change of policy. What the authority must not do is to refuse to listen at all. But a Ministry or large authority may have had to deal already with a multitude of similar applications and they they will almost certainly have evolved a policy so precise that it could well be called a rule. There can be no objection to that, provided that the authority is always willing to listen to anyone with something new to say - of course I do not mean to say that there need be an oral hearing. In the present case the respondent's officers have carefully considered all that the appellants have had to say and I have no doubt that they will continue to do so."

In the present case, the defendant has no doubt directed its mind to the fact that the telephones which have been represented are being presented for approval are the same telephones which were defective. It would have been reasonable and within the powers of the defendant to reject the telephones which were found to be defective. However, in the present case, the application by the plaintiff is not simply a representation of the same telephones. Infact the plaintiff has something new to say, and that is, that they have modified the defective telephones in accordance with the manufacturer's instructions and have been tested and found to be acceptable. Now the defendants have failed to listen to this new matter in this application. They have not even tested whether or not the modifications are up to standard and whether, or not, they have fixed the defect in the phones. They have rejected the phones without testing their suitability. In my view, in the circumstances of this case, this would amount to no consideration of the application by the plaintiff. Where this is so, mandamus will issue for the defendant to test and consider the phones with the modifications. As to whether, or not, the defendant will grant type approval is not a matter for this Court to indicate. That is within the discretion of the Board

INVALIDITY OF RADIO COMMUNICATIONS REGULATIONS (CH152)

The plaintiff in its Originating Summons seeks a declaration that the Radio Communications Regulations are void and of no effect by reason of the Post & Telecommunication Corporation (Consequential Amendments) Act 1982 (No 7 of 1982). Alternatively if the whole of the regulations are not void and of no effect, he submits that various sections of the Regulations should be declared to be void and of no effect.

The Radio Communications Regulations (ch 152) were made in accordance with s 14 of the Radio Communications Act (ch 152). Under this provision, the Head of State acting on advice makes regulations. These regulations were required amongst other things for purposes of enabling the Minister to grant licences under s 6 of the Radio Communications Act. However, by creation of a Post & Telecommunication Corporation Act in 1982, s 6 of the Radio Communications Act was amended by Post & Telecommunication Corporation (Consequential Amendments) Act 1982 (No 7 of 1982). Insofar as it is relevant, sch 2 of this Act amended s 6(1) by substituting Minister for the Board. Under this amendment, the Board of the Corporation is given the discretion to grant licences. Section 5 of the Radio Telecommunications Regulations (ch 152), the Minister still retains the exclusive privilege of establishing, erecting, maintaining, operating stations and apparatus. When the Act amended s 6(1) of the Radio Communications Act, no further provision was made in relation to the then existing Radio Communications Regulations (ch 152). The provisions relating to the Regulation made reference to the Minister granting licences, permits and other related matters. These have not been amended. Has the Consequential Act of 1982 repealed the Radio Communications Regulations (ch 152)?

Law relating to repeal of regulations by virtue of repeal of the Act which enables the regulations to be made can be found in the judgment of Lord Reading CJ in Watson v Winch [1916] 1 KB 688 at 690. The issue was put by Lord Reading in these terms:

"Upon these facts a question arises which has not been decided by any Court, namely, whether the repeal of an Act which enabled a corporation to make by-laws, involving as it does the revocation of the power of the corporation to make them, has the effect of repealing by-laws already made under the power while it existed, or whether the by-laws remain in force notwithstanding the repeal of the statute under which they were made. The question is one of general importance, and the argument on behalf of the appellant makes us regret that the respondent was not represented ... It was said in Surtees v Ellison (1),

"It has been long established, that, when an Act of Parliament is repealed, it must be considered (except as to transactions passed and closed) as if it had never existed. That is the general rule; and we must not destroy that, by indulging in conjectures as to the intention of the Legislature."

To that passage it is only necessary to make one qualification, namely, that since that case, Lord Brougham's Act (13 & 14 Vict.c.21) and the Interpretation Act, 1889, have been passed, and one must now bear the later Act in mind. It would follow that nay by-law made under a repealed statute ceases to have any validity unless the repealing Act contains some provision preserving the validity of the by-law notwithstanding the repeal. Applying that principle to this case, it follows that the by-laws made under the Norwich Improvement Act, 1879, have no longer any validity and that the conviction must be quashed."

In the present case, Radio Communications Act has not been repealed but amended only in certain provisions. The power to make regulations under which the Radio Communications Regulations were made is vested in the Head of State acting on advice under s 14 of the Radio Communications Act. The rule-making power under s 14 of the Act has not been amended. That being the case, there is no question of the repeal of the regulations. There is one other amendment to the Act which is relevant to the power of making regulations. Section 14 of the Act was amended by Radio Communications Amendment Act 1983 (63 of 1983) by repealing s 14(c) of the Act. That is to say, the power given to the Head of State, acting on advice, can no longer make regulations prescribing the fees for any matter under the Act or the Regulations. This has the effect of repealing any Regulations which prescribes a fee for such matters. Subject to this amendment, the Regulations are still in force.

The next question which arises, is, whether, the regulations are inconsistent with the provisions of the Act, as amended? That of course is required by the terms of s 14 of the Act. After the Consequential Act was passed by the Parliament to amend the Act, no consequential amending regulations by the Head of State acting on advice pursuant to s 14 of the Act was enacted to amend the Regulations. The Regulations as they stand is inconsistent with s 6 of the Act, in that, s 6 now vests the discretion to grant licences in the Board of Telecommunications Corporation whereas under the Regulations, the discretion is still to be exercised by the Minister. To this extent, regulations which purport to give the discretion to the Minister is inconsistent with s 6 of the Act. Such provisions, therefore, are invalid. The power of the Board to grant licence under s 6 of the Act is not affected. It is not necessary to consider whether, as a result of invalidity of the provisions, approvals given to others are invalid. People who have been given approvals have not been made parties to this proceedings and it would not be proper to deal with those issues here.

Lawyer for the Plaintiff: K.Y. Kara

Lawyer for the Defendant: W. Stollery