N5293

PAPUA NEW GUINEA
[IN THE NATIONAL COURT OF JUSTICE]

OS (JR) NO. 61 OF 2013

BETWEEN:

RAPHAEL KERUA trading as KEND FRESH LIQOUR
DISTRIBUTORS
Plaintiff
 
AND:

JOSEPH NENG as the CHAIRMAN OF THE
WESTERN HIGHLANDS PROVINCIAL LIQUOR LICENSING BOARD
First Defendant

AND:

THE WESTERN HIGHLANDS PROVINCIAL GOVERNMENT
Second Defendant

Mount Hagen: Poole, J
2013: 06 May

Cases cited:
Papua New Guinea Cases

Raz v Matane [1986] PNGLR 38, 
Premdas v The State [1979] PNGLR 329 
Peter Peipul v Sheehan, SC 706

Overseas Cases

Associated Provincial Picture Houses v The Wednesbury Corporation [1948] 1KB 223

Counsel:

Mr. P. Kunai, for Plaintiff
Mr. D. Tambili, for Defendant

6th May, 2013

1. POOLE, J: Background: The Plaintiff was granted Leave on 15 February 2013 to Judicially Review the decision of the First Defendant to revoke the Liquor Dealer's License which was granted to the Plaintiff in 2010 and renewed in 2011 and 2012. The Court, as well as granting Leave, stayed the effect of the First Defendant's notice of Revocation.

2. Certain of the facts are undisputed in this matter, and may be summarized as follows.

3. The Plaintiff was the holder of a Liquor Dealer's License issued by the Western Highlands Provincial Executive Council on 2 March 2012, and renewed by the Western Highlands Liquor Licensing Board on 28 November 2012. It was for a term to expire on 31st December, 2013.

4. The letter from the Chairman of the Provincial Liquor Licensing Board which notified the Plaintiff of the Defendant's decision to renew the license stated that it was made in accordance with section 14(b) and section 15(b) of Western Highlands Provincial Liquor (Licensing and Management) Act".

 That section is:

 "14 Functions
 Generally, the functions of the Board are as follows:

 (a) --------------------------------

 (b) To receive and deliberate on applications for the grant, renewal, amendment and removal of liquor Licenses.
 ------------------------------------"

5. In addition, I note that section 15(b) (Powers) of this Act gives power "To issue, suspend and terminate licenses."

6. It is also an undisputed fact that the decision to revoke the Plaintiffs licenses was made at a meeting of the Provincial Liquor Licensing Board on 22nd January 2013.

7. The reasons given for the revocation of the licenses is clearly stated, as follows:

"The Board was advised that Kend Fresh Liquor Distributors is not a peoples company and therefore profits made by this company would not benefit the people of Western Highlands.

On the other hand, Pacific Arabica Coffee is a peoples company and any profit made is benefited by the people of Western Highlands and this company has been providing the needy services (coffee rehabilitation and extension programs) to the people since it begin its operation.

On the basis of the above reasons, Kend fresh Liquor Distributors Dealers' license was revoked." (emphasis added).

8. The letter continued with demands and directions as to what should follow from this administrative decision.

9. The disputed facts may be stated as the Plaintiff disputing the validity of the decision and the reason given by the Defendant for that decision stated in the letter dated 28 January 2013 revoking the Plaintiff's licenses. 

10. On the evidence presented, the Court finds the following:

11. The Plaintiff had traded as a licensed liquor dealer during the years 2010, 2011 and 2012 pursuant to licenses issued annually by the Provincial Government. If the initial license was issued irregularly, the annual renewal of the license by the Western Highlands Liquor Licensing Board adopted and accepted as lawful the issue of the license and the renewal of the license by the Board on 20th November 2012 was, prima facie, a valid exercise of the administrative function of the Board.

12. The license for the year 2012 expired on 31 December 2012 and it would have been highly improper for the Board to have deferred consideration of licensing applications until December and run the risk of being unable to attend to business because of the disruption annually caused by the Christmas season.

13. The Provincial (Licensing and Management) Act specifically provides (see 29(9))" unless the holder of a license informs the Board to the contrary, he shall be deemed to have applied in due course for the renewal of his license on the same terms as his existing license."

14. Section 30 of the Act specifies:
 
"Renewals

(1) A holder of a license issued under this Act in the preceding year may apply for the renewal of his license on the same terms and conditions.

(2) The Board may renew a license issued under this Act unless the licensee has committed a breach of this Act, or the circumstances and conditions have changed since the grant of the license the previous year.

(3) A serious breach of the Act referred to in Subsection (2) are as follows:-

 (a) Failure to pay Provincial Sales Tax;

 (b) operating outside of trading hours;

 (c) obstruction of Police or Inspectors in the performance of their duties;

 (d) alteration of license;

 (e) bribery;

 (f) selling less quantity;

 (g) unlawful transfer of license;

 (h) willful defiance of orders and direction given by the Board;

 (i) breach of any other provisions of the Act which renders the license illegal and inoperative."

15. The Act also specifically requires the Board to (section 29(11);

"11. The Chairman shall publish in the gazette in respect of the renewal of licenses, a notice giving brief details of the licenses to be considered for renewal and of the date and place of the meeting at which the renewals will be considered".

16. Further, 29(13) requires such publication to be made "a month in advance" of the Board Meeting to consider the application. 

17. The First Defendant, in his affidavit filed on 22 April 2012, annexed a Copy of the minutes of the Meeting of the Western Highlands Provincial Liquor Licensing Board held on the 22nd January 2013.

18. The Minutes state that "The meeting was called purposely for the Board to get a brief on the Operations of the Liquor licensing office and to deliberate on the renewal of the 2013 Liquor Licenses which include the Dealer's License".

19. The meeting commenced straight after the swearing in of the newly appointed Board and was attended by 6 observers, two of whom were prominent politicians.

20. No notice of this meeting was given to the Plaintiff that the Board was meeting to "deliberate on the renewal of the 2013" license which the Board had granted on 28 November 2012.

21. The minutes record that one of the politicians, present as an observer, stated that "he was not happy with the decisions of the previous Board (LBCC) in re-issuing or renewal of liquor licenses for 2013 to the existing liquor license which included the Dealer's License, (Kend Fresh Liquor Distributors.)" 

22. The minutes go on to record that this politician, who was not a member of the Board, claimed "that the Board was making decision in favor of the previous Government which was not done in the best interest of the incoming Provincial Government." 

23. The Act, it must be stated, is "to provide for administration and control of the sale and disposal of fermented and spirituous liquor and for the grant and administration of licenses and for related purposes in the Western Highlands Province". (Preamble to Act.) The Act is devoid of any suggestion that the Board is to operate "in the best interest" of any Provincial Government of the day. If it is to act in any interest, it must be in the objective interests of the people of the Province in fair and open administration of Liquor Licensing and Management in the Province. It is a "mechanism law" whereby lawful Provincial Executive Council laws are put into action, and not intended to politically favor any government of the day.

24. The Minutes go on to record that the Chairman told the Board that "he had a new application for a Dealer's license" from Pacific Arabica Coffee.

(The Court notes that section 29(2) of the Act requires "an application for a license shall be called for by a notice in the Provincial Gazette in the first week of September each year.")

25. The Minutes go on to record that the politician "told the Board that this Company" (i.e. Pacific Arabica Coffee) "has existing facilities to meet the requirements of a Dealers' License as the company was involved in this business in the past."

26. This man then mentioned, the Minutes record, 
 
6.3 "----------- told the Board that this company was providing the needy services required by our people, especially those that are involved in coffee business. When he was the Governor in the past granted the Dealer's License to this company to make money and provide services for the people of this province who are involved in coffee project and the company has been providing this services for a long time now. Profits made by this company are benefited by the people of our province because it is the peoples company. Other Dealers profits are not benefited by our people."

27. Following this, the minutes record;

6.5. The Board after getting the brief decided and agreed to grant the Dealer's License to Pacific Arabica Coffee to provide the needy services to licensed liquor outlets in the Western Highlands Province. The decision to grant the Dealer's License to Pacific Arabica Coffee was moved by Cr. Plak Tei and seconded by Cr. John Kama.

6.6. The Board when making that decision also decided and resolved to revoke Kend Fresh Liquor Distributors License basing on the reasons that the license should be given to the peoples company in which profits made will be benefited by the people of the province and this company's profits will not be benefited by our people. Existing liquor outlets are to be notified of this decision and they are to do business with Pacific Arabica Coffee Ltd and to other unlicensed or recognized Liquor Distributors there may be. They are also to be told not to import liquor into WHP. The decision was moved by Cr. John Kama and seconded by Mr. Nigel Logue.

28. The law relating to Judicial Review in this jurisdiction is too often stated to require reiteration of Authorities and restatement of principles other than in the briefest way.

29. Review of an administrative decision is, in essence, a review of the process by which the decision is made. The merits of a decision are not for review unless the decision is so outrageously unreasonable as to indicate that the administrative decision has fundamentally miscarried. This exception is known as the "Wednesbury Principle" after the decision in Associated Provincial Picture Houses v Wednesbury Corporation [1948] 1KB 223 – a principle often affirmed in this jurisdiction (see, for example, Raz v Matane [1986] PNGLR 38, or Premdas v The State [1979] PNGLR 329 and Peter Peipul v Sheehan, SC 706.)

30. Natural Justice is embedded in the Constitution – the paramount expression of the laws of Papua New Guinea. Section 60 of the Constitution imposes the duty on the courts of Papua New Guinea to give "particular attention" to developing the principles of Natural Justice which, section 59 states, requires, as a minimum, the duty to act, and to be seen to act, fairly. It is to protect ordinary people from arbitrary and autocratic decisions by administrators.

 In reaching an administration decision, the decision maker:

•	Must consider those matters which, either explicitly or by necessary implication, the statutory law under which it operates requires it to consider;

•	It must not consider irrelevant matters outside the limits of its statutory discretion;

•	It must not operate in bad faith – especially by not giving a party affected by its decision a right to be heard in his or her own interest;

•	It must direct itself properly in law, 

•	It must not act so unreasonably that its decision is one so that no reasonable decision maker could make.
 
31. The Plaintiff, in his Statement filed under Order 16 rule 3(2)(a) of the Rules, asserts, as grounds for relief, that he was denied a right to be heard in his own interest, that the Board misdirected itself as to the law applicable for the revocation of licenses, (and, by necessary implication, considered irrelevant matters) and that its decision was so unreasonable as to breach the principle of Associated Provincial Picture Houses v The Wednesbury Corporation.

32. Application of the law to these facts shows that the Board:

(i) Acted ultra-vires it's powers in considering an application for a license by Pacific Arabica Coffee which was not made in compliance with a Notice Gazetted "in the first week of September each year" as required by section 29(2) of the Act;

(ii) Denied the Plaintiff the fundamental Natural Justice to which he is entitled under the Constitution and the Common Law by hearing and determining the question of the continuation of his license without giving him an opportunity either to know what was alleged against him or to be able to be heard in answer in his own interest;

(iii) Failed to consider the matters which the Statutory law required it to consider and misdirected itself as to the applicable law. This arose because the Board ignored the provisions of the Act which govern renewals of licenses. Those provisions are clear and plainly expressed in section 30 of the Act.

 "30. Renewals
(2) The Board may renew a License issued under this Act unless the Licensee has committed a breach of this Act, or the circumstances and conditions have changed since the grant of the license the previous year.

(3) A serious breach of the Act referred to in subsection 2 are as follows;

 (a) failure to pay provincial sales taxes;

 (b) operating outside of trading hours;

(c) obstruction of police or inspectors in the performance of their duties;

 (d) alteration of license;

 (e) bribery;

 (f) selling less quantity;

 (g) unlawful transfer of license;

 (h) willful defiance of orders and direction given by the board;

(i) breach of any other provision of the act which might render the license illegal and inoperative.

33. In its letter revoking the license the Board gave, as reason for the revocation, 

"(4) I am writing to you in my capacity as Chairman of the Provincial Liquor Licensing Board to inform you that Kend Fresh Liquor Distributors Dealers License issued by the previous Board was revoked at that meeting and in it stead approved and granted the Dealer's License to a new company, Pacific Arabica Coffee Ltd.

(5) The Board was advised that Kend Fresh Liquor Distributors is not a peoples company and therefore profits made by this company would not benefit the people of Western Highlands.

(6) On the other hand, Pacific Arabica Coffee Ltd is a peoples company and any profit made is benefited by the people of Western Highlands and this company has been providing the needy services (Coffee rehabilitation and extension programs) to the people since it begun its operation."

34. Further, the Board clearly considered matters which were wildly irrelevant to any question of the renewal or revocation of the Plaintiff's license.

35. The Board is an Administrative body which should function only within the jurisdiction and powers conferred on it by the Provincial Assembly in the terms of the Liquor Licensing Act.

36. It is a gross breach of the terms of that legislation for it to act on the direction and in satisfaction of the preferences of any non Board member who may attend its meeting. No matter who he may be, how much, as a politician, he may have respect as an individual, nor how forcefully he may express his views, if the Board ignores its duties and functions under the Act and simply goes along with what a political observer tells it, it is gross breach of its powers and duties.

37. The evidence that the Board did so forget itself is clear from the fact that many of the words recorded in the minutes as Statements by the politician who attended the meeting are exactly repeated in the motion passed by the Board and in the letter the Board wrote to the Plaintiff purporting to revoke his licenses.

38. A clear example of this occur on page 8 of the minutes.

6.3. The observer "told the Board that this company was providing the needy services required by our people, especially those that are involved in coffee business. When he was the Governor in the past granted the Dealer's License to this company to make money and provide services for the people of this province who are involved in coffee project and the company has been providing this services for a long time now. Profits made by this company are benefited by the people of our province because it is the peoples company. Other Dealers profits are not benefited by our people.

6.4. The Board was told that Pacific Arabica coffee has existing facilities to meet the requirements of a Dealers' License as the company was involved in this business in the past.

6.5. The Board after getting the brief decided and agreed to grant the Dealer's License to Pacific Arabica Coffee to provide the needy services to licensed liquor outlets in the Western Highlands Province. The decision to grant the Dealer's License to Pacific Arabica Coffee was moved by Cr. Plak Tei and seconded by Cr. John Kama.

6.6. The Board when making that decision also decided and resolved to revoke Kend Fresh Liquor Distributors License basing on the reasons that the license should be given to the peoples company in which profits made will be benefited by the people of the province and this company's profits will not be benefited by our people. Existing liquor outlets are to be notified of this decision and they are to do business with Pacific Arabica Coffee Ltd and not other unlicensed or recognized Liquor Distributors there may be. They are also to be told not to import liquor into WHP. The decision was moved by Cr. John Kama and seconded by Mr. Nigel Logue.

39. And the underlined words are repeated in the letter of revocation dated 28 January 2013.

" (4) I am writing to you in my capacity as Chairman of the Provincial Liquor Licensing Board to inform you that Kend Fresh Liquor Distributors Dealers License issued by the previous Board was revoked at that meeting and in it stead approved and granted the Dealer's License to a new company, Pacific Arabica Coffee Ltd.

(5) The Board was advised that Kend Fresh Liquor Distributors is not a peoples company and therefore profits made by this company would not benefit the people of Western Highlands.

(6) On the other hand, Pacific Arabica Coffee Ltd is a peoples company and any profit made is benefited by the people of Western Highlands and this company has been providing the needy services (Coffee rehabilitation and extension programs) to the people since it begun its operation.

40. The Board has breached the Plaintiff's rights to Natural Justice guaranteed both by the Constitution and the Common Law and has acted in an arbitrary and illegal fashion. 

41. For these reasons. The Orders of the Court are:

(i) The decision of the Western Highlands Provincial Liquor Licensing Board, conveyed to the Plaintiff in a letter dated 23rd January 2013, signed by the First Defendant, to revoke the Liquor Dealer's License issued to the Plaintiff by the Board on 28th November 2013 for a term to expire on 31st December 2013 is quashed pursuant to Orders 16 of the National Court rules;

(ii) An Order in the nature of Mandamus is issued requiring the Defendants to formally and fully reinstate the Liquor Dealer's License to the Plaintiff which it purported to revoke on 22nd January 2013 within 7 days of the date of this Order;

(iii) The Plaintiff's costs of and incidental to this application shall be paid by the Defendants, such costs to be taxed if not agreed;

(iv) Time is abridged to the time of the sealing of these Orders by the Registrar, which shall take place forthwith;

(v) The parties have liberty to apply the Court on two days' Notice.

___________________________________________________________
Wantok Legal Group Lawyers: Lawyers for the Plaintiff
Kunai & Co. Lawyers: Lawyers for the Defendant