Central Provincial Government v National Capital District Commission and The Internal Revenue Commission and The Independent State of Papua New Guinea (2013) N5262

• Jurisdiction: Papua New Guinea
• Judge: Cannings J
• Judgment Date: 18 July 2013
• Court: National Court
• Citation: (2013) N5262
• Docket Number: OS (JR) NO 335 OF 2010
• Year: 2013
• Judgement Number: N5262

Full Title: OS (JR) NO 335 OF 2010; Central Provincial Government v National Capital District Commission and The Internal Revenue Commission and The Independent State of Papua New Guinea (2013) N5262

National Court: Cannings J

Judgment Delivered: 18 July 2013

N5262

PAPUA NEW GUINEA

[IN THE NATIONAL COURT OF JUSTICE]

OS (JR) NO 335 OF 2010

CENTRAL PROVINCIAL GOVERNMENT

Plaintiff

V

NATIONAL CAPITAL DISTRICT COMMISSION

First Defendant

THE INTERNAL REVENUE COMMISSION

Second Defendant

THE INDEPENDENT STATE OF PAPUA NEW GUINEA

Third Defendant

Waigani: Cannings J

2013: 19, 21 March, 18 July

JUDICIAL REVIEW – whether National Capital District Commission or Internal Revenue Commission failed to comply with duty to provide financial assistance to Central Provincial Government – National Capital District Commission Act 2001, Section 33.

TAXATION – Goods and Services Tax – whether Goods and Services Tax Revenue Distribution Act 2003 has been repealed – operation of Inter-Governmental Relations (Functions and Funding) Act 2009.

STATUTES – interpretation – whether a statutory provision that refers to another law continues to apply in the same way when the other law is repealed – implied repeal – determination of legislative intention.

The Central Provincial Government applied for judicial review of the alleged failure of the National Capital District Commission (NCDC) and the Internal Revenue Commission (IRC) to comply with their duties to provide financial assistance to it under Section 33 of the National Capital District Commission Act 2001, which relevantly provides:

(1) Subject to Subsection (2), the [National Capital District] Commission shall provide financial assistance to the Central Provincial Government …

(2) The Internal Revenue Commission shall pay to … (a) the Central Provincial Government, a minimum of 10% of the Goods and Services Tax … due to the [National Capital District] Commission in a fiscal year in accordance with the Goods and Services Tax Revenue Distribution Act 2003.

Central Provincial Government argued that Section 33 obliges the NCDC and the IRC to each pay to it the sum of 10% of the Goods and Services Tax (GST) due to the NCDC in each fiscal year since 2004; and that the NCDC has been paying to it only 5% of the sum due to the NCDC and the IRC has been paying it nothing. It sought declarations that both the NCDC and the IRC have failed and are continuing to fail to comply with their statutory duties, orders in the nature of mandamus that would compel each of them to perform their duties according to law, orders for back-payments to 2004 and damages.

Held:

(1) The NCDC is under Section 33(1) of the NCDC Act under no obligation to pay to the Central Provincial Government any minimum percentage of GST revenue due to the NCDC in any fiscal year. Its obligation under Section 33(1) is to provide “financial assistance”. It must pay a reasonable sum having regard to (a) the purpose of the NCDC Act as set out in its Preamble, (b) the purpose of Section 33, which is to redress the economic imbalance created as a consequence of a large proportion of economic activity generated by Central Province taking place in the National Capital District, which results in a large part of GST revenue generated by Central Province being captured in the National Capital District and (c) the actual amount that is paid by the IRC to Central Provincial Government under Section 33(2)(a).

(2) The IRC is obliged by Section 33(2)(a) of the NCDC Act to pay to Central Provincial Government a minimum of 10% of the GST due to the NCDC in each fiscal year in accordance with (in respect of the period 15 July 2004 to 31 December 2007) the Goods and Services Tax Revenue Distribution Act 2003 or (since 1 January 2008) the Inter-Governmental Relations (Functions and Funding) Act 2009.

(3) Neither the implied repeal of the Goods and Services Tax Revenue Distribution Act 2003 nor enactment of the Inter-Governmental Relations (Functions and Funding) Act 2009 has affected the duty of the IRC to pay the prescribed sums to Central Provincial Government.

(4) No good reason has been advanced for avoiding the plain and literal meaning of Section 33(2)(a), which is consistent with the purpose of the provision: to promote a more equitable distribution of GST revenue between the NCDC and Central Provincial Government.

(5) There was insufficient evidence to establish that the NCDC has failed to comply with its duty under Section 33(1) of the NCDC Act to provide a reasonable amount of financial assistance to the Central Provincial Government and accordingly the plaintiff’s application to the extent that it sought declarations and orders against the NCDC was refused.

(6) There was sufficient evidence to establish that the IRC has entirely failed to comply with its duty under Section 33(2)(a) of the NCDC Act to pay the prescribed sum to the Central Provincial Government each fiscal year since 2004 and it was in the interests of justice that the plaintiff’s application to the extent that it sought declarations and orders against the IRC be granted.

(7) The Court made declarations as to the nature and extent of the IRC’s failure to comply with its statutory obligation and orders in the nature of mandamus compelling the IRC, through its head, the Commissioner General of Internal Revenue, to comply with its statutory obligation.

(8) The Court referred questions concerning the amounts due to Central Provincial Government and the timing of payments to mediation.

Cases cited

The following cases are cited in the judgment:

Arthur Agevu v The Government [1977] PNGLR 99

Blackpool Corporation v Starr Estate Company Limited [1922] 1 AC 27

Busin v Havini (Re Tichi) (1957) No 102

Chief Collector of Taxes v Bougainville Copper Ltd (2007) SC853

Cooper Brookes (Wollongong) Pty Ltd v Federal Commissioner of Taxation (1981) 147 CLR 297

Dale Christopher Smith v Minister for Lands (2009) SC973

Dr Foster’s case (1614) 77 ER 1222

Gulf Provincial Government v Minister for Provincial Affairs [1991] PNGLR 389

Inakambi Singorom v John Kalaut [1985] PNGLR 238

Internal Revenue Commission v Dr Pirouz Hamidian-Rad (2002) SC692

Joseph Kembu v Eko Mason [1971-72] PNGLR 407

Kampangio v R [1969-70] PNGLR 218

Lohia Doriga v Daera Guba (Re Era Taora Land) (1969) No 548

Mickey Wassey v The Police (2005) N2922

Mision Asiki v Manasupe Zurenuoc (2005) SC797

Motu Koita Assembly v NCDC (2011) N4429

Norah Mairi v Alkan Tololo (No 2) [1976] PNGLR 125

Parker v Virobo Re Urara Makana [1971-72] PNGLR 162

PLAR No 1 of 1980 [1980] PNGLR 326

png Ready Mixed Concrete Pty Ltd v The State [1981] PNGLR 396

R v Mitchell, Ex parte Wafing [1973] PNGLR 461

Rakatani Peter v South Pacific Brewery Ltd [1976] PNGLR 537

Sanage Kuri v MVIL (2004) N2759

SC Ref No 1 of 2000; Special Reference by Morobe Provincial Government (2002) SC693

SC Ref No 3 of 2011; Special Reference by East Sepik Provincial Executive (2011) SC1154

SCR No 5 of 1987; Re Central Banking (Foreign Exchange and Gold) Regulations [1987] PNGLR 433

SCR No 7 of 1992; Re Forestry Act 1991 and the East New Britain Forestry Operations Control Act 1992 [1992] PNGLR 514

The State v Danny Sunu [1983] PNGLR 396

The State v Kiap Bonga [1988-89] PNGLR 360

The State v Natpalau Tulong [1995] PNGLR 329

Vitus Sukuramu v NBPOL (2007) N3124

Abbreviations

The following abbreviations appear in the judgment:

ADR – Alternative Dispute Resolution

GST – Goods and Services Tax

IRC – Internal Revenue Commission

J – Justice

N – National Court judgment

NCD – National Capital District

NCDC – National Capital District Commission

NCDC Act – National Capital District Commission Act 2001

PNGLR – Papua New Guinea Law Reports

SC – Supreme Court judgment

SC Ref – Supreme Court Reference

JUDICIAL REVIEW

This was a review of the alleged failure of the NCDC and the IRC to comply with their statutory duties to provide financial assistance to Central Provincial Government.

Counsel

E Hampalekie, for the plaintiff

D Wood, for the first defendant

L N Nablu & S Sinen, for the second defendant

18 July, 2013

1. CANNINGS J: The Central Provincial Government applies for judicial review of the alleged failure of the National Capital District Commission and the Internal Revenue Commission to comply with their duties to provide financial assistance to it under the National Capital District Commission Act 2001. Section 33 (financial assistance to Central Provincial Government, Gulf Provincial Government and the Motu-Koitabu Council) is the key provision. It states:

(1) Subject to Subsection (2), the [National Capital District] Commission shall provide financial assistance to the Central Provincial Government, the Motu-Koitabu Council and the Gulf Provincial Government.

(2) The Internal Revenue Commission shall pay to—

(a) the Central Provincial Government, a minimum of 10% of the Goods and Services Tax; and

(b) the Motu-Koitabu Council, a...