MAS International Limited v David Sode, Acting Commissioner General of Internal Revenue (2008) SC944

• Jurisdiction: Papua New Guinea
• Judge: Gavara–Nanu, Manuhu & David, J
• Judgment Date: 24 July 2008
• Docket Number: SCA NO. 96 OF 2006
• Citation: (2008) SC944
• Court: Supreme Court
• Year: 2008
• Judgement Number: SC944

Full Title: SCA NO. 96 OF 2006; MAS International Limited v David Sode, Acting Commissioner General of Internal Revenue (2008) SC944

Supreme Court: Gavara–Nanu, Manuhu & David, J

Judgment Delivered: 24 July 2008

SC944

PAPUA NEW GUINEA

[IN THE SUPREME COURT OF JUSTICE]

SCA NO. 96 OF 2006

BETWEEN

MAS INTERNATIONAL LIMITED

Appellant

AND:

DAVID SODE, Acting Commissioner General

of Internal Revenue

Respondent

Waigani: Gavara-Nanu, Manuhu & David, J

2006: 29 November

2008: 24 July

APPEALS – Appeal against exercise of discretion by learned trial judge to refuse injunction - Appellant to demonstrate error.

TAXATION– Proper construction of tax legislation – Strict interpretation required – Provisions to be given their plain and ordinary meaning – Policy to pay first and litigate later – Posting of security is condition precedent to contesting any assessment made in respect of the value of goods seized including their return with or without litigation.

INJUNCTION– Principles discussed – Undertaking as to damages provided by appellant questionable –Whether Undertaking as to damages sufficient.

Cases cited:

AGK Pacfic (NG) Ltd v. William Brad Anderson & Ors (2000) N2062

American Cyanamid Co. v. Ethicon Ltd (1975) AC 396

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

Collins & Leahy Limited v. Collector of Stamp Duties (2001) N2150

Craftworks Niugini Pty Ltd v Allan Mott [1998] PNGLR 572

Employers Federation of PNG v. PNG Waterside Workers and Seaman’s Union & Anor (1982) N393

Fulleborn Plantations Ltd v. Pepi Kimas (2007) N3209

Gobe Hongu Ltd v. NEC & Ors (1999) N1920

Golobadana No.35 Ltd v. Bank South Pacific Ltd (2002) N2309

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

Kurt Reimann v. & Ors v. George Skell & Anor (2001) N2093.

Mark Opur v. Darbar Enterprises Ltd (2004) N2528

Markscal Limited & Robert Needham v. Mineral Resources Development Co. Pty Ltd (1996) N1472

Mauga Logging Company Pty Ltd v. South Pacific Oil Palm Development Pty Ltd [1977] PNGLR 80

Misima Mines Ltd v. The Collector of Customs (2003) N2497

Misima Mines Ltd v. The Collector of Customs & Anor (2007) N3206

MVIT v. Etape [1994] PNGLR 569

MVIT v. Pupune[1993] PNGLR 370

Mt. Hagen Airport v. Gibbs [1976] PNGLR 216

National Housing Corporation v. Yama Security Services Pty Ltd (2000) N1985

Norah Mairi v. Alkan Tololo [1976] PNGLR 125

Public Employees Association v. Public Service Commission [1988-89] PNGLR 585

Rimbink Pato v. Anthony Manjin & Ors (1999) SC622

Telikom PNG Limited v Independent Consumer and Competition Commission and Digicel (PNG) Limited (2007) N3143

Counsel:

H. J. Leahy, for the Appellant

L.N. Nablu, for the Respondent

24 July, 2008

1.BY THE COURT: Before us is an appeal against the whole of the judgment by Kandakasi, J given on 04 September 2006 in which his Honour refused the appellant’s application for certain orders, including an order in the nature of an interim injunction to restrain the respondent from taking steps, including advertising to sell or to deal with the tugboat CIK Memed and the pontoon Wirasperkasa (“the vessels”) and the cargo aboard each of the vessels inclusive of all heavy equipment and machinery and other property seized under certain notices of seizure issued and served upon the appellant by or on behalf of the respondent.

2. Aggrieved by that decision, the appellant instituted this appeal by way of a Notice of Appeal dated 12 September 2006 and filed on 17 September 2006.

3. On 20 October 2006, the appellant applied for and was granted an interim stay order under s.5 (1)(b) of the Supreme Court Act. The respondent applied for the discharge of the interim stay order which was heard by the full bench of the Supreme Court on 24 October 2006. The decision on that application appears to have been overtaken by this appeal.

4. This appeal lies without leave.

Background

5. The appellant claims to have imported certain logging equipment including machinery, motor vehicles and other items through the port of Wewak aboard a vessel called Sea Link Fly which arrived there on 03 January 2006. Inward customs clearance for the vessel and its cargo was obtained on 04 January 2006.

6. The vessels and their cargo arrived at Wewak port on 18 January 2006. The appellant’s cargo aboard the Sea Link Fly was off-loaded onto Wirasperkasa on 19 January 2006. The appellant claims in an affidavit sworn by Mr Loa Haihavu on 16 August, 2006, in paragraph 27, that outward customs clearance for the vessels was obtained in Wewak on 20 January 2006 for their journey to Port Moresby and the vessels left Wewak soon after. Mr Haihavu also deposes in the affidavit that documents including the outward clearance were in the possession of the captain of Cik Memed when it left the Wewak port. The documents he says were; Customs Clearance certificate dated 20 January 2006; Outward manifests; Customs Form 36; Application for Clearance and Guarantee to pay duty; Crew List; Passenger List and vessels’ store list.

7. The Customs Clearance certificate issued at the Wewak port was only in respect of Cik Memed, not Wirasperkasa.

8. The appellant claims that due to stress of weather, the vessels did not arrive in Alotau until 30 January 2006. According to the respondent, the vessels had no inward customs clearance and according to Mr Eric Awamaki, Manager, IRC Customs Operations in Alotau, his office was not aware of the presence of the vessels in Alotau port until 2 February 2006.

9. The appellant claims that Mr. Awamaki boarded Cik Memed and obtained from its captain the crew’s passports and the Wewak outward customs clearance documents. This happened following a complaint by local landowners. The passports were returned to Mr Haihavu, but not the outward customs clearance documents. Mr Awamaki sent the original of the outward Customs Clearance certificate for Cik Memed which was issued in Wewak through TNT to Customs Enforcement Division in Port Moresby on 27 February 2006.

10. Whilst anchored at the Alotau port Wirasperkasa accidentally caused a substantial damage to the local jetty. According to the respondent, after sorting out the damage, on or about 04 February 2006, the vessels without obtaining an outward customs clearance left Alotau to Kala Log Pond at Yule Island some 250 kilometres north west of Port Moresby. The vessels also did not have inward customs clearance to dock at Kala Log Pond. Mr Haihavu deposes in paragraph 40 of his first affidavit that Mr John Sam, Customs Manager in Port Moresby authorised customs clearance for the vessels to be docked at Kala Log Pond. On 18 February 2006 the vessels were intercepted by Customs Officers and ordered both vessels to return to Port Moresby.

11. When in Port Moresby, the respondent seized the vessels with all their cargo and advertised them for sale by public tender. The advertisements were placed in the Post Courier on 11 and 15 August 2006. According to the respondent, the seizures were effected by service upon the appellant of four notices of seizure; one notice dated 02 April 2006, which was in respect of sixteen containers onboard Wirasperkasa and three other notices each dated 10 April 2006, were in respect of the vessels and the rest of their cargo.

12. The vessels are currently docked at the Lancron Naval Base here in Port Moresby with all their cargo.

Correspondence between the parties regarding notices of seizure, lodgement of a written claim for goods and security for return of goods.

13. Correspondences were exchanged between the parties following the seizures, including a written claim by the appellant for the goods seized and the demand for the lodgement of security for the return of the seized goods by the respondent.

14. It is noted that with a covering letter from the respondent written by Ms Caroline Korus, Acting Assistant Commissioner, Customs Enforcement Division dated 13 April 2006, the respondent through Ms Korus served the three notices of seizure dated 10 April 2006 on the appellant. The letter and the three notices were served personally by Ms Korus on 13 April 2006 on Mr Gregory Emilio of Emilio Lawyers, who were lawyers acting for the appellant, in the presence of Mr Gabutu Hariki, who was introduced to Ms Korus as the Operations Manager for the appellant. Mr Dominic Voo in his affidavit sworn on 23 August 2006 (supplementary affidavit) on behalf of the Appellant confirms receiving the letter with the three notices.

15. The other notice of seizure dated 02 April 2006 in respect of the sixteen containers onboard Wirasperkasa was served on the appellant on 02 April 2006.

16. In the letter by Ms Korus dated 13April, 2006, the appellant was advised that:-

1. It was required under s.126 (2)(b) of the Customs Act, Chapter 101 (“the Act”) to make a written claim to the Collector for the seized goods within one month from the date of the notice of seizure;

2. It had the right to commence legal proceedings against the Collector for the return of the seized goods within four monthsfrom the date of the notices as required under s.129 of the Act;

3. The goods could be returned to it upon payment of security amounting K14,078,566.27, which was inclusive of the value of the goods seized, duty, GST and costs incurred in investigating and effecting the seizures in accordance with s.127 of the Act; either by a bank cheque or a bank guarantee.

17. By another letter from the respondent again written by Ms...