PNG Coffee Industry Board v Panga Coffee Factory Pty Ltd

• Jurisdiction: Papua New Guinea
• Judge: Amet J, Los J, Ellis J
• Judgment Date: 11 September 1990
• Citation: [1990] PNGLR 363
• Court: Supreme Court
• Year: 1990
• Judgement Number: SC393

Supreme Court: Amet J, Los J, Ellis J

Judgment Delivered: 11 September 1990

PAPUA NEW GUINEA

[SUPREME COURT OF JUSTICE]

PAPUA NEW GUINEA COFFEE INDUSTRY BOARD

V

PANGA COFFEE FACTORY PTY LTD

Waigani

Amet Los Ellis JJ

26-27 March 1990

11 September 1990

STATUTES — Statutory powers and duties — Statutory bodies — Power to contract — Power to do all things necessary to performance of functions — Power to issue licences subject to conditions — Discretionary powers — Fetter of discretion — Test for — Incompatibility with due exercise of valid powers — Licence conditions conflicting with contractual provisions.

TRADE AND COMMERCE — Statutory regulation of marketing — Coffee industry — Export licence — Conditions — Whether power to impose fettered by contractual provisions of stockpiling agreements — Coffee Industry Act (Ch No 208), ss 13, 14, 32.

ADMINISTRATION LAW — Statutory bodies — Statutory regulation of marketing — Coffee industry — Export licence — Conditions — Whether power to impose fettered by contractual provisions of stockpiling agreements — Coffee Industry Act (Ch No 208), ss 13, 14, 32.

COSTS — Departing from general rule — Discretion — Contempt proceedings — Conduct of party — Proceedings dismissed for non-compliance with Rules — Payment of costs by each party reasonable.

The Papua New Guinea Coffee Industry Board (the Board) entered into agreements with licensed exporters which encouraged the licensed exporters to stockpile green coffee beans (for advance payment of K$1.50 per kilo by the Board) for the purpose of demonstrating Papua New Guinea's capacity to meet additional demand on the international market and thereby to influence the International Coffee Organisation to enlarge the international quota for Papua New Guinea. The agreements, which obliged the exporter to make appropriate repayments if stockpiles were reduced, contained no other provisions or conditions as to repayment or reduction of stockpiles or other contingencies. The international quota scheme was abandoned in July 1989.

In October 1989, the Board issued an annual certificate of registration to a coffee exporter which, inter alia, required the coffee exporter to reduce its stockpile over the period of registration and to repay moneys not otherwise payable under its agreement with the Board.

The Coffee Industry Act (Ch No 208) conferred the following powers and duties on the Board:

· power to enter into contracts (s 13 (1) (i) );

· power to do all things necessary or convenient in connection with the performance of its functions (s 13 (1) );

· to exercise its powers and perform its functions in the best interests of the coffee producers of Papua New Guinea (s 14);

· power, subject to such conditions and restrictions as it thinks fit, to register a person as a registered coffee exporter (s 32 (1) );

· power to cancel registration for failure to comply with conditions or restrictions endorsed on a certificate of registration (s 32 (4) );

Held

(1) Persons or public bodies entrusted by the legislature with certain powers or duties expressly or impliedly for public purposes, cannot divest themselves of those powers and duties by entering into contracts or taking action incompatible with the due exercise of the powers or the discharge of the duties.

Birkdale District Electricity Supply Co v Southport Corporation [1926] AC 355 at 364, followed.

(2) (Amet J not deciding) A contract entered into by a statutory body pursuant to a valid exercise of power may operate to fetter the exercise of future discretionary powers in relation to the subject matter of the contract where the contract is not incompatible with the powers and duties of the statutory body.

Dowty Boulton Paul Ltd v Wolverhampton Corporation [1971] 1 WLR 204; [1971] 2 All ER 277.

Windsor and Maidenhead Royal Borough Council v Brandrose Investments Ltd [1981] 1 WLR 1083, followed.

(3) (Amet J not deciding) Accordingly, whilst the imposition of conditions and restrictions on the certificate of registration of a coffee exporter was a discretionary power conferred on the Board by s 32 (1) of the Coffee Industry Act, the Board had fettered its discretion to exercise those powers by entering into the agreement with the coffee exporter as to stockpiling which was not incompatible with the Board's powers under s 13 and s 14 of the Act.

Held Further

(4) (Amet J dissenting). Having regard to the conduct of the parties and the failure of the prosecutor to comply with the rules as to service, an order that each party to proceedings for contempt of court in failing to comply with an order of the court should pay its own costs, was fair and reasonable.

Bishop v Bishop Bros Engineering Pty Ltd [1988-89] PNGLR 533 and Knight v Clifton [1971] Ch 700, considered.

Cases Cited

Ansett Transport Industries (Operations) Pty Ltd v Commonwealth (1977) 139 CLR 54.

Ayr Harbour Trustees v Oswald (1883) 8 App Cas 623.

B (JA) (An infant), Re [1965] Ch D 1112.

Bailey v Conole (1931) 34 WALR 18.

Birkdale District Electricity Supply Co v Southport Corporation [1926] AC 355.

Bishop v Bishop Bros Engineering Pty Ltd [1988-89] PNGLR 533.

Brownells Ltd v Ironmongers' Wages Board (1950) 81 CLR 108.

Calverly v Chief Constable of the Merseyside Police [1986] 1 All ER 257.

Congreve v Home Office [1976] QB 629.

Crown Lands, Commissioners of v Page [1960] 2 KB 274.

Dowty Boulton Paul Ltd v Wolverhampton Corporation [1971] 1 WLR 204; [1971] 2 All ER 277.

Doyle v Commonwealth (1985) 156 CLR 510.

Gegeyo v Minister for Lands and Physical Planning [1987] PNGLR 331.

Knight v Clifton [1971] Ch 700.

Lend Lease Development Pty Ltd v Zemlicka (1985) 3 NSWLR 207.

Lewis v PNG [1980] PNGLR 219.

NTN Pty Ltd & NBN Ltd v The State [1986] PNGLR 167.

O'Reilly v Mackman [1983] 2 AC 237; [1982] 3 All ER 1124.

Preston v Inland Revenue Commissioners [1985] AC 835; 2 All ER 327.

R v The Australian Broadcasting Tribunal; Ex parte 2HD Pty Ltd (1979) 144 CLR 45.

R v Birmingham Licensing Planning Committee; Ex parte Kennedy [1972] 2 QB 140.

R v Bowman [1898] 1 QB 663.

R v Inner London Education Authority; Ex parte Westminister Council [1986] 1 WLR 28; [1986] 1 All ER 19.

R v Lovelady; Ex parte Attorney-General [1982] WAR 65.

Rimbink Pato v Umbu Pupu [1986] PNGLR 310.

Samrein Pty Ltd v Metropolitan Water Sewerage & Drainage Board (1982) 56 ALJR 678.

Skouvakis v Skouvakis [1976] 2 NSWLR 29.

Spindler v Balog (1959) 76 WN (NSW) 391.

Sydney, Municipal Council of v Campbell [1925] AC 338.

Taylor v Whelan [1962] VLR 306.

Victoria v Commonwealth (1975) 134 CLR 338.

Water Resources, Commissioner of v Federated Engine Drivers' and Firemen's Association of Australasia Queensland Branch [1988] 2 Qd 385.

William Cory & Son Ltd v London Corporation [1951] 2 KB 476.

Windsor and Maidenhead Royal Borough Council v Brandrose Investments Ltd [1981] 1 WLR 1083.

Appeals

This was an appeal from a decision of the National Court declaring that conditions imposed on the grant of a certificate of registration for an export licence under the Coffee Industry Act (Ch No 208) were not validly imposed.

Counsel

R O'Regan QC and J Maladina, for the appellant.

I Molloy, for the respondent.

Cur adv vult

11 September 1990

AMET J: The appellant, Papua New Guinea Coffee Industry Board (the Board), is a statutory corporation established under s 3 of the Coffee Industry Act (Ch No 208) (the Act). One of its major functions stipulated under s 12 is "to provide for the control and regulation of the production, processing, marketing and export of coffee, and for related purposes".

The respondent, Panga Coffee Factory, Pty Ltd (Panga), is a national company with its offices at Kagamuga in the Western Highlands Province. It is a coffee exporter. To so conduct business as a coffee exporter it needed to be registered by the Board pursuant to its powers under s 32 of the Act. Panga was registered for 1989.

Sometime in March 1988, the Board promulgated a policy whereby it would pay K1.50 per kilogram to coffee exporters to encourage them to stockpile coffee in their warehouses for the purposes of maximising stockpiled coffee by 30 March 1989. A formula was devised by which, upon a reduction of the additional stock, the exporter would pay to the Board an amount equal to the value of the stock reduced. The purpose of this stockpiling exercise was to demonstrate to the International Coffee Organisation, Papua New Guinea's capacity to produce and to make representation to the International Coffee Organisation not to reduce Papua New Guinea's membership quota but to increase it on the international market. The registered exporters, including Panga, were advised by the Board that, on 30 March 1989, a representative of the International Coffee Organisation would make an inspection and audit in Papua New Guinea of all coffee stocks. The International Coffee Organisation inspection was conducted and as a result of the auited amount of coffee stocks on hand and the...