SCM NO. 16 OF 2009; Dr. Allan Marat Attorney General of Papua New Guinea and The Independent State of Papua New Guinea v Hanjung Power Limited (2014) SC1357

• Jurisdiction: Papua New Guinea
• Judge: Gavara-Nanu, David & Collier JJ
• Judgment Date: 04 July 2014
• Court: Supreme Court
• Citation: (2014) SC1357
• Year: 2014
• Judgement Number: SC1357

Full Title: SCM NO. 16 OF 2009; Dr. Allan Marat Attorney General of Papua New Guinea and The Independent State of Papua New Guinea v Hanjung Power Limited (2014) SC1357

Supreme Court: Gavara-Nanu, David & Collier JJ

Judgment Delivered: 4 July 2014

SC1357

PAPUA NEW GUINEA

[IN THE SUPREME COURT OF JUSTICE]

SCM NO. 16 OF 2009

BETWEEN:

DR. ALLAN MARAT ATTORNEY GENERAL OF PAPUA NEW GUINEA

First Appellant

AND:

THE INDEPENDENT STATE OF PAPUA NEW GUINEA

Second Appellant

AND:

HANJUNG POWER LIMITED

Respondent

Waigani: Gavara-Nanu, David & Collier JJ

2013: 29 October

2014: 04 July

JUDICIAL REVIEW – Regulation made pursuant to ss. 23 (2) (a) and 193 of the Customs Act, 1951 – Regulation prohibiting absolutely the importation of heavy fuel oil content exceeding the Maximum Prescribed Standards – Respondent a power plant operator using heavy fuel of a certain capacity likely to be adversely affected by the Regulation - Whether the respondent entitled to be heard before the making of the Regulation - Decisions by the National Executive Council and the Governor General to make the Regulation – Whether the decision justiciable - Appellants excluded from being heard at the hearing by the trial judge for failing to comply with pre-trial directions of the Court - Appellants’ right to be heard – Exercise of Court’s discretion - Whether the decisions by the National Executive Council and the Governor General to make the Regulation ultra vires and unreasonable in the Wednesbury sense - Whether the decision reviewable - Whether formulation of new “legitimate expectation” rule in favour of the respondent by the Court valid– Whether the rule could apply retrospectively.

CONSTITUTIONAL LAW – Sections 41 and 59 of the Constitution - Whether the National Court had jurisdiction to interpret ss. 41 and 59 of the Constitution – Power of the Supreme Court to interpret Constitutional provisions - Principles discussed.

FACTS

Section 23 (2) (a) and 193 of the Customs Act, 1951, empowered the Governor General, acting with and in accordance with the advice of the National Executive Council (‘the NEC’) to make a Regulation prohibiting absolutely the importation of heavy fuel oil having a sulphur content in excess of the “Maximum Prescribed Standards”. The fuel is essential for the operation of the respondent’s power plant which is situated at Kanudi just outside of Port Moresby. The plant operates 24 hours per day supplying about a third of Port Moresby’s electricity. The respondent applied for judicial review of the decision by the appellants to make the Regulation. Due to the purported non-compliance by the appellants with certain pre-trial directions of the Court, the trial Judge ordered the appellants not to appear at the hearing without leave of the court. The appellants were consequently not heard at the hearing. In his ruling, the trial Judge struck down the Regulation on the grounds that the NEC failed to accord the respondent natural Justice, failed to give reasons for its decision, and made a Regulation that is unreasonable in the Wednesbury sense and which contravened section 41 of the Constitution. The appellants appealed the decision arguing, inter alia, that the trial Judge erred in law in not according them natural justice and allowing them to be heard at the hearing and make submissions on the issues before the Court. The appellants also argued that the National Court lacked jurisdiction to decide the validity of the Regulation as it was a legislative enactment and that the advice of the NEC to the Governor General, and the decision to make the Regulation, were non-justiciable under the provisions of ss. 84 (6), 149 (5), 153 (2) and Schedule 1.7 of the Constitution. The Court therefore had no power to interfere with the Regulation by inquiring into the advice the NEC gave to the Governor General to make the Regulation resulting in the Regulation being struck down. It is to be noted that it was common ground between the parties that the Regulation was valid and was not inconsistent with the Customs Act, 1951.

HELD:

1. The decision under review by the National Court was the decision of the NEC to advise the Governor-General to make the Regulation under section 23 of the Customs Act, 1951.

2. The Regulation being a subordinate legislation was made pursuant to an exercise of delegated legislative power.

3. (Per Gavara-Nanu J.; David J. agreeing); (Collier J. dissenting): The Regulation was not inconsistent with s. 23 of the Customs Act, 1951 thus was not ultra vires the enabling Act. The trial Court therefore had no power to interfere with the Regulation by reviewing it.

4. (Per Collier J.): As a matter of strict statutory interpretation, the Regulation was not inconsistent with the power in s. 23 of the Customs Act, 1951, to make a regulation to prohibit the importation of goods absolutely. However, the decision by the NEC to make the Regulation was reviewable because the NEC as the decision maker had the duty to consult the respondent and give it an opportunity to be heard on whether the importation of heavy fuel oil should be prohibited. The decision breached the principles of natural justice and was ultra vires.

5. (Per Collier J.): The decision by the NEC to make the Regulation was also unreasonable in the Wednesbury sense as it would directly affect the respondent’s business. The decision was therefore justiciable.

6. (Per Gavara-Nanu J.; David J. agreeing):The decision of the National Executive Council to advice the Governor- General to make the Regulation was made within the delegated legislative powers conferred by the Customs Act, 1951. Thus the decision was validly made and was non-justiciable.

7. (Per Gavara-Nanu J.; David J. agreeing): The Regulation not being inconsistent with s. 23 of the Customs Act, 1951, was a valid law which no court can question. Consequently, issues of ultra vires, natural justice and unreasonableness could not arise. Thus the learned trial judge erred in taking them into account and regarding them as grounds to review the NEC’s decision to review the Regulation.

8. (Per Collier J.): The appellants failed to make attempts to comply with the detailed orders of the National Court, which orders were made to progress litigation in the proceeding. Thus, it was appropriate that the National Court acted to enforce its orders and deal with the appellants who chose to ignore the orders of the Court.

9. (Per Gavara-Nanu J.; David J. agreeing): The learned trial Judge erred in denying the appellants their right to appear and be heard as parties to the proceeding at the hearing, for appellants’ purported failure to comply with Court’s pre-trial directions. The appellants were denied a fair hearing. It would have been a proper exercise of discretion had the learned trial Judge given the appellants an opportunity to explain the reasons for their purported non-compliance with the Court’s directions.

Cases cited:

Papua New Guinea Cases

Aeava v National Executive Council [2001] PGNC 62;N2163

Air Niugini Limited v Doiwa [2000] PNGLR 347

Allan Pinggah v Margaret Elias (2005) N2850

Alois Kingsley Golu v. NEC (2011) N4425

Application by Gabriel Dusava (1998) SC581

Cann v. Cann [1963] PNGLR 256

Chief Collector of Taxes v. T.A Field Pty Ltd [1975] PNGLR 144

Cl Toulik v. Andy Kuek (2006) SC786

Commissioner General of Internal Revenue Commission v. Douglas Properties

Ltd (2002) N2192

Consort Express Lines Limited v Marat (OS 105 of 2009, 27

March 2009)

Curran v State [1994] PNGLR 230

David Coyle and Ors v. Loani Henao [2000] PNGLR 17, SC655

Forest Product Ltd v Ossima Resources Ltd (SCA 6 of 2012, 19

September 2013)

Gaman Holdings Pty Ltd v. Labu Holdings Pty Ltd (2000) N2017

Gabi v Nate [2006] PGNC 178

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

Gerald Sidney Fallsheer v. Iambakey Okuk & The State [1980] PNGLR 101

Gipe v The State [2000] PGSC 10

Hon. Patrick Pruaich v. Chronox Manek (2010) SC1052

Iambakey Okuk and The State v. Gerald Sidney Fallsheer [1980] PNGLR 274;PGSC13

Issac Lupari v. The State (2008) SC930

In re Constitution Section 19 (1) Reference by Allan Marat [2012] PGSC 20

In re Moresby North East Election Petition, Patterson Lowa v. Goasa Damena

[1977] PNGLR 429

Jack Nou v. Richard Chirake (2004) N2539

Jimmy Maladina v. Posain Poioh (2004) N2568

Joseph Kimbu v. Eko Mason [1971] PNGLR 407

Joseph Lemuel Raz v. Paulus Matane [1986] PNGLR 38; N525

Kamit v Aus-PNG Research & Resources Impex Ltd N3112

Kawaso Ltd v. Oil Search PNG Ltd SC1218

Kekedo v Burns Philp (PNG) Ltd [1988-89] PNGLR 122

Kila Wari v. Gabriel Ramoi & Ors [1986] PNGLR 112; SC316

Kipalan v National Parliament [2004] PGSC 42

Kuya Kehi v Kelu Theodore [1978] PNGLR 217

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