(2) &nbssp; &nbssp; &nbp; Inan>In the case oa an application for an order of certiorari to remove any judgment, order, conviction or other proceeding for the
pe of ing ie relevant period for the purpose of paragparagraph (1) is three months after the dahe date ofte of the proceeding.”
Although Counsel for the Respondent relied on the House of Lords decision of Caswell -v- Dairy Produce Quota Tribunal foland and Wales (199 [1990] UKHL 5; (1990) 2 AC 738 on the issue of delay, I note that the Fiji Court of Appeal in Harikisun Ltd. -v- Dip Singh & Others Civil Appeal No. ABU0019 of 1995S said that the English authorities did not assist greatly in determining the meaning of the Fiji
Order 53 Rule 4 provision, because much of the English authorities dealt with reconciling two separate tests relating to delay contained
in the English Order 53 r 3 and 4 and section 31(b) of the Supreme Court Act 1981.
p class=MsoNormal stal style="margin-top: 1; margin-bottom: 1"> In Harikisun Ltd. (supra) the Court of Appeal said that at the sutive application, the Court can consider whether the grantiranting of the relief
sought would be likely to cause substantial hardship to any person, or would substantially prejudice the rights of any person, or
would be detrimental to good administration. Undue delay was said to mean excessive, extreme, unjustifiable or going beyond what
is appropriate.
In this case the application was filed within the three month time limit laid down for certiorari applicatiovertheless, the court
has ahas a discretion to consider delay even within this time limit.
There is no doubt that the application could have been made as soon as the Regulations were gazetted. The Applicants nued to issue
compulsory thry third party policies (under protest) using the new rates.
How would the granting of relief cause substantial hardship? How would it substantially prejudice any person or persons?d it be detrimental
to good good administration?
I note, as I did at leave stage, that after the Regulations were gazetted, the Applicants and the Respondent exchanged letters and
attended meetings. They tried to effect a compromise. The Applicants threatened to terminate offering cover for third party insurance.
Both parties threatened legal action. The Applicants agreed to abide by the Regulations, but reserved their right to take legal action.
In the circumstances, the delay in filing the application was not, in my view, undue.
Nor does the delay cause substantial hardship or prejudice to any person. This is partly because the Applicants have agreed to issue
pos under the new rates, and and to honour these policies even if the Regulations are declared to be invalid.
Further I am satisfied that any uncertainty caused to the administration of the Regulations by thisication, is to a great extent cured,
if the policies issuedssued under them are honoured by the insurance companies. Rates of premiums have been regularly reviewed in
the past, and I see no hardship or prejudice to the public if a further change were to be made if this application succeeds.
For these reasons I consider that the delay ling this application is not undue, nor does it cause hardship, prejudice nor is it likely
kely to be detrimental to good administration.
The Legislation
The Motor Vehicles (Third Party Insurance) Act Cap. 177, is described as an “Act to make provision for compulsory insuragainst Third Party risks arks arising out of the use of
Motor Vehicles.”
Section 29(1) of the Act provides:
p claoNormal style="yle="mae="margin-left: 36.0pt; margin-right: 72.0pt; margin-top: 1; margin-bottom: 1"> “The Mer may make Regulations for prescribing anything which may be prescribed under the provisiovisions of this Act and generally
for the purpose of carrying out the provisions of this Act and, in particular but without prejudice to the generality of the foregoing
provisions, may make regulations -
....(f) prescribing after consultation with the South Seas Island Fire and Tariff Association, the amount of premiums to be paid in
respect of policies of insurance covering such liabilities as are required to be covered by the provisions of this Act.”
This piece of legislation owes its origins to the Third Party (Rights Against Insurert 1930, which was discussed at length by Greer
L.J. in <Monk -v- Wareby ALL ER 374. At page 375-376, the Court of Appeal discussed the policy behind the legislation as follows:
“It had become apparent that people who were injured by the negligence of drivers of motor cars on the roads were in a parlous situation
if they happened to be injured by somebody who was unable to pay damages for the injuries which they had suffered, and accordingly
two Acts were passed.
One was for the purpose of enabling persons who were so injured to recover, in the cf the bankruptcy of the inse insured person, the
money which would be payable to him by the Insurance Company. That is the Third Party (Rights Against Insurers) Act 1930 .... Provision
.... was made in the Road Traffic Act 1930 for the protection of third persons against the risks arising out of the negligent driving
of a motor vehicle by an uninsured person to whom an insured owner had lent his car .... The Act provides that every person who owns
a car in respect of third party risks, and shall provide himself with a certificate of insurance containing particulars of the terms
of the insurance.”
It appears that the Minister never formerly issued Regulations to set premium rates. The Insurance Act 1976 allohe Commissioner of
Insurancurance to determine rates of insurance in respect of any class of insurance (including third party insurance) with the prior
approval of the Minister. This was the practice from 1976 to 1997. The evidence on the affidavits confirms that premium rates were
set by the Commissioner after discussions with the insurance companies.
In 1998 the Insurance Act 1976 was repealed by Act No. 36 of 1998. That Act deals with the regulation of insu business defined as
“the bthe business of undertaking liability by way of insurance, including re-insurance, in respect of a life, or any loss or damage,
including liability to pay damages or compensation, contingent upon the happening of a specified event.”
Section 3(2) of the 1998 Act provides:
“The functions assigned to the Reserve Bank by this Act include -
...(f) the determination, with the approval of thester, of the rates of insurance with respect to any class oass or classes of business
....”
A class of insurance business is defined as “a specific type of insurance business such as, but not limited to, insurance business,
motor itor insurance business or term life insurance business.”
It appears at first glance therefore, that prior to 1998 both the Commissioner of Insurance and the Minister of Transport ha power
to set premiums for for third party motor vehicle risks, and that since 1998, the Reserve Bank and the Minister have such powers.
Cap. 177 gives to the Minister a discretion to pass Regulations. The 1998 Act states that the Reserve Bank “must perform all the functions assigned to it by or under this Act” (my underlining). Both the Commissioner of Insurance (prior to 1998)
and the Reserve Bank were and are required to obtain the approval of the Minister before setting premium rates.
I do not consider that these powers given to the Minister under Cap. and the Reserve Bank in the 1998 Act, are so inconsistent that
the provisions of Section 29on 29(1)(f) were impliedly repealed by the subsequent legislation.
As Fullagar J said in Butler -v- Attorney-Ge for the State of Victoria (1961) 106 CLR, there is a strong presumption that the lthe legislature does not intend to contradict itself but in fact intends
both Acts to operate within the given sphere.
As a general principle, a later statute which is general in its terms, is presumed not to repeal an earlier statute dealing wispecific
topic. In GoGoodwin -v- Phillips [1908] HCA 55; (1908) 7 CLR 1 at p.14, O’Connor J said:-
“Where there is a general provision which, if applied in its ety, would neutralize a spea special provision dealing with the same
subject matter, the special provision must be read as a proviso to the general provision and the general provision, in so far as
it is inconsistent with the special provision, must be deemed not to apply.”
Applying this principle (referred to as the maxim “geia specialibus non derogant”) to this case, I find that section 29(1)(f) of the Motor Vtor Vehicle (Third Party Insurance) Act Cap. 177 was not repealed by the Insurance Act 1976 or by the Insurance Act 1998, and that section 3(2)(f) of the 1998 Act must be deemed not to apply to the setting of premium rates in the case of motor vehicle
third party insurance.
The Minister therefore had powers to make Regulations under section 29(1)(f) of the Act Cap. 177, t premium rates.
Consultation
Is there a statutory duty to consult the Insurance Council of Fiji? The duty to consult the South Sea Islands Fnd Tariff Association
was cwas clearly mandatory. However that Association had ceased to exist, and the insurance companies had since formed the Insurance
Underwriters’ Association and then the Insurance Council of Fiji.
ass=MsoNormal stal style="margin-top: 1; margin-bottom: 1"> Clearly the intention of the legislature was to ensure consultation with the bodies most affected by the regulationremium rates. The
literal mral meaning of section 29(1)(f) leads to an absurdity because it would suggest that consultation is only necessary if an
organisation called the South Seas Island Fire and Tariff Association exists. Such a meaning would run counter to the spirit of section
29(1)(f). Clearly the section is intended to prevent the Minister from regulating premium rates without allowing a representative
of the insurance companies offering third party motor insurance to make representations. If the duty to consult only existed as long
as the now defunct South Seas Island Fire and Tariff Association existed, this intention of the legislature would be frustrated.
In his affidavit, at paragraph 36, Geoffrey son states that the Insurance Council of Fiji, was formerly known as the Insurance Underwrierwriters’
Association, and replaced the South Seas Fire & Tariff Association. That Association represented the insurance industry in Fiji
and regulated premiums for various classes of insurance. He further said - “Following the introduction of the Insurance Act in 1976 the then Insurance Commissioner directed the industry to form three organisations to represent the various parties’ interests.
These were the Insurance Underwriters’ Association of Fiji, representing all licensed non-life insurance companies, the Life Insurers
Association of Fiji representing all licensed life insurers and the Licenced Insurance Brokers Association of Fiji representing all
licensed brokers. These bodies were formed and the Insurance Underwriters’ Association of Fiji replaced the role of the South Seas
Fire and Tariff Association in representing the non-life insurers of Fiji. In 1999 the Insurance Underwriters’ Association changed
its name to the Insurance Council of Fiji following an expansion of its membership to include all licensed life insurance companies.”
The change of name was registered with the Registrar of Industrial Associatiot appears that no certificate of change of name from
the Sohe South Seas Fire & Tariff Association to Insurance Underwriters’ Association was ever issued. Nevertheless, it is not
suggested by the Respondent that any other representative group offering third party insurance underwriting, exists, other than the
Insurance Council. Indeed the evidence is that the Respondent and her representatives liaised with the Insurance Underwriters’ Association
and then with the Insurance Council, on many occasions, on the basis that it represented all interested insurance companies. This
is not disputed by the Respondent.
In the circumstances despite the non-registration of a change in name, it is clear that there was a sory duty to consult with a representative
body of the insurinsurance underwriters, before the Regulations were made law. I find on the facts that the Insurance Council was
the only such body, and that the Respondent was aware that such a body existed. On the facts, there was a mandatory statutory duty
to consult the Insurance Council of Fiji.
Further, even in the absence of section 29(1)(f), I find that there was a common law duty to consult with the insuranceanies, either
severally or y or jointly. Not only does the evidence show that the Road Transport Department called meetings and exchanged letters
with representatives of the Council and of the companies on matter concerning Third Party Motor Insurance (thus creating a legitimate
expectation of consultation), but I also find that the principles of procedural propriety demanded fairness and transparency in adopting
changes to premium rates.
In the case of Smithkline Beecham (NZ) Ltd. -v- Minister of Health (1992) NZ Admin Reports 357, cited to me by counsel for the Applicants, the court held that where the parties involved in the pharmaceutical
business had proceeded on an understanding of a policy of subsidy on drug prices, a sudden change in policy gave rise to a legitimate
expectation on the part of the applicant to be consulted before the change was implemented, and cast a duty on the Minister responsible
for the change to afford a reasonable opportunity of consultation.
In this case the insurance companies had been consultethe Commissioner of Insurance before any changes were made to premium rates.
From 1997, the, the Applicants were free to set their own rates. A sudden change in policy, and in premium rates by regulations,
demanded, in the interests of fairness, an opportunity to make full and frank submissions in respect of the change in policy.
The Respondent says that the Applicants were consulted. The evidence however shows that the Applicants discovered the proposed chang
reading the Fiji Times. Ths. The Applicants say that they requested a meeting but were told that there was no duty to consult. They
were not given a copy of the Regulations until the 4th of February, after the intervention of the Attorney-General. The basis for the calculation of the new rates was not disclosed, until
the 4th of February. The Applicants say there was insufficient time to properly respond or to provide detailed statistics.
In Reg -v- Social Services Secretary Ex parte A.M.A. (1986) 1 WLR 1, there was a statutory duty on the Secretarytate to consult organisatiosations representing relevant housing authorities before he
made regulations under the Social Security and Housing Benefits Act. He requested submissions from the Association of Metropolitan
Authorities but gave it only 8 days to reply. The Association was given no draft of the proposed amendments and no information of
the material changes involved. On an application to quash the regulations, it was held (per Webster J of the Queens Bench Division)
that the Secretary of State had failed to consult the Association. At page 4 Webster J said:
ass=MsoNormal stal style="margin-left: 36.0pt; margin-right: 72.0pt; margin-top: 1; margin-bottom: 1"> “There is no general principle to be extracted from the case law as to what kind or amount of consultation is required before delegated
legislation of which consultation is a precondition, can validly be made. But in any context the essence is the communication of
a genuine invitation to give advice and a genuine receipt of that advice. In my view it must go without saying that to achieve consultation
sufficient information must be supplied by the consulting to the consulted party to enable it to do that, and sufficient time must
be available for such advice to be considered by the consulting party.”
In Wellington International Airport Ltd. -v- Air New Zealand (1993)LR 671, the New Zealand Court of Appeal emphasized the need need for the consulting party to keep an open mind in considering
the representations made by the consulted.
I find on the facts of this case, that the “consultation” process failed to satisfy these principles. Firstly there was no genuine
invitation to give advice until the 4th of February 1999, seven days before the Regulations were gazetted. The Applicants were given only three days to respond. They had
already been told by Mr Meo, that the Regulations had already been approved by Cabinet and could not be changed. The argument about
whether or not there was a duty to consult did not assist to create an atmosphere of genuine consultation.
Nor was the failure to provide a copy of the proposed Regulations to the applicauntil the 11th hour, or the refusal to explain tain the formula for the new rates conducive to the provision and receipt of helpful advice.
On the facts of this case, it is clear that there was a b of a duty to consult.
Substantive Ultra Vires
The basis for the new rates was explained in Mr Meo’s letter of 4th February 1999. id that the premiums in the Regulations had been calculatedlated by taking the yearly average of each premium rate
charged by the companies for the different classes of vehicles. In his affidavit he says rather more. At paragraph 30, he says that
the rates were arrived at after balancing the public interest against commercial reality.
In deciding what are relevant considerations in the passing of delegated legislation, it is necessary to consider the purpose o parent
Act. In this case tase the purpose of the Act is to ensure that innocent third parties who are victims of motor vehicle accidents,
are compensated. By providing for a compulsory insurance system, the insurance companies rates for premiums had to be regulated to
prevent exorbitant prices demanded of motorists who had little choice but to pay the prices set.
In the circumstances the Minister was entitled to consider the public interest in keeping premiums at an affordable level. However,
in doing so, she could nuld not insist that the insurance companies operate at a loss, nor could she ask them to subsidise the losses
of the third party insurance business by the profits made in other insurance business. Finally, the cost of providing insurance cover
in the third party insurance business, was clearly a relevant consideration.
To that extent the suggestion that the Respondent could consider the profits made inr types of insurance business, and did consider
those profiprofits when gazetting the Regulations (Paragraph 5 of Kolinio Meo’s affidavit) indicates the taking into account of an
irrelevant consideration.
Counsel for the Respondent suggested that the Respondent need not consider allowing the Applicants a 15% profit margin in regulatinmiums.
However, the considensideration of a profit margin is a relevant consideration (as Mr Meo conceded when he referred to “commercial
reality”). What weight is to be put on the size of a profit margin, the cost to the motoring public, the cost to the insurance companies,
the size of court awards in recent years and the need to ensure that insurance companies are prepared to continue to offer third
party insurance underwriting, is ultimately a matter for the Minister. They are all relevant considerations, consistent with the
purposes and policies behind the Motor Vehicle (Third Party Insurance) Act.
On the facts of this case, I am satisfied that the Minister took into account irrelevant considerations when st the premium rates
in the the Motor Vehicle (Third Party Insurance) Regulations 2000. Further, I am satisfied that she failed to consider a relevant
consideration, that is the cost of underwriting third party motor vehicle insurance, when she calculated the proposed rates, on the
yearly average premium rates.
Unreasonableness
Although there is considerable overlap between unreasonableness, and theng into account of irrelevant considerations, the Applicants
submit that the Minister’s decs decision was so unreasonable that no reasonable authority could have reached it. The Respondent does
not deny that the Applicants had generated an underwriting loss in the third party insurance business ($449,500.00 in 1992). The
Respondent says that the Applicants were making profits elsewhere.
However, the profits made on general insurance could not have been the conof the Road Transport Ministry. Furthermore the formula
usea used to calculate premiums in the new Regulations, completely disregarded the losses sustained in the third party insurance
business.
Finally the refusal to dismiss the Regulations with the Applicants until the intervention of the Attorney-General, the information
given to them by Mr Meo, that the matter was beyond salvation because the Regulations had been approved by Cabinet, and the 11th hour attempt at consultation are certainly to be deprecated. However I do not consider that the Respondent’s conduct was so unreasonable
or outrageous that no sensible person could have behaved in that way. Indeed it appears that the Respondent genuinely believed that
she had no statutory duty to consult the Applicants at all, and that the public interest in reducing the prices of premiums outweighed
all considerations.
This ground of the application therefore fails.
Cancellation of Policies
Section 3(3) of the Moto Vehicle (Third Party Insurance) Act Cap. 177 provides that:
“A certificate under the provisions of subsection (2) may beked by notice to such effeceffect under the seal of the company delivered
to the Minister and the company shall thereupon cease to be an approved insurance company and the declaration of approval shall be
cancelled by order of the Minister.”
Regulation 10(1) and (2) of the Regulations 2000 purport to allow the Minister to cancel tproval given to an insurance company to
issue third party irty insurance cover, if the company is convicted of an offence under Regulation 6 (the keeping of records of certificates
of insurance) or 7 (the duty to report to the Commissioner of Police when a policy ceases to be effective).
p class=MsoNormal stal style="margin-top: 1; margin-bottom: 1"> Regulation 10(2) gives the Minister power to caapproved upon receiving a complaint against an approved insurance company if the Minister
iter is satisfied that the Act or Regulations have been contravened.
These Regulations were purportedly made under sec29(1)(f) of the Act, which deals only with “the amount of premiums to be paid.”
<
Section 29(1)(c) gives the Minister powers to make regulations providing for the cancellation of certificates of insurance,section
29(1)(h) allows hims him/her to make regulations prescribing penalties. Penalties are limited to fines not exceeding $400 or imprisonment
not exceeding 2 years.
To the extent therefore that the Minister purports to use section 29(1)(f) to impose penalties, the Regulations are ultra vires. Further
the penalties imposed (cancellation of licenses) by Regulation 10, are ultra vires the Minister who cannot impose any other penalty
then that prescribed. Section 29 does not allow the Minister to regulate the issue, approval or cancellation of licenses. That is
already provided for in section 3 of the Act.
I find therefore that Regulation 10 of the Amendment Reguls 2000 is ultra vires the Minister.
Certiorari, Declaration and Ultra Vires
For the reasons I have given in this judgment, I find that the Reent was in breach of statutory and common law duty to consult the
Applicants before passingssing the Regulations, and that she considered irrelevant matters, and failed to consider relevant matters
in the setting of premium rates.
The Court has a discretion whether to make a declaration accordingly without quashing the Regulations (asdone in Reg -v- SociaSocial Services Secretary Ex parte A.M.A. (Supra)), or to declare the Regulations null and void and to quash them.
In the Social Service Secretary ex parte A.M.A
However, in this case, the Applicants object to the procedure and form in respect of the Regulations. The premiums set by the Regulations
and paid by motorists are part of a contract between motorists and the insurance companies which will be honoured. With a proper
consultation process, Government now has time to pass new amended Regulations which set new premium rates for the year 2001. Although
it is possible that rates may differ between this year and next year, this is not a novel situation. I do not consider that an order
quashing the Regulations on the ground that they are ultra vires the powers of the Respondent, will be grossly detrimental to public
administration.
Conclusion
On the grounds of ultra vires, the Motor Vehicle (Third Party Insurance) (Amendment) Regulations 2000quashed. The Respondent must
must pay the Applicant costs of this application which I set at $500.
Nazhat Shameem
JUDGE
At Suva
13th October 200an>
HBJ0024X.00S
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