Morgan Ltd v Autonomous Region of Bougainville Liquor Licensing Commission [2014] PGDC 5; DC3006 (17 March 2014)

DC3006

PAPUA NEW GUINEA

IN THE MATTER UNDER SECTION 20 OF THE AUTONOMOUS REGION
OF BOUGAINVILLE LIQUOR CONTROL ACT, 2001

AND

IN THE MATTER OF THE MORGAN LIMITED
APPEALLANT

AND

AUTONOMOUS REGION OF BOUGAINVILLE LIQUOR LICENSING
COMMISSION
RESPONDENT

BEFORE: BRUCE TASIKUL CHAIRMAN (SENIOR PROVINCIAL MAGISTRATE
: STELLA TUNIM (MEMBER)
: PASTOR ALCTHIN PUARIA (MEMBER)

AT: ARAWA, BUKA

DATE: 12,17^TH MARCH, 2014

DECISION

BY THE TRIBUNAL: This is an appeal by the Morgan’s limited a locally owned company who owned a Liquor Dealers License to sell and distributed liquor in bulk throughout the Autonomous Region of Bougainville. The company has two distribution locations, one in Buka and the other in Arawa.

This appeal arises as the result of the decision by the Bougainville Liquor licensing Commission on the 29^th November, 2011 to cancel the Morgan’s Limited Dealers license.

As this is the first of its kind and being our first time to hear such matter (License Review Tribunal) we propose to, first of all, discuss and establish the laws applicable to the relevant issues. Having done this, we should then be able to apply the correct law to the cases at hand and those yet to come in a universal fashion.

PRACTICE AND PROCEDURE ON APPEALS

First, there is a need for a suitable practice and procedure to be followed by the Tribunal. There are no provisions under the Autonomous Region of Bougainville Liquor Control Act, 2001 ("the Act") relating to practice and procedure. Given this vacuum, how does the Tribunal conduct its proceedings? An appeal is usually a proceeding taken to rectify an erroneous decision of an Administrative decision or body by bringing it before a higher authority.
The original decision must have been based on reports and materials available at the first instance. In an appeal, the Appellant is basically requesting a review of the same materials on the basis of which the original decision was made.

To appreciate this matter before us it is important for this tribunal to outline the facts of the matter in its chorological order as follows;

1. On the 14^th October, 2013 the Chief Bougainville Collector of Taxes Mr. Peter Siana wrote to Mr. Nick Matera the owner of The Morgans Limited expressing concern of his company’s failure for non-compliance in paying beer sales tax to the Autonomous Bougainville Government under the Sales Tax Act, 2011 on beer and cigarettes).
   
2. On the 12^th of November, 2013 the Chief Bougainville Collector of Taxes then wrote to the Acting Liquor Licensing Commissioner informing him about The Morgans Limited non-compliance in paying the beer sale taxes. The same letter as we understand to be the referral of The Morgans Limited to the Bougainville Liquor License Commission under section 24 (3) (c) of the Autonomous Region of Bougainville Liquor Control (Amendment) Act, 2013.
   
3. On the 29^th November, 2013 a special Liquor Licensing Commission sitting was held at Arawa in which a decision was made by the commission. The decision make are as follows;

LIQUOR LICENSING COMMISSION, S DECISION ON MORGANS LTD FOR NON PAYMENT OF BEER SALES TAX TO ABG TOTALLING K1, 231,200.00

1. The outstanding tax owed to the ABG shall be paid within two (2) years. Morgans Ltd shall make monthly payments of K51, 300.00 starting from the 20^th day of December, 2013 until Dec2015. Payment shall be made every 20^th day of the month, and if the 20^th falls on the weekend or public holiday it should be the next working day.
   
2. The K51, 300.00 monthly payments are on top of the normal monthly beer sales tax payments that are imposed by the ABG beer tax law.
   

100. Where the Morgans Ltd fails to make payments for two months on the outstanding tax payment, the commission will cancel the Dealer’s License the Morgans is operating under.
     

4. On the 2^nd December, 2013 the decision was forward to the Morgans Ltd in a letter by the Acting Chief Liquor Commissioner Mr. Reuben Tokome.
   
5. On the 20^th January, 2014 after the two months period imposed by the commission lapse the Morgans Ltd still failed to comply with that decision of the 29^th November, 2013, so the commission effectively advice The Morgans Ltd that their license now be cancelled and take effect on the 31^st January,2014.
   
6. On the 31^st January, 2014 the commission temporally lifted the cancellation of The Morgans Ltd Dealers License and extending their license to 14^th February, 2014. This was to allow them to sell of the remaining stock and also due to the Prime Minister’s visit to the Region where there was a restriction on liquor imposed by the commission.
   
7. The Morgans Ltd Liquor Dealers Licence was finally cancelled on the 5^th March, 2014 which now remains cancel.
   

These are basically the facts surrounding the matter which is now the subject of this appeal by this tribunal.

The Law

This tribunal is established under section 20 (1) of the Liquor Control Act, 2001. The jurisdiction of the tribunal is specified under section 21 of the Liquor Control Act, 2001 which empower the tribunal the powers to modify or revoke the decision of the commission.

The purpose of this tribunal is basically to review the decision of the Bougainville Liquor Licensing commission. That is why it is called a Licence Review Tribunal. Its purpose is to analyzed the decision by the Bougainville Liquor Licence Commission and the materials before it and make an informed decision on whether the decision of the Commission was correct in law or whether the appellant was given an opportunity to be heard or the principle of natural justice was accord to the appellant or the commission have made some error in law.

Before we discuss the Commission’s decision let us from the outset ask this question, what was the breach or the legal basis by The Morgans limited that warranted the cancellation of their Liquor Dealer’s Licence under the Bougainville Liquor Control Act,2001?

On the 20^th September, 2011 the Autonomous Bougainville House passed aSales Tax (Beer andCigarettes) Act, 2011. This piece of Legislation was gazette on the 26^th September, 2011. It has been implemented since is gazettal till to date. The implementing authority of this legislation is the office of the Bougainville Chief Collector of Taxes. Sections 3 of the Act clearly specify that the Chief Bougainville Collector of Taxes is responsible for the administration of this Act.

In or sometimes in 2013 the Autonomous Bougainville House amended the Liquor Control Act,2001 by passing a new Liquor Control (Amendment) Act, 2013. A new section was inserted at section 24 (3) by adding paragraph (c) which reads;
(c) the licensee has failed to pay any sales tax or other imposed on sale of beer or other alcoholic beverages as required by law”

A further amendment was made on section 74 (1) of the Liquor Control Act, 2011. Section 74 of the Principal Act is amended in subsection (1) by deleting the words “ this Act have been committed on his Licence premises’’ and substituting the words “” this Act or any other Act have been committed by the licensee whether or not on his licensed premises’’

To answer this question we apply the fact highlighted above to this law discussed. On the 12^th of November,2013 the Chief Bougainville Collector of Taxes Mr. Peter Siana refer The Morgans to the Bougainville Liquor Licensee Commission because The Morgans Ltd failed to pay beer sale tax under s.24 (3)(c ) of the amended Liquor Control (Amendment) Act,2013.

Because The Morgans has breach this provision of the Act, the Bougainville Chief Collector of taxes as the administrator of the Sale Tax (Beer and Cigarettes) Act, 2011 is seeking the Bougainville Liquor Commission to penalized The Morgans Ltd under section 74 (1) of the Liquor Control(Amendment) Act,2013. This is the legal basis by the commission in terminating or cancellation of The Morgans Ltd Dealers Licence after the commission was satisfied that The Morgans Ltd failed to pay the beer sale tax as required by law.

The tribunal during the hearing gave the opportunity to the parties to present before it any evidence in writing or oral in which we accepted for the purpose of this hearing. The tribunal also has before it materials, including correspondences between the Bougainville Taxation Office, the Commission and The Morgans Ltd and minutes of the Commission meeting leading up to the cancellation of The Morgans Ltd Dealers Licence.

The tribunal also had before it documents detailing the amount of outstanding arrears owed by The Morgans Ltd to the Autonomous Bougainville Government and the current amount owed to the ABG. The tribunal takes note of the submission presented to it by The Morgans Ltd.

After consulting the evidences, reports and materials before us we find that;

1. The Morgans still owed to the Autonomous Bougainville Government K1,372,554.00 in beer sale tax in which K198,684.00 is for current beer sale tax and K1,173,870.00 for the outstanding arrears from December,2012 to September,2013.
   
2. We also find that some payments had been made by The Morgans Ltd leaving thebalance still outstanding as detail above.
   

Having madethese findings it is the tribunal duty now to make its ruling; however, as we have mention earlier our role is only review the decision of the Bougainville Liquor Licensing Commission and if we find that the commission has error in law, then this tribunal can modify or revoke the commission’s decision.

The issues now before us is; 1. Whether or not the commission has error in law to cancel The Morgan Liquor Dealers Licence?

Section 3(1) of the Bougainville Liquor Control Act, 2001 established the Bougainville Liquor Licensing Commission. Sub-section (2) provides for the composition of the Commission. The jurisdiction of the commission is stipulated at s.8 which state;

Subject to this Act, theCommission has the jurisdiction to hear and determine all cases arising in or concerning-

1. The grant or refusal of license ,certificate,authorities,or permits, and;
2. The grant or refusal of renewal, transfer, or removal of a license, and;

100. The cancellation or suspension of a license or a certificate and;

4. As required or permitted by this Act, the fixing of hours for trading under or the condition of a license, and;
5. The disqualification of licenses or licensedpremises.

A letter dated 12^th November, 2013 was sent to the Commission by the Chief Bougainville Collector of Taxes Mr. Peter Siana advising the Commission that The Morgan Ltd owed the Autonomous Bougainville Government Taxation office outstanding amount of K1, 231,200.00 for beer sales tax as required under s.24 (3) of the Liquor Control (Amendment) Act, 2013. He asked the Liquor Commission if they can deal with The Morgans Ltd under s. 74 (1) of the Act.

Upon the receipt of this letter the Bougainville Liquor Licensing Commission then held a special sitting at Arawa on the 29^th November, 2013 to deliberate on the Bougainville Tax Office request. Those who were in attendance at that time were;

1. Mr. Reuben Tokome-acting Chief Liquor Commissioner
2. Mr. Michael Piriri- Liquor Commissioner

100. Mrs. Pamela Meura- Liquor Commissioner

4. Mrs. Josephine Herepa- Liquor Commissioner
5. Mr. Luke Taria- Chief Liquor Inspector
6. Ms. Marie Leni- Liquor Inspector
   

Also in attendance were The Morgans Ltd both licensees Michael and Cornelius Poowa, together with the owner Mr. Nick Matera. After deliberating on the matter Mr. Poowa admitted that The Morgans owned ABG outstanding beer sales tax.

A decision was then made for The Morgans to make first part payment of K200, 000.00 by December, 2013. The balance must be paid by installment for a period of one (1) year. The installments paid on top of normal monthly beer sales tax payments that are imposed by the ABG Tax law.

After the decision was handed down by the Commission Mr. Nick Matera argued that the decision was too harsh. The Commission than re-visited their decision and finally made the decision which is now the subject of this appeal.

After much discussion by the Tribunal we all agreed that s. 8 of the Bougainville Liquor Control Act, 2001 is very clear. The commission has the power to cancel and license if any licensed holders violate or breach any terms and condition of the licenses. In this case before us The Morgans Ltd failed to pay beer sales tax to the Autonomous Bougainville Government. S.24 of the Liquor Control (Amendment) Act, 2013 imposed an obligation to all dealers’ license holders to pay tax.

Having consulted the materials before us we are satisfied that The Morgans during the hearing by the Commission admitted that they failed to pay beer sales tax to the Autonomous Bougainville Government. Upon that admission The Morgans were ordered to pay the outstanding tax within two (2) years and a monthly installment payment of K51, 300.00 commencing from the 20^th December, 2013 up until December, 2015.

The question that this tribunal needs to answer is; was the decision by the Bougainville Liquor Commission to cancelled The Morgans dealers Licence and ordered The Morgans Ltd to pay monthly payment for beer sale tax violated the Liquor Control Act, 2001 or any other legislation?

The Bougainville Liquor Licensing Commission is a body established underan Autonomous Bougainville statue, and is subject to the principles of natural justice adopted in Schedule 2.21 of the Autonomous Bougainville Constitution. The principles of natural justice require a fair hearing in which the case for both sides is considered in a fair manner and a decision made and reasons and good reasons for decision given:

The tribunal having consulted the face of the records before it finds that on the 29^th November, 2011 during the hearing by the Commission gave the opportunity to The Morgans to present their cases. Because of their admission for failing to pay beer sale tax a decision was made. After the decision was handed down The Morgans through it owner Mr. Nick Matera rejected the decision as it was too harsh. The Commission than, re-visited its decision and then rescind the first decision and handed down the second decision which is now subject to this appeal.

The Morgans Ltd in their appeal raised the issue that they were not aware of the beer sales tax that the ABG was imposing. They contended that there was not enough awareness make by the Commission regarding this issue. It is our view that this contention is very shallow as this amended legislation was passed by the ABG and ignore of the law is not an excuse.

The tribunal in its view is satisfied that yes that The Morgans Ltd were given the opportunity to present their case before the Liquor Licensing Commission. After considering The Morgans Ltd admissions the Commission then decided to impose a monthly payment of K51, 300.00 in which The Morgans Ltd failed complied, resulted the cancellation of their dealer’s license.

The commission having satisfied itself that The Morgans Ltd failed to honor its decision cancelled their dealer license. The Commission exercises its discretion under s.8 (1) (c) of the Liquor Control Act, 2001. It is our view that the Commission has acted within its powers to cancel The Morgans Ltd dealer license and we find that the Bougainville Liquor Licensing Commission has NOT error in law.

However, the tribunal has an issue with the part of the Commission’s decision to extend The Morgans Ltd to pay their outstanding beer sale tax arrears. We have consulted the Liquor ControlAct, 2001, Liquor Control (Amendment) Act, 2013 and the Sale Tax (Beer and Cigarette) Act, 2011 and we find nothing in theses legislations giving the power to the Bougainville Liquor Licensing Commission to give extension to any dealers licensed holders time to pay tax when it is due.

This power lies directly with the Chief Bougainville Collector of Taxes which is clearly specify under s. 20 of the Sale Tax (Beer and Cigarette) Act,2011. The Commission can’t take the role and responsibility of the office of the Chief Collector of Taxes. The Commissions powers are very clear at s.8 of Liquor Control Act, 2011

It is the tribunal’s view that the Bougainville Licensing Commission over step it powers and took the role and responsibility of the Bougainville Chief Collector of Taxes in giving extension to The Morgans Ltd to pay their outstanding tax arrears. This tribunal finds that the part of the commission’s decision of the 29^th November, 2013 to extend The Morgans Ltd to pay their outstanding arrearsbeer sale tax isultra-vires. The have acted beyond their jurisdiction.

It now gives us the next issue of whether or not this tribunal has the jurisdiction to make decision for the extension of The Morgan Ltd to pay their outstanding tax arrears. We say this because The Morgans in their submission have requested this tribunal to extend payment of their outstanding beer saletax to five (5) years or alternatively have the outstanding beer sale tax to be written off as bad debt.

The tribunal powers are only to modify or revoke the decisions of the Bougainville Liquor Licensing Commission and nothing more. Any extension or permit the payment of sales tax by installment is the responsibility of the Bougainville Chief Collector of Taxes.Those powers are specify under the Sales Tax(Beer and Cigarettes) Act, 2011

It is the tribunal view that the Autonomous Bougainville House should re-visit theses legislation and make amendment giving powers to the tribunal or Bougainville Liquor Licensing Commission additional powers to accommodate the amendment in s.24 and s.74 of Liquor Control (Amendment) Act, 2013

Moreover, the whole Liquor Control Act 2001 needs to be review and amendment to meet the changing circumstance as this piece of legislation was enacted during the Bougainville Interim Provincial Government and it is out dated. Bougainville has moved from the Bougainville Provincial Government to an Autonomous Government.

However, having said that, the tribunal after considering all option available we came up with this decision.

1. The tribunal upheld the Bougainville Liquor Licensing Commission decision to cancel The Morgans Ltd Liquor Dealers Licence. That means that The Morgans Ltd license remain cancel and upon payment of the current beer sale tax of K198, 684.00, then the Commission will have to re-new The Morgans Ltd dealers license.
   
2. The outstanding arrears of beer sales tax of K1, 173,870.00 owed by The Morgans to the Autonomous BougainvilleGovernment would be the responsibility of the Office of the Chief Bougainville Collector of Tax and The Morgan Ltd to come up with a time frame for The Morgans Ltd to pay the outstanding beer sale tax of K1,173,870.00
   
3. Alternatively, the Autonomous Bougainville Government through the Office of the Bougainville Chief Collector of Tax has the liberty to seek re-dress through civil proceeding in the National Court to recover the outstanding beer sales tax that is owed to them by The Morgans Ltd.
   

Dated this 17^th March, 2014

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Chairman (Bruce Tasikul) Member (Stella Tunim) Member (Pastor Alcthin Puaria)