Burns Philp (PNG) Ltd v The State [1989] PGNC 24; N769 (3 November 1989)

Unreported National Court Decisions

N769

PAPUA NEW GUINEA

[NATIONAL COURT OF JUSTICE]

O S NO 84 OF 1989
BURNS PHILP (PNG) LTD
APPLICANT
AND
THE INDEPENDENT STATE OF PAPUA NEW GUINEA
FIRST RESPONDENT
KALA SWOKIN, MINISTER FOR LANDS
SECOND RESPONDENT
KARO LAVI, DEPUTY REGISTRAR OF TITLES
THIRD RESPONDENT
AMOS TOUA
FOURTH RESPONDENT
SMAEL MANIKOT (CHAIRMAN) & OTHER MEMBERS OF LAND BOARD N 1732
FIFTH RESPONDENT

Waigani

Bredmeyer J
9 October 1989
3 November 1989

ADMINISTRATIVE LAW - Judicial review - Whether actions of the Head of State acting on advice are justiciable.

Counsel

C Boland and I Kaur, for the applicant.

Z Gelu, for the first, second, third & fifth respondents.

J Shepherd, for the fourth respondent.

Cur adv vult

3 November 1989

BREDMEYER J: This is a dispute who shou should be given a lease of a choice block of land. The land is Lot 17 Section 451 Hohola of 2.073 hectares and is situated on the corner of Waigani Drive and Cameron Road, directly opposite Boroko Motors’ showrooms and workshop, and diagonally opposite the Islander Hotel. The land was first advertised by the Lands Department for tender on 4 September 1986. The reserve price, i.e. the minimum tender price, was K120,000, the annual rent K10,000, and the lessee was required to erect improvements and buildings on the land to a minimum value of one million kina within five years of the date of grant of the lease. It was advertised for tender on 4 September 1986 and the tenders closed on 10th September. Burns Philp and another applied for the lease within that time limit but someone objected to the Minister that the period allowed for the submission of applications was too short and the Minister ordered that the land be re-advertised. It was re-advertised in the National Gazette on 5 March 1987 and a number of persons and companies applied for the land including Burns Philp, Amos Toua and Niglieu No 21 Pty Ltd (hereinafter called “Niglieu”). The latter company submitted to the Land Board three plans prepared by Anthony Dempsey, a Port Moresby architect, which I shall refer to as the Dempsey plans. They consisted of a one-page site plan giving a lay out of a single storey shopping complex consisting of eight shops, a three-storey office building and car parking for a hundred cars. The other two papers consisted of sketches by an artist of the elevations from two sides. These plans had been prepared by Mr Dempsey initially for another company, Gemini Holdings Pty Ltd, a company chaired by Masket Iangalio. That company did not pay for the plans, neither did Niglieu, nor anyone subsequently. It appeared that Mr Dempsey prepared the plans for anyone to use probably in the hope that if that person was the successful tenderer, he would then engage Mr Dempsey to prepare detailed plans.

The applications were considered by Land Board No 1650 held on 6 May 1987 and the Land Board recommended that the lease of the land be given to Burns Philp. Amos Toua, Niglieu and two of the applicants appealed against that decision through the Minister to the Governor-General. In Mr Toua’s letter of appeal he criticised Burns Philp’s proposal to build a single-storey, low-lying complex to the value of four million kina. Hiw own proposal he said was to construct a ten-storey complex at a cost of thirty million kina which he thought was a more realistic use of the site. The National Executive Council decided that all four appeals be upheld and that the Land Board should re-hear the applications. The Governor-General acted on that advice and on 13 October 1988 the Land Board published a notice in the Gazette advising that there would be a re-hearing.

That re-hearing occurred at Land Board meeting No 1732 on 27 Oct 1988 when the Board considered ten applications including applications from Burns Philp and Amos Toua. Mr Toua at that meeting presented to the Land Board the Dempsey plans which had previously been presented to it by Niglieu. The Land Board recommended that Amos Toua should be given the lease. Burns Philp, Niglieu and another, appealed against that recommendation within the prescribed 28 day period. The appeals were forwarded to the Minister and went from him to the National Executive Council. The Minister prepared a business paper for the NEC setting out the background of the dispute and giving his reasons why he favoured the Land Board’s recommendation in favour of Amos Toua. He said:

“There is no serious allegation against Amos Toua. Amos Toua is considered one of the Papua New Guineans who has the ability to negotiate for the required funds for the required project. In fact Amos Toua had a plan to develop the subject land and I learnt that he was the first interested applicant and has spent a lot of time in Lands Department in order to get it advertised. In considering his struggle to get the subject land advertised it is fair that Amos Toua be given the chance to implement his proposal. During the re-hearing of all applications Amos Toua’s proposal was well considered and subsequently the lease was recommended in his favour.”

In commenting on the appeal by Niglieu, the Minister said that this company had been unsuccessful in two Land Board meetings and that its proposal did not impress the Land Board. He also said:

“Dempsey Architects withdrew its plans from Niglieu No 21 Pty Ltd and used the same plan during the re-hearing to support Amos Toua’s application. This is unfair on the part of Niglieu No 21 Pty Ltd.”

The Minister noted in his Cabinet paper that Amos Toua had tendered less than Burns Philp, i.e. K120,000, compared to Burns Philp’s K205,000.

In January or February 1989 Amos Toua said he called on the Chairman of the Land Board and withdrew the plans submitted by him to the Land Board and replaced them with a development proposal prepared for him by a consultant based in the Melbourne suburb of Scoresby. The proposal was for five storeys of shops, eight storeys of offices, a restaurant and conference area and car parking. The proposal said that a loan of K28 million was required.

The three appeals were rejected by the National Executive Council on 12 April 1989 and on 24th April the Governor-General accepted the advice of the NEC and formally rejected the three appeals.

Meanwhile on 15 April 1989, Burns Philp filed an Originating Summons seeking leave to apply for judicial review of the decision of the State and the Minister for Lands to grant a lease to Amos Toua. On 15 May 1989 Burns Philp applied ex-parte and obtained an interlocutory injunction against the State, the Minister and the Deputy Registrar of Titles preventing them from issuing or registering any lease of the said land. The interim injunction was returnable before the Court on 19th May. In the meantime, on 12 May 1989, three days before the interim injunction was granted, a delegate of the Minister signed the lease in favour of Amos Toua, so the effect of the interim injunction was merely to restrain the Deputy Registrar of Titles from registering the lease. On 19 May 1989 the ex-parte interim injunction was dissolved and on 22nd May the lease was registered as State Lease, Volume 119, Folio 211. Mr Shepherd of Kibi Kara’s office represented Mr Toua at the hearing on 19th May, and successfully got the injunction dissolved, but he said neither he nor his office had any part in getting the lease registered so quickly and its registration at that time was unknown to him. On 2 June 1989 the National Court gave leave for the applicant to apply for judicial review.

This matter comes before me by way of notice of motion given on behalf of Amos Toua that the principal relief by the applicant, Burns Philp, should be refused on the ground that the decision of the Head of State to reject the applicant’s appeal under Section 11 of the Land Act in respect of the grant of the lease to Amos Toua, is non-justiciable. To summarise the relevant facts for the purpose of considering this argument, the National Executive Council decided to reject Burns Philp’s appeal on 12 April 1989. The NEC advised the Governor-General of its decision and the Governor-General rejected the three appeals by a signed notice dated 24 April 1989. The lease itself was registered by the Deputy Registrar of Titles on 22 May 1989. On 2 June 1989 the applicant Burns Philp obtained leave to apply for judicial review of the “decision of the State and/or the Minister of Lands in relation to a grant of a State Lease over Lot 17 Section 451 to Amos Toua”.

The principal relief sought by the applicant is not well-defined in the Originating Summons but is set out in detail in the amended statement in support of the application for judicial review filed in accordance with the rules on 5 June 1989. Para 49 of that statement sets out the orders sought. In paras (A) (B) and (C) the applicant seeks declarations that Toua acted improperly in substituting better plans for the original plans which he presented to the Land Board, and that the Land Board acted improperly in allowing him to substitute the new plans. In para (D) the applicant seeks an order in the nature of certiorari quashing the recommendation of the Land Board in favour of Toua “in view of the improprieties alleged” and/or because it acted in “excess of jurisdiction”. Para (E) seeks a declaration that the grant by the Minister of the lease to Toua is null and void. Para (F) seeks an order quashing the decision of the State and the Minister to grant the lease to Toua in view of the improprieties alleged against Toua and the Land Board. In para (G) the applicant seeks an order in that nature of mandamus directing the Minister to forfeit the lease under s 46(1)(c) of the Land Act granted to Toua. Para (H) seeks such other orders as the Court may deem fit. It can be seen from this description of the orders sought that no orders are sought against the Governor-General or against the National Executive Council. I consider therefore that this present motion is misconceived because it asks the Court to refuse the principal relief sought by the applicant on the ground that the decision of the Head of State to reject the appeal is non-justiciable.

That is sufficient to dispose of this application but in case I am wrong on that point and the matter goes on appeal, and because I have heard argument on whether the decision of the Head of State is justiciable or not, I propose to say something about that by way of obiter dicta. The role of the Governor-General in hearing an appeal against a recommendation of the Land Board is governed by ss 11 and 12 of the Land Act. A person aggrieved by a decision of the Land Board may, not later than 28 days after notice is given to him of the Land Board recommendation, forward a notice of appeal to the Minister. The appeal is determined by the Head of State acting on advice. The Head of State may reject the appeal in which case under s 11(4) and s 12(5) his appeal is final, or if he decides to allow the appeal, he may refer the matter back to the Land Board for re-hearing. In any event the Head of State is required to act with, and in accordance with, the advice of the National Executive Council - see s 3(1) of the Interpretation Act (Ch 2). Although the notice of motion claims that the actions of the Head of State are non-justiciable, in view of the fact that the Head of State acts in this matter only on the advice of the National Executive Council I have decided to consider the justiciability, or otherwise, of the decision of the National Executive Council and of the Head of State acting on advice.

There is no general rule of law that the Head of State is immune from control by the Courts apart from the fact that by s 86(4) of the Constitution the question of what advice, if any, was given to the Head of State is made non-justiciable. If, however, the Head of State is given powers by the Constitution or by a statute and he act outside those powers, then Court orders can be made against him. That was decided by the Supreme Court in Kila Wari and Others v Gabriel Ramoi and Sir Kingsford Dibela [1986] PNGLR 112. At p 115 Sir Buri Kidu CJ gives an example. He says that under s 36(1) of the Constitution, no person can be tortured. If a regulation was made under the Corrective Institutions Act (Ch 63) allowing for the torture of prisoners and that regulation was made by the Head of State, then the National Court could rule that regulation unconstitutional. Likewise, the National Executive Council is not inviolable from control by the courts. If the Constitution or a statute gives it limited powers and it acts outside those powers then Court orders will lie against it. In the State v Philip Kapal [1987] PNGLR 417, Kidu CJ and Woods J at 420-421 held that judicial review would lie against the National Executive Council where it had (a) exceeded its powers, (b) abused its powers, or (c) made a decision which no reasonable authority could have made.

That decision is binding on me but, with respect to the learned Judges, I would treat point (c) with some caution. Two English authorities are cited for that proposition. The first is Preston v Inland Revenue Commissioners [1984] UKHL 5; [1985] 2 All ER 327 where at p 337 Lord Templeman said:

“The only remedy which might be available to the taxpayer was the remedy of judicial review. Judicial review is available where a decision-making authority exceeds its powers, commits an error of law, commits a breach of natural justice, reaches a decision which no reasonable tribunal could have reached or abuses its powers.”

Lord Templeman at p 338 quoted twice approval from Lord Diplock in another case (Self-Employed case [1981] UKHL 2; [1981] 2 All ER 93 as follows:

“Judicial review is available only as a remedy for conduct of a public officer or authority which is ultra vires or unlawful, but not for acts done lawfully in the exercise of an administrative discretion which are complained of only as being unfair or unwise ...” (at 102).

“The Inland Revenue Commissioners ‘are accountable to Parliament for what they do as regards efficiency and policy, and of that Parliament is the only judge; they are responsible to a court of justice for the lawfulness of what they do, and of that the Court is the only judge.’“ (at 107).

Lord Templeman gave no further discussion of the phrase “a decision which no reasonable authority could have made” but he did speak of “unfairness” as a basis for judicial review. At p 339, he said that in most cases in which the court has granted judicial review on the grounds of “unfairness” amounting to abuse of power, there has been some proven element of improper motive. He then referred to the leading case of Padfield v Minister of Agriculture Fisheries and Food [1968] UKHL 1; [1968] 1 All ER 694 and other cases.

In R v Chief Constable of the Merseyside Police, ex parte Calveley and others [1986] 1 All ER 257, one of the Judges, May LJ, quoted with approval the passage from Lord Templeman in Preston v IRC at p 337 which I have quoted above. But the court did not find that the decision complained of was one which “no reasonable tribunal could have reached”. The case concerned disciplinary proceedings taken against five policemen. The application for judicial review succeeded on the basis that the Chief Constable had failed to give to the officers notice of the allegations “as soon as practicable” as required by a regulation of the Police (Discipline) Regulations (1977). The case thus turned on the failure of the police to comply with their regulations relating to disciplinary procedures.

May LJ in R v Chief Constable of the Merseyside Police, ex parte Calveley and others (supra), at p 265 also quoted with approval from Lord Hailsham LC in Chief Constable of the North Wales Police v Evans [1982] UKHL 10; [1982] 3 All ER 141 at 144:

“The purpose of judicial review is to ensure that the individual receives fair treatment, and not to ensure that the authority, after according fair treatment, reaches on a matter which is authorised or enjoined by law to decide for itself a conclusion which is correct in the eyes of the court.”

May LJ also quoted from Lord Brightman in the same case at p 154:

“Judicial review is concerned, not with the decision, but with the decision-making process. Unless that restriction on the power of the court is observed, the court will in my view, under the guise of preventing the abuse of power, be itself guilty of usurping power.”

As I have said I am bound by the decision of the majority of the Supreme Court in State v Philip Kapal but the two English cases cited in support of point (c) which I have discussed and from which I have quoted were not concerned with the decisions of Cabinet and do not in my view, support the sweeping statement that the court can review a decision of Cabinet if it considers it is a decision which no reasonable Cabinet could have made.

In this particular case, ss 11 and 12 of the Land Act allow an appeal against a recommendation of the Land Board to be made to the Governor-General who must act on advice in deciding that appeal. The sections do not provide any procedure which the National Executive Council must observe in deciding these appeals. Neither do the sections provide any criteria by which Council must make its decision. There is no statutory provision that the Council must give the appellants an opportunity to be heard before it. In the absence of any expressed statutory provision as to procedure or criteria for decision I would be loathe to imply a requirement that the National Executive Council, or the Governor-General, must observe the rules of natural justice.

At common law the rules of natural justice, particularly the two cardinal rules that no man shall be a judge in his own cause and no man shall be condemned unheard, only apply to officials, tribunals, arbitrators, and others who have a duty to act judicially. See paras 64 and 65 of Vol 1 Halsbury’s Laws of England (4th ed.). At common law the duty to act judicially has been extended to a wide number of people and bodies e.g. clubs, trade unions, voluntary organizations, professional bodies, universities, other bodies exercising disciplinary functions, tribunals etc. The same position applies in Papua New Guinea by virtue of our Constitution. Under s 155(3) of the Constitution the National Court has an inherent power to review any exercise of “judicial authority”. That power to review may be removed or restricted by a constitutional law or a statute, see s 155(3)(e), in which case the National Court’s power of review can only be exercised where there are “over-riding considerations of public policy in the special circumstances of a particular case” (Section 155 (5)). But at the outset the National Court can only review the decision of an official or tribunal, which is exercising judicial authority. By s 59 of the Constitution we have a duty to develop the principles of natural justice but I consider that duty is limited to decision-makers who have a duty to act judicially. I consider that there is nothing in ss 11 and 12 of the Land Act which requires the National Executive Council in considering an appeal against a recommendation of the Land Board to act judicially and I would be loathe to imply those powers into Cabinet. The National Executive Council is the apex of the executive arm of government. Our Constitution establishes a separation of powers between the three arms of government with some links between them, but unless the National Executive Council acts contrary to the provisions of the Constitution or an Organic Law, or a Statute, I think it improper for this Court to imply that it must go about its deliberations in a particular way which is subject to the scrutiny and supervision of this Court.

As stated above during the course of this hearing, evidence was led that the lease granted to Amos Toua was registered on 22 May 1989, eleven days prior to the Court granting leave to the applicant for judicial review. This took both Counsel by surprise and I invited Mr Shepherd to address argument on that. He properly cited to me Mudge v Secretary for Lands and others [1985] PNGLR 387, which is an authority for the proposition that once a lease is registered, it confers an indefeasible title in the absence of fraud. He also argued that fraud is not alleged against his client. Mr Boland, for the applicant, was also taken by surprise when he discovered that the lease had been registered, and says his client wants to allege fraud. I consider that he should be allowed to do this and it is not appropriate that I should rule on a matter which has not been pleaded and which has not been the subject of evidence. I therefore propose to allow the applicant to further amend the statement in support of the application for judicial review, to account for the fact that the lease has been registered and to allege fraud and I direct that that statement be amended within 30 days.

I dismiss the applicant’s application to strike out the principal prayers for relief with costs granted to the applicant.

Lawyer for the applicant: Day and Associates.

Lawyer for the first, second and third respondents: State Solicitor.

Lawyer for the fourth respondents: K Y Kara.