Erikon Coffee Exporters v Papua New Guinea Coffee Industry Board [1992] PGNC 83; [1992] PNGLR 56; N1045 (5 March 1992)

N1045

PAPUA NEW GUINEA
[NATIONAL COURT OF JUSTICE]

ERIKON COFFEE EXPORTERS

V

PAPUA NEW GUINEA COFFEE INDUSTRY BOARD

Mount Hagen
Woods J

21 February 1992
5 March 1992

JUDICIAL REVIEW - Administrative acts - Discretion in board in granting licences - Power of court to interfere in that discretion - Coffee Industry Act Ch 208 ss 12, 13 and 14.

Facts

This is an application for review of the decision by the PNG Coffee Industry Board not to renew the applicant's coffee exporter registration. The applicant had been registered in 1990 as a coffee exporter under another name. He contended that (1) the Board gave him insufficient time to respond to the allegations which the Board had put to him; (2) it considered irrelevant material, and (3) it took into account improper considerations.

Issues

1. The role of the Court in review of administrative decisions.

2. The powers of the Coffee Industry Board in making determinations on an application for renewal of coffee exporter licenses.

Held

1. The role of the Court here is to review the exercise of discretionary power granted to the Coffee Industry Board, not to undertake a detailed review of the contested facts. So long as the Board exercises its authority within the statutorily granted powers and so long as those powers are not exercised arbitrarily or unreasonably, the Court will uphold the administrative decision. The arbitrary or unreasonable exercise of power includes consideration of irrelevant materials or acting dishonestly or in bad faith. The Board was entitled to raise issues in the application for renewal that were not raised in the original registration application. The Board is vested with broad discretionary powers.

2. The Board had the right under its statutory grant of powers to consider all the material it did. The application was dismissed.

Cases Cited

Papua New Guinea case cited

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

Other cases cited

Associated Provincial Picture Houses Ltd v Wednesbury Corp [1947] EWCA Civ 1; [1947] 2 All ER 680.
R v London Transport Executive [1983] 2 All ER 262.
R v Secretary of State for Trade [1983] 2 All ER 233.

Counsel

K Yalo, for the applicant.
R Barrell, for respondent.

5 March 1992

WOODS J: This is an application for the review of the decision by the Papua New Guinea Coffee Industry Board in September 1991 not to renew the applicant's registration as a coffee exporter.

The grounds of the application are:

(a) that the Board did not give the applicant sufficient or reasonable time to respond to the allegations which the Board had put to the applicant;

(b) that the Board took into account irrelevant considerations;

(c) that the board took into account improper considerations.

In 1990 the applicant, under another name, had been registered as a coffee exporter under s 32 of the Coffee Industry Act Ch 208. Under the section such registration remains in force until 30 September following the date of registration. In August 1991 the applicant applied for renewal of its registration; however, in September such renewal was refused. The grounds of such refusal as stated in the letter of 23 September were:

(1) the investigation of the former Coffee Board revealed that the licence for Erikon was obtained without meeting the guidelines and Mr Kaupa used his position on the Board to advance his own interests above that of the coffee growers.

(2) The conditions on the licence for 1990/91 were not met, in particular the divestment of shares to growers or the separation of office and warehouse from any other exporter.

(3) As the directors take full responsibility of the management and quality control, the Board considers this to be inadequate in view of the findings against Mr Kaupa in the investigation report.

What are the powers of the Board in such an application for renewal.

Whilst there has been a great mass of material filed in the Court by way of affidavit, one must remember that a judicial review is not designed for detailed enquiry into the contested facts - see R v Secretary of State for Trade [1983] 2 All ER 233. So even though there was material which contradicted material from the other side, such as affidavits about the quality of coffee, I refused to enter into the arena of deciding who was right or what was good coffee. My role in judicial review is the review of the exercise of the discretionary power given by the Act of the Parliament. As has been stated so often, such as in R v London Transport Executive [1983] 2 All ER 262, so long as the authority does not transgress those statutory powers their decisions are a matter for them, subject to one proviso, that they must not exercise their powers arbitrarily or so unreasonably that the exercise of the discretion is unjustifiable.

And as has been set down in Associated Provincial Picture Houses v Wednesbury Corp [1947] EWCA Civ 1; [1947] 2 All ER 680, subject to complying with the law, the discretion of a body to whom the discretion is entrusted is absolute. However:

(a) it must be a real exercise of the discretion;

(b) the body must have regard to matters to which it is expressly or by implication referred by the statute conferring the discretion;

(c) it must ignore irrelevant considerations;

(d) it must not operate on the basis of bad faith or dishonestly;

(e) it must direct itself properly in law;

(f) it must act as any reasonable person would act and must not be so absurd in its actions that no reasonable person would act in that way.

Such principles have been stated to apply in our Courts. I note the following principles as enunciated by Kapi Dep. CJ in Kekedo v Burns Philp (PNG) Ltd [1988-89] PNGLR 122 at 124:

"The circumstances under which judicial review may be available are where the 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.

The purpose of judicial review is not to examine the reasoning of the subordinate authority with the view to substituting its own opinion. Judicial review is concerned not with the decision but with the decision-making process."

So what has the Board done?

Under s 14 the Board must exercise its powers and perform its functions in such manner as the Board considers to be in the best interests of the coffee producers of Papua New Guinea. Under s 12 the Board must be concerned with all aspects of coffee production, processing, marketing and exporting. Section 13 refers to the Board's concern for the quality and standard of coffee.

It can, therefore, be seen that the Board has a very responsible role in the production and marketing and quality control and general reputation of what is a major export industry for Papua New Guinea. It must ensure that Papua New Guinea attains and maintains a high reputation on the world scene for the reliable supply of good quality coffee. It is common knowledge that much of our economy relies on this.

So this Court must be careful not to rush into a matter over which the Board is the responsible authority and has been given such wide powers.

The Board had communicated its concern to the applicant over matters raised in a report prepared for the board into the coffee industry. This was referred to a director and shareholder of the applicant in a letter of 12 August 1991. Another letter of 10 September 1991 to the applicant raised the Board's concern about certain matters which were relevant to the registration of the applicant as a coffee exporter. The Board had received various reports or found from its own investigation problems which raised questions in the Board's mind about the operation of the applicant as a coffee exporter. Whilst there is substantial material before me on these matter, it is not my role to examine the truth of all these matters; it is enough for me to see that the Board had received certain information which caused it to be concerned or to ask questions.

The granting of registration is dependent on a number of facts, many of which are noted with the licence or by the guidelines issued at the time of the registration. Now whilst all these matters may not have been raised specifically with the applicant when the question of renewal arose, it was completely within the Board's discretion to refer to and consider those when renewal came up. Under the section renewal is a whole new situation. And quite clearly the Board, whilst also not being satisfied with the answer given about other matters of concern, was also entitled to refer to the failure to comply with the original conditions noted at the time of the first registration. I note here the letter of 28 September 1990 which listed the following:

(1) Shareholding to be divested to broad-based national coffee grower groups or individual growers in the Simbu Province.

(2) Management, office and warehouse facilities to be separate from any other exporter.

It is clear that the Board was entitled to be concerned at the above and all the requirements of s 32 (3) (a) a year later when renewal came up.

The procedure for the granting of registration is not a hearing before a tribunal where material matters are brought before a Board; rather, it is a matter of the Board considering an application in the light of its own guidelines and knowledge of the industry and the compliance with those guidelines and conditions of which the applicant has knowledge.

The Board has wide discretionary powers for the reputation and stability of a vital export industry.

As I have already emphasised, I am not deciding the correctness of all the material put before me. I am satisfied that the Board had the right to consider all the material it did, it had the right to be dissatisfied with the matters answered by the applicant, and it had the right to consider all matters referred to in s 32 and matters noted at the time of the 1990 registration and in its guidelines, when it considered the renewal.

I am satisfied that the Board has acted in the way the Act has permitted and such discretion has not breached those principles I have referred to above from the Wednesbury case. I, therefore, find no grounds to order certiorari to quash the Board's decision or to order that the Board reconsider its decision. I dismiss the application.

________________

Lawyer for the applicant: Young & Williams.
Lawyer for the respondent: Henao Priestley.