Central Provincial Government v National Capital District Commission [2013] PGNC 91; N5262 (18 July 2013)

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JUDICIAL REVIEW – whether National Capital District Commission or Internal Revenue Commission failed to comply with duty to provide financial assistance to Central Provincial Government – National Capital District Commission Act 2001, Section 33.

STATUTES – interpretation – whether a statutory provision that refers to another law continues to apply in the same way when the other law is repealed – implied repeal – determination of legislative intention.

The Central Provincial Government applied for judicial review of the alleged failure of the National Capital District Commission (NCDC) and the Internal Revenue Commission (IRC) to comply with their duties to provide financial assistance to it under Section 33 of the National Capital District Commission Act 2001, which relevantly provides:

(1) Subject to Subsection (2), the [National Capital District] Commission shall provide financial assistance to the Central Provincial Government ...

(2) The Internal Revenue Commission shall pay to ... (a) the Central Provincial Government, a minimum of 10% of the Goods and Services Tax ... due to the [National Capital District] Commission in a fiscal year in accordance with the Goods and Services Tax Revenue Distribution Act 2003.

Central Provincial Government argued that Section 33 obliges the NCDC and the IRC to each pay to it the sum of 10% of the Goods and Services Tax (GST) due to the NCDC in each fiscal year since 2004; and that the NCDC has been paying to it only 5% of the sum due to the NCDC and the IRC has been paying it nothing. It sought declarations that both the NCDC and the IRC have failed and are continuing to fail to comply with their statutory duties, orders in the nature of mandamus that would compel each of them to perform their duties according to law, orders for back-payments to 2004 and damages.

Arthur Agevu v The Government [1977] PNGLR 99
Blackpool Corporation v Starr Estate Company Limited [1922] 1 AC 27
Busin v Havini (Re Tichi) (1957) No 102
Chief Collector of Taxes v Bougainville Copper Ltd (2007) SC853
Cooper Brookes (Wollongong) Pty Ltd v Federal Commissioner of Taxation (1981) 147 CLR 297
Dale Christopher Smith v Minister for Lands (2009) SC973
Dr Foster's case [1572] EngR 111; (1614) 77 ER 1222
Gulf Provincial Government v Minister for Provincial Affairs [1991] PNGLR 389
Inakambi Singorom v John Kalaut [1985] PNGLR 238
Internal Revenue Commission v Dr Pirouz Hamidian-Rad (2002) SC692
Joseph Kembu v Eko Mason [1971-72] PNGLR 407
Kampangio v R [1969-70] PNGLR 218
Lohia Doriga v Daera Guba (Re Era Taora Land) (1969) No 548
Mickey Wassey v The Police (2005) N2922
Mision Asiki v Manasupe Zurenuoc (2005) SC797
Motu Koita Assembly v NCDC (2011) N4429
Norah Mairi v Alkan Tololo (No 2) [1976] PNGLR 125
Parker v Virobo Re Urara Makana [1971-72] PNGLR 162
PLAR No 1 of 1980 [1980] PNGLR 326
png Ready Mixed Concrete Pty Ltd v The State [1981] PNGLR 396
R v Mitchell, Ex parte Wafing [1973] PNGLR 461
Rakatani Peter v South Pacific Brewery Ltd [1976] PNGLR 537
Sanage Kuri v MVIL (2004) N2759
SC Ref No 1 of 2000; Special Reference by Morobe Provincial Government (2002) SC693
SC Ref No 3 of 2011; Special Reference by East Sepik Provincial Executive (2011) SC1154
SCR No 5 of 1987; Re Central Banking (Foreign Exchange and Gold) Regulations [1987] PNGLR 433
SCR No 7 of 1992; Re Forestry Act 1991 and the East New Britain Forestry Operations Control Act 1992 [1992] PNGLR 514
The State v Danny Sunu [1983] PNGLR 396
The State v Kiap Bonga [1988-89] PNGLR 360
The State v Natpalau Tulong [1995] PNGLR 329
Vitus Sukuramu v NBPOL (2007) N3124

ADR – Alternative Dispute Resolution
GST – Goods and Services Tax
IRC – Internal Revenue Commission
J – Justice
N – National Court judgment
NCD – National Capital District
NCDC – National Capital District Commission
NCDC Act – National Capital District Commission Act 2001
PNGLR – Papua New Guinea Law Reports
SC – Supreme Court judgment
SC Ref – Supreme Court Reference
JUDICIAL REVIEW

This was a review of the alleged failure of the NCDC and the IRC to comply with their statutory duties to provide financial assistance to Central Provincial Government.

E Hampalekie, for the plaintiff
D Wood, for the first defendant
L N Nablu & S Sinen, for the second defendant

1. CANNINGS J: The Central Provincial Government applies for judicial review of the alleged failure of the National Capital District Commission and the Internal Revenue Commission to comply with their duties to provide financial assistance to it under the National Capital District Commission Act 2001. Section 33 (financial assistance to Central Provincial Government, Gulf Provincial Government and the Motu-Koitabu Council) is the key provision. It states:

(1) Subject to Subsection (2), the [National Capital District] Commission shall provide financial assistance to the Central Provincial Government, the Motu-Koitabu Council and the Gulf Provincial Government.

(a) the Central Provincial Government, a minimum of 10% of the Goods and Services Tax; and

(b) the Motu-Koitabu Council, a minimum of 2% of the Goods and Services Tax; and

(c) the Gulf Provincial Government, a minimum of 3% of the Goods and Services Tax,

2. Central Provincial Government argues that Section 33 obliges the NCDC and the IRC to each pay to it the sum of 10% of the Goods and Services Tax due to the NCDC in each fiscal year since 2004. It says that the NCDC has been paying to it only 5% of the sum due to the NCDC and the IRC has been paying it nothing. It seeks by notice of motion filed on 16 August 2012:

3. The NCDC (first defendant) and the IRC (second defendant) argue that there has been no failure to comply with Section 33 and that all relief sought by Central Provincial Government (plaintiff) should be refused. The NCDC argues that Section 33(1) allows it to decide for itself what amount of financial assistance it provides and that what it has been providing – 5% of GST revenue it receives – is generous, so there should be no complaint. The IRC argues that it has no obligation to make any payments at all to Central Provincial Government under Section 33(2)(a). It says that the Act that Section 33(2)(a) cross-refers to – the Goods and Services Tax Revenue Distribution Act 2003 – has been repealed and replaced by another Act which overrides Section 33(2)(a).

1 HAS THERE BEEN ANY FAILURE BY THE NCDC TO COMPLY WITH ITS DUTIES UNDER SECTION 33(1) OF THE NCDC ACT?

5. To uphold the submission of Mr Hampalekie for Central Provincial Government that Section 33(1) obliges the NCDC to pay to Central Provincial Government the sum of 10% of the Goods and Services Tax (GST) due to the NCDC in each fiscal year would be to depart from the plain and natural meaning of the words in Section 33(1). The obligation of the NCDC is "to provide financial assistance". The amount of financial assistance is not specified. The only reference to an amount of money to be provided to Central Provincial Government is in Section 33(2)(a), which imposes an obligation on the IRC, not the NCDC.

5. Mr Wood for the NCDC submits that Section 33(1) leaves determination of the quantum of financial assistance to the discretion of the NCDC. I reject that submission. If the legislative intention had been to leave it up to the NCDC to decide what in its opinion should be paid, words such as 'the Commission shall provide financial assistance as in its opinion is reasonable' would surely have been inserted in Section 33(1). I consider that there is an obligation imposed on the NCDC to provide an amount of financial assistance each fiscal year that is reasonable in all the circumstances, having regard to amongst other things:

(a) establish the National Capital District Commission to govern the National Capital District as required by Section 4 (National Capital District) of the Constitution; and

(b) recognizing that the need for representation of the people of the National Capital District in the decisions and affairs of the National Capital District Commission is beneficial for the proper and effective functioning of the Commission and the welfare of the people in the National Capital District including under-privileged and less advanced groups; and

(c) recognizing also that the National Capital District, as the Nation's capital, with the Seat of Government, has a special and constitutional status and is inhabited by people from all parts of Papua New Guinea and from overseas; and

(d) recognizing also that it is proper and in keeping with the Constitutional Goal of Equality and Participation to provide for representation in the Commission to be drawn from a broad base including—

(i) women, churches, business and professional groups, youths and workers representing all the people of the National Capital District; and

(ii) traditional landowners of the land on which the National Capital District is situated,

Being an Act to make provision in respect of the Government of the National Capital District pursuant to Section 4 (National Capital District) of the Constitution—by establishing the National Capital District Commission and to make provision for their composition, functions and powers and to repeal the National Capital District Commission Act 1990 as amended, and for related purposes.

6. In other words the minimum amount of financial assistance that must be paid by the NCDC to Central Provincial Government is capable of objective determination. It is not a subjective amount to be determined by what the NCDC thinks is reasonable. Having said that, there is insufficient evidence before the Court to conclude that the 5% of the NCDC's GST revenue that has been paid on a regular basis by the NCDC to Central Provincial Government, is not reasonable. This part of the plaintiff's case is unsubstantiated.

7. I find that Central Provincial Government has not proven any failure on the part of the NCDC to comply with its duties under Section 33(1) of the NCDC Act.

2 HAS THERE BEEN ANY FAILURE ON THE PART OF THE IRC TO COMPLY WITH ITS DUTIES UNDER SECTION 33(2)(a) OF THE NCDC ACT?

8. It is useful to focus on Section 33(2)(a) with a mind uncluttered by Section 33(1) (which imposes an obligation on the NCDC) or Sections 33(2)(b) and (c) (the beneficiaries of which are two other governmental bodies, the Motu-Koitabu Council and Gulf Provincial Government). Section 33(2)(a) states:

The Internal Revenue Commission shall pay to ... the Central Provincial Government, a minimum of 10% of the Goods and Services Tax ... due to the [National Capital District] Commission in a fiscal year in accordance with the Goods and Services Tax Revenue Distribution Act 2003.

9. At first glance Section 33(2)(a) appears to be straightforward: it imposes a duty on the IRC to pay to Central Provincial Government a certain sum of money. The sum is "a minimum of 10% of the Goods and Services Tax ... due to the [NCDC] in a fiscal year in accordance with the Goods and Services Tax Revenue Distribution Act 2003". Ms Nablu and Mr Sinen for the IRC, supported by Mr Wood, submit however that Section 33(2)(a) imposes no duty on the IRC to pay anything to Central Provincial Government. The following propositions are put in support of that submission:

11. The defendants argue that the Goods and Services Tax Revenue Distribution Act 2003 has been repealed in two ways. First, it has been expressly repealed by the Goods and Services Tax Revenue Distribution (Repeal) Act No 28 of 2009. Secondly it has been impliedly repealed by the Inter-Governmental Relations (Functions and Funding) Act 2009. The result is that for the purposes of Section 33(2)(a) of the NCDC Act the amount of GST due to the NCDC in a fiscal year in accordance with the Goods and Services Tax Revenue Distribution Act 2003 is zero. Nothing is due in accordance with that Act as it has been repealed. Ten per cent of nothing is nothing, so the IRC is obliged to pay nothing to Central Provincial Government. These arguments give rise to four issues:

12. I find that in fact the Goods and Services Tax Revenue Distribution Act 2003 has not been expressly repealed. The Goods and Services Tax Revenue Distribution (Repeal) Act 2009 was made by the Parliament and certified by the Speaker pursuant to Section 110 (certification as to making of laws) of the Constitution on 9 September 2009. Its purpose was clearly to repeal the 2003 Act as it consists of only one section (repeal), which states:

13. However, it ought not be presumed that certification of the making of a law brings it into operation. The question of whether and when a law has commenced operation must be determined in accordance with Section 110 (certification as to making of laws) of the Constitution, which states:

(a) being expressed to come, or to be deemed to have come, into force on a date specified by, or fixed in accordance with, law; or

(3) An Act of the Parliament or the Standing Orders of the Parliament may make provision under which a law made by the Parliament may, at the direction of the Head of State, acting with, and in accordance with, the advice of the National Executive Council, be recommitted to the Parliament for the consideration of amendments proposed by the Head of State, acting with, and in accordance with, the advice of the National Executive Council.

14. The combined effect of Sections 110(1) and (2) is that the starting point for determining the date on which a law comes into operation is the law itself (or any other law that fixes the date it comes into force). If the law itself (or some other law) deems the law to come into force on a date specified by or fixed in accordance with law, that date is the date the law comes into force. If no date is specified in that way the law comes into operation perforce of Section 110(1) on the date of certification (Mickey Wassey v The Police (2005) N2922).

15. The Constitution uses the terms 'come into operation' and 'come into force' interchangeably. Those terms mean the same thing, as does the term 'commence operation'. It is the practice of the Courts in PNG to use the three forms of words interchangeably (eg Arthur Agevu v The Government [1977] PNGLR 99, Gulf Provincial Government v Minister for Provincial Affairs [1991] PNGLR 389). I adopt that practice in this judgment.

16. The Goods and Services Tax Revenue Distribution (Repeal) Act 2009 contains a commencement clause (between the long title and the first and only section of the Act) which states:

Made by the National Parliament, to come into operation in accordance with a notice in the National Gazette by the Head of State acting with, and in accordance with, the advice of the Minister.

17. This is an example of a law being in the words of Section 110(2)(a) of the Constitution "expressed to come ... into force on a date specified by, or fixed in accordance with, law". The coming into force of this law depends on there being in the National Gazette a notice "by the Head of State [represented by the Governor-General] acting with and in accordance with the advice of the Minister".

18. I find as a fact that there has been no such notice. First, no evidence has been adduced in these proceedings of the publication of such a notice. Secondly the latest edition of the pngInLaw database (which I regard in the absence of evidence to the contrary as a reliable and authoritative source of information as to dates of commencement of the written laws of Papua New Guinea) has this notice at the top of the Goods and Services Tax Revenue Distribution Act 2003:

Warning: The Goods and Services Tax Revenue Distribution Act 2003 has been repealed by the Goods and Services Tax Revenue Distribution (Repeal) Act (No 28 of 2009) which at the date of publication of this Infobase (5 March 2013) had not yet commenced.

19. Thirdly the Court has enquired with the Office of Legislative Counsel which advises that no notice fixing a date of commencement has been published in the National Gazette.

20. The result is that the Goods and Services Tax Revenue Distribution (Repeal) Act 2009 has not yet come into force. The fact that it has been made by the Parliament and certified by the Speaker is of no consequence. The Goods and Services Tax Revenue Distribution Act 2003 has not been expressly repealed by the Goods and Services Tax Revenue Distribution (Repeal) Act 2009 or by any other law.

21. When two laws made at different times cover the same or similar subject matter the question naturally arises whether the later law, though it does not expressly repeal the earlier law, impliedly repeals it. That question arises in this case due to the similarity in the subject matter of:

Sec	Goods and Services Tax Revenue Distribution Act 2003	Sec	*Division V.1, Inter-Governmental Relations (Functions and Funding) Act* 2009**
1	Interpretation	4*	Interpretation
2	Establishment of trusts	33, 34	National GST Revenue Trust Provincial GST Trusts
3	Establishment of the Trust Accounts	35, 36	National GST Trust Account Provincial Inland GST Trust Accounts
4	Goods and Services Tax revenue to be paid into Trust Accounts	37	GST revenue to be paid into trust accounts
5	Additional revenue to be paid into GST Trust Accounts	38	Additional payments to trust accounts
6	Allocation of refunds	39	Allocation of refunds
7	Value of distributions to provincial governments	40	Amount of GST distributions to provincial governments
8	Order of precedence of distributions from the Trust Accounts	41, 42	Order of precedence of distributions from National GST Trust Account Order of precedence of distributions from each Provincial Inland GST Trust Account
9	Trustees to decide when payments shall be made to the Consolidated Revenue Fund	43	Trustees to decide when payments shall be made to the Consolidated Revenue Fund
10	Time of distribution of revenue to the provinces	44	Time of distribution
11	Administration of the Trust Accounts	45	Administration of trust accounts
12	Power of delegation	72*	Delegation
13	Regulations	74*	Regulations

* These sections are not in Division V.1, they are in other parts of the 2009 Act and are equivalent to the corresponding provisions in the 2003 Act.

23. The leading PNG cases on the subject of implied repeal are Busin v Havini (Re Tichi) (1957) No 102, Lohia Doriga v Daera Guba (Re Era Taora Land) (1969) No 548, Parker v Virobo Re Urara Makana [1971-72] PNGLR 162, R v Mitchell, Ex parte Wafing [1973] PNGLR 461, The State v Danny Sunu [1983] PNGLR 396, The State v Kiap Bonga [1988-89] PNGLR 360 and The State v Natpalau Tulong [1995] PNGLR 329. These cases show that the following considerations apply when determining whether a later law has impliedly repealed an earlier law:

Acts of Parliament are established with such gravity, wisdom and universal consent of the whole realm, for the advancement of the commonwealth, they ought not by any constrained construction out of the general and ambiguous words of a subsequent Act, to be abrogated.

24. Applying those principles to the present case, beginning with the presumption that there was no intention on the part of the Parliament to repeal the 2003 Act (which would leave both legislative schemes operating alongside each other), I find that, though there is little or no conflict between the 2003 Act and the 2009 Act, the presumption is rebutted as Division V.1 of the 2009 Act evinces an intention to cover the field on the subject of distribution as between the National Government and the Provincial Governments of GST tax revenue. The 2003 Act has been impliedly repealed by the 2009 Act.

25. What effect does the implied repeal of the 2003 Act have on Section 33(2)(a) of the NCDC Act? There has been no express repeal or amendment of any part of Section 33. Has the section been impliedly repealed? If it has not been repealed does the fact that it refers to an Act that has been repealed mean that the duties imposed by the section have been extinguished?

26. Applying the principles of implied repeal outlined above, again beginning with the presumption that there was no intention by the Parliament to repeal Section 33, I see no reason for concluding that Section 33 has been impliedly repealed. The existing Section 33 was inserted in the NCDC Act by the NCDC (Amendment) Act No 4 of 2004. It commenced operation (by notice in National Gazette No G84 of 15.07.04) on 15 July 2004. Until the 2004 amendment Section 33 simply provided:

The [National Capital District] Commission shall pay to the Central Provincial Government a minimum of 5% of the Value Added Tax [the predecessor to the GST] refunded to the [National Capital District] Commission in a fiscal year by the Internal Revenue Commission.

27. The 2004 amendment repealed that former Section 33 and replaced it with the current one. The 2004 amendment was significant in two respects. First, it extended the beneficiaries of financial assistance to include the Motu-Koitabu Council and Gulf Provincial Government as well as Central Provincial Government. (As to the Motu-Koitabu Council it should be noted that any reference to it in the NCDC Act should by virtue of Section 2 (interpretation) of the NCDC Act be read as a reference to the Motu Koita Assembly established under the Motu Koita Assembly Act 2007.) Secondly – and this is very significant for the purposes of the present case – it imposed a separate and additional obligation on the IRC to make payments to those three governmental bodies, those payments to be made from GST revenue due to the NCDC.

28. To make the principal revenue collection authority of the National Government responsible for paying to three particular governmental bodies tax revenue that would otherwise be due to another governmental body is, I suggest, a very significant legislative policy. I see nothing in the implied repeal of the Goods and Services Tax Revenue Distribution Act 2003 by the Inter-Governmental Relations (Functions and Funding) Act 2009 that evinces any intention on the part of the Parliament to alter that policy. Section 33 of the NCDC Act remains intact. It has not been expressly or impliedly repealed.

29. That leaves the question whether the reference in Section 33 to a repealed law – the Goods and Services Tax Revenue Distribution Act 2003 – means that Section 33(2)(a), though it remains in force, has no practical effect. I answer that question in the negative. The fact that a statutory provision refers to an Act that is subsequently repealed does not necessarily mean that the reference to the repealed Act should be ignored (Minister for Lands v Frame [1980] PNGLR 433). It is always a matter of discerning the legislature's intention. Here it is clear that the purpose of the 2004 amendment to the NCDC Act was amongst other things to oblige the IRC to pay to Central Provincial Government a minimum of 10% of GST revenue due to the NCDC each fiscal year, the amount of that revenue to be calculated according to the law governing the distribution of GST revenue between the National Government and the Provincial Governments (the NCDC being deemed by Section 1 of the 2003 Act and by Section 4 of the 2009 Act to be a Provincial Government).

30. At the time of the 2004 amendment, the governing law was the Goods and Services Tax Revenue Distribution Act 2003. That Act has since been impliedly repealed and replaced by Division V.1 of the Inter-Governmental Relations (Functions and Funding) Act 2009. Division V.1 is virtually a replica of the 2003 Act. In particular the amount to which the NCDC is entitled is in both the 2003 Act (Section 7(2A)) and the 2009 Act (Section 40) referenced to 60% of the net GST collections for the National Capital District during the second preceding fiscal year. Though the Parliament in making the 2009 Act had the opportunity to extinguish the obligations of the IRC under Section 33(2) of the NCDC Act it failed to do so.

31. In these circumstances the most reasonable inference to draw is that the reference in Section 33(2)(a) to the Goods and Services Tax Revenue Distribution Act 2003 should now be read as a reference to the Inter-Governmental Relations (Functions and Funding) Act 2009. The IRC's obligations under Section 33(2)(a) can be summarised as follows:

33. If for some reason the Inter-Governmental Relations (Functions and Funding) Act 2009 did extinguish the IRC's duties under Section 33(2)(a) of the NCDC Act, the operative date would be 1 January 2008, that being the date on which the 2009 Act is deemed (by a commencement clause placed between the long title and Section 1) to have come into operation. I have heard no worthwhile argument that the effect of the Inter-Governmental Relations (Functions and Funding) Act 2009 is to retrospectively abrogate the obligations of the IRC under Section 33(2)(a) of the NCDC Act.

34. As to the period before 1 January 2008 Mr Wood (who appeared for the NCDC but made submissions also in support of the IRC) submitted that the IRC was still obliged to pay nothing. He pointed out that prior to the NCDC (Amendment) Act No 3 of 2008, which he claimed did not commence operation until 22 April 2008, Section 33(2)(a) obliged the IRC only to pay to Central Provincial Government amounts "refundable" to the NCDC in accordance with the Goods and Services Tax Revenue Distribution Act 2003.

35. This is correct, as a matter of fact, in that prior to the NCDC (Amendment) Act 2008, Section 33(2)(a) stated:

The Internal Revenue Commission shall pay to ... (a) the Central Provincial Government, a minimum of 10% of the Goods and Services Tax ... refundable to the [National Capital District] Commission in a fiscal year in accordance with the Goods and Services Tax Revenue Distribution Act 2003. [Underlining added]

36. Mr Wood's argument is that nothing was "refundable" to the NCDC as that word implies that the amount of GST was something that the NCDC paid in excess of what it collected. GST revenue was payable to the NCDC but not refundable. This is the position that has consistently been taken by the IRC. In a letter to Central Provincial Administrator Mr Raphael Yibmaramba dated 22 November 2004 (exhibit P3, annexure B) the then Commissioner General of Internal Revenue Mr David Sode (under the letterhead of the Internal Revenue Commission) stated:

The amendment made last year to the NCDC Act was defective. It referred to a sharing of GST revenue 'refundable' to the Commission under the GST Revenue Distribution Act. The IRC does not 'refund' any amounts to the Commission (except in the unlikely event that NCDC has somehow overpaid GST to the IRC). What the IRC does is to distribute to the Commission under the GST Revenue Distribution Act, a share of GST revenue collected in NCD. As the IRC does not pay any refunds to the Commission, there is nothing to share.

37. I find it perplexing that the Commissioner General was able to so dismissively regard an amendment to an Act of the Parliament as "defective". The policy behind the amendment was clear enough. I cannot see any good reason for it being ignored.

38. In any event I reject Mr Wood's submission for two reasons. First the word "refundable" is not a technical expression, at least not in the context of a law that is setting out the powers, functions, duties and responsibilities of a governmental body such as the NCDC. Although it is possible to read the word narrowly, as the Commissioner General did in 2004, as referring only to money originally in the hands of someone, paid to someone else and then returned to the original custodian (in accordance with the dictionary definition of refund: to pay back, to reimburse), a broader meaning is required, such that refundable is equivalent to "payable" or "due", in order to give effect to the policy of Section 33(2), which is as explained earlier to redress the economic imbalance created as a consequence of a large proportion of economic activity generated by Central Province taking place in the National Capital District, which results in a large part of GST revenue generated by Central Province being captured in the National Capital District.

39. Secondly I find that the NCDC (Amendment) Act 2008 commenced operation on 22 April 2004. I note that pngInLaw shows the commencement date as 22 April 2008 (based on notices appearing in the National Gazette No G143 of 07.08.08, page 2 and No G151 of 28.08.08, page 5), however that date is wrong. Notices in the National Gazette cannot override the words of commencement of an Act, which form part of the Act (Interpretation Act, Section 24A (titles, enacting words etc). The NCDC (Amendment) Act 2008 has a commencement clause between the long title and the first and only section (which repeals the word "refundable" and replaces it with "due"), which states:

Made by the National Parliament to be deemed to have come into operation on 22 Aril 2004.

40. That is a peculiar date as it pre-dates the date of certification of the 2008 Act (16 July 2008) by more than four years, making the Act substantially retrospective in its operation. It also pre-dates the date of commencement (15 July 2004) of the amendments to Section 33 made by the NCDC (Amendment) Act 2004. But 22 April 2004 is the date that has been fixed by the Parliament and it should as far as practicable be given effect as there is no unfairness, injustice or absurdity evident as a result of doing so.

41. In summary, if the IRC's duty to make payments to Central Provincial Government has been extinguished by the Inter-Governmental Relations (Functions and Funding) Act 2009, the date from which those obligations no longer operate is 1 January 2008. The IRC's duty applied in respect of the period from 15 July 2004 (the date of commencement, in its current form, of Section 33 of the NCDC Act) to 31 December 2007.

42. The Goods and Services Tax Revenue Distribution Act 2003 has been impliedly (but not expressly) repealed by the Inter-Governmental Relations (Functions and Funding) Act 2009. The implied repeal of the 2003 Act has had no effect on the IRC's duty under Section 33(2)(a) of the NCDC Act to pay to Central Provincial Government 10% of the GST due to the NCDC each fiscal year. If for some reason the IRC's duty under Section 33(2)(a) has been extinguished by the 2009 Act, that duty is extinguished with effect from 1 January 2008. The duty still applies to the period 15 July 2004 to 31 December 2007.

43. I see no merit in this argument as nothing in the Inter-Governmental Relations (Functions and Funding) Act 2009 alters the policy or practice of redistribution of GST revenue from the NCDC to Central Provincial Government (and the Motu-Koitabu Council and Gulf Provincial Government) that was in place under Section 33(2) of the NCDC Act.

44. It is correct that no discretion is expressly vested by the 2009 Act in the Commissioner General to depart from the statutory formula in the 2009 Act or from the terms of the various trust instruments and trust accounts provided for under that Act. But it does not follow that the Commissioner General can choose to ignore the duties imposed expressly on the IRC by Section 33(2) of the NCDC Act. The 2009 Act can be interpreted and administered harmoniously with Section 33(2) of the NCDC Act. The duties imposed on the Commissioner General by the 2009 Act must be read and applied subject to and together with the duties imposed on the IRC and therefore on the Commissioner General by Section 33(2) of the NCDC Act.

45. That there should be harmony between the two sets of provisions is reinforced by the maxim of statutory interpretation generalia specialibus non derogant: the general does not detract from the specific (R v Mitchell, Ex parte Wafing [1973] PNGLR 461, Joseph Kembu v Eko Mason [1971-72] PNGLR 407, Sanage Kuri v MVIL (2004) N2759). Here the general provisions are found in the Inter-Governmental Relations (Functions and Funding) Act 2009, which, if read alone, would appear to provide an exhaustive code for distribution by the IRC of GST revenue. The specific provisions are in Section 33(2) of the NCDC Act, which provides for distribution of GST revenue as between the NCDC and Central Provincial Government (and Motu-Koita Assembly and Gulf Provincial Government). The presumption is that the general provisions are to be read subject to the specific provisions, the rationale being expressed by Viscount Haldane in Blackpool Corporation v Starr Estate Company Limited [1922] 1 AC 27, cited with approval by the Supreme Court in Mitchell, as:

Wherever Parliament in an earlier statute has directed its attention to an individual case and has made provision for it unambiguously, there arises a presumption that if in a subsequent statute the legislature lays down a general principle, that general principle is not to be taken as meant to rip up what the legislature had before provided for individually, unless an intention to do so is specially declared.

46. The Parliament has in passing the Inter-Governmental Relations (Functions and Funding) Act 2009 declared no intention of 'ripping up' the specific obligations imposed on the IRC by Section 33(2)(a) of the NCDC Act. Those two Acts must be applied together.

47. The 2009 Act does not provide an exhaustive code for distribution of GST tax revenue. The fact that it vests no discretion in the Commissioner General to depart from the statutory formula it prescribes is of no consequence. The general provisions of the 2009 Act can and must be read harmoniously with and subject to the specific obligations imposed on the IRC by Section 33(2) of the NCDC Act. The Commissioner General of Internal Revenue is obliged to depart from the statutory formula in the Inter-Governmental Relations (Functions and Funding) Act 2009 in order to give effect to the obligations imposed on the IRC by Section 33(2) of the NCDC Act.

48. This argument must be consigned to the same path of failure set by propositions (a) and (b). It might well be that the rigidity of the minimum 10% figure prescribed by Section 33(2)(a) of the NCDC Act is inconsistent with the needs approach to grants and funding underpinning the Inter-Governmental Relations (Functions and Funding) Act 2009. However, the apparent inconsistency in policy does not (for reasons advanced earlier regarding whether Section 33(2)(a) has been impliedly repealed) lead to the conclusion that the obligations imposed by Section 33(2)(a) are extinguished or can be disregarded. Proposition (c) is rejected.

49. It is largely correct that the IRC is not a legal entity in that it is not established as a corporation and it has not been created by statute. Does that mean that it does not exist? Or that the Parliament's instructions to it can be ignored? Or that failure to comply with statutory duties imposed on it has no consequences? The answer to these questions is no.

50. The IRC exists. I take judicial notice of that fact. The IRC is a governmental body headed by the Commissioner General of Internal Revenue appointed under Section 6(1) (Commissioner General of Internal Revenue) of the Income Tax Act 1959. The IRC is the principal revenue collection agency of the National Government. It is recognised as existing and has various powers, functions, duties and responsibilities conferred on it by numerous statutory provisions including Section 33(2)(a) of the NCDC Act. Examples appear in the following table.

Law	Section	Content
Organic Law on the Integrity of Political Parties & Candidates	29(3)(vi)	Application for registration of political party to be accompanied by copy of annual income tax return for preceding year certified by Internal Revenue Commission
Organic Law on Peace Building in Bougainville	45(1)	Internal Revenue Commission shall collect taxes for Bougainville Government
Customs Act Chapter 110	1, 3C, 3D, 3E, 3F, 177B	"Customs-related law" includes Acts falling within administration of Commissioner General of the Internal Revenue Commission
Excise Act Chapter 105	1	"the Customs" means the Division of Customs of the Internal Revenue Commission
Gaming Control Act 2007	104	Casino duty shall be paid to Internal Revenue Commission etc
Goods and Services Tax Act 2003	77(5), 95(1)(d)	Person objecting to assessment of GST to serve notice of objection on Commissioner at Head Office of Internal Revenue Commission; it is an offence to: intentionally mislead the Commissioner or any other officer of the Internal Revenue Commission, obstruct an officer of the Internal Revenue Commission
Income Tax (International Agreements) Act 1987	Schedule 8, Article 3(1)(i)	"Competent authority" includes Commissioner General of the Internal Revenue Commission
Income Tax Act 1959	6(4)	Commissioner General of Internal Revenue Commission has general administration of this Act
National Roads Authority Act 2003	30(1C)	Internal Revenue Commission authorised to deal with excise duty collections on diesel sales in manner approved by Commissioner General of Internal Revenue

51. The fact that the Internal Revenue Commission is not established as a corporation does not mean that Parliament's instructions to it (such as those conveyed by Section 33(2) of the NCDC Act) are inoperable. It is a governmental body capable of being instructed what to do by the Parliament, and if necessary by the Court. That it is not a creature of statute does not make it immune from the jurisdiction of the Courts. Any uncertainty that might arise as a result of the orders of the Court being directed at a body that is not a legal person in the strict sense can be resolved by directing the orders of the Court at the person who heads the body: the Commissioner General of Internal Revenue. Proposition (d) is rejected.

(e) Tax legislation must be strictly interpreted so that the court does not engage in law making

52. Mr Sinen submitted that the Court has a duty to interpret tax legislation strictly and literally and give it a plain and ordinary meaning that should only be departed from if it leads to irrational consequences. He cited the leading PNG cases Internal Revenue Commission v Dr Pirouz Hamidian-Rad (2002) SC692 and Chief Collector of Taxes v Bougainville Copper Ltd (2007) SC853 in support of that proposition. He urged the Court, relying on the warning sounded by the High Court of Australia in Cooper Brookes (Wollongong) Pty Ltd v Federal Commissioner of Taxation (1981) 147 CLR 297, to ensure that it does not descend into the sphere of law making in the guise of statutory interpretation. If those principles are strictly applied the Court will be led to the conclusion that the payment mechanism for distribution of GST revenue under the Inter-Governmental Relations (Functions and Funding) Act 2009 must be maintained. Obliging the Commissioner General of Internal Revenue to depart from that payment mechanism would involve an unwarranted departure from the plain and ordinary meaning of the 2009 Act. If the Court adopts that approach it may well be descending into law making.

53. I must confess I have difficulty with the idea of putting tax legislation into a special category and saying that it must be applied strictly and literally, as if legislation that does not fit into that special category should be subject to some different principles of interpretation. Judges, in my view, should not be spooked by warnings about engaging in 'law making'. There is nothing wrong in making law. Every time a Judge interprets a written law he or she makes law. A precedent is set. Words in a statute are given a clearer meaning. It is a naïve pretence that Judges by giving words their clear and literal meaning can somehow tiptoe their way along a path of strict and complete legalism and avoid falling off that lofty precipice and descending into what is portrayed as the dark and shameful practice of 'law making'.

54. Judges should not be treated like racehorses fitted with blinkers, forced to read only the literal meaning of words without considering the purpose of the legislation in which the words appear.

55. There are very clear and overriding constitutional reasons that Judges in Papua New Guinea must consider not only the plain and literal meaning of the words of a statute but also their purpose and effect (Norah Mairi v Alkan Tololo (No 2) [1976] PNGLR 125, Rakatani Peter v South Pacific Brewery Ltd [1976] PNGLR 537, PLAR No 1 of 1980 [1980] PNGLR 326, Inakambi Singorom v John Kalaut [1985] PNGLR 238, SCR No 5 of 1987; Re Central Banking (Foreign Exchange and Gold) Regulations [1987] PNGLR 433, SC Ref No 1 of 2000; Special Reference by Morobe Provincial Government (2002) SC693, SC Ref No 3 of 2011; Special Reference by East Sepik Provincial Executive (2011) SC1154).

56. As I explained in Vitus Sukuramu v New Britain Palm Oil Ltd (2007) N3124 Judges in Papua New Guinea are given a breathtaking array of powers, functions, duties and responsibilities not clothed upon Judges in many other jurisdictions, including those in the Commonwealth. The Constitution provides insight, inspiration and instructions as to how these daunting tasks are to be achieved. Two provisions of the Constitution are particularly pertinent. Section 109(4) (general power of law-making) states:

Each law made by the Parliament shall receive such fair, large and liberal construction and interpretation as will best ensure the attainment of the object of the law according to its true intent, meaning and spirit, and there is no presumption against extra-territoriality.

57. Section 158(2) (exercise of the judicial power) is an equally strident call for Judges to consider the purpose of legislation – no exception being made for tax legislation – and the effect of their interpretation of all laws:

In interpreting the law the courts shall give paramount consideration to the dispensation of justice.

58. Having said all that, is this really a case about 'tax legislation'? To properly fall into that special category and to make it even arguable that special rules of interpretation are required, the laws involved would I suggest need to be imposing taxation, the sort of laws the making of which is regulated by Sections 209 (parliamentary responsibility) and 210 (executive initiative) of the Constitution, which relevantly provide:

209(1): Notwithstanding anything in this Constitution, the raising and expenditure of finance by the National Government, including the imposition of taxation and the raising of loans, is subject to authorization and control by the Parliament, and shall be regulated by an Act of the Parliament.

210(1): The Parliament shall not provide for the imposition of taxation, the raising of loans or the expenditure of public moneys of Papua New Guinea except on the recommendation of the Head of State, acting with, and in accordance with, the advice of the National Executive Council.

59. The laws being interpreted in this case (the NCDC Act, the Goods and Services Tax Revenue Distribution Act 2003, the Inter-Governmental Relations (Functions and Funding) Act 2009) are not laws imposing taxation. They are laws about distribution of tax revenue amongst various governmental bodies. They do not fall within the generally accepted meaning of the term 'tax legislation' so there is no reason, even if it were necessary to apply special rules of interpretation to tax legislation, for any special approach here.

60. If my categorisation of these laws is incorrect and my scepticism about the need to apply special rules of interpretation is misplaced, then, being mindful of the defendants' imploration to stick to the plain and ordinary meaning of the words of tax legislation, I think I have done just that. The plain and ordinary meaning of the words in Section 33(2)(a) of the NCDC Act and those in the Inter-Governmental Relations (Functions and Funding) Act 2009 is that which I stated earlier: the IRC is obliged to pay to Central Provincial Government a minimum of 10% of GST revenue due to the NCDC each fiscal year.

61. The plain and ordinary meaning of the words in these laws is consistent with the meaning arrived at by giving them such fair, large and liberal construction and interpretation as will best ensure the attainment of the object of the laws according to their true intent, meaning and spirit (Constitution, Section 109(4)), and by giving paramount consideration to the dispensation of justice (Constitution, Section 109(4)). Proposition (e) is rejected.

62. Section 33(2)(a) of the NCDC Act means what it says: Central Provincial Government is entitled to a 10% share of the GST revenue of the NCDC. The IRC has since 15 July 2004 (the date of commencement of Section 33(2)(a)) been subject to a duty to pay this money to Central Provincial Government. That duty has been entirely disregarded.

63. An application for judicial review proceeds in two stages. First the plaintiff must establish good grounds for judicial review. Secondly if one or more grounds are established the plaintiff must make a case for a remedy, which is a matter of discretion (Mision Asiki v Manasupe Zurenuoc (2005) SC797, Dale Christopher Smith v Minister for Lands (2009) SC973). Here the plaintiff has established one ground of review: error of law by the second defendant constituted by its continuing failure to comply with the duty imposed on it by Section 33(2)(a) of the NCDC Act to pay money to the plaintiff. The question therefore arises whether the Court should as a matter of discretion grant the relief sought by the plaintiff in its notice of motion filed on 16 August 2012.

64. Central Provincial Government seeks orders against both the NCDC and the IRC. I have concluded that there is insufficient evidence of any breach of statutory duty by the NCDC so all orders sought against it will be refused.

65. As to the IRC it has entirely failed to comply with its duty under Section 33(2)(a) of the NCDC Act to pay the prescribed sums to Central Provincial Government. At this juncture it is useful to refocus on the Court's duty to dispense justice, which is reinforced by Section 155(4) (the national judicial system) of the Constitution:

Both the Supreme Court and the National Court have an inherent power to make, in such circumstances as seem to them proper, orders in the nature of prerogative writs and such other orders as are necessary to do justice in the circumstances of a particular case.

66. I see no good reason to refuse the principal relief sought against the IRC: an order in the nature of the prerogative writ of mandamus requiring the IRC to perform its duty according to law. Should the order extend back in time? Should Central Provincial Government be paid back to the date of commencement of Section 33(2)(a) of the NCDC Act, 15 July 2004? Is such an order necessary to do justice in the circumstances of this case?

67. Mr Wood submitted no, nothing should be paid as Central Provincial Government has already been paid 5% of the NCDC's GST revenue. It has accepted that and is estopped from claiming any more. There is a common law principle that payment by a third party of a lesser amount than that which is owed by a debtor to a creditor discharges the debt in full.

68. No authority for such a principle was provided and with respect I doubt its pedigree and its relevance. More credible was Mr Wood's submission relying on png Ready Mixed Concrete Pty Ltd v The State [1981] PNGLR 396 that by accepting the financial assistance of 5% of GST revenue provided to it by the NCDC, Central Provincial Government led the NCDC to believe that it accepted those moneys in full satisfaction of the NCDC's obligation to provide financial assistance under Section 33(1); and then it has tried to double-dip into the GST by obtaining a further payment from the IRC. This is not permitted, Mr Wood submitted, as it would contravene Section 33(1), the operation of which is subject to any payments made under Section 33(2).

69. I reject those submissions. The fact that Central Provincial Government has accepted 5% of the NCDC's GST revenue does not mean that it was leading the NCDC (or anyone else) to believe that it was accepting that money in full satisfaction of the NCDC's or the IRC's obligations under Section 33(1) or Section 33(2)(a). What was Central Provincial Government expected to do? Send the money back to the NCDC? The evidence is clear that Central Provincial Government has been complaining to both the NCDC and the IRC over many years that it was not being paid what it was entitled to under Section 33. It cannot reasonably be inferred from the evidence that the NCDC or the IRC were led to believe that Central Provincial Government had accepted that it was owed nothing more. No estoppel operates against Central Provincial Government.

70. I reiterate that Section 33 of the NCDC Act imposes duties on two different bodies:

71. The plaintiff has failed to prove a breach by the NCDC of the first duty but has proven a breach by the IRC of the second. The fact that there is no proven duty of the first duty has no bearing on the finding that there has been a breach of the second duty. Nor does it bear upon the exercise of the Court's discretion as to the justice of requiring the IRC to comply with the second duty. I have considered Section 71 (Act does not confer right of action) of the Inter-Governmental Relations (Functions and Funding) Act 2009 and in particular Section 71(3), which states:

Nothing in this Act confers on any Provincial Government or Local-level Government any right of action in respect of any grants payable under the Organic Law that were not paid to that Provincial Government or Local-level Government before the commencement of this Act.

72. Central Provincial Government is not seeking to enforce any right of action conferred by the 2009 Act. It is seeking to enforce a duty imposed on the IRC by the NCDC Act. Section 71(3) does not prevent the Court making the orders that it considers necessary in the circumstances.

73. I see no good reason for refusing the application for an order that would require the IRC to remedy its complete failure to comply with the duty under Section 33(2)(a). There is no good reason for not ordering that Central Provincial Government be paid back to the date of commencement of Section 33(2)(a) of the NCDC Act: 15 July 2004.

74. This may cause inconvenience to the IRC and hardship to the NCDC but I am satisfied that those are inevitable consequences of the Court making orders that enforce the law. Central Provincial Government has been trying to negotiate this matter with both the NCDC and the IRC over a number of years. It has been forced into litigating this dispute due to the intransigence of the IRC and the NCDC. The legitimate expectations and interests of the people of Central Province have been ignored.

75. Central Provincial Government is owed a substantial amount of money. The evidence before the Court (in the affidavits of Malcolm Billie, Central Provincial Government Accountant, exhibit P3, and Augustine Ravi, Financial Controller NCDC, exhibit D1) suggests that in the five years from 2006 to 2010 the IRC paid a total amount of approximately K550 million in GST revenue to the NCDC, an average of K110 million each year. Extrapolating those figures to include the years not covered by the evidence (2004, 2005, 2011 and 2012) results in an estimate of K990 million paid by the IRC to the NCDC over the nine years from 2004 to 2012. Ten per cent of that is K99 million. It can be said therefore that – and I reiterate this is only an estimate – about K100 million is at stake.

77. I am not in a position to say how much money must be paid. That is best sorted out and agreed on by the parties. To facilitate agreement I will order that this issue be referred for mediation. Under Section 7B(2) (power to order mediation, etc) of the National Court Act and Rule 5(2) (ordering mediation) of the ADR Rules the National Court is empowered by Rule 5(2), of its own motion, to order mediation for a resolution of any part of any proceedings provided that at the time of considering whether to order mediation it has regard to the factors prescribed by Rule 5(3). I have had regard to those matters. I consider that: (a) mediation will not result in prejudice to the rights of any of the parties; (b) it is reasonably within the ability and power of the parties to comply with a mediation order; (c) mediation will not entail substantial work for the parties; (d) the nature of the relief sought lends itself to mediation; (e) a mediation can be set up very soon and this should be convenient to all parties; (f) no party has expressed opposition to the prospect of mediation; (g) mediation has not yet been attempted and it should be attempted at least once before consideration is given to hearing submissions; (h) no party loses the right to have the issues of the amount and timing of payments being determined by the Court; and (i) it is in the interests of justice to attempt mediation as a method of resolving disputes such as this between different governmental bodies. I will therefore make an order for mediation.

78. I will leave open the timing of the payment. I do not think it would be reasonable to order that all the money be paid in a lump sum or that it all be paid immediately as the Court's order will have significant revenue and cash flow implications for the NCDC. Timing of the payment will also be the subject of mediation.

79. Central Provincial Government has also sought an order for damages against both defendants but this part of the application is poorly articulated and I decline to award any damages.

80. I noticed in the submissions of all parties an imperfect understanding of the determination of dates of commencement of laws. It is often presumed that an Act of the Parliament commences operation on the date of certification by the Speaker. As I explained when dealing with the issue of the date of commencement of the Goods and Services Tax Revenue Distribution (Repeal) Act 2009 no such presumption can be made. An Act will only commence operation on that date if no other provision is made in accordance with law for its commencement. In the following table I summarise determinations I have made of dates of commencement of the various Acts referred to in this judgment. I trust this will be useful for any future disputes that might arise concerning application of these laws.

Law	Date	Explanation
Goods and Services Tax Act 2003	1 January 2004	Commencement clause in Act
Goods and Services Tax Revenue Distribution Act 2003	1 January 2004	Commencement clause in Act
Goods and Services Tax Revenue Distribution (Repeal) Act 2009	Not commenced	Commencement clause in Act states it will come into operation in accordance with a notice in the National Gazette by the Head of State acting with and in accordance with the advice of the Minister: but there has been no such notice
Inter-Governmental Relations (Functions and Funding) Act 2009	1 January 2008	Commencement clause in Act
NCDC Act 2001	14 December 2001	Commencement clause in Act states it will come into operation in accordance with a notice in the National Gazette by the Head of State acting with and in accordance with the advice of the Minister: notice of commencement date published in National Gazette No G162 of 14.12.01
NCDC (Amendment) Act 2004	15 July 2004	Commencement clause in Act states it will come into operation in accordance with a notice in the National Gazette by the Head of State acting with and in accordance with the advice of the Minister: notice of commencement date published in National Gazette No G84 of 15.07.04
NCDC (Amendment) Act 2008	22 April 2004	Commencement clause in Act

Judgment accordingly.
_____________________________________________________
M S Wagambie Lawyers: Lawyers for the Plaintiff
Ashurst Lawyers: Lawyers for the First Defendant
Legal Services Division, IRC: Lawyers for the Second Defendant

National Court of Papua New Guinea

Central Provincial Government v National Capital District Commission [2013] PGNC 91; N5262 (18 July 2013)