Papua New Guinea Customs Brokers Association v Paul [2021] PGNC 542; N9354 (13 December 2021)

N9354

PAPUA NEW GUINEA
[IN THE NATIONAL COURT OF JUSTICE]

OS(JR) NO. 664 OF 2019

BETWEEN:
PAPUA NEW GUINEA CUSTOMS BROKERS ASSOCIATION
Plaintiff

AND:
RAY PAUL, in his capacity as
CHIEF COMMISSIONER OF PAPUA NEW GUINEA
First Defendant

AND:
PAPUA NEW GUINEA CUSTOMS COUNCIL
Second Defendant

AND:
THE INDEPENDENT STATE OF PAPUA NEW GUINEA
Third Defendant

Waigani: Dingake J
2021: 13^th December

PRACTICE AND PROCEDURE – Notion of Motion seeking orders in the nature of certiorari to bring into court and quash the decision of the first defendant to block the plaintiffs from accessing and process declarations in the customs computer system – the Customs Act 1951 does not give the Customs Commissioner any powers to block access to customs brokers - the decision of the First Defendant is arbitrary and therefore unreasonable in that it is blanket in its nature and fails to acknowledge that brokers also act for other owners of goods who may not be in default of paying duty - decision of the First Defendant giving notice that Customs Brokers who had unpaid duties would be blocked from accessing and processing declaration through the ASYCUDA WORLD processing system is quashed in its entirety with costs awarded to the plaintiffs

Cases Cited:
Papua New Guinea Cases

Henry Bailasi, Provincial Administrator of Milne Bay Province v Rigo Lua, Chairman, Public Service Commission, Ors. & The State [2013] PGNC 304 N5145
Francis Kambaka, District Administrator of Ambunti-Dreikikier & Anor. v Michael Dick, Acting Chief Ombudsman, Ors. & State; [2018] PGNC 126 N7209
The Honourable Sir Dr Puka Temu, Minister for Public Service & Ors. v Ombudsman Commission of Papua New Guinea [2016] PGNC 195 N6388

Overseas Cases

Council of Civil Service Unions v Minister for Civil Service (1985) AC 374

Counsel:

Mr. Ralph Diweni, for the Plaintiff
Mr. Ephraim Bua, for the Defendants

JUDGMENT

13^th December, 2021

1. DINGAKE J: INTRODUCTION: The Plaintiff is an association of customs brokers in Papua New Guinea. In this application they seek to review the decision of the Commissioner of Papua New Guinea Customs Service published on the 11^th of September 2019, giving notice that with effect from the 1^st of October 2019, Custom Brokers who had unpaid duties would be blocked from accessing and processing declaration in the Computer System named ASYCUDA WORLD customs declaration system.
   
2. The ASYCUDA WORLD customs processing system enables customs to process declarations and collect duty.
   
3. The application for leave to review has already been granted.
   
4. The Plaintiff seeks an Order in the nature of certiorari to bring up to this Court and quash the decision of the Commissioner referred to above, alternatively to have the said decision of the Commissioner of Papua New Guinea Customs Service declared null and void.
   
5. At the hearing of this matter on the 18^th of March, 2020, the Defendants notwithstanding being duly served, were absent, without explanation and the Court decided to proceed with the matter.
   
6. The Plaintiff, which is a representative of customs brokers in PNG is aggrieved by the decision sought to be reviewed and avers that the decision is ultra-vires the powers of the Commissioner; as stipulated in the Customs Act, 1951. The Plaintiff also complains that the decision is harsh, oppressive and unreasonable.
   

Submissions

7. Mr.Diweni, learned Counsel for the Plaintiff has submitted that the decision of the Commissioner sought to be quashed was a blanket punishment of brokers and was therefore arbitrary. He also contends that the Commissioner had no power to take such decision under the empowering Act, namely, Customs Act 1951. He submitted that the decision is harsh, oppressive, and unreasonable as it unfairly targets brokers with a penalty leaving the principal owners of goods to go free, while the agents face cancellation of their licenses and effectively denying them the means to conduct business and earn an income.
   
8. In order to determine whether there is merit in the submissions of learned Counsel, I would review the evidence filed of record and the applicable law.
   

Evidence

9. The Plaintiff relies on three (3) Affidavits filed of record, sworn by Nathaniel Baloiloi filed on the 26^th of September 2019, 3^rd of October 2019 and 25^th of October 2019, together with the Statement filed pursuant to Order 16 Rule 3 of the National Court Rules and the Affidavit verifying those facts filed on the 26^th of September, 2019.
   
10. It would appear from the evidence filed of record that the First Defendant became concerned with instances of unpaid duties and decided to block brokers who had clients with outstanding duties which were reflected in the AYSCUDA system.
    
11. It would appear from the Affidavit of Nathaniel Baloiloi filed in support of the application, that the Plaintiff has a large body of clients, ranging from corporate and statutory bodies to individuals, who stood to be potentially disadvantaged by the decision of the First Defendant.
    
12. Mr. Baloiloi explains in his Affidavit filed on the 26^th of September, 2019 that there are different arrangements in place as to how their clients pay duty. He explains that some clients have prepaid accounts while the rest pay by cash, bank cards or direct bank deposit/transfer. He also says Government entities may take longer to pay duty after being informed of assessments due to their accounting systems.
    
13. The Plaintiff avers that the Defendant’s decision will have a severe impact on the Plaintiff’s operations and will affect their trade and business.
    

The Law

14. It is clear from the scheme of the Customs Act 1951, (Act) that the First Defendant has the power to administer the Act. The Act imposes an obligation on importers and exporters of goods to pay customs and the Collector is empowered to collect same.
    
15. The Act makes it clear that any debt owing to the First Defendant is recoverable in a Court of competent jurisdiction.
    
16. Under Section 16(1) of the Act the First Defendant has full control of goods until they are delivered to the owner.
    
17. The Act gives the Commissioner a wide array of powers to collect any duties or debt owing, such as withholding clearance of goods, forfeiture and statutory garnishee (see Sections 13, 16, 189, 191 and 191A).
    

Analysis

18. It seems clear to me that the decision of the Commissioner was an attempt to force brokers to pay up any outstanding arrears. There is no doubt in my mind as counsel for the Plaintiff contended, that it was a form of penalty intended to expedite payment.
    
19. I have perused the Customs Act 1951, and the Regulations make thereunder, and nowhere does it give the Commissioner a power to take such a decision. The Act make it clear that he/she can do to collect any duty that may be owing. The Act empowers him and or his officers to withhold clearance of the goods affected and forfeiture of goods. He/She is also empowered to issue statutory guarantee under Section 191 of the Act. He has no power to take any measures not authorised by the Act to collect duties or any debt owing. This is so because the Papua New Guinea Customs Service is a creature of statute. It can only do that which it is authorized by law to do.
    
20. In all the circumstances of this case, I am satisfied that the First Defendant sought to circumvent the clear provisions of the law set out in the Customs Act, 1951, by taking the decision sought to be reviewed; and in so doing acted ultra-vires the empowering Act; namely the Customs Act, 1951.
    
21. The Defendants as creatures of Statute can only do those acts authorized by the enabling legislation or those acts which maybe fairly regarded as incidental thereto.
    
22. The First Defendant decision to block access of some brokers to the ASYCUDA system was neither authorized as a form of collecting outstanding duties, nor was it incidental to or consequential upon those things which the Legislature has authorized.
    
23. It is trite law that an administrative authority can exercise only those powers granted to it either expressly or impliedly. (Henry Bailasi, Provincial Administrator of Milne Bay Province v Rigo Lua, Chairman, Public Service Commission, Ors. & The State [2013] PGNC 304 N5145; Council of Civil Service Unions v Minister for Civil Service (1985) AC 374).
    
24. I cannot emphasize more the importance of the need by administrative bodies to understand the law under which they operate and to give effect to it.
    
25. Ordinarily, having found that the decision of the Commissioner was ultra-vires should be the end of the matter. However, in the event I am wrong to so hold, I am of the considered view that the decision is liable to be quashed on the basis that it is irrational as counsel for the Plaintiff Mr. Diweni contended.
    
26. It is trite law that any arbitrary use of power will amount to unreasonableness and such exercise of power is reviewable. (Francis Kambaka, District Administrator of Ambunti-Dreikikier & Anor. v Michael Dick, Acting Chief Ombudsman, Ors. & The State; [2018] PGNC 126 N7209; The Honourable Sir Dr Puka Temu, Minister for Public Service & Ors. v Ombudsman Commission of Papua New Guinea [2016] PGNC 195 N6388). The decision of the First Defendant is arbitrary and therefore unreasonable in that it is blanket in its nature and fails to acknowledge that brokers also act for other owners of goods who many not be in default of paying duty.
    

Costs

27. The law is that costs follow the event. In this matter there is no reason why costs should not follow the event.
    
28. In the result:
    
    • (a) The decision of the First Defendant published on the 11^th of September, 2019, giving notice that with effect from the 1^st of October, 2019, Customs Brokers who had unpaid duties would be blocked from accessing and processing declaration through the ASYCUDA WORLD processing system is hereby quashed in its entirety, with costs.

_______________________________________________________________
Diweni Lawyers: Lawyers for the Plaintiffs
Office of the Solicitor General: Lawyers for the Defendants