Premier of Isabel Province v Earthmovers Group of Companies [2005] SBCA 17; [2005] 2 LRC 439 (4 August 2005)

[2005] 2 LRC 439

IN THE COURT OF APPEAL OF SOLOMON ISLANDS

PREMIER OF ISABEL PROVINCE

v

EARTHMOVERS GROUP OF COMPANIES
(trading as Eastern Development Enterprises Ltd)

Court of Appeal
Lord Slynn of Hadley P, Adams and Kabui JJA
18 July, 4 August 2005

Administrative law - Local government - Statutory powers -Limitations - Revenue - Provincial government having limited taxing power - Licence fees - Licences for logging - Fee increased - Fee raising revenue for provincial government - Whether amounting to tax - Whether provincial government acting ultra vires - Relevant considerations - Constitution of the Solomon Islands 1978, s 106 - Provincial Government Act 1997, ss 26, 31, Sch 3 - Interpretation and General Provisions Act, s 67(2).

The provincial government in the Isabel Province increased the fee for a business licence for logging. Under s 31 the Provincial Government Act 1997 a Provincial Assembly had no power to make laws amending taxation unless that power was expressly conferred on them by or under that Act. Section 26 of the 1997 Act specified the functions of a provincial Assembly which included, in para 4 of Sch 3, the collection of 'fees for services performed or licences issued by on behalf of the Provincial Executive...' Under s 67 of the Interpretation and General Provisions Act charges from a public body in respect of services provided were not to be 'excessive or unreasonable'. The Isabel Business Licence Amendment Ordinance 1994, as amended in 1995, and the Amendment Order 2003 increased the licence fee for logging in that province. The plaintiff filed a claim that the imposed annual business licence fees for timber felling and logging were ultra vires the Provincial Executive and the Assembly. The plaintiff contended that they were not fees but were taxes which the provincial government was precluded from setting or enforcing under s 106 of the Constitution. The plaintiff further contended that the fee was unreasonable or excessive under s 67 of the Interpretation and General Provisions Act. The High Court held that the licence fees had the nature of a tax rather than a charge for services rendered; the judge placed particular reliance on the admission of a minister that revenue was raised through those fees. The judge accordingly held that the 1995 and 2003 Amendment Ordinances were ultra vires the Isabel Provincial Executive and the Assembly, in so far as they imposed annual licence fees, and that the fees sought to be imposed on the plaintiff for the years 2001-2004 were of no force and effect. The defendant appealed to the Court of Appeal.

HELD: Appeal allowed.

The Provincial Assembly had the power under s 26(1) and Sch 3(4) (c) of the 1997 Act to raise revenue by 'fees for services performed or licences issued' and there was no doubt that in the instant case licence was granted under the 1994 Ordinance, which enabled conditions to be imposed on the way businesses were conducted and enabled monitoring and supervision of businesses. Section 67(2) of the Interpretation and General Provisions Act, providing that fees or charges should not be excessive or unreasonable, clearly applied only to charges for services rendered and therefore did not apply; there was no provision in terms that a licence fee should be reasonable. In any event, the fees for the particular licences in question were not unreasonable. The minister's statement in the High Court that the fees raised revenue did not indicate that the principal purpose of the licence fees was 'illicit taxation'. Revenue could be raised in a number of ways which did not constitute taxation. Charges for services were obviously permitted and the provision of such services might well produce revenue over and above the actual cost of providing the services. That did not make the excess 'profit' a tax. That different licence fees were fixed for different activities did not mean that those were necessarily discriminatory. The provincial government was entitled to have regard to the nature of the services, to their scope and to other economic considerations. There was evidence that the cost of monitoring relevant businesses under the ordinances was high and the fees went towards meeting such costs. That some of the fees might find their way into the general revenue of the provinces did not convert what was a genuine licence fee into a tax. In the instant case the fee was for a genuine licence issued by the provincial government within powers conferred on it under and fees were properly payable. It was not ultra vires the Provincial Executive and the Assembly (see pp 449-450, below). Solomon Motors Ltd v Honiara Town Council (5 September 1995, [1995] SBCA 2; Civil Appeal Case No 11 1994, unreported), Allardyce Lumber Co Ltd v Premier of Western Province (14 March 1995, [1995] SBHC 24; HC 234/94, unreported); (18 November 1996, [1996] SBHC 68; Civil Case No 161 of 1996, unreported), Y Sato & Co Ltd v Honiara Town Council; Solomon Motors Ltd v Honiara Town Council (16 June 1998, [1998] SBHC 31; Civil Cases 48/97 and 55/97, unreported) and Luton v Lessels [2002] HCA 13; (2002) 187 ALR 529 considered.

Per curiam. It might well be that in a developing administrative law there is an implied requirement that a fee should be reasonable or proportional. However, it is still right in principle that the court should pay regard to the assessment by elected representatives and government officials as to what is required and justified for the purpose of license activity within the province (see p 449-450, below). Kruse v Johnson [1898]2 QB 91 and Allardyce Timber Lumber Co Ltd v Premier of Western Province (14 March 1995, [1995] SBHC 24; HC 234/94, unreported); (18 November 1996, [1996] SBHC 68; Civil Case No 161 of 1996, unreported) considered.

[Editors' note: Sections 31, 26 and Sch 3 of the Provincial Government Act 1997, so far as material, are set out at p 442, below.

Section 67 of the Interpretation and General Provisions Act (Cap 85), so far as material, is set out at p 442, below.

Section 106 of the Constitution of Solomon Islands 1978, so far as material, is set out at p 442, below.]

Cases referred to in judgment

A-G for Quebec v Williams (1944) 4 DLR 488
Air Caledonian International v Commonwealth [1988] 165 CL 462, Aus HC
Allardyce Timber Lumber Co Ltd v Premier of Western Province (14 March 1995, [1995] SBHC 24; HC 234/94, unreported); (18 November 1996, [1996] SBHC 68; Civil Case No 161 of 1996, unreported)
Conrad v State of Delaware 16 Atl Rep (2nd) 121
Kruse v Johnson [1898] UKLawRpKQB 101; [1898] 2 QB 91, [1855-99] All ER Rep 105, UK DC
Luton v Lessels [2002] HCA 13; (2002) 187 ALR 529, Aus HC
Matthews v Chicory Marketing Board (Vict) [1938] HCA 38; (1938) 60 CLR 263, Aus HC
Lower Mainland Dairy Products Sales Adjustment Committee v Crystal Dairy Ltd [1933] AC 168, [1932] All ER Rep Ext 1005, Can PC
Solomon Motors Ltd v Honiara Town Council (5 September 1995, [1995] SBCA 2; Civil Appeal Case No 11 of 1994, unreported)
State of Wisconsin v Jackman (1973) 211 NW 2D 480, Wisconsin SC
Y Sato & Co Ltd v Honiara Town Council; Solomon Motors Ltd v Honiara Town Council (16 June 1998, [1998] SBHC 31; Civil Cases 48/97 and 55/97, unreported)

Legislation referred to in judgment

Constitution of Solomon Islands 1978, s 106
Crown Proceedings Act, s 15(1)
Forest Resources Timber Utilisation Act (Cap 40), ss 4-5
Interpretation and General Provisions Act (Cap 85), s 67
Isabel Business Licence Amendment Order 2003
Isabel Business Licence Amendment Ordinance 1995
Isabel Business Licence Ordinance 1994, ss 3, 5, 6(1), Sch 2, Sch 3
Provincial Government Act 1997, ss 26(1), 31(1), (5), Sch 3, Sch 4

Appeal

The defendant, the Premier of Isabel Province (representing the Isabel Provincial Executive of the Isabel Provincial Assembly), appealed against the decision of Palmer CJ (Civil Case No 048 of 2004) allowing the respondent's claim that the Isabel Business Licence Amendment Ordinance of 1995 and Amendment Order of 2003 were ultra vires the Provincial Executive and the Assembly. The respondent, Earthmovers Group of Companies (trading as Eastern Development Enterprises Ltd), opposed the appeal. The facts are set out in the judgment of the court.

N Moshinsky QC for the appellant.
J Sullivan and Rodney Kingmele for the plaintiff.

4 August 2005. The following judgment of the court was delivered.

LORD SLYNN OF HADLEY P, ADAMS and KABUI JJA.

Eastern Development Enterprises Ltd ('the company') is a company incorporated in the Solomon Islands. Its business primarily is that of logging in the Isabel Province and in other parts of the Solomon Islands. The defendant, the Premier of Isabel Province, is sued as representing the Isabel Provincial Executive of the Isabel Provincial Assembly ('the provincial government').

The central question in these proceedings is whether the company is liable to pay to the provincial government substantial moneys in respect of business licences for logging activities in the years 2001 to 2004 and, conversely, whether the provincial government is liable to repay to the company such moneys which the company has already paid. There is a second question as to whether the business licence fees for shipping services, freighter and stevedore services fell to be paid by the company since it did not carry on such businesses.

The central question arises in this way. By s 106 of the Constitution 'No taxation shall be imposed or altered except by or under an Act of Parliament'.

By s 31 of the Provincial Government Act 1997:

'(1) A Provincial Assembly has power to make laws only (1) if and to the extent that (a) they relate to matters with the legislative competence of the Assembly...

(5) A Provincial Assembly has no power to make laws imposing, altering or abolishing any tax, except where power to do so is expressly conferred on the Provincial Assembly by or under this Act.'

Section 26(1) of that Act, under the heading 'Transfer of Functions Devolution of Functions etc', provides that '(i) A Provincial Assembly shall exercise as regards the Province the functions specified in Schedule 3 and 4'. Schedule 3 includes 'Finance':

'(4) Raising revenue by-

(a) basic rates;

(b) property tax;

(c) fees for services performed or licences issued by or on behalf of the Provincial Executive (other than services performed or licences issued by them as agent of another)...'

By s 67 of the Interpretation and General Provisions Act (Cap 85):

'(1) the power under an Act to make regulations providing for fees or charges may be exercised by making provisions for the same in the ways specified; but...

(3) Where any fees or charges referred to Schedule (1) is in respect of any services provided by any public body, such fees or charges shall as far as practicable be within arrange properly chargeable in respect of the services provided, and shall not be excessive or unreasonable.'

The Provincial Assembly by the Isabel Business Licence Ordinance 1994 provided in s 3 that no persons should operate 'any Business in the Province unless they have first been granted a Licence in accordance with the provisions of this Ordinance'. Schedule 2 to the Ordinance specified the categories of business and the fees payable was set out in Sch 3 where the range is from $30 for prepared food to $150,000 for mining. The fee for timber felling: permanent logging-export was $56,000.

By s 5:

'...(2) The Executive or Authorized officer shall not grant a licence unless they are satisfied that the applicant complies with all relevant National and Provincial laws and policies.

(3) The Executive... may attach such conditions and restrictions to any licence granted as it considers appropriate or necessary

(4) the Applicant "shall be notified of any conditions attached to the Licence"

(5) All licence (sic) may be revoked by the Executive for breach of any conditions or restrictions endorsed thereon.'

By s 6(1) before a business licence is granted the extent of involvement in the business by people indigenous to the Isabel Province and resident in the locality where the business is to be carried out and the contribution to services to the people of the Isabel Province are to be taken into consideration. Carrying on business without a licence attracts a penalty.

By the Isabel Business Licence Amendment Ordinance 1995 the fee for timber felling - permanent logging was set at $80,000. By an Amendment Order of 2003 the fee for timber felling - logging was set at $100,000 for a contractor and $30,000 for a sub-contractor per concession area. Other fees were also increased by the 2003 Ordinance, eg mining was increased to $500,000.

In addition to the requirement of a business licence s 4 of the Forest Resources Timber Utilisation Act (Cap 40) provided that it is an offence 'to fell any tree or remove any timber from any land for the purposes of sale otherwise than for specified purposes and in particular under and in accordance with the terms of a licence issued under section 5'.

By a writ of summons and a statement of claim dated 21 March 2004, as amended on 14 October 2004, the company claimed a declaration that the Business Licence Amendment Ordinances of 1995 and 2003, in so far as they imposed annual business licence fees for timber felling; permanent logging for export of round logs, were ultra vires the Provincial Executive and the Assembly.

The moneys claimed are said by the provincial government to be fees due under the Licensing Ordinance. The company contends that they are not fees but they are taxes which the provincial government is precluded from setting or enforcing.

We had the advantage of submissions on a number of preliminary issues by the learned Solicitor General on behalf of the Attorney General. In view of the conclusions to which we have come it is we think sufficient, without any disrespect to the Solicitor General, if we summarise our views on these matters.

In the first place we accept his submission that the relief granted was of a final nature so that leave to appeal was not required. We agree too that the orders made should have been interlocutory rather than final orders but in the end, for reasons which will appear, the appellant was not prejudiced by this.

Although the contrary was not argued fully, consider that the Solicitor General is right in contending for the reasons advanced by him that the Provincial Executive should be regarded as included in the concept of 'the Crown' and that accordingly, for the purpose of these proceedings, the Attorney General should have been joined as a party to the proceedings under s 15(1) of the Crown Proceedings Act.

We gave leave for the Attorney General to be joined and he was joined. He submitted that the learned judge had erred in law in holding that the licence fee was a tax.

The Solicitor General contended that the fee here was only 'fee for a licence' and not a charge for a service. It was payment for a privilege. We deal with this matter below:

There are other issues between the parties as to the amount owing - the claim initially for $9,087,660 was later revised or reduced to $1,354,588, although it is now reinstated at the former figure. The company denies separate liability for different areas covered by one licence since there can only be one charge for all land covered by a licence. There may also be a dispute as to how much has already been paid by the company, which contends that it paid $565,334 plus $32,500. There is also a contention that some of the money is claimed in respect of land where the company has a licence but where it has not commenced, or it has ceased, logging. However, none of these calls for decision on this appeal since the learned judge did not need to deal with them.

The judge found that the business licence fees in Sch 3 to the 2003 Ordinance were discriminatory on their face since the province was seeking 'to raise revenue by attaching large licence fees to categories which attract large business interests'. No justification had been shown for the difference between $100,000 for contractors and $30,000 for sub-contractors.

'In the absence of any apparent Forest Management powers divested by the Central Government Act or the Provincial Government Act these business licence fees complained of have the indicia of "tax" rather than any "services rendered" in consideration of such charges.'

The charges were apparently excessive and so may be seen as a tax. He concluded that there was no sufficient evidence to show what services were provided by the province and how they related to the amount of the fees. The Deputy Prime Minister had conceded in cross-examination that the moneys charged for the licence 'raise revenue' and the judge said that he was satisfied on that that 'the principle purposes of these licence fees, to raise revenue, was illicit taxation' and beyond the power of the province. The scheme therefore in purporting to impose licence fees on loggers, shipping services and stevedore services is void for it was ultra wires the provincial government.

The learned judge accordingly held that the 1995 and the 2003 Amendment ordinances were ultra vires the Isabel Provincial Executive and the Assembly in so far as they imposed annual business licence fees in respect of 'timber felling: permanent logging for export of round logs' and the fees sought to be imposed on the plaintiff for the four years beginning on 1 April 2001, 2002, 2003 and 2004 were of no force and effect and that the plaintiff was not liable to pay them. Secondly, the learned judge held that during those years 2000-2004 the plaintiff did not carry on the 'business of shipping services - foreign freighters' or 'stevedore services' within the jurisdiction of the defendant so that there was no liability to pay any fees in respect of those matters. The second matter is not the subject of this appeal.

Although the judge does not deal with other items in the schedule than those referred to it would seem to follow that, in the absence of specific services for specific businesses at what are proved be reasonable cost-related charges, his ruling would apply to other if not all items in the schedule and to all other provinces which seek to impose business licence fees and make charges as on the face of it they are empowered to do.

The provincial government appeals on the grounds that the judge was wrong to consider whether the 'fee for service' charge rejected the cost of any actual service and indeed whether there was any discernible service to the plaintiff. There was no legal requirement that the service funded by a licence fee had to be provided to the licensee itself. He also erred in holding that the licence fees in Sch 3 of the 2003 Ordinance were discriminatory and that the fee for logging business was excessive. He was wrong to hold that in the absence of specific devolved powers to the defendant and in the absence of forest management powers divested by the central government to the provincial government the licence fee had the indicia of a tax.

The central question in this case has arisen before the court on a number of occasions. It is necessary to have a regard to what this court and judges of the High Court have said.

In Solomon Motors Ltd v Honiara Town Council (5 September 1995, Civil Appeal Case No 11 of 1994, unreported) the fees extracted were flat rate fees though companies might be charged several fees for various aspects of their businesses. This court recited that Palmer J at first instance had found that A-G for Quebec v Williams (1944) 4 Dom LR 488) and Conrad v State of Delaware 16 Atl Rep (2nd) 121 had established the proposition that-

'the essence of a law imposing (or altering) taxation (as distinct from a licence fee) is - (1) that it is properly catalogued as a law to secure funds to a public authority by way of contribution to the revenue for what are properly seen as the Public Services of the State; or (2) that it is imposed solely or primarily or mainly to ensure revenue and not for the costs properly chargeable for the purposes of conducting proper system of business licensing.'

In order to differentiate a particular charge as a licence fee or as taxation Palmer J considered that it was appropriate to apply the test stated by Hallows CJ in State of Wisconsin v Jackman (1973) 211 NW 2d 480, cited in his Lordship's reasons, namely-

'a tax is one whose primary purpose is to obtain revenue while a licence a fee is one made primarily for regulation and whatever fee is provided is to cover the cost and the expenses of supervision or regulation.'

The Court of Appeal added -

'Neither party contested this approach. Each accepted that this was the essence of the distinction envisaged by section 106 of the Constitution. For the moment the court will assume that this is correct.'

The Court of Appeal said (at 7):

'It can be seen that both for the arguments addressed to constitutional validity and those concerning the reasonableness of the fees charged by plaintiff for the licensing of businesses, an important, even crucial, question may be the establishment of the relationship (if any) between the fees actually charged by the plaintiff to licence particular businesses and the activities performed by the plaintiff in relation to such licensing. If all that the plaintiff were to do was to provide a piece of paper called "a licence" to any business applicant, conducting no investigations, inspections or enquiries and providing no services at all, clearly the "licence" and fees would be revealed as nothing more than the raising of revenue for the plaintiff. This would then raise the three objections tendered by the appellant in the appeal. If, however, there were services provided which bore some arguable relationship between the fees charged and the services provided, the Court would not involve itself in the precise ratio between charges and services. It would be enough for the Court to note that an arguable relationship was established. This would meet the contention that purported licence fees were actual illicit taxation, beyond power or otherwise not reasonable in the relevant sense.'

The court in that case found that there was no sufficient evidence as to work done by the council in inspecting and evaluating applications and, more particularly, about any ongoing monitoring of businesses 'which would be normal in a system which was truly one of licensing of businesses (as distinct from revenue raising)'. The case was accordingly sent back to the High Court for further evidence on these matters.

'If the answer is that the Council does the activities apt for a business licensing body (inspection, monitoring sanctioning unacceptable activity etc,) the Court will not become involved in the exact relationship between the Council's activities and its charges.'

In Allardyce Timber Lumber Co Ltd v Premier of Western Province (14 March 1995, HC 234/94, unreported) Muria CJ, having referred to Australian authority, held that a licence fee in respect of round log timber exporting based on $10 per cubic metre on log exported or cut for export was a tax, being a duty of excise, because it related to the volume of logs so dealt with. A flat rate fee of $50,000 per annum for logging activities, however-

'did not necessarily have the effect of putting a control over the commercial operations of the plaintiffs in the Province but was rather a fee for carry on business in the Province. It is therefore within the competence of the Province to charge a reasonable licence fee based on a flat rate.'

He added:

'I hear no argument against the reasonableness of the flat rate licence fee of $50,000 in this case. In view of the nature of the operations of the Plaintiff in the Province, I see no justification for any objection to the flat rate here imposed.'

In Allardyce Timber Lumber Co Ltd v Premier of Western Province (18 November 1996, Civil Case No 161 of 1996, unreported) Awich J held that a flat rate fee of $150,000 per year for the business of round logs was ultra vires. He said (at 9):

'A very useful discussion on the question of whether a sum charged is fee or tax is in the American cases of Conrad v State of Delaware 16 Atl Rep (2nd) 121 and State of Wisconsin v Jackman (1973) 211 NW 2d 480 (and in the Canadian case of A-G for Quebec v William (1944) 4 Dom LR 488. If the charge is imposed (1) solely or mainly to ensure revenue and not for the costs properly chargeable for the purpose of conducting a proper system of business licensing, and (2) to secure funds to a public authority by way of contribution to the revenue for public services then the charges they tax.'

The judge added (at 10):

'Moreover it is not for the court to calculate the precise arithmetic ratio of the relationship. I am, on the other hand, sure that there is no way that a figure as high as $150,000 would be within range. It is my decision that the charge of $150,000 per year for licence for exporting round logs from Western Province, bears is no arguable relationship whatsoever to duties expected of officials of the Province in relation to the business.'

His decision on that point was not eventually challenged by the Premier but the appeal was allowed on the basis that the judge had been wrong to hold that the $50,000 fee revived if the $150,000 fee was set aside.

We have been referred to a number of authorities which have looked further afield. Thus, in Y Sato & Co Ltd v Honiara Town Council; Solomon Motors Ltd v Honiara Town Council (16 June 1998, Civil cases 48/97 and 55/97, unreported), the judge put this matter in this way:-

'From the views of the judges I have mentioned above it is my conclusion that for an imposition of money to be regarded as reasonable and therefore a licence fee and not tax, the imposition must be related to a sum of money required for defraying costs of services provided, duties carried out or expected to be carried out in monitoring, regulating, conserving or carrying out other activities required in relation to the business to be licensed or to be related to the value of the privilege for which the licence is to issue. The sum need not to be mathematically accurate it will suffice if it bears some reasonably proportion to the costs to be defrayed or the value of the privilege.'

At p 19 of his judgment he referred:

(a) to a decision of the Privy Council in Lower Mainland Dairy Products Sales Adjustment Committee v Crystal Dairy Ltd [1933] AC 168 that a tax was said to be compulsory, imposed for public purposes, and enforceable by law; and

(b) to Air Caledonia International v Commonwealths [(1988) [1988] HCA 61; 165 CLR 462] where there was added a fourth condition derived from Matthews v Chicory Marketing Board (Vict) [1938] HCA 38; (1938) 60 CLR 263, namely that in addition to the three conditions the charge should not be 'a licence fee'.

The High Court of Australia commented that this definition was not an exhaustive definition of a tax and that tax might take different forms. They also added that the payment for services rendered must be services rendered to or at the direction or request of the person required to make the payment. The reference to the payment not being a payment for service as rendered was intended to be 'but an example for various special types of exaction which may not be taxes even though the positive attributes mentioned' are all present. Awich J in Y Sato & Co Ltd v Honiara Town Council; Solomon Motors Ltd v Honiara Town Council (16 June 1998, civil cases 48/97 and 55/97, unreported) added that the definition was in still incomplete since it necessitated defining, a licence fee 'itself exhibiting all the three positive attributes'. In defining or determining what a licence fee is, the issue of relationship with services, duty and privilege and of reasonableness come in. Moreover, it is often still necessary to explain further that money imposed as a licence fee is not payable into the general consolidation fund of the state for providing general services.

In Luton v Lessels [2002] HCA 13; (2002) 187 ALR 529 Gaudron and Hayne JJ stated that:

'The presence or absence of none of them, however, is determinative of the character of the legislation said to impose a tax. It is necessary, in every case, to consider all the features of the legislation which is aid to impose a tax.'

In the present case Brown J concentrated on the question whether there were services performed and he asked 'so what does the Province do for the grant of these licences?' He answered 'nowhere does the Province show type of services given the business in satisfaction'. Assuming that is the right question this court does not consider that it is necessary, as it was found to be necessary in Solomon Motors Ltd v Honiara Town Council (5 September 1995, Civil Appeal Case No 11 of 1994, unreported) to send the case back for further evidence as to the nature of the services provided. In para 6 of an affidavit sworn by Mathias Padaronvo Simata, Deputy Premier, Minister of Finance for Isabel Province, he stated:-

'In 2003, the Defendant has increased the business licence fees for logging business per concession area from $80,000.00 to $100,000.00 per year. The Defendant increased the licence fees for logging business because of the nature of the logging industry and the number of logging companies operating in Isabel. The logging industry is very costly to the Defendant, hence, increasing the business licence fees. Some of the costs are:

(a) in order to process business licences, the Provincial Executive members have to be called to Buala from all over Isabel to deliberate on the applications;

(b) calling of Executive from all over Isabel to deliberate on Form I applications from the Commissioner of Forests;

(c) staff touring of the logging camps for inspections and other related activities;

(d) repair and maintenance of outboard motor canoes and engines used for the touring;

(e) fuel usage on the outboard canoes and engines;

(f) stationeries and supplies including photocopies;

(g) travelling costs, accommodation, meals during Honiara tours in relation to logging matters.'

That statement does not set out the details but it gives the sense of what it is done and it is not necessary to show that items are individually charged. We do not see that the charges in any event have been shown to be unreasonable.

But that, in our view, is not the right question. The starting point is that the provincial government can only tax where a power 'to do so is expressly conferred on the Provincial Assembly and by or under this Act' ie the Provincial Government Act 1997. Section 26(1) and Sch 3 give that power. We stress that Sch 3 in para 4 includes not only fees for services performed but also for licences issued. The question is not whether this was a charge for services rendered but whether it was a fee for licence issued by the provincial government.

We have no doubt that here a licence was granted. The 1994 Ordinance is headed 'Isabel Province Business Licence Ordinance. An Ordinance to provide for the regulation control and licensing of business carry on in Isabel Province'. It enables conditions to be imposed on the way in which businesses are to be conducted in the province and it enables monitoring and supervision of the way in which businesses are conducted.

Reliance has been placed by the company on s 67 of the Interpretation and General Provisions Act (Cap 85) which requires that in respect of services provided the charges shall be within a range properly chargeable in respect of the services provided and not be excessive or unreasonable. That, however, clearly applies only to the charge for services rendered. There is no provision in terms that the licence fee shall be a reasonable one. That section does not apply.

It may well be that in a developing administrative law there is an implied requirement that a fee should be reasonable or proportional. Assuming, without deciding, that that is so it is relevant to have regard to the judgment of Lord Russell CJ in Kruse v Johnson [1898] UKLawRpKQB 101; [1898] 2 QB 91 which is cited by Awich J in Allardyce Lumber Timber Co Ltd v Premier of the Western Province (18 November 1996, Civil Case No 161 of 1996, unreported).

That statement may have been overtaken by the later development of administrative law, but it is still right in principle that the court should pay regard to the assessment by elected representatives and government officials as to what is required and justified for the purpose of licensing activity within the province. We are, in any event, satisfied that the fees for the particular licences involved here are not unreasonable.

We do not consider that the answer of the minister in dealing with the fees charged for contractors and sub-contractors- 'Correct, that is how we raise revenue'- indicates that the principal purpose of the licence fees was 'illicit taxation'. Revenue can be produced in number of ways which do not constitute taxation. Charges for services were obviously permitted and the provision of such services may well produce revenue over and the above the actual cost of providing the services. That does not make the excess, 'the profit', a tax. Nor do we think that the fact that different licence fees are fixed for different activities means that these were necessarily discriminatory. The provincial government is entitled to have regard to the nature of the services to their scope and to other economic considerations. Similarly, the fact that different fees may be charged for a driving licence from the fees charge for a television set or radio does not make the tax necessarily discriminatory.

The evidence was that the cost of monitoring these businesses could be high and there is also evidence that the fees went towards meeting these costs. The fact that some of the fees might find their way into the general revenue of the provinces does not, in our view, convert what is a genuine licence fee into a tax.

If properly seen the licence fees are to be regarded as a tax then, in our view, they are not in breach of s 106 of the Constitution because they are imposed by or under an Act of Parliament, ie by the Provincial Government Act 1997, namely by s 26 and item 4 in Sch 3 to the Act.

Accordingly, we hold that this was a fee for a genuine licence issued by the provincial government within powers conferred on it and fees are properly payable. It was not ultra vires the Provincial Executive and the Assembly. We allow the appeal.