Commodities Export Marketing Authority v Attorney General [1989] SBHC 14; [1988-1989] SILR 39 (7 August 1989)

[1988-1989] SILR 39

IN THE HIGH COURT OF SOLOMON ISLANDS

Civil Case No. 115 of 1989

IN THE MATTER OF THE COMMODITIES EXPORT MARKETING AUTHORITY ACT

THE COMMODITIES EXPORT MARKETING AUTHORITY

v

THE ATTORNEY GENERAL

High Court of Solomon Islands
(Ward C.J.)
Civil Case No. 115 of 1989

Hearing: 26 July 1989
Judgment: 7 August 1989

Originating summons - Commodities Export Marketing Authority Act 1984 - whether Commodities Export Marketing Authority empowered to act as guarantor for loans made by commercial banks to its employees.

Facts:

The Commodities Export Marketing Authority, a statutory corporation established under the Commodities Export Marketing Authority Act 1984, applied by originating summons for a determination of four questions:

1. Whether the Applicant is empowered under the Commodities Export Marketing Authority Act (No.5 of 1984) to act as guarantor for loans made by commercial banks to employees of the Applicant.

2. If the answer to 1 is yes, whether there are any restrictions on the Applicant’s right to give such guarantees.

3. If the answer to 1 is no, whether the Applicant may provide other assistance to its employees to enable them to obtain loans for personal use.

4. If the answer to 3 is no, whether the Applicant may provide other assistance to its employees to enable them to obtain loans for uses connected indirectly with their employment.

Held:

(1) Both s.6 and s.23 of the Act make it clear that the only circumstances in which the Authority is empowered to act as a guarantor is where to do so is in furtherance of the Authority’s functions under s.6 of promoting export of any commodity. The provision of guarantees to employees is not in furtherance of this object. The answer to the first question was no.

(2) The express mention of the power to make loans to producers in s.24 of the Act excludes any general implication that such powers may be used in other circumstances. Had Parliament intended such a power it would have included a specific reference to it. The answer to the third and fourth questions was also no.

Cases referred to:

Guaranty Trust v. Hannay [1915] 2 K.B. 536
In re Stephen [1916] 1 Ch. 322
Rediffusion (Hong Kong) v. Attorney General of Hong Kong [1970] UKPC 12; [1970] 2 W.L.R. 1264

J Corrin for Applicant
R. Teutao for the Attorney General

WARD CJ: By originating summons, Miss Corrin applies to this court on behalf of the Commodities Export Marketing Authority for a determination of four questions:

1. Whether the Applicant is empowered under the Commodities Export Marketing Authority Act (No.5 of 1984) to act as guarantor for loans made by commercial banks to employees of the Applicant.

2. If the answer to 1 is yes, whether there are any restrictions on the Applicant’s right to give such guarantees.

3. If the answer to 1 is no, whether the Applicant may provide other assistance to its employees to enable them to obtain loans for personal use.

4. If the answer to 3 is no, whether the Applicant may provide other assistance to its employees to enable them to obtain loans for uses connected indirectly with their employment.

The application is made under Order 27, rule 5 and Order 58 and I initially questioned whether the Applicant had sufficient interest to bring this action and whether the court had jurisdiction.

I am satisfied that there is a sufficient interest and the Court can make such a declaration on the authority of Guaranty Trust v. Hannay [1915] 2 K.B. 536, In re Stephen [1916] 1 Ch. 322 and Rediffusion (Hong Kong) v. Attorney General of Hong Kong [1970] UKPC 12; [1970] 2 W.L.R. 1264. However, I directed that the Attorney General be served with the summons and joined as a defendant.

The Commodities Export Marketing Authority is a statutory corporation established under the Commodities Export Marketing Authority Act 1984 to provide, according to the title, for the development of the production of certain commodities for the purpose of their export and for promoting and regulating their marketing and for matters connected therewith or incidental thereto. It was, amongst other things, the successor to the Copra Board and Schedule 3 of the Act sets out transitional provisions by which the chairman and members of that Board became the chairman and members of the new Authority. Similarly the employees of the Copra Board were to continue in employment on the same salaries and conditions of service with the Commodities Export Marketing Authority.

It appears that the Copra Board had established a staff loan guarantee scheme and the Commodities Export Marketing Authority continued with the scheme. However, the commercial banks who were making the loans questioned whether the Authority had such power and refused to accept such guarantees.

It appeared during argument before the Court that the Authority had sought the advice of the Attorney General and were assured that the scheme was covered by the transitional provisions that allowed employees to continue on the same terms as previously. I have not seen that advice and can only assume there was some misunderstanding. Mr Afeau, who now appears for the Attorney General, concedes that advice was wrong.

The Authority now seeks declarations to clarify their position on the matter.

It is well settled law that the powers of statutory corporations are limited by the Act creating them. The learned editor of Halsbury (Laws, 4th Edition, Vol. 9, para. 1333) states the principle in the following terms:

“The powers of a corporation created by statute are limited and circumscribed by the statutes which regulate it, and extend no further than is expressly stated therein, or is necessarily and properly required for carrying into effect the purposes of its incorporation, or may be fairly regarded as incidental to, or consequential upon, those things which the legislature has authorised. What the statute does not expressly or impliedly authorise is to be prohibited”.

I accept that states the position here as established by a line of authorities in England.

The Authority had claimed the power to give guarantees under section 8(a) of the Act:

“8. For performing its functions under this Act, the Authority may -

(a) appoint such employees as it reasonably requires, upon such terms and conditions and on such remuneration, as it thinks fit;”

On the face of that provision I cannot accept it gives the power to guarantee such loans. By such a guarantee the Authority may be in the position of having to repay the loan on behalf of the employee. That is not part of the terms and conditions of employees or of the employees’ remuneration.

By section 26 the Authority is limited in its application of funds at its disposal. That section provides in paragraph (c) for “the payment of the remuneration, allowances and salaries payable to its ..... employees ......”

The payment of funds to honour a guarantee of a loan to an employee cannot be considered part of the remuneration, allowances or salary of that employee.

The Act does allow guarantees to be provided in certain circumstances. Section 6(2)(c) allows such guarantees on such conditions as may be approved by the Minister in consultation with the Minister of Finance to persons engaged in any activity prescribed by the Minister with a view to promoting export of any commodity.

Section 23 also provides:

“The Authority may, from time to time and only with the written approval of the Minister given after he has consulted with the Minister for Finance, guarantee in such manner, as it thinks fit, the repayment of the principal of and interest and other charges on a loan by a bank made to a producer for the production of a commodity or for carrying on any other prescribed activity in a commodity, on the recommendation of the Authority.”

Both these sections make it clear they are to be employed for the furtherance of the Authority’s function under the Act as set out in section 6 and, as such, are for the purpose of promoting the export of commodities. The provision of guarantees to employees cannot be said to be in furtherance of that object.

Equally, the fact there are specific provisions for guarantees in other sections would suggest that the Legislature did not intend such a power in section 8. The principle is that the express mention of one thing may mean an intention not to include it in any other part.

The answer to the first question is “No”.

The third and fourth questions are based on section 24.

“The Authority may, from time to time and only with the written approval of the Minister given after he has consulted with the Minister for Finance, lend money to a producer for or in connection with the purposes of this Act, on such terms and conditions as it thinks fit.”

Clearly that section is limited to loans to producers (as defined in section 2) for the reasons stated. It cannot be suggested that applies to an employee unless, of course, he is also a producer and is applying in that capacity.

Such an express mention of loans excludes any general implication that such powers may be used in other circumstances. Had Parliament intended such a power, having considered it for the purposes of section 24, it would no doubt have included a specific reference to it.

The answer therefore to questions three and four is also “No” in each case.