Murray v Premier of Makira Ulawa Province [1995] SBHC 57; HC-CC 153 of 1995 (17 October 1995)

HIGH COURT OF SOLOMON ISLANDS

Civil Case No. 153 of 1995

ALFRED MURRAY

-v-

THE PREMIER MAKIRA ULAWA PROVINCE

High Court of Solomon Islands
(Muria, CJ.)

Hearing: 15th September 1995
Judgment: 17th October 1995

A. Radclyffe for Plaintiff
C. Ashley for Defendant

MURIA CJ: This is an application by the plaintiff by way of an Originating Summons seeking a number of declaratory orders which are as follows:

1. That the ban on the licensing and sale of liquor by the Makira Ulawa Provincial Executive dated 28th June 1994 is ultra vires and void.
   
2. That as a result of the illegal ban the Plaintiff has suffered losses of $13,680.00 being the value of 95 cartons of SB Beer at $144 per carton which the plaintiff has been unable to sell as a result of the ban.
   
3. That the Plaintiff is entitled to damages of $13,680.00 from the Defendant.
   
4. An order that the makira Ulawa Liqour Licensing Board meet to consider applications for Liquor Licenses.
   

The facts of this case are not in dispute. The plaintiff carries on a retail business at Namuga, Star Harbour in the Makira Ulawa Province. He also had a retail beer licence for the year 1994 which under normal circumstances would expire on 31 December 1994. A fee of $2,000.00 had been paid for the issue of that licence.

On the 28 June 1994 the Makira Ulawa Provincial Executive by resolution imposed a ban on the licensing and sale of liquor in the Province effective from the date of the expiry of the 1994 licences. That ban is still effective throughout Makira Ulawa Province. The plaintiff was given notice in writing in July 1994 of the Executive’s decision on the ban.

In early December 1994, the plaintiff ordered 150 cartons of beer from Honiara at the landing cost of $95.42 per carton and he was then selling them at $144.00 per carton. By the end of December 1994 the plaintiff still had 95 cartons of beer left which he was not able to sell because as he said, of the ban on licensing and sale of liquor in the Province.

The issue here is whether the Provincial Executive had the power to impose such a ban on licensing and sale of liquor in the Province. If it did, where is source of such power? The search for such authority may require looking at the Liquor Act (as amended) (Cap 33) and/or the Provincial Government Act 1981 (as amended).

On behalf of the plaintiff Mr Radclyffe contended that the Provincial Executive simply did not have the power to impose the ban on licensing and sale of liquor in the Province. In doing so, Counsel argued, the Executive were in effect halting the operation of Parts III and IV of the Liquor Act. This submission is really in agreement to the legal opinion expressed by the Solicitor General on the matter.

It is further contended that the powers which the Premier who is the Head of the Executive in the Province can exercise are those specified in section 84 of the Act but that such powers do not extend to imposing the ban as here complained of. I set out section 84 of the Act which shows what those powers are:

“84. (1) The Premier may, whenever it may seem to him expedient to do so, by order, direct that all or any licensed premises, or that all or any of the bars therein, shall be closed, or that no liquor shall be sold on any such premises, on such day or days and for such times as may be mentioned in such order.

(2) Any licensee who contravenes an order under this section shall be guilty of an offence and shall be lible to a fine of two hundred dollars.”

Mr Radclyffe submitted that s.84 is intended to apply to temporary ban for a few days duration or for particular occasions. Counsel argued that if the Executive was relying on that provision then they were wrongly applying the powers intended for use in that section.

Mr Ashley’s argument is that the Executive had acted reasonably in imposing the ban. He added that imposition of the ban was not done under section 84 of the Act as that section was not relevant.

Mr Ashley’s contention in the main is on the question of damages. As he submitted, the plaintiff knew for 5 months that there would be a ban on the licensing and sale of liquor, yet he chose to order the beer in December 1994 when he knew his current licence was coming to an end. Counsel submitted that the plaintiff, hoping his licence would be renewed, ordered the cartons of beer. As such Counsel argued, the plaintiff was not entitled to the selling price of the 95 cartons but only the difference between the selling price and cost price, if he is entitled to that at all.

The powers exercisable under s.84 of the Liquor Act have now been devolved to the Provincial Executive. As it has been shown, the section speaks of the Premier’s power to make order directing all or any “licensed premises” or all or any of “the bars” closed. In addition, the Premier has power by order to direct that “no liquor shall be sold on any “such premises” on such day or days and for such times as mentioned in the order. There is clearly no power under that provision entitling the Premier or the Provincial Executive to direct a total ban on the licensing of liquor in the Province. Likewise the provision also does not confer power on the Premier or Provincial Executive to direct a total ban or the sale of liquor in the Province. What s.84 permits is the making of an order by the Premier directing the closure of all or any “licensed premises” or the closure of all or any of “the bars” in those licensed premises or directing that no liquor to be sold in those licensed premises (rather than closing such premises) for a specified period.

I think Mr Ashley was correct in saying that s.84 is irrelevant in this case. The Premier and his Executive could not have relied on the powers conferred by that section. If they did, then that would be an improper exercise of the powers under that provision and this court has been given the obligation and also the duty to intervene and to put the matters right. See Liversidge -v- Anderson [1941] UKHL 1; [1942] A.C. 206, at 244 where Lord Atkin reiterated that the court must be “alert to see that any coercive action is justified in law.”

If therefore s.84 of the Liquor Act is not relevant and which the Provincial Executive did not rely on, where can there be the legal source of the action of the Provincial Executive in imposing the indefinite ban on the Licensing and sale of Liquor in the Province? Unfortunately, it has not been made clear which provisions of the law gave the Provincial Executive the power to impose the ban. What has been made clear by the Defendant is that following a number of representations from members of the public, particularly women in and around Kira Kira, regarding alcoholic consumption, the Provincial Executive met and passed a resolution banning the licensing and sale of liquor in the Province. The Defendant confirmed in his evidence that it was the complaints which gave rise to the passing of the resolution.

How is the Provincial Executive to effectively execute its resolution? It is clear from the Defendant’s evidence that to give effect to the resolution, the Premier would not appoint any Liquor Licensing Board after the expiration of the then current Board whose term expired at the end of December 1994. In this way there would be no Board and so no new applications or renewals would ever be considered.

On reflection and although the Defendant never expressly mentioned the power conferred on him to appoint a Liquor Licensing Board, it is more likely than not that as head of the Provincial Executive he knew he had the power to constitute a Liquor Licensing Board for the Province. However to give effect to the resolution, he therefore exercised his power under s.16 of the Liquor Act and refrained from appointing a new Liquor Licensing Board for the Makira Ulawa Province. In that way the ban on licensing and sale of Liquor in the Province would continue for as long as there is no such Board in the Province.

I set out the Premier’s power as set out in section 16 of the Act:

“16. (1) There is established in each Province a Liquor Licensing Board which shall be the liquor licensing authority for that Province.

(2) The Board shall consist of the Principal Magistrate in that Province who shall be Chairman and each of the following persons as members -

(a) A Church representative in that Province;

(b) a woman representative in that Province;

(c) a police officer in that Province nominated by the officer in charge of the police force in that Province; and

(d) a representative of the business sector in that Province.

(3) The members shall be appointed by the Premier of the Province and hold office at the pleasure of the Premier for a period not exceeding one year commencing on the date they are appointed and are eligible for reappointment.

(4) A member of the Board may resign at any time by giving notice in writing to the Premier and the resignation shall take effect on the date specified in the notice or, if no date is specified, on the date the Premier receives the notice.

(5) Where the Chairman is unable to perform his functions as Chairman, the Premier may appoint one of the members to act as Chairman of the Board.

(6) At any meeting of the Board, the Chairman or in his absence the acting Chairman, and three members shall constitute a quorum.

(7) The Chairman of the Board shall have a deliberate vote and, in the case of an equality of votes, shall also have a casting vote.

(8) The procedure at each meeting of the Board shall be regulated by the Chairman or, in his absence, the acting Chairman.

(9) In this section, the expression -

“Province” includes Honiara Town Council;

“Provincial Secretary” includes the Clerk to Honiara Town Council; and

“Premier” includes the President of Honiara Town Council.

One of the arguments put forward by Mr Ashley is that under s.16 the members of the Liquor Licensing Board are appointed and shall serve at the pleasure of the Premier for a period of one year. Implied in that argument is the suggestion that the Premier was justified in not constituting a new Board for Makira Ulawa Province which in turn would give effect to the indefinite ban of the licensing and sale of Liquor in the Province. I have to say, that I view such a suggestion as an affront to good and orderly administration in a government especially where the search for the legal basis for the Executive’s original decision is likely to reveal that no such legal basis exists.

I return to the search for the source of the Provincial Executive’s power to do what it did in this case. It has to be said that under the Liquor Act I find no such power vested in the Provincial Executive authorising it to impose an indefinite ban on the licensing and sale of liquor in the Province. Under the Provincial Government Act 1981, apart from the fact that, as provided for under section 28(4) and sch.5 of that Act, the functions under sections 16,84 and 96 of the Liquor Act are functions transferred to the Province, I fail to see any provisions upon which the Provincial Executive could base its action.

It now turns solely on the question of whether the Provincial Executive acted reasonably or not in resolving to impose an indefinite ban on licensing and sale of liquor. In considering the reasonableness of the defendant’s action, it must be borne in mind that the bottom line argument must be that the defendant’s action must be one that is allowed by law or that there is statutory authority for it. In the absence of the legal basis for the action, the court is bound to view such action as ultra vires. Once that is done, the argument based on reasonableness of the action falls apart.

Speaking on the subject of the ultra vires doctrine in relation to judicial review of administrative action, Prof. de Smith & Brazier in Constitutional and Administrative Law, New Edition said on p.548:

“The starting point for judicial review of administrative action is that public authorities will be restrained from exceeding their powers (acting ultra vires) and inferior tribunals will be prevented from exceeding the limits of their jurisdiction. This important constitutional function of containing both the Executive and inferior tribunals within the limits of their authority has long been exercised by the courts. In the seventeenth century it was established that the Crown could not set itself above the law by a bare assertion of prerogative. Today the ultra vires doctrine prevents public authorities from doing anything which the law forbids, or taking any action for which they have no statutory authority.”

The case cited by the learned authors in support of that principal is Lake Airways Ltd -v- Department of Trade [1976] EWCA Civ 10; [1977] QB 643. That case is concerned with the withdrawal of the plaintiff’s licence to operate skytrain service across the Atlantic. The license having been given in 1972 but the British Government reversed its policy in 1975 and so the Secretary of State directed that the skytrain’s license be withdrawn. The Secretary of State relied on the powers under the Civil Aviation Act 1971 which empower the Civil Aviation Authority to license air services. The Act also specified criteria to follow which include no monopoly on air route by British Airways. The Act also empower the Secretary of State to give guidance to the Authority. The Court of Appeal held that the Secretary of State acted ultra vires in directing the Authority to cancel the plaintiff’s licence when the Act only allowed him to give guidance. The Secretary of State exercised the power unlawfully in an attempt to do indirectly what he was unable to do directly, which is, to prevent the plaintiff from competing on the transatlantic route.

The present case, in my judgment, is an incident of the sort purported to be done in the Lake Airway case. The defendant in this case attempted to justify his Executive’s ban on the licensing and sale of liquor in the Makira Ulawa Province by refraining from constituting the Liquor Licensing Board for the Province. Such an action is clearly without legal basis and so it is unlawful.

As to damages, I think Mr Ashley’s argument has force. The plaintiff knew his licence would expire at the end of December 1994 and yet he decided to order 150 cartons in the hope, firstly, that he would sell them by christmas and secondly, hoping that his licence would be renewed.

There was delay in the shipping and so the plaintiff’s goods arrived late in December. That was not in any way contributed to by the defendant.

The plaintiff must accept the risks he took when he ordered the cartons of beer. It would not be correct to penalise the defendant if the plaintiff’s knowingly took the risk and suffer as a result.

In those circumstances I feel the proper course would be to allow the plaintiff’s claim for damages also but, only on the difference between the cost and selling price of the remaining 95 cartons.

I do not think it is necessary to order the Liquor Licensing Board to meet to consider applications for liquor licenses since there is no Board in existence. That is a matter for the Premier of the Province. When he exercises his power under s.16 of the Liquor Act, the Board under its chairman can then perform its functions.

Order:

1. There will be a declaration that the ban on the licensing and sale of liquor for an indefinite period throughout the whole of Makira Ulawa Province by the Makira Ulawa Provincial Executive is ultra vires and void.
   
2. There will be a declaration that the plaintiff is only entitled to damages based on the difference between the selling price and cost price on the remaining 95 cartons of SB Beer.
   
3. I decline to make the other declarations sought in the Originating Summons.
   

Costs to plaintiff.

(Sir John Muria)
CHIEF JUSTICE