Y Sato & Company Ltd v Honiara Town Council [1998] SBHC 31; HC-CC 048 of 1997 & 055 of 1997 (16 June 1998)

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High Court of Solomon Islands
Before: Lungole-Awich, J
Civil Case No. 48/97 &
Civil Case No. 55/97

Mr. A. Radclyffe for both Plaintiffs;
Mr. G. Samuel (representing Attorney General) for the defendant

This is judgment in two cases heard together because most of the facts in them were the same and they raised the same issues of law. The cases are HC CC48/97, Y. Sato and Company Limited v Honiara Town Council, and HC CC55/97, Solomon Motors Limited v Honiara Town Council. Both plaintiffs carry on businesses in Honiara Town, the area over which the defendant has statutory authority and is charged with statutory responsibility to provide certain services. For the year 1997, the defendant has demanded from each plaintiff, certain business licence fees for the businesses carried on by them.

The plaintiffs have come to Court, by originating summonses asking the court to declare that the Council has no power to impose those fees, or to the extent of the sums imposed, and so the fees are invalid. The plaintiffs' cases are drafted in exactly the same words. I set out here one of the drafts.

"LET THE HONIARA TOWN COUNCIL of P.O. Box 324, Honiara and THE ATTORNEY GENERAL of P.O. Box 111, Honiara within eight days of service of this summons on them inclusive of the day of service cause an appearance to be entered for them to this summons which is issued on the application of Y. Sato & Company Ltd. which is seeking the following declarations: -

1. That the fees charged by the First Defendant for business licences for the Plaintiff under the Honiara (Licensing of Businesses) (Amendment) Bye - Laws 1997 (the 1997 Bye - Laws) constitute taxation which by Section 106 of the Constitution may only be made by or under an Act of Parliament.

2. Alternatively that the First Defendant is in breach of the Interpretation and General Provisions (Amendment) Act 1987 on the grounds that the fees are not within a range properly chargeable in respect of the services, if any, provided by the First Defendant so that the said fees are excessive or unreasonable and thus unenforceable.

3. Alternatively that the fees purportedly imposed by the 1997 Bye Laws or any of them are beyond power as: -

(a) outside the scope and purpose of the legislative power to make such a Bye Law, which is limited to the licensing of "trades, businesses and other occupations"; or

(b) so unreasonable as to be such that no local government authority properly exercising the power of delegated legislation conferred on it by Parliament, would have made the charges levied by the First Defendant on the Plaintiff.

4. Alternatively that the 1997 Bye - laws did not come into operation on 1^st January 1997 as the Bye - laws had not been published in the Solomon Islands Gazette as required by section 55 of the Interpretation and General Provisions Act 1978.

5. That the 1997 Bye - laws cannot be brought into force retrospectively on 1^st January 1997.

6. That as a consequence of paragraphs 4 and 5 above the 1994 Bye - laws have not been revoked and remain in force as at 1^st at January 1997."

Mr. Yukio Sato, the Managing Director of the company, stated in paragraph 2 of his affidavit sworn on 21.2.1997, filed the same day in support of the case, the 1997 fees along side 1996 fees for comparison. I quote here the paragraph:

"2. The business licence fees charged by the First Defendant for 1996 and 1997 are as follows:-

Business	1996 fees	1997 fees	% increase
(a) Wholesale Store (b) Retail Store (c) Video Cassette hire (d) Outboard Motor sales (e) Out Board Motor repairs (f) Supermarket (g) Arts & Crafts store	$2000 800 800 1000 1000 1500 500	$4000 2000 800 1000 - 4000 500	100 150 - - - approx 167 -
Total	$7600	$12,300"

The fees that Solomon Motors Limited complained about were stated in paragraph 4 of the affidavit of Sam Iro, a director of the company, sworn on 27.2.1997, filed on 28.2.1998. I quote the paragraph:

"4. The defendant is charging the Plaintiff the following fees which covers (sic) our activities at the service stations: -

(a)
(b)
(c)
(d)
(e)
(f)
(g)

Vehicle sales
Petrol filling station
Garage and Workshop
Spare Parts Retail
Outboard Motor Sales
Hire Cars
Tyre repairs

$3,000.00
$2,000.00 per station
$1,000.00
$1,500.00
$1,000.00
$1,000.00
$500.00"

"5. In 1996 we were charged the following business licence fees by the Defendant:

(a)Tyre repair services (b)Car rental (c) Car dealers (d) Spare parts	$ 500.00 $ 500.00 $2,000.00 $1,000.00
	4,000.00"

I see no factual basis for the ground that the instrument that introduced the 1997 fees was not published in the Government Gazette. The ground was boldly stated in supporting affidavits of Mr. Sato and Mr. Iro, and learned counsel Mr. Radclyffe for the plaintiffs stated it in his submission, but without reference to the relevant parts of the affidavit of Mr. Hasiau, sworn on 8.5.1997 and filed on 9.5.1997, for the defendant in reply. Mr. Hasiau deposed in paragraph 3 what he took to be the relevant bye - laws and the relevant schedule. He stated that they were published in the Gazette. The plaintiffs have not countered that part of Mr. Hasiau's deposition either by affidavits or by illustration in submission made.

All the licence fees challenged by the plaintiffs appear in the schedule to Honiara (Licensing of Business) (Amendment) Bye - Laws, 1997 said to have been made under section 50 of the Local Government Act Cap 14 of the Laws of Solomon Islands. The Bye - Laws including the schedule were given Legal Notice No. 134 of 1996 and appear on pages 480 to 483 of the Supplement to the Solomon Islands Gazette of Monday 30^th December 1996. There is no evidence that the Gazette was actually not published on the 30^th December 1996, despite the date having been stated in the Gazette copies on page 480, so that the Court could disregard that date - see Civ. App. 14 of 1997 David Maesua v Charles Dausabea and James Delemani. That ground is dismissed.

The ground that the licence fees are unconstitutional is an involved one. Section 106 of the Constitution of Solomon Islands states:

106. No taxation shall be imposed or altered except by or under an Act of Parliament

The Act of Parliament under which the plaintiffs as well as the Council say the Council made bye - laws for licensing of businesses, is the Local Government Act. The relevant section is section 50; I quote the material provisions of the section here:

50. (1) A Council may from time to time make and having made, amend, vary or cancel bye - laws, having the force of law in the area of authority of the Council, for the carrying into effect and for the purposes of any function conferred upon it by virtue of this or any other Ordinance....

(3) Bye - laws may make provision for the payment of such fees or charges as shall to the Council seem fit:

Provided that, if a Council shall make bye - laws relating to the licensing of any occupation, trade, business or industry within the area of its authority, no person shall be required to take out a licence or to pay any licence fee for a licence entitling him to follow or exercise such occupation, trade, business or industry if such occupation, trade, business or industry is also required to be licensed under the provisions of any Ordinance for the time being in force.

(5) Any bye - law made under the provisions of this Ordinance may require acts or things to be performed or done to the satisfaction of a specified person and may empower a specified person to issue orders to any other person requiring acts or things to be performed or done, imposing conditions and prescribing periods and dates upon, within or before which such acts or things shall be performed or done or such conditions shall be fulfilled.

(6) Any bye - law made under the provisions of this Ordinance may confer upon a Council and any of its officers and employees specified in such bye - law such powers of inspection and inquiry and such power to execute any work as may be reasonably necessary for the proper carrying out or enforcement of such bye - law.

Nothing in s.50 offends the provision of s.106 of the Constitution. It appears the original Bye - laws in which fees for business licence were made were the Honiara (Licensing of Business) Bye - Laws, 1965. They were revoked by the Bye - Laws made in 1990, which were styled, Honiara (Licensing of Business) (Amendment) Bye - Laws, 1990. It seems to me that the inclusion of, "(Amendment)" in the title is an error because Bye - Law 11 therein revoked the 1965 Bye - Laws all together so that the 1990 Bye - Laws became the principal Bye - Laws. The 1990 Bye - laws were statutory Instrument No. 12, published as Legal Notice No. 42 of 1990 in the Gazette of Friday 6^th April 1990. Since then, there have been amending Bye - Laws, the Honiara (Licensing of Business) (Amendment) Bye - Laws, 1997. It was published as Legal Notice No. 134 of 1997 in the Gazette of Monday 30^th December 1996. In the amending Bye - Laws the schedule of licence fees chargeable under the 1990 Bye - Laws were replaced by the Schedule in the 1997, Bye - Laws, to become effective on 1.1.1997. The fees that are the subject of these suits are enumerated in the schedules to the 1997 Bye - Laws. I failed to find the 1994 Bye - Laws referred to in paragraphs 6 of the plaintiffs' originating summonses. Counsel did not produce a copy in Court. Nothing on the faces of the 1990 Bye - Laws, as amended by the 1997 Bye - Laws exacted money as tax, and so nothing on their faces suggests that s.106 of the Constitution, which forbids the imposition of tax without authority of an Act of Parliament, has so far, been contravened.

The Plaintiffs' cases are that the licence fees are unlawful because they are excessive or unreasonable, so they are: 1, unconstitutional or, 2, were made in breach of the Interpretation and General Provisions Act or, 3, are to be regarded as being outside the scope or purpose of the legislative power to make the licensing Bye - Laws. The legislative power meant would be that in s.50 of the Local Government Act. The important consideration in all the three grounds is reasonableness.

The facts in both cases are easily ascertainable. The fees charged as licence fees and protested by the plaintiffs are:

The Business to be licensed

(a) Wholesale Store
(b) Retail Store
(c) Video Cassette hire
(d) Outboard Motor sales
(e) Outboard Motor repairs
(f) Supermarket
(g) Arts & Crafts store

Total

The 1997 fees

$4000
2000
800
1000
-
4000
500

$12,300

The Business to be licensed

(a) Vehicle sales
(b) Petrol filling station
(c) Garage & Workshop
(d) Spare parts Retail
(e) Outboard Motor sales
(f) Hire Cars
(g) Tyre Repairs

The 1997 fees
$3,000.00
$2,000.00 per stn
$1,000.00
$1,500.00
$1,000.00
$1,000.00
$500.00

The affidavit of Mr. Sato filed in HC CC48/97 is a damning deposition about neglect of duties by the Council. Mr Sato, who I understand is originally from Japan, deposed that since he commenced business in Honiara in 1978 (the year independence was attained, 20 years ago), he has never had an official of the Council come to his business premises to carry out inspection or to obtain information, "in connection with business licences." He has, however, had inspections in connection with sale of liquor licensing and by the Labour Department in the Central Government. It is to be noted that under s.16 of the Liquor Act, Cap 33 of the Laws of Solomon Islands, the chairman of a local Liquor Licensing Board is a magistrate; members are representatives of the church, police, women, and business people, and 2 ordinary residents. All are not employed or supervised by the local government, in this case, the Council. One, therefore understands the noticeable contrast that the magistrate and his members in Honiara insist on duties, relevant to the responsibilities of the Liquor Licensing Board, being carried out whereas for licensing businesses generally, the Council officials concerned with enforcing requirements for licensing and with after licensing monitoring, do not bother to carry out inspection, give advice or direction or obtain necessary information. Affidavit of Mr. Iro is to the same effect as Mr. Sato's. He deposed in paragraph 7 that the Council has never inspected the premises on which Solomon Motors does business.

For the Council, affidavit of Mr. Hasiau, does not provide evidence that officials of the defendant ever carried out inspections, investigations or gathered information so as to promote health, safety, commercial aims or other interests of residents or even of the Council itself. It is merely useful as evidence that there are sufficient Bye - Laws and there are offices and officials in Honiara Town Council who could carry out the responsibilities of monitoring, regulating and improving businesses in Honiara Town, but that the responsibilities have not been carried out. Leave was granted by Court, on application, to have Mr. Hasiau cross - examined. He came out as a Town Clerk who knew very well the areas of the duties of officials whose works are relevant to granting business licences and monitoring businesses. He could, however, mention only one service, the collection of refuse that he said the Council provided to the plaintiff businesses. He said it was not easy to identify services rendered to the businesses, the subjects of these cases. When it was suggested to Mr. Hasiau that the only inspection carried out by the Council was in connection with liquor licensing, he agreed, but he added that non payment or late payment of licence fees was one of the things hampering the work of officials of the Council, it brought about lack of transport for officials to travel to business premises. I wonder how far Council offices are from the businesses of Solomon Motors Ltd and Y. Sate and Company Limited so that it has been impossible in 20 years for officials of the Council to take, even if only occasional walk to the businesses. In the end the material fact established by the affidavit evidence and in the cross examination of Mr. Hasiau is that the Council provides very little services or carries out very little duties in connection with the business licences it requires in the businesses of the two plaintiffs.

Ground 1, of the plaintiffs' cases, that the fees are unconstitutional because they are taxes and therefore made contrary to s.61 of the Constitution, is based on the Common Law as expounded in case laws. The principle is that an imposition of money, even if described as licence fee, will be regarded as tax if it is excessive or unreasonable. Reasonableness is determined by considering the licence fee in relation to what are required of the licensing authority. That principle in ground 1 is in fact what is stated in s.61 of the Interpretation and General Provisions Act, which is the basis of ground 2, being that the fees imposed are unreasonable and therefore made, "in breach of the Interpretation and General Provisions (Amendment) Act 1987.... Section 61 (3) states:

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

Ground 3, that the licence fees are outside the scope of the legislative power is a principle in Constitutional Law and Administrative Law. The consideration in the principle is also whether the subject matter, in this case, the licence fees, are so unreasonable.

If the determination of these cases were to depend entirely on the direct proportionality of the sums charged as licence fees and the services actually provided or being provided specifically to the plaintiff businesses, the answer would be a simple one that the sums imposed were grossly out of proportion to the services provided or being provided to and for the plaintiff businesses. In my view, the questions of excessiveness and reasonableness require consideration of several more factors than only services provided. Moreover, the services to be considered must cover more than the services provided specifically to the plaintiffs' businesses in these two cases.

I would say that a licence fee is a charge towards meeting the costs of the services provided for the business licensed, and of carrying out the duties of the authority in monitoring, regulating and enforcing the requirements of the laws relating to the business; it is also a charge for the privilege or authority for doing the business. An example of a case which emphasises the aspect of service to the business licensed is Civ App (CA) No. 11 of 1994, Solomon Motors Limited v Honiara Town Council. In the case, Kirby, President then, of the Court of Appeal of Solomon Islands stated at page 7 this:

"It can be seen that both for the arguments addressed to constitutional validity and those concerning the reasonableness of the fees charged by the respondent 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 respondent to license particular businesses and the activities performed by the respondent in relation to such licensing. If all that the respondent were to do was to provide a piece of paper, called a "license", to any business applicant, conducting no investigations, inspections or enquiries and providing no services at all, clearly the "license" fees would be revealed as nothing more than the raising of revenue for the respondent. 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 the purported license fees were actually illicit taxation, beyond power or otherwise not reasonable in the relevant sense."

"Most importantly, the Town Clerk's affidavit is completely silent about the activities of the Council after the initial licensing. There is no evidence at all 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 brought to court by the same plaintiff in HC CC55/97, one of the present two cases, against the defendant who is now defendant in these cases. The plaintiff then, in 1994, complained about what it saw as licence fees that were too high for more or less the same businesses as in its present case. The Court of Appeal having stated that in order to determine that the charges were licence fees and not taxes a relationship must be established between the fees charged and the activities performed by the respondent, decided that on the record, not sufficient evidence had been made available for the determination exercise. It returned the case for further evidence about services, if any, provided by the respondent. An Australian case, Harper v Minister for Sea Fisheries [1989] HCA 47; (1989) 168 CLR 314, demonstrates the duty and privilege aspects. The duty was to control the harvesting of abalone off the sea coasts of Tasmania, and thus the duty to conserve and protect the sedentary sea creatures from depletion and extinction. The High Court of Australia decided that the money exacted for abalone fishing licence, though based on volume and value, was not a tax and so could not be a levy of duty of excise, so as to be an indirect tax which the state of Tasmania could not, under the Federal Constitution, have power to impose. Downson, Toohey and McHugh, JJ in their joint judgment, agreeing with the judgment of Brennan J., said about the privilege conferred by the licence, this:

"We agree with Brennan J. and would add only the following comment. Whilst the proper conclusion is that the amount paid for a commercial abalone licence is not a tax and, therefore, is not a duty of excise, that conclusion flows from all the circumstances of the case. Most important is the fact that it is possible to discern a relationship between the amount paid and the value of the privilege conferred by the licence, namely, the right to acquire abalone for commercial purposes in specified quantities."

Their Lordships warned, however, that "what is otherwise a tax is not converted into something else merely because it serves the purpose of conserving a natural public resource." The judgments in Harper's case is distinguishable from the judgment of Sir John Muria, Chief Justice of this Court in the case of Allardyce Lumber Co. Ltd. and Other v The Premier of Western Province, HC CC234/94. The facts of Allardyce Lumber Co. case showed clearly, as the Chief Justice found, that the imposition of licence fee of $10 per cubic metre of logs exported, was merely a way for the province to raise general revenue for general purposes, not in anyway related to costs in connection with the business licensed. Note that the judges in Harper's case stressed that the conclusion they made "flowed from all the circumstances of the case."

A direct statement about licence fee being payment for a privilege was made by an American judge, Drew J in the American case of Pennsylvania Liquor Control Board v Publicker Commercial Alcohol Co, 32 Atlantic Reporter, Second Series 914, at page 917. One of the questions for consideration was whether a statute which required licence fees to be paid by a distillery for alcohol manufactured in Pennsylvania State, and sold to the government of the United States, was an unlawful attempt to tax the federal government. In his judgment, Drew J. stated:

"The 'licence fee' is charged for the special privilege or authority of manufacturing alcohol, and is a regulatory fee not a tax. A licence fee is a charge which is imposed by the sovereign, in the exercise of its police power, upon a person within its jurisdiction for the privilege of performing certain acts and which has for its purpose the defraying of the expense of the regulation of such acts for the benefit of the general public, it is not the equivalent of or in lieu of an excise or a property tax, which are levied by virtue of the government's taxing power solely for the purpose of raising revenue."

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 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 be related to the value of the privilege for which licence is to issue. The sum need not be mathematically accurate, it will suffice if it bears some reasonable proportion to the costs to be defrayed or the value of the privilege.

In the present two cases, collection of refuse, though done for all the other businesses and residents of Honiara, is not an irrelevant service to take into account. I also think that the duties of the physical planners, business licensing officers, environmental health officers, and others, whose duties include initial and continual inspections to determine or monitor economic viability, water, sanitation, nuisance, disposal of refuse and waste material and other duties, are relevant considerations. The fact that the present officials do very little or nothing does not mean that the Council may not in future get them or others to do the work. Should the Council take that step and the complaints of the plaintiffs are met, where will the money to defray the costs come from if appropriate fees are not authorised in the bye - laws?

I have charted out what I consider relevant in the consideration of reasonable fees for licence in the businesses of the plaintiffs, so I now ask the question; are the fees excessive or unreasonable so as to be taxed, or unreasonable so as to offend s.61 of the Interpretation and General Provisions Act, or unreasonable so that they may be regarded as outside the scope of s.50 of the Local Government Act, a principle of ultra vires? No doubt there have been some very steep percentage increases in the fees. In Y. Sato and Company Limited businesses the increases were: 100%, for wholesale businesses, 150% for retail business, 167% for supermarket business. Learned counsel Mr. Radclyffe computed average of 61%. In Solomon Motors Limited businesses, the increases were: 33% for vehicle sale business, 50% for spare parts sale business, 100% for vehicle hire business. That would be average of about 60%. Mr. Radciyffe's submission seemed to have centred on the large increases as evidence of excessiveness or unreasonableness. I do not think that is always correct. In fact I think it is most of the time misleading because if the original fees were too small or fees were not charged at all, huge percentage increases may not make the fees excessive or unreasonable so as to bear no relationship to the costs of service, duty or privilege relevant. Moreover, the annual inflation rate given is not cumulative from the year of the original fees. I think the better approach is to balance the fees with the service, duty or privilege. That is the approach suggested in the appeal case, Solomon Motors Limited v Honiara Town Council. In my view, even if the increases may be viewed as high, the fees themselves are not excessive or unreasonable so as to bear no discernible proportions to the costs of services, and duties or the value of the privilege. On the facts, it may be that further increases in the near future may upset the relationship. All the fees imposed by the schedule to Honiara (Licensing of Business) (Amendment) Bye - Laws, 1997 are not excessive or unreasonable.

I note that the affidavit of Mr. Iro suggests that some of their businesses of sale of vehicles, sale of spare parts, repair of vehicles and repair of tyres should be regarded as one and licensed as one business. That was not raised in the originating summons so that the defendant could reply to it, and it was not argued in court. I think it would be unfair to the defendant for me to consider it in my determination without proper opportunity having been given to it to be heard

In my consideration, I focused on the question; what is a licence fee or fee? The result would not be different had I focused on the question; what is a tax? In deciding whether an imposition is a tax, much depends on the legislation exacting money. Moreover, the question is usually what kind of tax, other than, is it a tax. Tax generally has not been easy to define. Several efforts have been made in case law to define tax legally, but so far it is safer to regard the efforts as stating descriptions other than definitions because they are not exclusive of the other forms of exaction of money. The difficulty is evident in the fact that in the early cases some judges used the word tax to refer to any imposition of money - see the judgment of the Privy Council in the case of Attorney General (Canada) v Attorneys General (Ontario, Quebec and Nova Scotia) [1898] UKLawRpAC 26; (1898) AC 700. At page 713 the Committee stated:

"In addition, however, to the legislative power conferred by the 12^th item of s: 91, the 4^th item of that section confers upon the Parliament of Canada the power of raising money by any mode or system of taxation. Their Lordships think it is impossible to exclude as not within this power the provision imposing a tax by way of licence as a condition of the right to fish."

Generally accepted attributes of tax are those given by the Privy Council in England in the case of, Lower Midland Dairy Product Sales Adjustment Committee v Crystal Dairy Ltd [1933] AC 168. The Judicial Committee of the Privy Council stated that tax was a levy that was: 1, compulsory, 2, for public purposes and 3, enforceable by law. The levies under consideration were imposed by statute on dairy farmers to control the glut of liquid milk in the market and to meet costs of a committee appointed under the statute for the purpose of controlling the glut. It is not surprising that the Court of Appeal in British Columbia had confirmed the decision of the trial judge that the levies were not taxes. The case was a difficult one. The attributes of tax stated by the Privy Council Committee was adopted in several subsequent cases. In Australia two cases are important, namely Mathew v Chiroy Marketing Board [1938] HCA 38; (1938) 60 CLR 263, and Air Caledonie v The Commonwealth [1988] 165 CLR 462. In the later, a sum said to be fee for immigration clearance of passengers arriving in Australia on International flights was held to be tax, at least in as far as it applied to Australian citizens, whose right to return to Australia did not depend on any immigration formality, and so the sum imposed could not, because of a provision in the Constitution, be included in an already valid existing legislation, in the case, about immigration. The Constitution provided that any legislation imposing or altering tax was not to include matters other than tax matters. The definition of tax said to have been taken from Mathew's case (above), the definition which was derived from the Lower Midland Dairy case (also above) was that a tax was: 1, a compulsory imposition, 2, for public purposes and 3, compulsorily enforced by law, and 4, was not a licence fee. The four attributes have become commonly known as the positive and negative attributes. In my view, there is still deficiency in the definition in that it still leaves it necessary to define 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 licence fee is not payable into the general consolidation fund of the state, for providing general services. Sometimes it is even necessary to state that a tax is not a fine for offence committed.

So it can be seen that even if I focused on the question; what is a tax, I would still have to proceed to determine what a licence fee is, for the purposes of the two cases, by considering whether the sums imposed bear some relationship to the particular services, duties and privileges associated with the plaintiffs' businesses, and whether they are reasonable in the relationship. I would end up on the same route I followed by focusing on the question, what a licence fee is.

Learned counsel Mr. Samuel raised the point that because under the Income Tax Act, sums paid as licence fees are refunded, licence fees are to be regarded as recognised by legislation as tax, and so are taxes imposed, "by or under legislation." That cannot be correct. Rebates, refunds, concessions tax holidays or other privileges granted to a tax payer to relieve part of his tax burden cannot themselves be regarded as tax, that is logic not law. They are merely kinds of incentives or simply bounty. Mr. Samuel also made the point that licence fees are taxes anyway. It is true that tax and licence fees are both impositions of money. They are both sources of revenue for public purpose. It, however, becomes necessary often in law to distinguish tax from licence fees or other fees because often legislations impose different restrictions about the manner and authority to impose tax, licence fees, or other fees, as has happened in this case. The usual legal distinguishing attributes of tax in contrast to licence fee or fee generally are then to be considered; one of those attributes is that tax is money imposed and collected for the general and not any particular purpose of the state whereas licence fees are intended for purposes of the business licensed or privilege granted. In Economics licence fees and other fees may be regarded simply as kinds of taxes. In law licence fees are not regarded simply as tax.

1. The fees that Honiara Town Council imposed as 1997 business licence fees for the businesses of Y. Sato and Company Limited and of Solomon Motors Limited, which fees were in the schedule to the Honiara (Licensing of Business) (Amendment) Bye - Laws, 1997 are not excessive and unreasonable and are therefore not taxes.

2. The fees charged are not excessive and unreasonable so as to be in breach of s.61(3) of the Interpretation and General Provisions Act.

3. The fees are not so unreasonable so as to be outside the scope and purpose of s.50 of the Local Government Act; they are not ultra vires.

Costs of these two cases are awarded to the two plaintiffs against the defendant, Honiara Town Council, although the plaintiffs have not succeeded in their cases. The reason is that the plaintiffs had good reason to bring their cases. The good reason was that the Council never carried out its duties of inspection, monitoring and controlling businesses yet it always demanded payment of licence fees. Although I have decided that the licence fees for 1997 were made lawfully, the plaintiffs have made a good point, that the Council must do its part as the law requires. This part of the judgment should be brought to the attention of Honiara Town Clerk, the President of Honiara Town Council and to the Permanent Secretary, Ministry of Home Affairs. May be it will be possible in future to avoid court cases over non performance of duty, they are becoming regular in court. Another thing which needs mentioning is that this is yet another case before the High Court in which Honiara Town Council has been sued, served with court papers and simply has ignored to file its side of the case or to attend court. The Court has always, in the interest of justice, requested Attorney General to come in and assist. Attorney General and his staff have always obliged and taken on the extra duty. The disappointing part is that even when Attorney General has offered to help, sometimes people in Honiara Town Council do not assist Attorney General by frankly providing the facts of the case or at all. There have been cases involving money and land about which the Council has not bothered to attend court. On several occasions the present two cases have been adjourned for the reasons I have stated. The situation needs attention. Attorney General may not be acting harshly if in future he considers bringing suit on behalf of the government against persons who have been negligent in their duties who simply ignore court papers and cause avoidable losses to the Council. The task of the Attorney General is made unnecessarily onerous because of the negligence or care - free attitudes of others.