Lau Lava Ltd v Minister of Labour Commerce and Industries [2004] TOSC 62; CV 599 2004 (6 September 2004)

IN THE SUPREME COURT OF TONGA
CIVIL JURISDICTION
NUKU’ALOFA REGISTRY

NO. CV599/2004

BETWEEN:

LAU LAVA LIMITED
Plaintiff

AND:

THE MINISTER OF LABOUR COMMERCE AND INDUSTRIES
First Defendant

THE MINISTRY OF LABOUR COMMERCE AND INDUSTRIES
Second Defendant

HA’AMO GROWERS LIMITED
Third Defendant

PORT SERVICES LIMITED
Fourth Defendant

BEFORE THE HON. JUSTICE McELREA

Counsel: Mr Tavake Afeaki for the Plaintiff

Miss Simiki for First and Second Defendants

Mr Niu for Third Defendant

Mr Edwards for Fourth Defendant

Date of hearing: 27 August 2004
Date of decision: 6 September 2004

JUDGMENT

The essential issue

On Friday 27 August 2004 between 5 pm and 5.45 pm I gave an oral decision on the plaintiff’s application for interim injunctions to stop the loading of an export order of sato imo taro for Japan on the next working day, Monday 30 August. Partly for reasons of time, I reserved my decision on the plaintiff's belated application for leave to bring judicial review proceedings relating to the export licence issued to the exporter, Ha'amo Growers Company Ltd ("Ha'amo"). This reserved decision is now delivered.

I say "belated" because both of plaintiff's counsel seemed unaware of the need for leave to apply for judicial review before it was pointed out in court on 27 August. A written application was handed up during the hearing.

Ha'amo’s licence was issued on 9 February 2004 by the First and/or Second Defendants (here collectively called "the Minister"). However, the Minister had on 16 October 2001 issued an export licence to the plaintiff, Lau Lava Ltd ("Lau Lava"), which purported to be an "exclusive" licence issued for five years. The essence of Lau Lava's attack on Ha'amo's licence was that it infringed Lau Lava's exclusive right to export sato imo taro (or Japanese taro), and thereby made its licence "virtually worthless".

The relief sought

The initial statement of claim in this action did not seek any relief except damages against the Minister. When it was pointed out from the Bench that the proposed interim relief did not relate to any relief sought in the action, an amended statement of claim was filed. This seeks by way of relief nothing at all against Ha'amo, or Port Services Ltd (the Fourth Defendant). As against the Minister it seeks:

A declaration that the process giving rise to the Ha'amo licence was "either illegal or unreasonable or procedurally unfair"; and

An "order certiorari" quashing the Ha'amo licence; or in the alternative

An order requiring the Minister to revoke the Ha'amo licence; and

An order restraining the Minister from issuing any second licence during the currency of "the exclusive licence"; or alternatively to all of the foregoing,

Damages of $1,000,000 and costs.

The plaintiff’s causes of action

The proceedings are certainly well rounded, in the sense that declaratory relief, certiorari, mandamus, injunction and damages are all included. The causes of action are also a mixture. They are listed seriatim in the statement of claim as being:

[The] illegal, unfair or unreasonable issue of a second purported licence in abrogation of the plaintiff’s exclusive licence.

Breach of contract (breach of a lawful voluntary agreement supported by valuable consideration); or in the alternative

Breach of fiduciary duty (breach of a duty requiring the first and second defendants to act solely in the interests of the plaintiff); or in the alternative

Breach of the Constitution ('one law for all')

The requirement for leave

Order 27 Rule 2 of the Supreme Court Rules 1991 provides:

No application shall be made for judicial review unless the leave of the Court has been obtained in accordance with this rule.

An application to apply for judicial review shall be made promptly and in any event within three months from the date when grounds for the application first arose unless the Court considers that there is good reason for extending that period.

An application for leave shall be made ex parte by filing-

(a) a summons stating concisely the relief claimed and the grounds therefore;

(b) a copy of the proposed writ and statement of claim;

(c) an affidavit verifying the facts relied on.

The Court may grant the application without a hearing, but shall not refuse it without hearing the applicant.

The Court shall not grant leave unless satisfied that the applicant has a sufficient interest in the matter to which the application relates.

If the Court grants leave,

(a) it may do so subject to such terms as to costs and to giving security as it thinks fit; and

(b) it may grant such interim relief as appears necessary and just.

The decision of the Court of Appeal in 'Akau'ola v Pohiva [1990] Tonga LR 159, concerning the procedural requirements in judicial review cases, must now be read subject to the Supreme Court Rules 1991 which were enacted the following year. The finding in that case that leave was not required to commence judicial review proceedings (let alone leave obtained within three months) has been overtaken by the 1991 Rules, and 'Akau'ola accordingly provides no guidance on the point for decision in this case.

It is clear that O27 R2 requires a grant of leave before a plaintiff applies for judicial review. For this reason, the action commenced by the plaintiff without leave must be regarded as only provisionally accepted by the Court – i.e. that it is subject to leave being granted "nunc pro tunc", or retrospectively, to the extent that it seeks judicial review.

Mixed public and private law claims

The application of rule 2 is defined by rule 1, which provides that Order 27 applies to any action against an inferior court, tribunal or public body (including an individual charged with public duties) in which the relief claimed includes an order of mandamus, prohibition or certiorari, or a declaration or injunction.

The fact that a claim for damages is included along with proposed injunctive relief does not take the action out of the scope of Order 27 – rule 1 is inclusive in this respect.

However, if the basis of the claim is the infringement of a purely private law right, with no element of public law involved, leave to pursue judicial review will be refused: see Vaioleti v Tonga Development Bank [1999] Tonga LR 57. It follows, in my view, that where some of the causes of action are of a private law nature (as here – contract, and fiduciary duty), the refusal of leave to pursue judicial review may not prevent those other aspects being pursued in a claim for damages on an amended statement of claim. It would not be for me to decide, but I have difficulty seeing how breach of contract or of a fiduciary duty could lead to the issue of one of the extraordinary remedies of the Court. (As to fiduciary duty, see 'Akau'ola at pp167, 168.)

The plaintiff’s documentation

I have been prepared to treat the plaintiff's application for leave as if it had been made by summons, as required, and to consider the application even though it was filed after the action was commenced, rather than before – see O27 R2(1) and (3)(a) and (b). The affidavit in support of the application for interim relief can serve also as an affidavit complying with sub-rule (3)(c).

Matters to be established by the applicant

There is no comprehensive statement of the criteria for determining applications for leave: de Smith, Judicial Review of Administrative Action 5th ed, 1995 para 15-014.

However, on the authorities the principal matters to be established by an applicant would appear to be three-fold, to which can be added a fourth, open-ended factor:

A. A sufficient interest on the part of the applicant; and

B. an application made promptly and in any event within three months (or longer if there is good reason to extend such period); and

C. an arguable case for the grant of one or more of the extraordinary remedies listed in O27 R1; and

D. a proper case for the exercise of the discretion, looking at any other relevant factors in the particular case.

A. a sufficient interest on the part of the applicant

The Court will be loath to take a "short cut" by finding against an applicant on the topic of sufficient interest, or of standing. See 'Akau'ola at p165, where this was referred to as a "draconian" step which should only rarely be taken. However, the context of that remark, and the English authority cited at that point, makes it clear that it related to the sufficiency of an applicant's interest, which will depend on many factors to be assessed on the evidence at trial. It does not relate, for example, to the issue of delay.

It was not suggested that the plaintiff does not have a sufficient interest to pursue this action, and I find that it has. It is the party claiming to have an exclusive right to export this produce to Japan, the right which it claims was breached by the Minister's action in granting a second licence. This element is satisfied.

B an application made promptly ...

Counsel’s submissions

Counsel for the Minister dealt with the question of delay under the heading of acquiescence, citing In re Pauling's Settlement Trusts [1964] 1 Ch 303. However, I understood this submission to be addressing a defence to the substantive action, rather than the application for leave.

Mr Niu for Ha'amo submitted that Lau Lava had not applied to the Court promptly or within three months and that this was fatal to the application for leave, as Lau Lava had not discharged the burden of showing reasonable grounds for delay. Whether this argument had been raised by a party or not, it was certainly a topic the Court had to address; but it is up to the applicant to demonstrate that there is good reason to extend the period: Holani v Kingdom of Tonga [1997] Tonga LR 264, 265.

For Lau Lava Mr Afeaki argued on the facts that there was no delay because Lau Lava was pressing to see a copy of the licence it had been told had been issued to Ha'amo, and to have the Minister’s advice that a second licence had been issued confirmed in writing. The former was never achieved by Lau Lava, and the latter was not achieved until Lau Lava received the Minister’s letter of 16 August 2004, one week before proceedings were commenced. Mr Afeaki relied also on his client’s evidence that there were ongoing discussions between the two growers as to some form of cooperation, but (Lau Lava says) always on the basis that Lau Lava had an exclusive licence.

I mention at this point, as I omitted to do so in my oral decision on the application for interim relief, that Lau Lava’s repeated offer to allow Ha'amo to export under Lau Lava’s licence, had only minimal impact on the question of losses likely to be incurred by Ha'amo, and no impact on my view of the merits of the matter overall. It is common ground that the parties had been in negotiations for some time, but they had never been able to agree on price. Mr Afeaki was not able to advise the Court of a price that had been offered to and refused by Ha'amo for the use of Lau Lava’s licence. In any event, such offer begs the question whether Ha'amo was entitled to export under its own licence once that was issued. Finally, I record my view that the offer, repeated in court by Mr Afeaki more than once, served to reinforce the impression that Lau Lava was more interested in using its "exclusive licence" as a means of extracting money from Ha'amo than as a means of exporting the product itself. This may help explain its delay in issuing proceedings.

When does the three months commence to run?

Under the rule, time runs from "the date when the grounds for the application first arose". This was the time at which the second licence was issued, which was 9 February 2004. On this basis, the application (made on 27 August) was three-and-a-half months outside the three month period.

It could be argued that the grounds for the application did not arise until Lau Lava was aware of them, but in my view the grounds for an action, and a party’s awareness of those grounds, are legally and logically distinct topics, and the more appropriate way to deal with a lack of knowledge of one’s entitlement is to treat it as a good reason for extending the three months period. (This view is also consistent with the English approach – see Supreme Court Practice (1997) para 53/1-14/31.)

I agree with Mr Niu's submission that the onus is on the party seeking the extension of time to justify it. Under the rule the application is made ex parte, but it is open to this Court to follow English practice under O53 R4 and require any application for an extension of time to be served on the proposed defendant. (See R v Ashford, Kent JJ., ex parte Rickley [1955] 1 WLR 562.) It was appropriate therefore that the Court heard the views of the parties whom the Chief Justice had directed be served with the first application.

Was the application made promptly?

This is the primary question, even if an application is made within three months. It is fallacious to think that an intending plaintiff necessarily has three months in which to seek leave. (See R v Independent Television Commission, ex parte TV NI Ltd Times LR, 30 December 1991 (CA), cited in Supreme Court Practice (1997) para 53/1-14/31.)

Based on Lau Lava's own evidence, I do not consider that this application was made promptly. There are several reasons for that conclusion.

1. Lau Lava knew from November 2003 that Ha'amo was no longer prepared to rely on Lau Lava for planting material and was importing its own material direct from Japan. In the same month Lau Lava was told by the Minister that Ha'amo had applied for permission to export sato imo taro to Japan. Whether an applicant had prior warning of the decision complained of is a relevant factor: R v Secretary of State for Transport ex p. Presvac Engineering Ltd (1992) 4 Admin LR 121 (CA). Warning bells must have been ringing for Lau Lava at that stage.

2. Ha'amo told Lau Lava in April 2004 that it had been granted permission by the Minister to export to Japan, and that it intended to do so in August 2004. This advice was absolutely correct in both respects, yet Lau Lava continued in discussions with Ha'amo about possible cooperation, and with requests to the Minister for clarification, and took no steps to prevent Ha'amo from acting on its licence.

3. When discussions between the parties had produced no form of joint venture agreement, Lau Lava told Ha'amo at a meeting on 9 July 2004 that it was considering legal action to enforce its exclusive licence. Even at that stage it waited more than six weeks (over seven weeks before applying for leave), knowing that Ha'amo was about to harvest a substantial crop.

4. On 19 July 2004, six weeks before Lau Lava applied for leave, it was told by the Minister what it had been told by Ha'amo three months earlier, namely that Ha'amo had been given permission by the Minister to export to Japan. Still it did not act.

5. Lau Lava’s explanation concerning the need for advice before taking legal action is quite inadequate. It could have got that advice in April when it was informed by Ha'amo that it had an export licence.

It is clear that throughout this long period Lau Lava chose to pursue every other course except legal action, apparently hoping that Ha'amo would eventually have to agree to its terms for some form of cooperative enterprise. That in my view is not a justification for the delay that occurred, and falls far short of being a good reason to extend the three month period. Likewise time taken to seek "political" redress is not a good reason to extend time – see R v Redbridge LBC [1991] COD 398.

In any event, whatever the motivation for the delay, the prolonged absence of legal action is obvious and – with one exception - no good reason has been provided to extend the three month period.

The only extension beyond 9 February 2004 that I believe is justifiable is an extension until the unspecified date in April when Lau Lava was told fairly and squarely by Ha'amo that it had been granted its own export licence. Given the "warning bells" that had been rung in November 2003, such advice in April ought to have produced prompt action, if judicial review was to be sought at all.

Thus far I have addressed the issue of delay largely in terms of what might reasonably have been expected of Lau Lava, and of the effects of delay on Ha'amo. However, the effects of delay on the Minister are a further factor. As Ms Simiki pointed out for the Minister, exhibit "D" to Lau Lava's affidavit - a letter from the Minister to Lau Lava dated 16 August 2004 – shows that the Minister had been concerned for some time about Lau Lava’s lack of progress in implementing its export licence. (Lau Lava has only ever exported 2.99 tonnes of Japanese taro, and that was only on 18 May 2004, two years and seven months after being awarded its export licence.) In the meantime Australia had entered the market. The Minister was concerned also about the damaging effects of reports from the Japanese market that Lau Lava promised to deliver sato imo in 2002/2003 but this was never delivered. As Ms Simiki put it, Lau Lava's delays reflected also on the Minister and on the Kingdom of Tonga itself. While that submission was directed at Lau Lava’s delays in supplying the Japanese market, it is clear that the Minister was attempting to find a solution in Tonga’s best interests that involved two exporters, "since two would be more advantageous than one" (exhibit "D" p 2). The delay by Lau Lava in seeking leave to judicially review the action of the Minister clearly caused the Minister to continue for six months (four months from when Lau Lava knew of the second licence) in fruitless efforts "to try to amicably resolve the issue".

In Holani (above) Lewis CJ stated at p265 that the length of delay will be a factor affecting the determination of what amounts to "good reason" in each case on its merits. It was also stated that the rules specify a period of time so that the class against whom review may be sought will not be disadvantaged or prejudiced.

The relevant disadvantage or prejudice in this case is to the Minister who is required to deal with the development of Tonga’s trading and commercial interests, and those to whom licences may be sought from and/or granted by the Minister under the Licences Act. All of such people are entitled to know without undue delay whether there will be any challenge to administrative action taken by the Minister, and by "undue delay" I mean a lack of promptness, and in any event a delay of more than three months – or a longer period if good reason is shown.

Where the application is not made promptly and within the maximum time allowed, then the Rule permits of no discretion to grant leave notwithstanding the delay – e.g. on the grounds that no specific prejudice is suffered. However, questions of prejudice will be relevant in deciding whether there may be good reason to extend the three month time limit.

Conclusions regarding delay

I am satisfied that Lau Lava has not applied promptly for leave. It has sat on its rights to seek judicial review and allowed other parties to continue in the execution of their duties or the conduct of their business. While it is arguable that Lau Lava should have taken legal action, if it was going to at all, in November 2003 when told of Ha'amo’s request for an export licence, any attempt to quash that licence once issued should have been undertaken as soon as Lau Lava was told that Ha'amo had received permission to export – i.e. in April 2004, or the very latest in early May (if that advice was received in late April).

As well as not having applied promptly, Lau Lava did not apply within the three month period, i.e. by 9 May 2004; and even extending that period by two months leaves Lau Lava outside the maximum permitted period.

I regard this as a very clear case of unacceptable delay, and Lau Lava has failed to satisfy the requirements of sub-rule (2).

Strictly speaking it is unnecessary to continue the enquiry further, but in case I am wrong on the subject of delay, I now go on to consider the two remaining topics.

C an arguable case

The test to be applied

In Supreme Court Practice (1997) para 53/1-14/30 it is said that the Court has to consider whether there is a case fit for further investigation at a full hearing. Leave should be granted if, without going in to the matter in depth, there is an arguable case for granting relief.

I leave aside the suggestion in de Smith, Judicial Review of Administrative Action 5th ed, 1995 para 17-011 that where leave is required to move for an interim injunction, the old requirement that the applicant establish a prima facie case (rather than a serious issue to be tried) continues to apply in practice – and, indeed, that where a mandatory injunction is sought on an interim basis, a strong prima facie case must be shown. Had Lau Lava done as required by the rules and made a prior application for leave, those tests may have been relevant. However, I have accepted an application for leave made after the commencement of this action, and have already decided that interim relief will not be granted, so I think it right to give Lau Lava the benefit of the doubt and apply the lower standard of having an arguable case.

While this test is usually an easy one to meet, I have considerable doubts about whether it has been met in this case. The reasons for this conclusion are best addressed under the headings that follow.

Can an export licence exceed one year?

I note first that there appears to be no legal basis for the issue of a licence for more than one year in duration. The only statute dealing with licences of this type is The Licences Act (Cap 47). Ms Simiki advised that this is the statute relied on by the Minister, and Mr Afeaki for Lau Lava was unable to point to any other. The export of sato imo taro is within category 20(b) of part E of Schedule A of that Act – "other produce and commodities ... 100 kg or more by ship". Such a business must be licenced under the Act – see s.4. However, every licence to carry on a business in Schedule A "shall be issued for a year, quarter year, or day: s. 6(1). Licences are dated from the first days of January, April, July of October and expire on the last days of March, June, September or December: s. 6(2). Whether Lau Lava obtained a licence for five years is therefore in considerable doubt. At best it would seem to have been given a licence that was intended to be renewed each year for five years.

However, on reflection the question of one year or five is, on the facts, not determinative in this case. Lau Lava argues that its licence did not come into force until 18 May 2004 when it exported its first crop. It relies on condition (1) of the licence – "The Exclusive Export Licence will become effective once you start exporting sato ima to Japan." On this basis the licence is still within its first year. But one cannot say that it was within its first year when the Ha'amo licence was granted, because that licence was issued over three months before Lau Lava achieved its first export.

Although Mr Afeaki for Lau Lava did not address any argument to this point, despite the Court raising the question of the apparent restriction to a one year term, it is clear that Lau Lava would have to argue that its licence had legal effect in terms of its exclusivity even before it took effect as a permission to export. This argument would have merit, in my view, had Lau Lava exported promptly, but its delay in exporting raises a difficult issue. Could it delay for four years and still claim exclusivity? Or for eight years? When the Minister did not stipulate a time limit, either there was none - or perhaps Lau Lava was obliged to export within the one year fixed by statute; or as Mr Waalkens submitted in his written submission presented by Mr Niu (relying on condition 3: "The licence will be revoked if you cease to export any Satoimo for a period of 8 months or more") within eight months; or perhaps within a reasonable time, viewed objectively.

Ms Simiki for the Minister argued that there was an implied term of the licence that Lau Lava would get on and promptly implement what it was given in 2001, and having failed to do so it could not claim any exclusivity in 2004. Alternatively she argued that the issue of the Ha'amo licence was not contrary to Lau Lava’s licence as the former was issued before the latter came into effect.

Mr Afeaki's general submission on the legal basis of the Lau Lava licence was that the Minister had a discretion to grant licences on any terms he sees fit. That would appear to overlook the fact that the power to grant licences is a creature of statute and must be bound by the terms of such statute. He went on to suggest that Lau Lava was entitled to proceed on the assumption that the Minister was competent to issue a valid licence. Insofar as this is a statement of the correct point that official or administrative action is presumed to be valid until the contrary is established by a competent court, it is a reasonable position - but the same presumption must then apply to the grant of Ha'amo's licence. Mr Afeaki could only respond at this point that Ha'amo knew when it got its licence that Lau Lava claimed to have an exclusive licence.

I do not consider it is appropriate to try and resolve an issue of this complexity at this preliminary stage. Lau Lava may well have real problems on the "five year" front, but I will assume for present purposes that they could be overcome.

Could the Minister grant an exclusive licence?

A further problem for Lau Lava under The Licences Act is that the power to restrict the number of licences of any particular class is dependent on the Privy Council enacting an Order-in-Council to that effect – see s.5(3). There would seem to be no reason to restrict the application of the term "class or classes of licences" to the categories listed in Schedule A – baker’s licence, hawker’s licence, etc. Export licences for Japanese taro are a class of licence in the ordinary meaning of that term, and were obviously dealt with separately from other produce.

Ms Simiki advised the Court after taking instructions on the point that there has been no Order-in-Council fixing the number of licences that may be granted, but rather it has been left to the discretion of the Minister appointed under s.5(1) to issue licences. She submitted that the absolute discretion referred to in subs (2) – under which an Order-in-Council had been made – was sufficient authority to the Minister to issue exclusive licences, especially in view of the "policy intent" referred to in the Minister’s letter of 16 August 2004, exhibit "D", which reads:

The intent of the exclusive export licence policy is to encourage the private sector to go out and find new export markets. To reward their efforts they are given exclusivity for a particular product for a specific market, over a number of years, before it is opened up to other exporters. So far 6 exclusive licences have been issued. The one for nonu juice is working very well.

Mr Afeaki of course relies on the same passage to justify his client's claim to exclusive rights. However, with respect to both counsel, policy intent may well supplement and fill out a statutory scheme but cannot operate contrary to the terms of the statute. Such a policy could justify an Order-in-Council under s. 5(3) creating single-holder licence classes for particular export commodities or produce, and a renewal of such licences each year for a number of years under s 6. Bu policy cannot supplanpplant such statutory steps.

Counsel may wish to consider the case concerning export quotas under the similar provisions of the Licences (Amendment) Act 1993, Touliki Trading v Fakafanua and Kingdom of Tonga (No. 2) [1996] Tonga LR 145 (CA). There it was said that "the Minister's power under the Act [to impose export quotas for squash] would only be enlivened upon the making of an Order-in-Council ..." (line 329). Incidentally, the same case throws doubt on Lau Lava's reliance on the "one law for all" cause of action. At line 568 the Court of Appeal held that cl 4 of the Constitution ("one law in Tonga for chiefs and commoners") was of no assistance to the squash exporters. Indeed, in the context of the present case, if cl 4 applied at all, one would have thought that it would be an argument against the granting of an exclusive licence to Lau Lava.

Mr Afeaki submitted that if the Court were to take the view that exclusive licences were not authorised by statute, it would undermine all six exclusive licences, affecting the security of their investment and their finances. I do not accept that that at all. The Minister can continue to exercise his discretion as to whom licences are granted to, and can apply the policy intent in that exercise, but on a year by year basis. Where, as here, he claims that the policy intent requires the issue of another licence in the interests of Tonga, e.g. because the first licensee has failed to develop the market as intended, he could exercise his discretion to issue a second licence. That does not necessarily mean that the other five licences would cease to be "exclusive".

Legitimate expectation

However, despite all these legal problems in the way of Lau Lava, I cannot rule out the possibility that it may have a claim against the Minister for reliance damages based on "legitimate expectation". Mr Afeaki did not use this term, but he does not claim expertise in this area. Nor was the term used in the written submissions by Mr Hirschfeld of Auckland on behalf of Lau Lava. Mr Afeaki agreed (somewhat unwisely, I suggested) to appear for his family - his father and brother being the directors of and two deponents on behalf of Lau Lava - in the absence of Mr Hirschfeld. It was explained that Mr Hirschfeld had advised on the matter and was to appear but was tied up in the High Court in New Zealand. I would have thought that counsel more experienced in administrative law matters could have been found.

Be this as it may, I acknowledge that Lau Lava, if represented by experienced counsel, might be able to build a case for reliance damages based on the existing pleadings – though I express no view as to whether it would succeed. My understanding is that damages are not readily available for breaches of public rights, and that this distinction has been preserved in relation to breaches of statutory duty. Quite apart from these legal difficulties there are the factual difficulties surrounding Lau Lava's own delays in the matter, the negligible use it has made of the licence thus far (especially when contrasted with Ha'amo's ability to produce an export crop of approximately 170 tonnes within six months from the grant of its licence), the fact that Lau Lava's licence had not "become effective" at the time the Ha'amo licence was granted, and the lack of evidence of any real value of the Lau Lava licence in the light of these matters – to list just the more obvious hurdles it would face.

For completeness I mention that I have considered Mr Edwards’ argument based on ss. 24 and 27 of The Consumer Protection Act 2000 but I doubt that those provisions have any application here. There is no evidence that Lau Lava has imposed "exclusive dealing" terms on its customer(s) in Japan – see s.24; and whether Lau Lava is a monopoly under s. 27 is not established – indeed it is hotly contested by Ha'amo.

Conclusion regarding an arguable case

Although initially forming the view that Lau Lava had not established even an arguable case, I have concluded that with competent counsel a claim for judicial review is arguable, albeit not on the basis advanced by either Mr Hershel or Mr Afeaki, and only with rather uncertain prospects of success. The mere fact that the arguments on the statutory issues could not be succinctly stated in this judgment has also suggested that they were deserving of fuller examination.

By a narrow margin I conclude that an arguable case for Lau Lava exists, although on a limited basis and with uncertain prospects. As a result, leave would not have been refused for lack of an arguable case.

D a proper case for the exercise of the discretion, looking at any other relevant factors in the particular case.

It is clear that the Court has a residual discretion to refuse to grant leave, even if all three principal factors are decided in the applicant’s favour. (I am not aware of any corresponding discretion to grant leave where any of the three principal factors are decided against an applicant.)

On the authorities, other relevant factors include a range of issues. One has already been mentioned – that the basis of the claim is the infringement of a purely private law right, with no element of public law involved, as was stated in Vaioleti. Other examples arise where the application is vexatious, or where there is a more appropriate remedy than judicial review, or where there is a concealment of material facts: see de Smith, Judicial Review of Administrative Action 5th ed, 1995 para 15-015.

This last matter, a concealment of material facts, is relevant in this case. It is expressed in Supreme Court Practice (1997) para 53/1-14/30 as a duty to make full and frank disclosure. This is the same duty that falls on a party applying ex parte for interim relief. It was one of the grounds for refusing interim relief on 27 August, and it is also relevant here. Lau Lava’s affidavit in support of the application for interim relief is being treated also as its affidavit in support of the grant of leave. It is irrelevant that it was not intended for that purpose, as Lau Lava was obliged to get leave before commencing its action, and for that purpose to disclose all material facts.

Lau Lava's affidavit traverses a considerable amount of the history of the matter but, significantly, failed to disclose an important letter from Ha'amo dated 12 July 2004 denying that Lau Lava would be entitled to any injunction and pointing out that Lau Lava's problems were of its own making. Ha'amo also specifically asked that it be served with any application for an injunction (which did not initially happen) and that its letter of denial be put before the Court, which Lau Lava did not do. Given that Lau Lava sought injunctions against the Minister (i.e. judicial review, as defined), and the injunctions were designed to prevent Ha'amo exporting under its own licence, Ha'amo's view of the matter was very relevant not only to the question of interim relief but also to the question of leave to judicially review. I therefore consider that Lau Lava’s failure to disclose Ha'amo's letter is a factor against the grant of leave.

On its own it may not have been enough, if a satisfactory explanation had been forthcoming for the omission, but none was provided in this case. Lau Lava’s first proceedings were prepared and filed by New Zealand counsel, Mr Charles Hirschfeld, who must have known of the obligation of disclosure in ex parte matters, even if he was unaware of the need for leave. I was told that the second proceeding was prepared by Lau Lava's directors who were not aware of the need for such disclosure. They may have relied on counsel's earlier advice. Alternatively, the request by Ha'amo for its letter to be produced to the Court was made to the directors, not to counsel. They had had ample time to take appropriate legal advice in the six weeks before they filed their proceedings, and should have enquired as to whether the letter had to be disclosed.

In the circumstances I regard the failure to disclose Ha'amo's letter as another reason to decline leave.

Conclusion

Lau Lava has a sufficient interest or standing to seek judicial review, and has (just) made out an arguable case on a limited basis. However the application for leave was not made promptly, and the application fails on that ground. The failure to make full disclosure also counts against the grant of leave.

The application for leave is accordingly declined.

The Minister and Ha'amo will be entitled to costs, although I expect that the bulk of their costs entitlement will arise under the application for interim relief. If costs cannot be agreed by 24 September (the date already fixed in respect of interim relief), then costs are to be taxed in conjunction with the taxation of costs on interim relief. (The interest of Port Services Ltd was confined to the injunction application so its costs will be likewise confined.)

NUKU’ALOFA: 6 September 2004

JUDGE