Jones Business Services Ltd v Kingdom of Tonga [2020] TOSC 101; CV 32 of 2020 (13 November 2020)

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

CV 32 of 2020

BETWEEN:

[1] JONES BUSINESS SERVICES LTD
[2] ENDANGERED ENCOUNTERS LTD
[3] SHELL GARDEN LTD
[4] TONGAN EXPEDITIONS LTD
[5] WHALES IN THE WILD LTD
[6] DIANE CLARKE trading as VAKA VAVE Plaintiffs

-and-

THE KINGDOM OF TONGA by and through the acts and omissions
of the Minister and Chief Executive Officer of the Ministry for
Infrastructure & Tourism Defendant

JUDGMENT

BEFORE: LORD CHIEF JUSTICE WHITTEN QC
Appearances: Mrs D. Stephenson for the Plaintiffs
Mr S. Sisifa S.G. for the Defendant
Date of hearing: 29 October 2020
Date of judgment: 13 November 2020

Introduction

1. On or about 28 February 2020, the Honourable Akosita Lavulavu, Minister for Infrastructure and Tourism, declined each of the Plaintiff’s “applications” for whale watching and whale swimming licences (“the decisions”).
2. On 17 June 2020, the Plaintiffs were granted leave pursuant to Order 39 of the Supreme Court Rules to apply for judicial review in respect of the Defendant’s decisions. They seek declarations that the decisions were wrong at law and an order that they be quashed.

Evidence

3. The evidence in the proceeding has been filed by way of the following affidavits:
   • (a) Brenda Kay Cox, sworn 19 August 2020, for and on behalf of all the Plaintiffs; and
   • (a) the Honourable Akosita Lavulavu, Minister for Infrastructure & Tourism , sworn 18 September 2020; Sione Moala-Mafi, Chief Executive Officer of the said Ministry, sworn 18 September 2020; and Teisa Fifita, Principal Tourist Officer for the said Ministry, sworn 18 September 2020 and a supplementary affidavit sworn 23 October 2020.
4. None of the background evidence or key facts are in dispute. No deponents were required for cross-examination. The hearing proceeded by way of submissions only.

Background

5. Whale watching and swimming with whales has developed into an important and lucrative attraction for the tourism industry in Tonga. Those returns require substantial capital investments and operating outlays for those service providers who are licenced to provide whale watching and swimming services in the Kingdom (“operators”).
6. Prior to 2009, operator licences were administered by the Ministry of Tourism pursuant to the Tourist Act 1976. Since 2009, the industry has been regulated by the Whale Watching and Swimming Act (“the Act”). The Act was amended in 2012, and in 2013, the Whale Watching and Swimming Regulations (“the Regulations”) came into operation.
7. Under the 2013 Regulations, licences were issued by the Ministry of Commerce, Tourism and Labour. In May that year, the Ministry issued a press release informing of the new licence application requirements, that licences issued would be valid for a period of three years and could be renewed upon application.
8. In or about July/August 2013, each of the Plaintiffs applied for and were issued licences. Five of the six licences bore expiry dates of 31 December 2013. The Fourth Plaintiff’s licence had an expiry date of 31 December 2015. The Ministry’s cover letter for each licence advised the licence holder to submit a notice of continued activity (“NoCA”) each year to the Ministry “for the next three years” in order to maintain their licence.
9. On 2 September 2013, in response to a query by the Third Plaintiff regarding the duration of its licence, a Ministry official confirmed that the licence was for three years.
10. In August 2014, the Ministry reminded licence holders that “even though the whale watching and swimming licence is for three years” they were still required to keep related documents and certifications such as boat surveys and coastal trade certificates up to date. A similar reminder was issued in April 2015.
11. Each of the Plaintiffs complied with the annual NoCA requirements in 2014 and 2015 and continued their whale watching activities during those years in accordance with their licences issued in 2013.
12. In July 2015, all operators were advised that, from then on, all applications for and concerning licences would be administered by the Ministry of Tourism.
13. In 2016, the Plaintiffs applied to the Ministry of Tourism, with payment of the relevant fees, and were granted, renewed licences. Each licence bore an expiry date of 31 December 2016 and were issued on the following conditions:

“Licence is subject to the provisions for the Whale Watching & Swimming Regulations 2013.”

14. In 2017 and 2018, the Plaintiffs submitted their NoCAs, again with their relevant fees, notifying the Ministry of their respective continued operations. However, for the first time, the new Ministry responded by issuing licence certificates to the Plaintiffs. Those licences stated that their “expiry date unless renewed” was 31 December 2017 and 31 December 2018 respectively.
15. On 25 June 2018, immediately prior to the start of the 2018 season, the then Minister wrote to each of the plaintiffs informing them of certain further conditions in relation to their licences. The new conditions were operational in nature in that, among other things, they specified the maximum time for which licence boats could be on the water and within a certain distance from shore.
16. On 31 October 2018, Teisa Fifita emailed all operators, including the plaintiffs, in relation to the upcoming 2019 season and attached a list of operators whose licences were either “continual” or due for “renewal”.^[1] The total number of operators on the list was 20 in Vava'u, 8 in Ha’apai, 6 in Tongatapu and 3 in ‘Eua. Of that total of 37, 10 were marked as “Continual” and the balance, which included the plaintiffs, were marked “Renewal”.
17. Each of the plaintiffs applied for renewal of their licences, paid the relevant renewal fees and were issued with renewed licences, which they received between July and September 2019. Each of the 2019 licences were subject to the same conditions as the previous licences, namely, the Regulations. Each bore a date of issue of 1 July 2019 and an “expiry date unless renewed” of 30 November 2019. It is those licences which are the subject of this proceeding. A representative example, being a copy of the Second Plaintiff’s 2019 licence, is annexed hereto.
18. Upon receipt of their 2019 licences, the plaintiffs commenced preparations for that season. They also planned and received deposits for new and recurrent bookings for the 2020 season. On the basis of the earlier Ministry’s confirmation in 2013, and payment of their renewal fees in 2016 and 2019, the Plaintiffs believed their 2019 licences were valid for a period of three years. Prior to 31 December 2019, each of the Plaintiffs submitted their NoCA filings.
19. On 25 February 2020, Minister Akosita Lavulavu issued the following Order:^[2]

“IN EXERCISE of the powers conferred by Regulation 5 (7) (a) and (b) of the Whale Watching and Swimming Regulations, the Minister responsible for Tourism, makes the following Order –
(1) That the number of licences to be issued under the Whale Watching and Swimming Regulations 2020 shall be limited to not exceed 7 for Tongatapu, 20 for Vava’u, 10 for Ha’apai, and 4 for ‘Eua.
(2) That this Order shall have effect for one year starting from the date of gazettal.
(3) That this Order is necessary for –
(a) the management, protection and conservation of whales; and
(b) the need to sustain the economic viability of the whale watching and whale swimming industry in the Kingdom.”

20. On 27 February 2020,^[3] the Minister wrote to each of the plaintiffs in the following terms:

"Thank you for your application for a whale watching and swimming licence. The Ministry received a record number of applications from both local and overseas operators.
With the Cabinet's approval, for the first time, a Ministerial Order pursuant to the Whale Watching and Swimming Regulations has been published in the Tonga Government Gazette. My Order places a limit on the number of licences that will be issued for the 2020 whale watching season. This is necessary for the management, protection and conservation of the whales, and to sustain the economic viability of the whale watching and swimming industry in the Kingdom.
That said, I regret to inform you that your application has been declined. Thank you once again for your application, and willingness to have provided this activity in Tonga as an operator."...

21. No part of the plaintiffs' renewal fees has been rebated or refunded to them.
22. In his affidavit, Mr Moala-Mafi deposed [8] that for the 2020 season, the total number of licences issued was 20 for Vava'u, 5 for Tongatapu, 8 for Ha’apai and 3 for ‘Eua. Of those, four new licences were issued in Vava'u and one new licence was issued for each of the other islands. When asked during submissions about the reasons for the new licences being issued, Mr Sisifa told the Court that he had sought instructions, but had not received any explanation.
23. In early March 2020, the plaintiffs requested the Minister to reconsider her decision. On 10 March 2020, Mr Moala-Mafi advised that:

"The Ministry will now move to reassess all such letters together, reviewing all applications at the same time, before making a recommendation to the Honourable Minister of Tourism. We aim to complete the review process by 20 March 2020 and will inform you of the results shortly thereafter."

24. He went on to repeat the reason for the Minister's decision as being based on scientific research that the activities were having an effect on the whales, which meant that:

“... applications, even if completed, would not be automatically granted as a right."

25. The plaintiffs did not receive any further response from the review process by 20 March 2020.
26. On 13 May 2020, the Minister wrote to the plaintiffs. She apologised for the delay in providing a decision which she attributed to the ongoing Covid-19 pandemic and Cyclone Harold as having caused Tonga's tourism industry "unimaginable loss". She noted that it was not clear whether a whale watching season would be possible in 2020 given the travel restrictions, distancing requirements and uncertainty caused by the pandemic. The Minister then referred to her Order published in the Gazette and the reasons for it. She concluded by informing the plaintiffs that their applications were still under review by the Ministry and that they would “aim to provide a clear decision moving forward by no later than 30 June 2020”.
27. On 27 May 2020, the lawyers for the plaintiffs lodged a complaint with the Ombudsman's office challenging the validity of the Minister's purported decision to decline the plaintiff's "applications".
28. On 16 June 2020, the plaintiffs filed these proceedings for judicial review of the Minister's decision.

Statutory framework

29. The following provisions of the Act and the Regulations provide the relevant statutory framework in respect of the issues for determination in this proceeding.

Whale Watching and Swimming Act

30. The preamble to the Act describes it as being an act:

“AN ACT TO ESTABLISH REQUIREMENTS FOR THE REGULATING OF WHALE WATCHING AND WHALE INDUSTRIES AND RELATED MATTERS”

31. Section 3 provides that the functions of the Minister are to:

(a) receive and determine applications for Licences under this Act;
(b) register Licences issued under this Act;
(c) provide training courses to service providers.

32. Sections 4 and 5 requires applications for licences to be lodged with the Minister in the prescribed form and accompanied by the prescribed fee. The Minister is then required to consider an application and determine whether or not to issue a licence "according to prescribed conditions and any other matters (she) considers appropriate". A licence granted is to be in the prescribed form and subject to the conditions contained therein.
33. Section 6 permits the Minister to suspend or cancel all licences issued under the Act.
34. Section 7 provides that all licences shall be valid for a prescribed period before renewal.
35. Pursuant to s.11, the Minister may, with the consent of Cabinet, make Regulations for giving effective to and carrying out the purpose of the Act.

Whale Watching and Swimming Regulations 2013

36. Regulation 4 describes the purpose of the Regulations as to provide for:

(a) the management and licensing of commercial services; and
(b) the protection, conservation, and management of whales by:
(i) regulating human contact or behaviour with whales either by service providers or other persons, in order to prevent adverse effects on and interference with whales; and
(ii) prescribing appropriate behaviour by service providers and other persons seeking to come into contact with whales.

37. Regulation 5(1) mirrors the requirements for applications for licences set out in section 4 of the Act. Sub regulation (2) provides that upon granting an application, the Minister shall issue the licence in the form set out in Schedule 3 and may impose such conditions as (s)he considers proper. Sub regulation (3) prescribes the fees payable for applications for licences as set out in Schedule 4. Sub regulation (4) provides that in considering any application for a licence, the Minister shall have regard to the following:

(a) that the commercial services should not be contrary to the purposes and provisions of the Act and these Regulations;
(b) whether the commercial services is likely to have any significant adverse effect on the behavioural patterns of the whales to which the application refers, having regard to, among other things, the number and effect of existing commercial services and the applicant’s proposed plan of operation;
(c) that it should be in the interest of the conservation, management, or protection of the whales that a licence be issued;
(d) whether the applicant, and such of the applicant’s staff who may come into contact with whales, have sufficient experience with whales;
(e) whether the applicant, and such of the applicant’s staff who may come into contact with whales have sufficient knowledge of the local area and of sea and weather conditions;
(f) whether the applicant and such of the applicant’s staff who may come into contact with whales have convictions for offences involving mistreatment of animals;
(g) whether the applicant and such of the applicant’s staff who may come into contact with whales have the required skills and knowledge to provide valued services to customers; and
(h) that the commercial services should not be contrary to the provisions of relevant legislation which may include but is not limited the Business Licence Act, Foreign Investment Act and Shipping Act.

38. By sub regulation (7), the Minister may, by notice published in the Gazette, limit the number of licences, and the number of vessels certified under each licence, granted and issued for a specified period of time where the Minister believes on reasonable grounds that:

(a) it is necessary for the management, protection or conservation of whales; and
(b) there is a need to sustain the economic viability of the whale watching and whale swimming industry in the Kingdom.

39. Regulations 6 and 7 are central to this proceeding. Regulation 6 prescribes the duration of licences as:

(1) A Licence granted and issued under these Regulations shall be valid for 3 years, as of the date of issuance, and may be renewed upon application under these Regulations.
(2) A service provider shall throughout the duration of the validity of a licence, whether it be the initial licence or a renewed licence under these Regulations, submit before 31 December of each year to the Ministry a notice of continued activity as prescribed in Schedule 7 and accompanied by the prescribed annual notification fees.

[emphasis added]

40. Regulation 7 provides that a licence may be renewed for three years upon expiry of the initial or renewed licence.
41. Regulation 8(1) permits the Minister to suspend or cancel a licence if:

(a) the application form or any subsequent submittals to the Minister in relation to the licence contains any material misrepresentation or false statement;
(b) any information given in the application or any other submittals to the Minister related to the business licence was materially incorrect so as to create a false impression of the ownership of the business or the nature of its business activity;
(c) the service provider carries on a prohibited activity;
(d) a condition imposed on the licence is breached or a necessary approval or permit from another government agency is absent or cancelled;
(e) the service provider or members of its staff are convicted of an offence under the Act or these Regulations; or
(f) the service provider is a foreign national and is found to be operating without a valid business visa.

42. Where the Minister suspends or cancels a licence, sub regulation (2) requires that the service provider be notified in writing of the reason for suspension or cancellation. Sub regulation (3) permits the Minister to temporarily suspend some or all licences issued under the Act and the Regulations for such period of time as (s)he deems necessary due to:

(a) a major disturbance to the whale population in the Kingdom which has been identified;
(b) the poor health of any whale population;
(c) the serious injury or death of a whale watcher, swimmer or whale or a
serious accident involving a vessel certified under licence; or
(d) the failure of a licence holder to comply with the terms of the licence, the Act or these Regulations.

43. Regulations 9 to 11 prescribe various conditions governing interactions around whales.
44. The form for licences is prescribed in Schedule 3 as depicted in the annexure hereto. Schedule 4 sets out the various fees payable for licences, annual NoCAs and renewals. Relevantly, the fee payable for a combined whale watching and swimming licence, when granted, is TOP$3,450 per certified vessel. The annual notification fee is $1,150, or exactly one third of the licence fee. Renewal fees for combined licences are $2,300 per certified vessel.
45. Schedule 7 provides the form for NoCAs. The form asks for information such as whether:
    • (a) there is any change to the ownership structure of the licence holder;
    • (b) the licence holder has third-party public liability insurance in place, approved certification from the Marine Division of the Ministry responsible for transport for all vessels used for commercial services, a valid Masters certificate, and a Certificate of a Coasting Trading Licence issued by the Marine Division of the Ministry responsible for transport;
    • (c) there are any changes to the licence holder's address; and
    • (d) the licence holder has obtained signed waiver agreements from every client during the year as required by regulation 11.
46. Part 8 of the notice requires that it be signed by an authorised person who declares, among other things, that the information in the notice is true and complete and that the licence holder is eligible to hold a licence under the Act.

Pleadings

47. The plaintiffs plead that the Minister's decision was wrong at law and in fact because:
    • (a) pursuant to s.7 of the Act and regulation 6, the further renewed licences issued to the plaintiffs in 2019 were valid for a period of three years until 2022;
    • (b) the further renewed licences had not been suspended or cancelled by the Minister pursuant to s.6 of the Act on any of the grounds contained in regulation 8; and
    • (c) the Minister could not rely on the Ministerial Order gazetted on 25 February 2020 as a basis to decline the licences issued to the plaintiffs in 2019 as such Order did not, and could not, operate retrospectively to affect the plaintiffs' rights to those licences, for to do so would be in breach of clause 20 of the Constitution of Tonga.
48. To that, the defendant pleads that the Minister's decision "to decline the application for renewal" of the plaintiffs’ licences was correct and in accordance with the law. The Defendant notes that each of the plaintiffs’ licences since 2013 expired on 31 December of each year in which they were issued except the 2019 licences which expired on 30 November that year.
49. At paragraph 13 (repeated for each of the six plaintiffs' causes of action) the defendant admits that the Minister did not purport to suspend or cancel the licences pursuant to s.6 of the Act on any of the grounds contained in regulation 8 "because the Minister was simply responding to an application for renewal of licence" and "it was not necessary to suspend, or cancel (the licences) as they had expired on 30 November 2019, a condition which was clearly expressed in the licence".
50. At paragraph 14, the defendant alleges that despite s.7 of the Act and regulation 6, "there are Regulatory exceptions to this validity period which has been duly put into past practice by the Ministry". In support of that proposition, the defendant then goes on to plead that, in summary:
    • (a) the plaintiffs "annually conceded" that each of their licences was issued for only approximately four months annually;
    • (b) the Minister is authorised by the Regulations to impose any condition (s)he sees fit;
    • (c) the "certificate template" (Schedule 3) provided by the Regulations, under the section entitled "Conditions of Licence", permits the Minister to enter the licence’s expiry date, thereby lawfully limiting the prescribed period of three years;
    • (d) the plaintiffs never objected to the 2019 licences bearing an expiry date of 30 November;
    • (e) that every year, “licence applicants”, including the plaintiffs, must submit either a new application for a licence, an application for renewal or notice of continued activity;
    • (f) regardless of whether the plaintiffs submit a new application, an annual notification form or application for renewal, the requirements are the same;
    • (g) those forms or applications are required by the Minister to ensure applicants satisfy all requirements before a licence can be issued;
    • (h) the plaintiffs’ licences did not automatically renew every year after November 2019 because every year (the plaintiffs) must obtain and provide with their form or application various documents such as certificates of vessel seaworthiness and others as being valid for the current year as well as other information relating to the overall management, detection or conservation of whales;
    • (i) by reason of the requirements for those documents and other information, a licence holder cannot ‘deem’ that their licences are automatically valid every year because of the Regulations;
    • (j) "There are in actual practice, Regulatory conditions that must be met. This is why it has always been a condition that the licence expires every year, in order to ensure all safety, financial, management, compliance and record-keeping aspects are met. Therefore in practice the Ministry treats and refers to all applications as a ‘Licence Application’, whether it is a new application for a licence, an application for renewal or notice of continued activity”; and
    • (k) all licence holders have accepted that practice without reservation.
51. The plaintiffs' Statement of Reply denies the Defendant's justification for the decision and recounts the historical background and dealings between them and the two Ministries since 2013. The plaintiffs contend that the Minister's decision has placed them in a "limbo" situation where they are not able to plan for the 2021 season until the status of their licences is determined. They say they have paid in full for three-year licences and are entitled to the enjoyment and benefit of those licences for the full period of validity.
52. The plaintiffs deny that the Minister was entitled to impose conditions on the licences in the form of expiry dates which reduced the period of validity to less than three years. They refer to the additional conditions which were imposed in 2018, which they described as “operational” in nature, and the types of conditions contemplated by the Regulations. They contend that the Minister’s power to impose conditions does not extend to unilaterally amending the licence duration periods prescribed by regulations 6(1) and 7(1).
53. On the issue of whether the Minister's Order has had an impermissible retrospective effect, the plaintiffs allege that while the Minister was entitled to issue the Order, the limitation on the number of licences stipulated in the Order could only operate from the date of publication of the Order and only with respect to new applications for licences after that date. It cannot have any retroactive effect on the pre-existing renewed licences issued to the plaintiffs in 2019 which remain valid for three years from the date of issue.

Submissions

54. Both counsel provided helpful written submissions. As the main legal issues were ventilated in the pleadings referred to above, it will suffice to summarise the key submissions as filed and developed during the hearing.

Plaintiffs

55. On behalf of the plaintiffs, Mrs Stephenson submitted:
    • (a) Regulations 6 and 7 prescribe the validity period for licences as three years. No other provision of the Act or Regulations provides otherwise.
    • (b) All communications between the Plaintiffs and the former Ministry in charge and the current, since 2013, until the Minister’s decision this year, have been consistent with the three year validity period.
    • (c) The Defendant has not identified the source of the Ministry’s alleged power to make “regulatory exceptions” to the validity period “which has been duly put into past practice by the Ministry.”
    • (d) The effect of the Ministry’s ‘practice’ of treating application licences, applications for renewals of licence and annual NoCAs the same, is to ignore the three year validity period mandated by the regulations.
    • (e) While a statutory decision-maker may develop a policy to guide the exercise of a discretionary power, that policy does not enjoy the status of legislation or regulations made under an Act. The same necessarily applies in respect of a practice adopted as a consequence of a policy. To elevate a “past practice” to the level of a regulation or statutory provision is tantamount to bypassing the lawmaking process and risks chaos and uncertainty. Relying on a “past practice” to effect a regulatory change is simply impermissible, particularly when such practice directly contradicts an existing and overriding regulation.
    • (f) The wording of regulations 6(1) and 7(1) as to the three year validity period of licences are clear and unambiguous and must be given effect. They plainly indicate the relevant Minister’s own intention at the time when the Regulations were enacted.
    • (g) A NoCA is not an application for a licence or for renewal of one. Regulation 6(2) also specifically requires that the NoCA be submitted before 31 December of each year “throughout the duration of the validity of a licence, whether it be the initial licence or a renewed licence”. If licence applications are submitted each year as the Ministry contends, then a NoCA becomes entirely redundant. Further, a NoCA is an informational filing. It does not confer any additional rights or privileges on the licencee in the manner that a licence does. It is simply a mechanism by which the Ministry is provided with up to date information on the licencee’s operations each year during the three year validity period of the licence.
    • (h) That the filing fees for a NoCA each year are precisely one third of the relevant (initial) licence fee is entirely consistent with the licence period being three years.
    • (i) The Ministry’s claim that a NoCA is, in effect, a licence application entitling the Minister to exercise her discretion to grant or decline it each year impermissibly elevates a NoCA to the status of a licence. The wording of regulation 6(2) makes it apparent that there is a clear distinction between them. The Minister’s treatment of NoCA’s as “licence applications” is fundamentally inconsistent with the clear wording of the Regulations.
    • (j) It follows from the fact that there is no statutory or regulatory basis permitting the Minister to issue licences for a period of less than three years, that the expiry dates on the 2019 licences (and earlier) have no legal effect because they are inconsistent with the validity period prescribed by regulation 7(1).
    • (k) Accordingly, in February 2020, the Plaintiffs’ licences were valid and subsisting and were not available for review in any form by the Minister (subject only to suspension or cancellation in accordance with regulation 8, which was not the basis for the Minister’s decision).
    • (l) The Ministerial Order could only have effect on licences (either initial or renewed) issued from 25 February 2020 to 24 February 2021. As the Plaintiffs held valid licences issued in 2019 and subsisting prior to the publication of the Order, the Order did not, and could not, apply to them. To do so would be to give retroactive effect to the Order and contradict the express terms of the Order itself.
    • (m) The Minister’s decision proceeded from an incorrect assumption that the Plaintiffs’ 2019 licences had expired on 30 November 2019. That led the Minister to treat the NoCAs filed at the end of 2019 as applications for “renewed” licences for the 2020 season. The decision did not reflect a correct understanding of the law which regulated the Minister’s decision making power.
    • (n) In view of the clear and unambiguous wording of regulation 7(1), it was entirely unreasonable for the Minister to consider that she had the authority to (i) review and (ii) decline the Plaintiffs’ existing licences in 2020. In doing so, the Minister acted ultra vires the powers granted to her under the Act and the Regulations.
    • (o) There is no explanation offered by the Defendant Ministry as to why licences were declined to legitimately licenced and experienced operators such as the plaintiffs, while licences were granted to new operators in circumstances where certain of those new operators do not appear to be licenced in terms of the Business Licences Act (and therefore are prohibited from carrying on a business activity in Tonga). That appeared to have been overlooked by the Minister and further called into question the decision-making process.
    • (p) The practice of the current Ministry relied upon to treat the annual NoCA filings as “licence applications” is a clear departure from the position taken by the prior Ministry. As a consequence, if the decision is left to stand, the plaintiffs will be deprived of two years of operations in Vava’u. Permitting the Ministry to so frustrate the plaintiffs’ expectations is so fundamentally unfair that it amounts to a form of abuse of power and, as such, is subject to review by the Courts.
    • (q) There is no overriding public interest consideration pleaded or claimed by the Minister which could provide any justification for departing from the representations made in 2103, 2014 and 2015 that the licences were valid for three years as prescribed by the Regulations.

Defendant

56. On behalf of the defendant, Mr Sisifa submitted that:
    • (a) Although s.7 of the Act and regulation 6 state that a licence shall be valid for a period of three years, it has been common practice within the Ministry for licences to be granted for four months from 1 July to 30 November each year, in order to enforce the purpose of the Regulations and to ensure the conservation, management and protection of whales.
    • (b) In 2019, the plaintiffs’ applications for renewal of their licences were granted and their licences were issued from 1 July 2019 to 30 November 2019.
    • (c) The Ministerial Order limiting the numbers of licences to be issued for the 2020 season was for the purpose of managing, protecting and conserving the whales annually migrating to Tonga and to manage the economic viability of the whale watching and swimming industry in Tonga.
    • (d) The Ministry has never received a single objection regarding the Order to limit licences. It had never been done before, but it was a clear signal from the Regulator that the number of licences granted would be limited.
    • (e) The requirements of regulation 6(2) for all service providers to submit an annual notice of continued activity before 31 December each year places a limitation on the three-year validity of a licence provided by regulation 6(1).
    • (f) The expiry date on each licence is a condition which the Minister is authorised to impose pursuant to regulation 5(2) and which lawfully limits the prescribed period of three years.
    • (g) If licences do not expire every year, operators could operate and stop whenever they wanted, which would also affect how frequently whales encounter humans. It is also appropriate that licences expire every year because this will allow the Ministry to conduct a review of past performances, alleged violations of the Regulations by vessels, crew, and clients, particularly during interacting with the whales, and also to consider specific reports, scientific data and advice on the status of whales.
    • (h) The Ministry’s annual licence practice and its reasons were known to the plaintiffs. The defendant never received any complaints or objections from the plaintiffs regarding the expiry date condition on their licences. The defendant has never been aware of any operator claiming that their licence was valid for a three-year period.
    • (i) Discretionary powers conferred upon a Minister or other public authority are deemed to be exercisable if the Minister or relevant authority is satisfied that it is requisite or expedient in the national or public interest: Re Beck and Pollitzer’s Application, Re Requisitioned Land and War Works Act 1945 [1948] 2 KB 339.
    • (j) The threshold for "Wednesbury unreasonableness" is very high: Moala v PSC and Government of Tonga [2012] TOCA 14.
    • (k) There have been growing concerns from the community plus scientific advice regarding the detrimental effect of increased whale watching and while swimming operations on whales. Since the Act and Regulations came into force, the number of licences granted each year has increased. If the Ministry reverses its decision to decline the plaintiffs’ licence applications, the limit of licences issued in 2020 will have to be increased by Gazette to 26.
    • (l) The Minister’s exercise of discretion and decision to limit the number of licences was based on advice received from her Ministry and was fair. Reference was made to Halsbury’s Laws of England for the proposition that "Discretion must also be exercised fairly, not capriciously, and in accordance with proper legal principles; and these standards imply that all relevant considerations must be taken into account and that extraneous considerations be disregarded by the person or body exercising the power." Further, in the discharge of a quasi-judicial function, the law requires judicial fairness. What is fair in a given situation depends upon the circumstances: Tukuafa v Kingdom of Tonga [1999] TOCA 2.
57. During the course of oral submissions, Mr Sisifa conceded that if the Minister's decision, and the Ministry's practices which underpinned it, were found to be correct, the practical result would be that s.7 of the Act and regulations 6(1) and 7(1) would be rendered "meaningless".

Consideration

58. The Defendant’s case may be condensed to two central propositions:
    • (a) notwithstanding the express terms of s.7 of the Act and regulations 6(1) and 7(1) prescribing a period of validity for every licence of three years, the Minister and her Ministry were entitled to ignore those provisions by employing a practice of treating every licence as only being valid for four months each year, as a means of giving effect to the purpose of the Regulations; and
    • (b) the four month expiry dates on the plaintiffs’ licences were conditions the Minister was entitled to impose pursuant to regulation 5(2).
59. For the reasons which follow, the Defendant’s submissions cannot be accepted.

Not an issue of policy

60. At the outset, it must be emphasized that this proceeding does not involve an attempt by the plaintiffs to have this Court review a matter of ‘high policy involving political judgment’. Such matters have been held to be ‘inherently unsuitable for review by the courts’: Flyniu v Ata [2006] Tonga LR 10. Rather, the proceeding involves review of an administrative decision. The underlying policy and purpose of the Act and its regulations are not in question. It is the Defendant’s interpretation and application of those relevant statutory provisions, and the process by which the Minister arrived at her decision, which are in question and are thus justiciable before this Court.
61. The Court is not concerned with reviewing the merits of the findings and conclusions of the statutory decision-maker. The purpose of the remedy of judicial review is to ensure that the individual is given fair treatment by the authority to which he has been subjected. It is no part of that purpose to substitute the opinion of the judiciary or of individual judges for that of the authority constituted by law to decide the matter in question. The duty of the court is to confine itself to the question of legality. Its concern is with whether a decision-making authority exceeded its powers, committed an error of law, committed a breach of the rules of natural justice, reached a decision which no reasonable tribunal could have reached or abused its powers.": Karalus v Royal Commission of Inquiry into the sinking of the MV Princess Ashika [2010] Tonga LR 133 at [3]. The grounds upon which administrative action is subject to judicial review have been conveniently classified as ‘illegality’, ‘irrationality’ and ‘procedural impropriety’: Pekipaki v Fifita [2018] TOCA 19 at [29].^[4]

Incorrect understanding of the law

62. In a judicial review context, it is axiomatic that a decision maker must understand correctly the law that regulates his/her decision-making power and must give effect to it: Council of Civil Service Unions v The Minister for the Civil Service [1985] AC 374, 410.^[5] The decision-maker, in making its evaluation, and drawing its conclusions, must proceed upon a correct interpretation of relevant law and must have taken account of relevant considerations and ignored irrelevant considerations. To fail in any of those respects is an error of law: Tafa v Viau [2006] Tonga LR 125 at [62]; Kautoke v Public Service Commission [2019] TOCA 9 at [43], [44].
63. The relevant terms of s.7 of the Act and regulations 6(1) and 7(1) are clear and unambiguous. In this proceeding, the Defendant did not contend otherwise. As such, they pelucidly indicate what must be taken to have been the intention of Parliament (including Cabinet and the Minister responsible for the Regulations when they were made). There is no need to look elsewhere to discover their intention or meaning: Gough Finance Ltd v Westpac Bank of Tonga [2005] Tonga LR 390 at 394. Where the decision maker has misunderstood the statutory language,^[6] the Court must intervene to ensure that effect is given to the ascertained purpose of the legislature when it enacted the Act and Cabinet consented to the Regulations.
64. Here, the Defendant clearly either ignored or, at least, misunderstood the relevant provisions which stipulated a validity period for licences of three years. In my view, there was no justification for not giving effect to those provisions in accordance with the plain and natural meaning of their terms. Section 7 and regulation 6(1) are in mandatory terms (“shall”). While the terms of regulation 7(2) that a licence “may be renewed” suggests a permissive approach, the words which follow – “for the duration of 3 years...” – are clearly consistent with the same duration mandated by s.7 and regulation 6(1).
65. By misapprehending that the Plaintiff’s 2019 licences were valid for three years, and instead treating them as only valid for approximately four months from issue to 30 November 2019, the Minister’s decision was inconsistent with s.7 of the Act and regulation 7(1).
66. Contrary to the defendant’s submissions, that plain reading or literal analysis is consistent with, and does not undermine, the purpose of the Act or the Regulations. It was unnecessary for the defendant to disregard the three year provisions and unilaterally purport instead to apply a one year (or four month) validity period to licences in order to fulfil the relevant purposes of the legislation. The asserted practice adopted within the Ministry of Tourism, the Ministerial Order and the Minister's decision in respect of the plaintiffs' licences are all aimed at better protecting the health of the migratory whale population and the inextricably linked economic viability of the whale watching and swimming tourism industry.
67. However, the Minister had other legislative tools available to her to achieve that result. For example, s.6 of the Act empowers the Minister to suspend or cancel licences. That discretion must not be exercised capriciously or arbitrarily but according to law. In the case of misconduct or breaches by particular operators, the power could be exercised in accordance with regulation 8(1) in which, for example, sub regulation (d) permits suspension or cancellation for breach of condition of a licence. If the standard condition imposed on licences for all operators was the same or similar to that imposed on the plaintiffs' licences (as shown in the annexure hereto), licences were all subject to an omnibus condition in the form of the whole of the Regulations. Moreover, the Minister has power to temporarily suspend licences for such period as she deems necessary due to, among other things, an identified major disturbance in, or poor health of, the whale population in the Kingdom. There is no suggestion in the material filed in this proceeding that the Minister considered, or was advised to consider, taking ameliorative action pursuant to any of those provisions.

The Ministry’s ‘practice’

68. The only explanation proffered by the defendant for its contravention of the provisions discussed above, was the ‘practice’ adopted within the Ministry of treating every licence as only valid for, and requiring renewal, each annual season. For the reasons discussed above, that practice too was the product of a misunderstanding of the relevant statutory framework.
69. As discussed in ‘Atenisi Institute Inc v Tonga National Qualifications and Accreditation Board [2019] TOSC 45,^[7] a statutory power will be construed as impliedly authorising everything which can fairly be regarded as incidental or consequential to the power itself. A similar principle is embodied in s.9 of the Interpretation Act, which provides that where an Act or regulation empowers a person to do or enforce the doing of any act or thing, all such powers shall be understood to be given as are reasonably necessary to enable the person to do or enforce the doing of the act or thing. Therefore, a statutory decision-maker may develop a policy or practice to guide the exercise of a discretionary power: Re Minister for Resources; ex parte Cazaly Iron Pty Ltd [2007] WASCA 175.
70. However, a policy does not enjoy the status of legislation or regulations made under an Act. As Webster J said in Vai v 'Uliafu [1989] Tonga LR 56:^[8]

“It is never right for administrative practice to be out of step with statutory legal requirements, as this can cause great confusion and seriously mislead the ordinary people in their transactions."

71. The Ministry's policy or practice cannot create or confer on itself any power which is not provided for by the Act or the Regulations. To the extent that the practice adopted here conflicted with express provisions of the Act and the Regulations, it was invalid.
72. The plaintiffs identified, and the defendant confirmed, that a particular incident of the practice adopted by the Ministry has been to treat the requirement of regulation 6(2) to submit annual NoCAs as effectively applications for renewals of licences. That practice, whether rooted in either a disregard or misunderstanding of the relevant provisions, is patently incorrect.
73. Firstly, regulation 6(2) makes plain that a NoCA is required before 31 December each year of the “duration of the validity of a licence”. Any view that a licence is only valid for a year (or less) directly conflicts with the three year duration prescribed by regulation 6(1).
74. Secondly, treating a NoCA as an application for renewal each year also conflicts with regulation 7 and would necessarily render it wholly otiose.
75. Thirdly, Schedule 2 (application for renewal of a licence) and Schedule 7 (NoCA) are substantially different, not only in terms of form but also the nature and content of information and other documents required.
76. Fourthly, the fees payable for each as specified in Schedule 4 are different. If the practice was to be applied by reference to that, the absurdity of it may be reflected in asking which fee is payable each year – the renewal fee, the NoCA fee or both?

Legal unreasonableness

77. It follows from the findings in the two preceding sections that the ‘high threshold’ for a finding of ‘Wednesbury’^[9] or legal unreasonableness has been met. I am satisfied that by reason of the errors of law discussed, the Minister’s decision was so manifestly unreasonable that no reasonable Minister could have reached it. For that further reason, the decision must be set aside.

Expiry dates are not conditions

78. The other main plank to the defendant’s case was that the expiry dates on the relevant licences were conditions permitted by regulation 5(2). With respect to whomever may have been the author/s of the argument, the fact that that justification was never uttered in any of the communications or other documents passing between the parties prior to the commencement of this proceeding gave it the very real appearance of an afterthought.
79. Assuming for the moment that the expiry dates could be considered conditions, any condition within the purview of the general power conferred by regulation 5(2) cannot conflict with the express and specific provisions of regulations 6(1) and 7(1). To achieve that result, regulations 6(1) and 7(1) would have to be prefaced as being subject to any condition as to duration of validity which might otherwise be imposed pursuant to regulation 5(2). Or, conversely, regulation 5(2) would have to be prefaced by words such as “notwithstanding regulations 6(1) or 7(1)...”. That none of those provisions have been framed in those terms, and that s.7 of the Act refers to licences being valid for a ‘prescribed period’ which is only to be found in regulations 6(1) and 7(1), are powerful indications that Parliament did not intend for the Minister’s power to impose conditions pursuant to regulation 5(2) to be capable of extending to and overriding regulations 6(1) and/or 7(1) or rendering them ‘meaningless’.
80. In any event, I do not accept that the expiry dates on the licence forms are to be characterised as conditions for the purposes of regulation 5(2). The prescribed form of the licence in Schedule 3 to the Regulations has a dedicated section entitled “Conditions of Licence” followed by a colon. The space beside or beneath that is clearly intended for any such conditions. As may be seen in the specimen licence annexed hereto, the only condition inserted in the plaintiffs’ licences is that they were subject to the Regulations. Below that space on the form are found the places for insertion of the ‘date of issue’ and ‘expiry date unless renewed’. If they were to be included as part of the conditions above them, there would be no need for the form to make provision for the dates to be inserted in their specified places. Instead, the dates would just be inserted as part of the Conditions of Licence.
81. Further, the logical reflexion of the defendant’s submission would result in the licences being internally contradictory. By imposing the condition in the plaintiffs’ licences that they were subject to the Regulations necessarily meant they were subject to regulations 6(1) or 7(1) as the case may be. If therefore the four month expiry date were also a condition of the licence pursuant to regulation 5(2), it would conflict with the three year validity period prescribed by regulations 6(1) or 7(1).
82. I also agree with the Plaintiffs’ submission that, on its proper interpretation, the conditions contemplated by regulation 5(2) (apart from a blanket reference to all the Regulations as has been inserted by the Ministry), are more likely to be operational in nature such as those imposed on the plaintiffs’ licences in 2018. As it is, regulations 9, 10 and 11 provide a large number of operational requirements or conditions. In the event the Minister considered that any other such conditions were ‘proper’, they could be added in the Conditions section of the relevant licence.
83. For those reasons, I find that the expiry dates on the plaintiffs’ 2019 licences of 30 November 2019 were inconsistent with regulation 7(1) and therefore invalid. The valid expiry date is 30 June 2022.

The Ministerial Order

84. There has been no issue raised in this proceeding as to the merit, purpose, or validity, of the Minister’s Order. However, insofar as the Minister purported to use the Order as a basis for her decisions to ‘decline’ the Plaintiffs’ licences, she, and those advising her, were in error.
85. Firstly, one need look no further than the terms of the Order itself. The opening sentence refers to the number of licences to be issued for the 2020 season and that the Order is have effect for one year from the date of gazettal. Both emphasized phrases are prospective, that is, the altered regime for issuing licences can only apply in respect of applications for licences to be issued on or after the effective date of the Order. By definition therefore, the limitations on the number of licences sought to be imposed by the altered regime could not apply to licences which had been issued prior to that date and which remain valid during the operation of the Order. For the reasons stated above, the plaintiffs’ 2019 renewed licences were issued prior to the date of the Order and will remain valid (subject to the Act and the Regulations) during the operation of the Order.
86. Secondly, and conversely, if the Order is permitted as a basis for the Minister to interfere with the existing rights (and obligations) of operators whose licences have been issued prior to the date of the Order, and which remain valid during the period of the Order, such interference is likely to struck down as offending the law against retrospectivity.
87. Clause 20 of the Constitution provides:

20 Retrospective laws

It shall not be lawful to enact any retrospective laws in so far as they may curtail or take away or affect rights or privileges existing at the time of the passing of such laws.

88. The source of the Minister’s power to issue the Order (or ‘notice’) is regulation 5(7). The source of power to make the regulations is s.11 of the Act. Insofar as the Order, through those statutory linkages, purports to have the effect of enacting laws which are retrospective, by curtailing or taking away the Plaintiffs’ rights existing at the time of the order, it is unlawful.
89. Thirdly, the Minister’s purported decision in respect of the laintiffs’ licences was a product of her erroneous belief that every licence was only valid for four months each year, and that therefore, when she issued the Order reducing the number of licences to be issued for 2020, all 2019 licences and any applications for new licences were ‘up for grabs’, as it were. From that incorrect premise, the Minister then went on to decide which operators would have their licences renewed, which would not, and most quizzically, how many new licences would be issued and to whom. That sequence of errors of law additionally vitiates the Minister’s decisions in respect of the plaintiffs’ licences.

Plaintiffs’ acquiescence

90. Mr Sisifa sought to reinforce the defendant’s position on its practice, and rejection of the plaintiffs’ complaints, by reference to Ms Fifita’s evidence that:

“All whale watching and swimming operators were fully aware of the reason why their licences expire every year. I had never been aware of any operator claiming that their licence was valid for three years.”

91. Perhaps not surprisingly, neither in its pleading or submissions, did the defendant attempt to elevate that evidence to a basis for any legal justification for its position. In fact, no legal significance was attached at all. It is therefore unnecessary to say much on the matter. However, as a matter of completeness, it may be observed that any suggestion that members of the public in the position of the plaintiffs, who might not complain at the time about any unlawful act or omission of a public authority, or even conduct their operations in accordance that act or omission, ought be precluded from relief by reason of acquiescence, waiver or some form of estoppel, would almost certainly be specious and without merit: Chapman v Earl (1968) 1 WLR 1315; Bradford City MC v Secretary of state for the Environment (1986) 53 P & CR 55.

Legitimate expectations

92. Finally, I agree with the plaintiffs’ submission that the defendant’s conduct in this case was as unfair breach of their legitimate expectations.
93. A legitimate expectation arises where a person responsible for taking a decision induces in someone who may be affected by the decision a reasonable expectation that he would receive or retain a benefit or that he would be granted a hearing before the decision was taken and in such cases the courts have held that the expectation ought not be summarily disappointed: Flyniu v Ata [2006] Tonga LR 10. The doctrine of legitimate expectation is rooted in fairness: R v IRC ex parte MFK Underwriting Agents Ltd [1990] 1 WLR 1545, at 1569.
94. Here, the Plaintiffs’ had received earlier confirmations from the former Ministry in charge that their earlier licences were valid for three years from issue. Between then and now, neither the Act nor the Regulations were amended. The prescribed duration period of three years remained. The plaintiffs complied with the actual regulatory requirements every year, including submitting annual NoCAs and three yearly applications for renewal of their licences. At no time did the present Ministry ever explicitly purport to change the statutory duration of licences notwithstanding the erroneous expiry dates inserted in them. It was only when the Minister made the decisions hereunder consideration that the plaintiffs became aware that Minister had effectively purported to do just that. To that point, the former and current Ministries had induced in the plaintiffs a reasonable expectation that they would issue and honour the licences in accordance with the Act and its Regulations. The Minister’s decision was a marked departure from, and inconsistent with, that legitimate expectation. It was unfair in the relevant sense and cannot be condoned by this Court.
95. A further albeit unpleaded aspect to this issue, separate to the above findings of unlawfulness, is in relation to what the Minister should have done prior to making her decision and which she will be required to do, if in future, any action is taken to interfere with an operator’s valid licence. Legitimate expectations also encompass the overarching administrative law requirements of natural justice and procedural fairness.
96. Here, prior to making her decision, the Minister did not give the plaintiffs any notice that she was considering effectively cancelling their licences (on the proper interpretation of the relevant statutory provisions as discussed above), the grounds for doing so and, perhaps most importantly, why she had chosen theirs over others which were renewed or allowed to continue (or new licences to be issued within the reduced overall numbers of licences). Nor did she afford the Plaintiffs any opportunity to be heard before making her decision. The Defendant is commended to carefully bear in mind and give effect to those legal obligations if and when any future action pursuant to the Act and the Regulations might be considered in relation to the suspension or cancellation of licences in the future.

Result

97. For the reasons stated, there will be judgment for the Plaintiffs.
98. It is hereby declared that:
    • (a) The Minister’s decisions made on or about 28 February 2020 purporting to decline each of the Plaintiffs’ whale watching and swimming licences issued in 2019, were infected by errors of law and were ultra vires the Act and the Regulations.
    • (b) The expiry dates of 30 November 2019 inserted on each of the plaintiffs’ 2019 licences are invalid.
    • (c) Each of the plaintiffs’ licences issued in 2019 are valid and will continue to be valid (subject to the provisions of the Act and the Regulations), for a period of three years from the date of their issue.
99. The Minister’s decisions made on or about 28 February 2020 purporting to decline each of the Plaintiffs’ whale watching and swimming licences issued in 2019 are quashed and set aside.
100. The Defendant shall pay the Plaintiffs’ costs of and incidental to the proceeding, to be taxed, in default of agreement.

NUKU’ALOFA		M. H. Whitten QC
13 November 2020		LORD CHIEF JUSTICE

ANNEXURE

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^[1] Court book 72 to 74.

^[2] Tonga Government Gazette Supplement Extraordinary No. 9, 25th February 2020.

^[3] Court book 78 to 83. The body of each letter was identical although a number of them were erroneously dated 26 June 2018.

^[4] As discussed in 'Atenisi Institute Inc v Tonga National Qualifications and Accreditation Board [2019] TOSC 45 at [91], [92].

^[5] Referred to in Pekipaki v Fifita, ibid, at [29] and in Public Service Commission v Public Service Tribunal [2020] TOSC 58 at [65].

^[6] Butler v Removal Review Authority [1998] NZHC 1311; [1998] NZAR 409 at 420-421 (HC).

^[7] At [251] to [253.

^[8] Referred to in Tukuafu v Tupoumalohi [2002] Tonga LR 268

^[9] Associated Provincial Picture Houses Ltd v Wednesbury Corporation [1947] EWCA Civ 1; [1948] 1 KB 223, 229–30, discussed in Moala v Public Service Commission [2012] TOCA 14 at [12].