Union Electrique de Vanuatu Ltd v Municipality of Port Vila [2003] VUSC 139; Civil Case 71 of 2003 (2 October 2003)

IN THE SUPREME COURT OF
THE REPUBLIC OF VANUATU
(Civil Jurisdiction)

Civil Case No.71 of 2003

BETWEEN:

UNION ELECTRIQUE DE VANUATU LIMITED
Claimant

AND:

MUNICIPALITY OF PORT VILA
Defendant

Mr. Hurley for the Claimant
Mr. Ishmael for the Defendant

REASONS FOR CONSENT ORDERS

CLAIM

The Claimant holds various concession contracts with the Government of Vanuatu in relation to provision of Electricity and Water and seeks declarations in relation to various Bye-Laws passed by the Municipality of Port Vila which touched upon its activities and contends that those Bye-Laws are invalid and that the Defendant should be restrained from requiring payment to it by the Claimant of amounts due it in respect of the Bye-Laws.

The Bye-Laws in contention are the following:-

(1) Section 2 of Bye-Law No. 13 of 2000, which provides:-

"CONTROL OF THE INSTALLATION OF STREET ELECTRICAL LAMP POST, POWER TRANSFORMERS AND LAYING OF CABLES

1) No electrical lamp post or power transformer shall be erected and no cable may be laid within the Council boundaries without the prior approval of the Council

2) For the avoidance of doubt the digging of land and deposit of gravel, coral, sand and all materials necessary for the carrying out of sub section 1, as well as the parking of vehicle or machinery at the designated area shall be treated for the purpose of this section as installation of any electrical lamp post or any power transformer and/or any cable laying.

3) Any person, company or organisation wishing to erect any street electricity lamp post, power transformers and/or lay electricity cables within the boundaries of the Council must apply to the Council in writing stating their intention and plans prior to the intended installation or cable laying",

(2) Section 2 of Bye-Law No. 15 of 2000, which provides:-

"CONTROL OF THE INSTALLATION OF PRESSURE VALVES, WATER TANKS AND LAYING OF WATER MAINS

No pressure valves or water tanks may be installed and no water mains may be layed without the prior approval of the Council.

(1) Any person, company or corporation wishing to install any pressure valve, or any water tank or lay any water mains shall apply to the Council in writing three months prior to the proposed installation or laying of water stating all of the following:-

a) place of installation and/or water mains laying;

b) actual period of installation and/or water mains laying;

and c) proposed plans ",

(3) Section 1 of Bye-Law No. 19 of 2000, which provides:-

"COMMISSION FROM ELECTRICITY CHARGES

(1) The electricity company must pay to the Port Vila Municipality a commission for electricity charged to users.

(2) The percentage from the electricity charges to consumers by the electricity company to be paid to the Municipal Council shall be 1 Vatu for every kilo-watt used",

(4) Section 1 of bye-Law No. 38 of 2000, which provides:-

"PROHIBITION OF CUTTING UP OR DIGGING OF ROADS

No person, persons or organisation must cut up or dig any roads whether tar sealed or gravelled for the laying of pipes and or lines for the purpose of electricity, telephone, water or any other purposes within the boundaries of the Port Vila Municipality without the prior approval of the municipal council",

(5). Section 1 of Bye-Law No.39 of 2000, which provides:-

"PROHIBITION OF DIGGING AT FOOTPATHS AND ROADSIDES

No person, persons or organisation must dig any trenches or holes on footpaths or roadsides within the boundaries of the Port Vila Municipality for any purposed whether laying of pipes, cables, erecting posts, etc, without the prior approval of the municipal council" and,

(6) Section 1 of Bye-Law No. 42 of 2000, which provides:-

"COMMISSION FROM WATER CHARGES

1) The water company must pay to the Port Vila Municipality a commission for water charged to consumers.

2) The percentage from the water charges to consumers by the water company to be paid to the Municipal Council shall be 1 Vatu for every cubic metres of water consumed".

The Claimant also claims that those Bye-Laws are Ultra Vires as being contrary to Article 25 (2) of the Constitution of the Republic of Vanuatu and by way of alternative that those Bye-Laws are Ultra Vires by virtue of section 38 of the Municipalities Act [CAP. 126], as amended.

While the Defendant filed a response to the claim on 8^th May 2003 it has never filed a defence nor has it filed legal submissions in response, as directed in a Court Order dated 10 July 2003. A synopsis of the Claimant's submission was filed on 2 September 2003. In addition, despite Orders of this Court made on 12 September 2003 when the hearing date on 2 October was confirmed, the Defendant has never filed and served any statement of defence.

HEARING

The hearing was set down for 9a.m. on 2 October 2003. It had been provisionally fixed for that date by Orders of this Court dated 10 July 2003 and was confirmed as a fixture on 12 September 2003. At the hearing, Mr. Malcolm appeared for the Defendant and indicated that paragraphs 3 to 15 of the statement of claim would not be opposed but that it was intended that the defendant would dispute paragraphs 1 and 2 relating to Bye-Law No. 13 of 2000. Mr. Malcolm asked the Court to deal with the matter in two ways. First, he asked that the matter be adjourned for 7 days or more to allow the Defendant to provide written submissions. He submitted that there was no prejudice to either party for any delay occasioned by that course as there had been no enforcement of the Bye-Laws in any event. Alternatively Mr. Malcolm requested the Court to stand the matter down for an hour to allow Mr. Kalsakau to appear to argue the Defendant's point of view. The Court allowed the matter to be adjourned until 10.15a.m.

There was no appearance of any Counsel for the defence at the appointed hour and Mr. Hurley for the Claimant confirmed the content of his written submissions. Somewhat belatedly Mr. Malcolm and Mr. Kalsakau appeared and Mr. Kalsakau advised the Court that the Defendant wished to call evidence in relation to the passing of the Bye-Laws. That course was opposed by the Claimant. The Claimant had filed a sworn statement of Anatole Hymak on 16 April 2003. The Defendant had never filed any sworn statement. The Court advised the Defendant that it would not allow evidence to be called at that late stage as no notice of this had ever been given either to the Court or the Claimant. Mr. Kalsakau then sought leave of the Court to file a written submissions in 3 days. The Court was not prepared to allow this in the circumstances but indicated that Mr. Kalsakau could make any legal submissions that he wished to make at the hearing. Mr. Kalsakau declined to do so.

A consent memorandum was then filed conceding that the declarations holding the various bye-laws to be invalid could be made and that orders could be made restraining the Defendant from requiring any payment under the Bye-Laws.

LAW

Under section 36 of the Municipality Act [CAP. 126] a power to make Bye-Laws is provided for. That section provides as follows:-

"(1) Subject to the provisions of this Part a council may from time to time make bye-laws in respect of all such matters as are necessary or expedient for-

(a) the safety of the inhabitants of the municipality, or

(b) the maintenance of the health, well-being and good order and government of the municipality, or

(c) the prevention and suppression of nuisances in the municipality.

(2) In particular, and without prejudice to the generality of subsection (1) a council may make bye-laws necessary for carrying out the powers conferred upon the council by this or any other law and for such additional purposes as may be prescribed by the Minister.

(3) Bye-laws made under the provisions of this section may apply to the whole or any part of the municipality.

Clearly the operation of section 36 is restricted by section 38, which is set out below.

The general powers conferred upon the Defendant by the Act are those listed in the schedule referred to in section 26.

I agree with the Claimant that the Act does not grant general taxation power to the Defendant which does not have any inherent power to make Bye-laws nor to levy fees or taxation unless it is authorized by statute. Here it is clear that the Bye-laws complained of seek to extend the Defendant's powers into Government areas which means that it has acted ultra vires.

Article 25 (2) of the Constitution of the Republic of Vanuatu provides as follows:-

"(2) No taxation shall be imposed or altered and no expenditure of public funds shall be incurred except by or under a law passed by Parliament."

The Defendant is plainly breaching that article by these Bye-laws.

Section 38 of the Act provides as follows:-

"Nothing in this Act shall empower a council to make any bye-law which is in conflict with or derogates from the provisions of any Act or order for the time being, in force in Vanuatu; and to the extent that any bye-law conflicts with or derogates from any such Act or Order it shall be void"

In addition, it is clear that Bye-laws no. 13, 15, 38 and 39 are in conflict with the Physical Planning Act [CAP.193]. Section 4 and 5 of that Act provides as follows:-

"DEVELOPMENT IN A PHYSICAL PLANNING AREA

4) No person shall carry on development in a Physical Planning Area, except as specified in the declaration of that Physical Planning Area, without having first received permission in writing from the council

APPLICATION FOR PLANNING PERMISSION

5) An application of development shall be made to the Council in such form and containing such information as the Council may specify, and shall be accompanied by such number of copies as the Council may specify"

The Bye-laws clearly conflict with those section and I agree with the submission that if they were enforced then there would effectively be double payment of fees by the Claimant.

The Water Supply Act [CAP. 24] has the following definitions:-

"Water Main" means any pipe of whatever material used for the purpose of the distribution of the public water supply and includes any valves, chambers, meters, fire hydrants, access shafts and other fittings as may be necessary for the proper functioning of the system of public water supply."

Clearly the Pressure Valve and the Water Mains are the same and I agree with the Defendant in that regard.

As to Bye-law No. 19, that provides for payment to the Defendant of a commission for electricity charged to users. The percentage from the charges is set out in the Bye-law and that is in direct conflict with the Electricity Supply Act [CAP. 65]. It is provided in section 2 of that Act that:-

"The provisions of this Act shall be subject to the terms of the contract with the Minister under which such concession was granted".

The Claimant has the concession here for the purposes of the Electricity Act and the Bye-law is in conflict with that concession with the Government.

I also agree that Bye-law 13, 38 and 29 are in conflict with section 5 of the Electricity Supply Act [CAP. 65] because, upon authorisation by the Minister, the Claimant may do all or any of the Acts as specified in those Bye-laws.

As to Bye-law No. 42 of 2000, as set out in the submissions that is in direct conflict with section 22 of the Water Supply Act [CAP. 24] as amended.

I agree that the generally accepted legal test regarding Bye-laws is as follows:-

(1) They must be reasonable,

(2) They must be certain in their terms,

(3) They must not be repugnant to or conflict with any other law whether statute law or common law, and

(4) They must be written within the powers given by the statute under which they are made.

FINDINGS

It is clear that the Bye-laws in contention in this action are in breach of the above test. The fees in the Bye-laws cannot be properly imposed by the Council for revenue purposes and must be limited to such amount as will reasonably recoup the Council for its administrative charges. Clearly in the case of these regulations- the fees bear no relationship to the costs of administration. They are unreasonable and virtually amount to taxation. In addition they conflict with other laws and are outside the powers given by the statute under which they have been made.

I also agree that they are void and of no legal effect because they are unconstitutional in that they are ultra vires the powers of taxation as set out in Article 25 (2) above.

In making these findings, I have carefully considered the authorities referred to by the Claimant which reinforce the orders that I now make.

ORDERS

In accordance with the memorandum of consent orders signed and filed by the parties, and for the above reasons, I declare that Bye-laws No.13 of 2000, 15 of 2000, 19 of 2000, 38 of 2000, 39 of 2000 and 42 of 2000 are invalid and ultra vires. I order that in each case the Defendant be restrained from requiring payments to it by the Claimant in respect of any of the amounts calculated according to the terms of those Bye-laws.

I direct that the Defendant pays the costs of the Claimant at the standard rate.

Dated AT PORT VILA, this 2^nd day of October 2003.

BY THE COURT

P.I. TRESTON
Judge