Apia Bottling Company Ltd v Attorney-General [1979] WSLawRp 1; [1970-79] WSLR 227 (6 April 1979)

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ADMINISTRATIVE LAW (Exercise of discretionary powers) - Duty to act fairly - Discretionary powers vested in Cabinet by Parliament to grant economic incentives to proposed enterprises in Western Samoa pursuant to the Enterprises Incentives Act 1965 - Powers of Cabinet limited by careful procedural requirements set out in the Act, viz., a formal application for approval of the proposed enterprise (s 10), a report from the Director of Economic Development to the Enterprises Board following his investigation of the application and consideration of any objections thereto and accompanied by his recommendation (ss 11 and 12), and a report to Cabinet by the Enterprises Board (s 13) - An agreement having been entered into by Government to grant incentives to a proposed brewery enterprise before any application for its approval had been made pursuant to the Act and none of the foregoing statutory requirements having been complied with in terms of the Act, it was held that Cabinet had failed to act fairly in the exercise of its discretionary powers by prejudging the issues involved in contravention of the rule against bias and consequently there was no valid approval of the enterprise and no valid grant of incentives:

Moreover s 11 of the Act requiring the Director to cause notice of the application to be published if he considered "that the enterprise may unduly affect any efficient existing enterprise producing a similar product in Western Samoa" and calling for objections, limited his discretion to considering the "mere possibility" that such an enterprise would be affected - Failure to publish notice in circumstances where two other existing enterprises would be placed in direct competition with the proposed enterprise was held unfair, biased, unreasonable, and lacking in bona fides: Chandra v Attorney-General (unreported) per Barker J of the New Zealand Supreme Court, Pearlberg v Varty [1972] 2 All ER 6, 13, Furnell v Whangarei High Schools Board [1973] 2 NZLR 705, Lower Hutt City Council v Bank [1974] 1 NZLR 545, 548, Associated Provincial Picture Houses v Wednesbury Corporation [1947] EWCA Civ 1; [1948] 1 KB 223, 234 considered and applied.

EQUITY (Laches) - Although the applicant had established his right to a declaratory judgment his delay of over a year in instituting his proceedings made it inequitable to grant such relief: R v Aston University Senate [1969] 2 All ER 964, Turner v Allison [1971] 1 NZLR 33, Anderson v Valuer-General [1974] 1 NZLR 603 considered and applied.

PRACTICE AND PROCEDURE (Judgments and orders) - Declaratory judgment - Question whether Court has power to make such a declaration without other consequential relief held a matter of procedure governed by s 39 of the Judicature Ordinance 1961 - Such jurisdiction to be exercised as the Court "thinks in each case to be the most consistent with natural justice and convenience":

MOTION for a declaration that the Cabinet decision in granting incentives to Western Samoa Breweries Limited was invalid and ultra vires in terms of the Act and a declaration that the action of the Director in forwarding the application to the Incentives Board without requiring the Company to publish notice calling for objections was invalid and any reports by him to the Board were consequentially invalid.

Southwick and Stevenson for applicant.
Attorney-General Slade and Barlow for respondents.

NICHOLSON C.J.: This is an action for a declaration in relation to the rights of the applicant under the Enterprises Incentives Act 1965. Before proceeding to the principal issues I pause to consider a matter which was not argued before me, namely, the jurisdiction of the Supreme Court of Western Samoa to make a declaratory judgment in proceedings which do not seek relief of any other kind. In the United Kingdom and in New Zealand, the two countries providing the principal sources of law for Western Samoa, the situation regarding declaratory judgments is governed by statute. Doubtless, this is because there appears to have been doubt in the minds of English judges of the 19th century as to whether a court of equity had the power to make a declaratory judgment without proceeding to provide some other form of equitable relief such as certiorari or injunction. In New Zealand, the situation was first considered by Richmond J. in the case of Hollard v. Ollivier (1881) N.Z.L.R. 1 S.C. 197 at page 211. There, Richmond J. took the view that the Regulae Generales of 1856, Rule 238, clearly gave him authority to make a declaratory decree. He considered the difficulties in which English judges had found themselves in this respect, but concluded that the matter was merely one of procedure, and that the Supreme Court of the Colony of New Zealand ought not, in the matter of procedure, to follow English decisions too closely, since the Supreme Court in New Zealand was vested with jurisdiction in both common law and equity, unlike the courts in England at that time. In a second New Zealand decision of the Mayor Etc. of Lower Hutt v. Yerex (1904) 24 N.Z.L.R. 697 at page 702 Stout C.J., after referring to the decision in Hollard's case, expressed doubt as Zealand Supreme Court had a power to pronounce a declaratory decree. The matter was put beyond doubt by the passing of the New Zealand Declaratory Judgments Act 1908. No Similar statutory provision is in force in Western Samoa, although section 12 of the Government Proceedings Act 1974 empowers the Court to issue declaratory judgments against Government in lieu of granting an injunction or specific performance or an order for recovery of land. None of those circumstances appear to arise here.

I rely on the view of Richmond J. in Hollard's case that the question is purely a matter of procedure. There is no formal code of civil procedure presently in existence in Western Samoa, and by section 39 of the Judicature Ordinance 1961 the practice and procedure of the Supreme Court in the exercise of its civil jurisdiction "shall be such as the Court thinks in each case to be most consistent with natural justice and convenience." In pursuance of the discretion vested in me by section 39 of the Judicature Ordinance, I conclude that it is in accordance with natural justice and convenience for me to allow an action seeking a declaratory judgment alone. I conclude that there is jurisdiction for the Supreme Court to make a declaratory decree alone in Western Samoa.

I should add that the Statement of Claim as originally presented to the Court was couched in such terms as to make it less than clear whether a remedy beyond a mere declaration was sought. At the hearing of interlocutory proceedings prior to the commencement of this hearing Mr Southwick for the applicant explained that his client sought nothing more than a declaratory judgment and that he was not seeking in this action any extraordinary relief beyond that.

I turn now to the case presented to me, and I think it necessary before reviewing the facts, to consider the terms of the Enterprises Incentives Act 1965 of Western Samoa. The long title to the Act reads:-

An Act to encourage the establishment and expansion of enterprises in Western Samoa, by making provisions for the grant of certain relief from customs duties, income tax and business licence fees to persons engaging in approved enterprises; and for purposes incidental to or connected with any of the foregoing purposes.

The policy of the Act is clearly to encourage investment of overseas capital to set up business enterprises in Western Samoa by relieving such new businesses, at least on a temporary basis, of the burden of certain customs duties, income tax and licence fees. The scheme of the Act enables any company or organisation wishing to set up an enterprise in Western Samoa and wishing to take advantage of the inducement offered by the Act to make application under section 10 of the Act to the Director of Economic Development for an approval order approving the enterprise as one which qualifies for incentives.

The Director of economic Development, Mr Kruse, (hereinafter referred to as "the Director"), by virtue of section 11 of the Act, "if he considers that the enterprise may unduly affect any efficient existing enterprise producing a similar product in Western Samoa shall" publish a notice of the application for approval of the enterprise in a newspaper published in Apia stating the nature of the application and calling for objections thereto. He is then called upon to consider any objections, which may have been received pursuant to that notice, and any reply to that objection filed by the applicant, within two weeks after the expiry date of the publication.

Under section 12 of the Act the Director is then required to analyse and investigate each application and submit it, together with his analysis, any objections and any replies to the objections, to the Incentives Board set up under section 4 of the Act. The Board consists of the Minister of Economic Development, two other members of the Legislative Assembly, a member of the Chamber of Commerce, a planter, and as non-voting ex officio members, the Director, the Financial Secretary, the Commissioner of Inland Revenue, and the Collector of Customs. The Board, after considering all the material of the application, must submit the same to Cabinet, together with all documents received from the Director and with a recommendation from the Board as to what the decision of Cabinet should be.

Under section 14(1) of the Act, the Cabinet may approve the enterprise in respect of which an application has been made under section 10, on being satisfied:-

(d) It will not unduly affect any existing efficient enterprise producing a similar product in Western Samoa; and

(e) If the enterprise is to be conducted by a company, the company is, or will be incorporated under the Samoa Companies Order 1935 (Reprint S.R. 1956/126 (N.Z.)), or registered thereunder.

By subsection (3) of section 14 it is declared that the decision of Cabinet on each application shall be final. By subsection (4) the approval order is required to specify:-

(d) Each article which Cabinet is satisfied about, and directs to be specified in the approval order, in terms of subsection (1) of section 18 of this Act; and

(e) Each article which Cabinet is satisfied about, and directs to be specified in the approval order, in terms of subsection (5) of section 18 of this Act, with a statement of the extent to which it may be free of customs duty on importation into or purchase in Western Samoa.

The evidence, which is almost entirely undisputed, shows that for the past six years the Government has had under consideration a proposal to establish a brewery for beer in the country and various feasibility studies have been undertaken and negotiations entered into with a number of overseas suppliers and manufacturers. On the 21st September, 1974 Cabinet reached a decision on what was known as the "Brauhaase proposal" for the establishment of a brewery, and Cabinet directed that the Department of Economic Development should immediately pursue negotiations on the basis of this particular proposal. This proposal eventually resulted in the formation of the Company known as Western Samoa Breweries Limited, which was incorporated in Western Samoa sometime in 1976. The shareholding arrangement in the Company provided for a majority of shares to be held by the Government of Western Samoa and certain German interests to hold the remaining shares. There was also an arrangement whereby a certain portion of the Government holding would be released to the public of Western Samoa for purchase. On the 15th January, 1976 Cabinet further resolved that the Department of Economic Development be responsible for the implementation of the project and development of the brewery, and this was confirmed on the 19th January, 1976 by a Ministerial directive to the Director and to the Financial Secretary. A number of agreements were entered into between the Government and the representatives of the German interests during 1976, one of which was known as the 'basic agreement' and, according to the affidavit of the Director, article 19(3) of that agreement provided as follows:-

The Government undertakes to grant to Western Samoa Breweries Limited in accordance with the Enterprises Incentives Act 1965 relief from the payment of Customs duty on all importation of raw materials required for the production of beer for a period of 5 years.

The Director, in evidence, has made it clear that he was deeply involved in these complicated negotiations for a number of years prior to these agreements being reached, and that as a result of these negotiations, he was in a position to ascertain all of the very detailed information which was required to be contained in a formal application by Western Samoa Breweries under section 10 of the Act to himself as Director of Economic Development. In fact no formal application for approval of the brewery enterprise under section 10 of the Enterprises Incentives Act 1965 was ever filed. Mr Kruse, the Director, says, in his evidence, that he was under the impression that there was merely a request for incentives made, but no documentary evidence of such a request was produced. The Director proceeded to place before the Enterprises Incentives Board a proposal for the granting of incentives to Western Samoa Breweries Limited. In doing so, he did not present a formal report in terms of section 12, nor did he advertise the fact of any application as provided under section 11, although it was quite clear from the negotiations and the agreement reached that Western Samoa Breweries Limited would not be confining its production to beer, but would, in addition, be manufacturing soft drinks and ice.

The applicant is one of two Companies engaged in the manufacture and sale of soft drinks in Western Samoa. There seems to be no dispute that in terms of section 11 of the Act, the enterprise of the applicant was "an efficient existing enterprise producing a similar product in Western Samoa" to the proposed soft drinks production of the new brewery. Mr Kruse told the Court, in evidence, that he reached a decision not to advertise because he did not consider that the applicant undertaking might be unduly affected by the brewery undertaking the manufacture and sale of soft drinks in competition with the applicant.

In concluding that the applicant was not an enterprise that might be unduly affected by the brewery enterprise, Mr Kruse gave as his reasons for not advertising the so called application:-

(1) that it was not intended that the incentives contemplated were to be given for the production of soft drinks;

(2) that it was within his knowledge because of previous applications that the applicant was making a profit and ought to be able to withstand healthy competition;

(3) that at the time he believed that there were substantial imports of foreign soft drinks being brought into the country although he gave no details of this;

(4) that he had some evidence (again which he did not detail) of shortages of supplies of soft drink on certain festive occasions during the year;

(5) finally, he referred to the virtues of healthy competition in a free market system improving the quality and range of goods available.

He, therefore, made no move to advertise any notice of the fact that the Incentives Board would be considering the brewery's so called application and he proceeded to place the matter before the Enterprises Incentives Board, which in turn made a recommendation to Cabinet closely following his own recommendation that incentives be granted.

Cabinet's decision on 12th November, 1976 embraced a number of resolutions regarding the brewery proposal. On the incentives aspect it merely reads as follows:-

(iii) Endorsed the granting of benefits applied for and recommended by the Enterprises Incentives Board in its meeting held on Tuesday, 9th November, 1976.

There was no evidence to show whether Cabinet had regard to the matters mentioned in section 14(1) or not.

Mr Carpenter, the Managing Director of the applicant, in his affidavit has set out the anticipated effect of the competition of the new brewery upon the applicant's soft drinks business. This evidence is not disputed and shows that the applicant will be seriously affected by the competition.

On the 15th of November, 1976 a formal document headed, "Approval Order under the Enterprises incentives Act 1965" was drawn up. It purported to be made pursuant to section 15 of the Act and in accordance with Cabinet decision CM (76) 43 and gave public notice of an approval order issued to Western Samoa Breweries Limited. It then listed the following matters:-

(a) date of approval order	-	11 November 1976;

(b) name of enterprise	-	Western Samoa Breweries Limited;

(c) address	-	Vaitele, Apia;

(d) type of enterprise	-	Brewery;

(e) tax holiday	-	5 years as from date of production;

(f) date of production	-	12 April 1978;

(g) duty free imports:
building materials	-	$860,000;
plant equipment machinery and vehicles		$1,950,000;
furniture and fixtures	-	$106,000;
raw materials	-	$4,500,000.

There was a further heading "Use requirements" annexed to this document which read as follows:-

The abovementioned plant equipment and vehicles are to be used exclusively for the manufacture of beer and soft drinks and are not to be used in whole or in part for any other purpose. Any use of the plant and equipment under this approval order for the purpose other than that stated herein will be grounds for revocation under this approval order. The raw materials shall be used for the production of beer only.

This document was signed by the Director. The terms of this document are such that, although it is headed as an approval order under the Act, the text makes it clear that it amounts merely to public notice of an approval order, and Mr Kruse took the attitude in evidence that so far as he was concerned the approval order itself consisted in the Cabinet minute recording its decision on the application of the brewery. In fact this public notice was never published. No approval order has ever been drawn up, but by section 14(5) of the Act the order came into force on 12th November, 1976 regardless of this informality.

In April of 1977 an invitation to purchase ordinary shares in the brewery was prepared and issued to the public. According to the affidavit of Mr Carpenter, the Managing Director of the applicant Company, this invitation was brought to his notice "some months after April of 1977" when it was issued, and it was only at this stage that he first realised that Western Samoa Breweries proposed to operate in competition with his Company and the other soft drink undertaking operation in Western Samoa by producing soft drinks. The applicant Company in June, 1978 took steps to reapply for approval under the Enterprises Incentives Act for expansion of its own undertaking, but that application has not been dealt with finally, having been deferred by a decision of the Board. The applicant had originally been set up in 1966 with the aid of approval and incentives granted under the Enterprises Incentives Act and in 1975 had sought approval for expansion of its business without success. In August, 1978 the present proceedings were filed in this Court.

On 17th January, 1979 the Director attempted to publish a notice under the Enterprises Incentives Act 1965 in the Samoa Times. The text of the advertisement was as follows:-

The public is informed that Western Samoa Breweries Limited is presently manufacturing soft drinks using benefits granted under the Enterprises Incentives Act 1965 and amendments.

Existing enterprises producing a similar product in Western Samoa who feel that their operations may be unduly affected, are asked to lodge in quadruplicate any objections thereto, and grounds thereof, with the Department of Economic Development before 4.30 p.m. Wednesday 7th February 1979.

It is of significance that the Director of Economic Development, by virtue of his deep involvement in the negotiations and implementation of the whole proposal of a brewery business in Western Samoa, was appointed Secretary of the Company. Mr Kruse says that this was done to enable him to get the brewery proposal "off the ground", as he put it, and that he was Secretary of the Company at the time that the question of the grant of incentives to the brewery as an enterprise under the Act was being considered. He is no longer Secretary, but is a director of a number of other commercial enterprises in which Government has a major interest.

It must be remembered that it is not for this Court to consider the matters that were put before the Director and to substitute its own decision for the Director's simply on the basis of the evidence before him. The question is whether the Director exercised properly, the discretion which he had, or whether it was exercised in such a fashion as to warrant the Court's intervention for the number of reasons advanced by the applicant, which I will deal with later.

The applicant seeks a declaration that the decision of Cabinet in the matter was invalid or ultra vires the powers of Cabinet in terms of the Enterprises Incentives Act 1965, and a declaration that the actions of the Director in forwarding the application of Western Samoa Breweries Limited to the Incentives Board without requiring that Company to publish a notice calling for objections was invalid, and any reports made by him to the Board were consequentially invalid. The remaining prayers as I understand it have now been abandoned. I should mention here that I was informed from the Bar that it was only in the last few days prior to hearing that the applicant was informed of the fact that no formal application for approval under the Act has ever been made. Consequently, the pleadings did not cover that aspect. Mr Southwick for the applicant argued:-

(a) That the failure to follow the prescribed procedures under the Act, and the failure of the Director, the Board, and Cabinet to address itself to the question of approval before granting incentives, was fatal to the validity of Cabinet's decision;

(b) The exercise by the Director of his discretion regarding advertising for objections was void as contrary to natural justice, unfair, biased, unreasonable, and in bad faith;

(a) Section 14 gave Cabinet a very wide executive discretion, which in general should not be subject to the control of the Courts, nor bound by the principles of natural justice;

(b) The "enterprise" approved by Cabinet was only the beer production enterprise, and not the soft drinks enterprise, or the ice production enterprise;

(d) In any event Cabinet is not bound to follow the prescribed procedure, under the terms of section 14;

(e) If there was bias by Cabinet, or the Director, it was bias ex necessitate and therefore excusable;

(f) In any event, the relief sought was unnecessary, without practical consequence, and should not be granted because -

Dealing with the first of the applicant's complaints advanced, I say at once that I reject any argument by the respondent that the procedure laid down under the Enterprises Incentives Act need not be followed by the Cabinet, and that mere procedural omissions on the part of the Director, the Board and Cabinet can have no significance. The scheme of the Enterprises Incentives Act 1965 is to grant very substantial revenue concessions to new companies and businesses. These take the form of exemptions from Customs duties, licence fees, and taxes, which are not available to the ordinary taxpayer and citizen. These privileges are not lightly to be given, and the suggestion that the very careful form of application and approval procedure laid down by the Act can be ignored or circumvented I reject as unrealistic having regard to the importance of the exemptions which are available. If, as the Attorney-General urges, Cabinet has the power to grant incentives without the application procedures prescribed being followed, then there appears to be little point in prescribing procedures at all. I construe this Act as laying down, within careful limits, a power to Cabinet to give these revenue privileges which otherwise cannot under the law be given to anybody. It would be an extraordinary power for Parliament to give Cabinet without the procedural safeguards laid down and I am unable to interpret the terms of the Act in that fashion. I reject any suggestion that the provision that the decision of Cabinet shall be final entitles the Cabinet to override the procedures prescribed. The decision of Cabinet is final only if it is within the careful limitations placed on it by the Act itself.

The respondents argue that the term "enterprise" is open to the interpretation that it may be one of several spheres of operations of a business. The respondents urged that Cabinet has only purported to grant incentives in respect of beer production, but not to the soft drinks or ice production spheres of the brewery operations. The learned Attorney-General drew the analogy of the Act permitting a proposed expansion of an existing enterprise to be treated as a separate enterprise. I consider that this submission must be rejected. To begin with the terms of the so called approval order of the 15th November, 1976 make it clear that incentives would cover machinery and equipment intended for beer and soft drinks production. In any event as a matter of common sense I think it impossible to separate the one enterprise into different enterprises for the purposes of the Act. If the Company is to receive incentives merely for beer production, that incentive must still operate indirectly to the benefit of the whole undertaking and not just to that one sphere of operation.

I find that there has been no formal application for approval in terms of section 10 of the Enterprises Incentives Act and no report by the Director to the Board in terms of section 12 of the Act. The Director did prepare a relatively brief memorandum for the Board, but it certainly did not cover the matters contemplated by section 12, viz., the results of the Director's analysis and investigation of an application. Instead, the tenor of that memorandum was to advise the Board that Government had already reached agreement on the setting up of the brewery. Moreover, it only recommended approval of certain incentives and did not seek the Board's approval of the enterprise as such, under the Act. The minutes of the meeting of the Board on 9th November, 1976 show that the Director led a discussion of background developments and efforts made to set up a brewery, including the work involved in negotiating and drawing up the agreements. The Board then approved certain incentives without approving the enterprise itself.

Again, there was no report by the Board to Cabinet in terms of section 13 of the Act. The chronology of events at this time is of interest. On 4th November, 1976 the Director prepared his memorandum for the Board. On the 8th November, 1976 a Cabinet submission under the hand of the Minister of Economic Development was prepared, which closely followed the terms of the Director's memorandum to the Board. It recommended to Cabinet the grant of incentives, it omitted to recommend approval of the enterprise, and it did not mention the Board at all. On 9th November, 1976 the Board met and made the decision I have described. On 10th November, 1976 a further submission to Cabinet was prepared under the joint signatures of the Minister of Economic Affairs and the Minister of Finance. It recommended the approval of the "incentives granted to Western Samoa Breweries by the meeting of the Enterprises Incentives Board on Tuesday, 9th November, 1976." Again no mention of the approval of the enterprise as such was made. But these events and the methods of expression used in these documents reveal fundamental misunderstandings on the part of the Director, the Board, and the members of Cabinet responsible for the submissions, of the true functions of the Enterprises Incentives Act.

It may appear that the applicant's argument is of an unduly technical nature in the submission that there has been a mere request for and grant of incentives without the preliminary step of considering whether or not the enterprise should be approved for the purposes of the Enterprises Incentives Act in the first place. I do not concur in this view. To begin with, I am unable to find on the evidence even that the request for incentives referred to somewhat vaguely by Mr Kruse, was in fact made. But more significantly, I am persuaded that the whole tenor of the Act called for two separate and important steps. The first was for the Director, the Board and Cabinet in turn, applying the criteria laid down in the Act, to reach a conclusion either that the brewery undertaking was a desirable business to set up in Western Samoa and to approve it as an enterprise, or that it was not desirable and to reject the application. I do not think that this step can be regarded as merely technical even though negotiations had gone on for some years over the possible setting up of a brewery.

The second step was for the Director, the Board, and Cabinet, in turn, to reach a conclusion as to which incentives would be granted and the extent of those incentives. Since no application for approval was ever made, and since I am satisfied that it was an essential step in the process of obtaining incentives that such application be presented, analysed, and considered in conformity with the Act, it follows that no valid approval order under the Act was obtained and no valid grant of incentives was made.

The Director from the documentary and viva voce evidence before me, appears to have persistently addressed his mind to the grant of incentives rather than the approval of the enterprise, and this fundamental error in approach permeated throughout the remaining procedures of the Board and Cabinet.

Cabinet may by order approve any enterprise in respect of which an application has been made in accordance with section 10 of the Act........

Since I am satisfied that no application under section 10 was made, the argument of the respondents that the power given to Cabinet by section 14(1) is so wide that the mere omission to follow the required procedures does not affect the issue, must fail in any event.

In view of my findings so far, it is not strictly necessary for me to consider the several remaining arguments of the applicant concerning the exercise by the Director of his discretion to call for objections, and the validity of Cabinet's decision. But, against the possibility that this matter may go further, I proceed to express my views on those issues before dealing with the residuary question of whether the Court's discretion to issue a declaration should be exercised in the circumstances.

The applicant argues that the Director so exercised his discretion to call for objections that his decision must be void as contrary to natural justice, unfair, biased, unreasonable, lacking bona fides, and contrary to the policy of the Act.

The respondents argue that the executive power conferred by section 14 of the Act on Cabinet is so wide that it should not be subject to the scrutiny of the Courts, nor be bound by principles of natural justice. I do not accept that argument. The scheme of the Act is directed to limiting the scope within which Cabinet may grant these privileges and its discretion is subject primarily to an application under section 10 of the Act being made.

After a consideration of the authorities and the commentary of S.A. de Smith's Judicial Review of Administrative Action, 3rd Edn., p. 71, I conclude that the exercise of the Director's discretion was not quasi-judicial in its nature. To begin with, there is little of the trappings of a Court type procedure, and the result of the exercise of the power is not a binding decision on the parties involved. It is merely preliminary procedure, and even if objections are called for and made there is no provision for a viva voce hearing, the objections and replies thereto being submitted in writing and merely passed on by the Director to a Board. Certainly, something in the nature of a lis between the parties would exist, but there is little else of the characteristics of a judicial function on the Director's part. However, the trend of modern decisions appears to be to minimise the importance of the distinction between quasi judicial and administrative functions. Barker J. in the Supreme Court of New Zealand, as recently as the 6th December, 1978, in Chandra v. Attorney-General (unreported) was moved to comment that there is now no valid distinction between the duty to act fairly and the duty to act in accordance with the principles of natural justice.

It is clear that even in an administrative function the duty to act fairly is fundamental. In Pearlberg v. Varty [1972] 2 All ER 6 at page 13 Viscount Dilhorne said, "Whether the commissioner's function in deciding to give leave is to be described as judicial or administrative, he must obviously act fairly." In Furnell v. Whangarei High Schools Board [1973] 2 NZLR 705 Lord Morris of Borth-y-Gest observed, at page 718 "Natural justice is but fairness writ large and juridically. It has been described as 'fair play in action.' Nor is it a leaven to be associated only with judicial or quasi-judicial occasions." The New Zealand Court of Appeal, in Lower Hutt City Council v. Bank [1974] 1 NZLR 545 at page 548 said, "Furthermore, we believe that the clear-cut distinction, once favoured by the Courts, between administrative functions, on the one hand, and judicial functions, on the other, as a result of which it was proper to require the observance of the rules of natural justice in the latter but not in the former, is not in these days to be accepted as supplying the answer in a case such as we have before us. Former clear-cut distinctions have been blurred of recent years by directions from highest authority to apply the requirement of fairness in administrative actions as well, if the interests of justice make it apparent that the quality of fairness is required in those actions." In the present case I conclude that in making the decision he did, the Director did not act fairly having regard to the words of the statute governing his discretion. I gained the impression from the evidence of the Director as to his reasons for not advertising that he had posed to himself the question, "Would the applicant be unduly affected by the brewery enterprise?", rather than "Might the applicant be unduly affected." The legislation places in the Director a discretion to consider a mere possibility, not a likelihood, nor a virtual certainty. Again, he adopted as one of his reasons that the enterprise incentives contemplated were related to beer production only. Subsequent events showed that this was not the case. But be that as it may, there can be no doubt, I find, that the applicant should have had an opportunity to submit an objection, and the Director was in breach of his duty of fairness in denying the applicant that opportunity. Moreover, he was in breach of that duty in holding the dual posts of Director of Economic Development and Secretary to the brewery at the time he exercised his discretion.

The question of bias in some cases appears to have been limited to quasi-judicial functions, but the commentator de Smith allows for the possibility that bias can be raised too in relation to administrative functions at p. 222 of his publication where he writes, "If the decision in question has a judicial flavour (because of express procedural requirements), or an obligation to determine questions of law and fact before a discretion is exercised in a matter having civil consequences for individuals, a duty to act fairly may entail compliance with the rule against interest and likelihood of bias." That passage is apt for the present case and I conclude that the Director was required here to comply with the rule against interest and likelihood of bias.

I make full allowance for the natural partiality of a Departmental officer in endeavouring to encourage the setting up of a major industrial undertaking in accord with declared Governmental policy. I am not concerned at that degree of bias, often referred to in the cases as bias "ex necessitate." But, in acting both as Director of Economic Development and as Secretary to the enterprise in question simultaneously, I consider the Director was beyond that normal degree of partiality and was in breach of the rule against interest and bias. At the same time I wish to make it clear that there was no personal gain to the Director by his acting in both capacities, but the situation was one which called for him to disqualify himself from one of his two posts for the purposes of the brewery's application and this he did not do.

On the question of unreasonableness and bad faith, I am satisfied that the Director was under a duty to act reasonably even in his administrative function and within the policy of the [1947] EWCA Civ 1; Act. In Associated Provincial Picture Houses v. Wednesbury Corporation [1948] 1 K.B. 223 at p. 233, 234 Lord Greene MR summarised the principle involved in the following terms:-

The court is entitled to investigate the action of the local authority with a view to seeing whether they have taken into account matters which they ought not to take into account, or, conversely, have refused to take into account or neglected to take into account matters which they ought to take into account. Once that question is answered in favour of the local authority, it may be still possible to say that, although the local authority have kept within the four corners of the matters which they ought to consider, they have nevertheless come to a conclusion so unreasonable that no reasonable authority could ever have come to it.

Applying that passage to the instant case, I found most of the reasons offered by the Director for his decision unconvincing, and in one case based upon a wrong assumption that the incentives would be for beer production only. I can hardly imagine that with his deep knowledge of the whole proposal that he did not know that machinery and equipment for soft drinks production was going to be the subject of incentives. That being so I find that the decision he reached was so unreasonable that a reasonable Director could not have come to it, and I ascribe to him a lack of bona fides in the legal sense.

Turning from the position of the Director to that of Cabinet, it follows from what I have already said that Cabinet also addressed itself to the wrong question, viz., to the granting of incentives rather than to the approval of the enterprise under the Act, and that in purporting to grant incentives it did so without legislative authority or without jurisdiction as the applicant puts it, for as I have pointed out earlier, section 14(1) of the Act from which Cabinet purported to draw its authority only confers that authority when an application under section 10 has been made. But the most serious error made by Cabinet in this whole affair was its undertaking given in paragraph 19(3) (a) of the basic agreement to which I referred earlier. I construe this paragraph as a promise to give the brewery incentives, come what may although that undertaking was confined to raw materials for beer production. While it uses the words, "in accordance with the Enterprises Incentives Act," the undertaking is quite inconsistent with the terms of the Act, which requires an independent Board to process applications for incentives. The Government by this paragraph said to the brewery in effect, "If you go through the formalities of applying under the Enterprises Incentives Act, the Government undertakes to grant you your incentives, regardless of any recommendations the Board may make or submissions any objector may make." There was thus a prejudging by Government of the issues which the following of proper procedures under the Act may have raised. The Director and the Board were placed in the unenviable position of processing an application, the result of which to a large extent was a foregone conclusion. Cabinet was in breach of the rule in these circumstances.

This commitment by Government may well have contributed to the attitude adopted by the Director in the haphazard procedures he employed thereafter.

Finally, I turn to the argument of the learned Attorney-General that I should not exercise my discretion to issue a declaration in the circumstances. His arguments in this respect are:-

In elaboration of the first argument, he drew attention to the portion of Mr Carpenter's affidavit where he acknowledged that he first became aware of the proposal that the brewery manufacture soft drinks and that it had been granted incentives a matter of "some months" after the Company's prospectus was published in April of 1977. If one allowed generously for this period of "some months", it seemed that a delay of about a year occurred before proceedings were taken in early August of 1978. During that period the brewery was being built, equipment unpacked and installed, and production commenced. At the hearing, I think it was accepted by the parties that the brewery opened for public business at the end of October, 1978.

I infer that the applicant was aware of the situation by August of 1977 at the latest, on the evidence before me. Apparently no action was taken at all by the applicant until June of 1978 when it wrote to the Director to revive its own application for incentives. That application was deferred "for further study" by the Board on 29th June, 1978 and these proceedings commenced on 3rd August, 1978. But the relevant period I have to consider, I find, was from August, 1977 to August, 1978. No real explanation has been put forward for this delay except Mr Southwick's general submission that such matters take time to sort out.

The case law shows that the courts are loth to grant any of the extraordinary remedies where complainants have failed to pursue their claims promptly. In R. v. Aston University Senate [1969] 2 All ER 964 the English Court of Appeal held that inasmuch as prerogative orders were discretionary remedies and should not be made available to those who slept upon their rights the applicants in that case by their inaction between December, 1967 and July, 1968 had forfeited any claim to relief. In Turner v. Allison [1971 NZLR 833 a delay of almost twelve months was held by the New Zealand Court of Appeal to be fatal and in Anderson v. Valuer-General [1974] 1 NZLR 603 Roper J in the Supreme Court held that a delay of fourteen months was fatal.

I can see no reason why the same principle should not apply to a claim for a declaratory judgment which is a discretionary form of relief. In addition it is not simply the delay itself that concerns the Court. The brewery in the period in question virtually came into being. If these proceedings had been issued promptly the brewery would have had an opportunity to modify its undertaking until the outcome of the proceedings was known. Moreover, it appears that the applicant was concerned, not so much with the brewery gaining incentives as with gaining fresh incentives for itself, and it was only after that application for incentives was deferred by the Board that it launched these proceedings, which are, in effect, a complaint that it was not given a chance to object. If that were the applicant's true concern, one would have expected these proceedings to have been filed promptly and not to have been left until the result of its fresh incentives application was known. I conclude that while the applicant has established grounds for a declaratory judgment, its undue delay in pursuing its remedy means it has forfeited its claim to the declaration sought. In these circumstances I do not need to consider the remaining arguments put forward by the Attorney-General.

The application for a declaration is refused. Looking at the entire merits of this case, I make no order as to costs.

Samoa Law Reports

Apia Bottling Company Ltd v Attorney-General [1979] WSLawRp 1; [1970-79] WSLR 227 (6 April 1979)