IN THE HIGH COURT OF SOLOMON
ISLANDS
Civil Case Number 193 of 1997
GOLDEN STAR TRADING
CORPORATION LIMITED
v
ATTORNEY - GENERAL
(ON BEHALF OF THE MINISTER
OF FINANCE)
High Court oomon Islands
(FRANK O. KABUI, J.)
Civil Case Number 193 of 1997
Date of Hearing: 14th November
2001
Date of Judgment: 15th November
2001
Mr J. Apaniai for the
Plaintiff
Mr S. Manetoali for the
Defendant
JUDGMENT
<
(Kabui, J.):
By Summons filed on 19th 19th October 2001, the Plaintiff seeks assessment of
damages, such further relief as the court
thinks just and costs. This
summons arises from Muria, C.J.'s order dated 13th July 1998 declaring,
amongst other things,
that the Plaintiff in Civil Case No. 193 of 1997 be
entitled to damages to be assessed. I am accordingly being asked by the
Plaintiff to assess its damages.
Thts
>
The facts are as set out in
Muria, C.J.'s judgment delivered on 13th July 1998. Briefly, the facts are
that the Plaintiff
in September 1996 applied to the then Minister of Finance
for duty remission in respect of imported goods. A remission of 50%
was
granted by the Minister on 7th December 1996 for a period of one year. This
duty remission was subsequently revoked
by the Minister on 4th April 1997.
In the meantime, the Plaintiff had to pay full duty on goods it had ordered
before
the revocation of its 50% duty remission. The Plaintiff now claims
the loss it incurred as a result of the revocation of its
50% duty
remission. The sum being claimed by the Plaintiff is $118,750.02. This sum
represents the Plaintiff�s loss for
having to pay the sum, which it ought
not to have paid in the first place, but for the Minister's erroneous
exercise
of his powers under section 8 of the Customs and Excise Act (Cap.
121). This is a strange case. I find it rather awkward to deal with it. The
application before Muria, C.J. was
by Originating Summons seeking two
declarations and an order that the Plaintiff be entitled to damages to be
assessed.
The main declaration being sought before Muria, C.J. was that the
Minister's exercise of his discretion under section 8 of
the Act above was
both wrongful and unlawful in nature. In Muria, C.J.'s judgment delivered on
13th July 1998, it is
clear that His Lordship based His Lordship's ruling on
the ground that the Minister's decision to revoke 50% duty remission
was
contrary to the principles of natural justice, which would attract review by
the Court. The basis for the claim for
damages was not stated in the
Originating Summons.
Remission of Duty
Remi of duty no doubt can
be made under section 8 of the Act. This section states
...�The Minisay in any
case direct, and the Comptroller may in anyn any case grant, the remission or
refund in whole or
in part of any duty payable or paid on any goods imported
or exported, or manufactured in Solomon Islands, or of any rent,
charges, or
fees payable or paid to the Comptroller and in directing such remission or
refund the Minister or the Comptroller,
as the case may be, may impose such
conditions as he may think fit.
Provided that in no single
case shall the Comptroller grant a nt a remission or refund exceeding twenty
dollars�...
class="MsoNoMsoNormal" style="margin-top: 1; margin-bottom: 1">
The proviso to this section
does restrict the grant of remission or refu $20.00. The limit is
$20.00. Section 235
of the Act would seem to suggest that section 8 as
regards remission or refund only applies to goods lost or destroyed. An
application would have to be made to the Comptroller for remission or
:refund. Remission of duty is not the same thing
as reduction of duty.
lass="MsoNoMsoNormal" style="text-align: justify; margin-top: 1; margin-bottom: 1">
Reduction of duty can only granted under section 7 of the Act. This section statestates:
ass="MsoNoMsoNormal" style="margin-left: 72.0pt; margin-top: 1; margin-bottom: 1">
(a) to impose import or
export duties of customs upon any goods whatsoever which mich may be imported
into or exported
from Solomon Islands and to revoke, suspend, reduce,
increase or alter any such duties, and to provide for the importation
or
exportation of any goods without payment of customs duty thereon:
p class="Mss="MsoNormal" style="text-indent: -.55pt; margin-left: 72.0pt; margin-top: 1; margin-bottom: 1">
Provided that all import or
export duties of customs and and all exemptions from duties of customs set out
in the First
Schedule shall continue in force until revoked, suspended,
reduced, increased or altered in the manner provided in this Act;
(b) to impose excise duties
any goods whatsoever manufactured in Solomon Islands and tond to revoke,
suspend, reduce,
increase or alter any such duties and to provide for
exemptions therefrom�...
Under (a) above, the Minister
may by order impose import or expoties on any goods at all imll imported
into Solomon Islands
or exported therefrom. Duties imposed by the Minister
can be revoked, suspended, reduced, increased or altered by the Minister
by
order. Duty may not also apply to any goods designated by order of the
Minister. Duties imposed by the Ministers are set out in the First
Schedule
to the Act. Goods that are exempted from duty are also set out in the First
Schedule. This is stipulated in
the proviso to section 7(a) above. Duties
imposed, together with any duty exemptions would remain in force until
revoked,
suspended, reduced, increased or altered by order of the Minister.
By Order of the Minister
In practice, the Minister
decides the rates of duties to be ed on goods imported into Snto Solomon
Islands or exported
from it. The Minister also decides which goods do not
attract duties. As I have said above, these rates of duties and exemptions
are set out in the First Schedule. The First Schedule can be amended by the
Minister from time to time by order signed
by him and published in the
Gazette as legal supplements. An order is a form of subsidiary legislation.
Section 16(1)
of the Interpretation and General Provisions Act (Cap. 85)
defines �subsidiary legislation� as meaning ...
�any legislative provision
(includ delegation of powers or duor duties) made in exercise of any power
in that behalf conferred
by any Act, by way of by - law, notice, order,
proclamation, regulation, rule, rule of court or other instrument;�...
This ff legislation is
further treated in sections 61 and 62 of the Interpretation and Gene General
Provisions Act above.
Section 61 states -
class="Mss="MsoNormal" style="margin-left: 36.0pt; margin-top: 1; margin-bottom: 1">
... �(1) Subsidiary
legislation made after the ncement of this Act -
/p>
(a) shall be published in
the Gazettd
(b) shall come into
operation on the date of publication or, if it is t is provided that the
subsidiary legislation is
to come into operation on some other date, on that
date.
(2) Subsidiary legislation
is in operation as from the beginning of the day on which it comes into
operation�...
Lik, section 62 states �
... �(1) Subject to
stion (3), subsidiary legislation made under an Act after ther the
commencement of this Act shall
be laid before Parliament.
(2) If Parliament passes a
resolution, within three months after any subsidiary legislation is laid
before it, to the
effect that the subsidiary legislation is annulled, the
subsidiary legislation shall thereupon cease to have effect, but without
prejudice to the validity of anything previously done under the subsidiary
legislation
(3) Subsection (1) does not
apply y subsidiary legislation a on a draft of which is laid before, and
approved by resolution
by, Parliament before the making of the subsidiary
legislation�...
Clearly, subsidiary legislation
is a form of delegated legislation, which hr must be sanctioned by
y
Parliament through
the Parliamentary procedures specified in section 62
above. When one compares section 20, which deals with Acts of Parliament
with section 61, one sees the obvious similarity between these two sections.
Both an Act of Parliament and a subsidiary
legislation must be published in
the Gazette. They both come into effect on the date of publication in the
Gazette or
if on a different date, that date. They come into operation from
the beginning of the date of coming into operation. The point
here is that
for any subsidiary legislation to be effective, it must be published in the
Gazette and comes into operation
on the date of publication in the Gazette
in the absence of another date designated for it to come into operation.
The First Sch
The First Schedule under
section 7 of the Act contains the rates of customs duty that apply to all
goods imported into
or exported from Solomon Islands. The rates of customs
duty in the First Schedule are not the same. Some rates of customs duty
are
higher than others. The First Schedule also contains goods which are
exempted from customs duty. The rates of customs
duty in the First Schedule
are the maximum for individual items of goods to be paid by all importers
and exporters. The
First Schedule is a level playing field for all importers
and exporters alike. The only exceptions are exemptions from customs
duty.
These exceptions are conventional in that they apply to the Head of State
and Diplomatic Missions in Solomon Islands
and other goods to be used for
the public benefit.
Again,amendments,
suspension or revocation effected by the Minister does not have any elemeelement
of choice apart from
exemptions, as to who should benefit from such changes
in the rates of customs duty. Such changes in the rates of customs duty
do
not change the existence of a level playing field for all importers and
exporters alike. In other words, the rates
of customs duty may change but
the fact of a level playing field for all importers and exporters remains
the same. Any
reduction of customs duty on any item of goods in the First
Schedule applies to all importers or exporters subject to exceptions
referred to above.
Was the 50% duty remission
eive in law?
First of all, duty remission
under section 8 of the Act does not, as I have saxceed $20.00 in any
s single case. Section
8 of the Act was an amendment in 1966 to give some
relief to importers to claim duty remission for lost or damaged goods during
the course of journey from the point of loading to delivery to the importer.
To describe the purported 50% duty reduction
granted to the Plaintiff in
1996 as duty remission is wrong in principle as well as in law. A 50% duty
remission in this
case is a legal impossibility under section 8 of the Act.
The dictionary meaning of the word �remit� is �to cancel a debt,
payment or
penalty�. (see Oxford Advanced Learner's Dictionary, A.P. Cowie,
Fourth Edition at 1066). The word �reduce� means �to make something smaller
in size, number, degree, price
etc�. (see the same Dictionary cited above at
1054). There is therefore a world of difference in the meaning of the words
�remit� and �reduce� in the context of dealing with customs duty. The
purported 50% duty remission granted to the Plaintiff
must have obviously
been meant to be 50% duty reduction under section 7 of the Act. Two things
are wrong about this purported
50% duty reduction. First, section 7 of the
Act does not give the Minister the power to grant reduction in the rates of
customs duty to individual entities such as the Plaintiff or to private
individuals. That is not the intention and spirit
of section 7 of he Act.
There can be reduction of rates of customs duty but that benefit is to be
enjoyed by all. That
is what I call the level playing field concept that is
embedded in section 7 of the Act. It does make sense for it removes
discriminatory inclinations, prevents abuse by the Minister and protects the
revenue of the Government. Second, the purported
50% duty reduction was not
made by order of the Minister published in the Gazette. There is no evidence
of publication
in the Gazette. It is therefore ineffective in law. It is a
nullity as though the Minister had never made an order under section
7 of
the Act. (see Hall & Co. Ltd v Shoreham-By-Sea
Urban District Council &
Another [1964] 1 A E
R 1. The Minister could not have revoked nothingness. There was nothing to
revoke.
Is the Plaintiff entitling
to the refund of $118,750.0pan>
At the hearing, I raised with
Counsel for both parties the implications of sections 7 and 8 of the Act and
the effectiveness
in law of the purported grant of 50% duty reduction in the
absence of an order by the Minister published in the Gazette. Counsel
for
the Plaintiff, Mr Apaniai, in response said that the Plaintiffs application
for assessment of damages was in pursuance
of Muria, CJ.'s ruling on 13th
July 1998. Counsel for the Defendant, Mr Manetoali, said nothing other than
to say that
he did not dispute the sum of $118,750.02 claimed by the
Plaintiff. I had raised these two points of law for which neither
Counsel,
it would appear, was prepared to argue in any meaningful way. I had
apparently gone outside their mind - set
in this regard. I took Counsel for
the Plaintiff, Mr Apaniai, as telling me that his client, the Plaintiff, had
come
to Court to reap the fruit of his judgment without further ado. This
was a very powerful argument. Against this argument are
the words of Muria,
C.J. at pages 5 of His Lordship's judgment in these terms ...
�I will assume for the
purpose of these proceedings that the Minister has the power to grant
remission of duty and hence
the power to revoke that grant. I said, assume,
because my reading of section 8 of the Customs & Excise Act together with
section 27 of the Interpretation and General Provisions Act would appear to
leave room for argument as to whether the Minister does in fact have the
power to grant remission of
duty on goods imported. I would, however, say
that a statutory discretion must be exercised by the person in whom the
power is reposed. See Ansett Transport Industries (Operations)
Pty Ltd � v Commonwealth (1977)139 C.L.R. 54. This question does not
fall for consideration in this matter and I shall leave it at that for the
moment� ...
His Lordship therefore did not
decide the validity of the purported grant of 50% duty remission on 7th
November 1996.
His Lordship left it for another time. This is a matter of
great importance to the collection of Government revenue. Does the
Minister
have the power under section 7 of the Act to reduce customs duty for his
friends or supporters of his Government
or anybody for that matter at the
expense of Government revenue? The answer is no. As I have said, the
Minister does
not have the power to reduce customs duty for any particular
category of persons than to do so for all importers and exporters
alike.
This is important because it means that doubt is now cast upon the
lawfulness of duty reductions granted by the
Minister in the past and now.
It also means that any reduction of duty must be for the benefit of all
importers and exporters
alike and any deviation from this by the Minister
would be invalid even if the order by the Minister were signed by the
Minister and published in Gazette. There can be no discriminatory reduction
of duty under section 7 of the Act for special
category of persons. Even
duty exemptions cannot be discriminatory for those who are entitled to the
benefit that flows
from them. I am fully aware of the fact that Muria, C.J.
granted an order that the Plaintiff was entitled to damages to be
assessed.
I would find it almost impossible for me to assess damages that lack any
legal basis. However, it would seem
that His Lordship granted the order, as
he did, on the basis of some negligence on the part of the Minister in
acting
in breach of natural justice and doing so in an unreasonable way.
Whilst questions may be asked about the correctness of Muria,
C.J.'s order
for damages, His Lordship's order stands until set aside or appealed. I do
not sit as the Court of Appeal.
For what it is worth, I would grant the
Plaintiff�s application. The damage suffered by the Plaintiff is assessed at
$118,570.02. There will be cost for the Plaintiff.
F.O. Kabui
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