N8151
PAPUA NEW GUINEA
[IN THE NATIONAL COURT OF JUSTICE]

OS NO 193 OF 2019

VITIS INDUSTRIES LIMITED
Plaintiff

V

MADANG PROVINCIAL GOVERNMENT
Defendant

Madang: Cannings J
2019: 23rd November, 3rd, 11th December

LICENSING AND REGULATION – control of liquor sales – prohibition of sale of bottled liquor – proper authority to license and control sale  of liquor – whether provincial executive council has power to ban sale of bottled liquor – whether provincial law provided an exclusive code for licensing and regulation of liquor sales. 

A provincial executive council imposed a ban of indefinite duration on the sale of beer and other liquor in bottles of less than 500 millilitres. The plaintiff, a manufacturer of bottled liquor, challenged the legality of the ban, seeking a declaration that it is null and void and an order that it be uplifted, on grounds that the provincial executive council had no power to impose such a ban as the power to impose a liquor ban in the province is vested in the provincial liquor commission under the provincial liquor law, and the power to regulate the packaging of liquor products is vested in the National Government under the Packaging Act (Chapter 285). 

Held:

(1)	The provincial liquor law provides an exclusive code for licensing and regulation of sale and distribution of liquor in the province, including the imposition of liquor bans.The provincial liquor law confers exclusive power on the provincial liquor commission to impose liquor bans, in prescribed circumstances. The provincial executive council has no such power. 

(2)	The provincial liquor law does not confer power to ban the sale of liquor in bottles. Such a ban can only be imposed by a National Government authority under the Packaging Act.

(3)	Declarations and orders made accordingly.

Cases cited

The following cases are cited in the judgment:

Mudge v Secretary for Lands [1985] PNGLR 387
Veronica Mocke trading as AC Unann Bottle-Shop v Hon Peter Yama (2019) N7738
Zachary Gelu v Francis Damem (2004) N2762

ORIGINATING SUMMONS 

This was a trial in which the plaintiff argued that a provincial ban on sale of bottled liquor was unlawful and sought declarations and orders to remedy the illegality. 

Counsel

J Kolkia, for the Plaintiff

11th December, 2019 

1.      CANNINGS J: The plaintiff, Vitis Industries Ltd, is a manufacturer of bottled liquor. It is unable to trade in some of its products in Madang Province as the Madang Provincial Executive Council in its meeting No 3 of 2014 imposed a ban of indefinite duration on the sale of beer and other liquor in bottles.  Public notice of the ban was given on 15 December 2014, under the letterhead of the Provincial Administrator, in the following terms:

To:		Hotels
		Clubs
	Restaurants
	Bottle shops
	Trade stores
	Other liquor trading outlets in Madang Province

This circular serves to inform you that the Provincial Executive Council during its meeting No 3/2014 … went on to make a decision on a complete ban on sale of SP bottles plus other liquor bottles, less than 500 mls apart from spirits and hard staff [sic] which will only have to be in 1 or 2 litres. You are all advised that whatever is remaining of the SP bottle must be completely removed from the selves [sic] by the end of March 2017. … 

You are to strictly adhere to this instruction.

DANIEL L ALOI 
Chairman & Chief Liquor Licensing Commissioner 

2.     The plaintiff challenges the legality of the ban, seeking a declaration that it is null and void and an order that it be uplifted. It argues that the Provincial Executive Council has no power to impose such a ban as the power to impose any liquor ban in the province is vested in the Provincial Liquor Commission under the provincial liquor law, and the power to regulate the packaging of liquor products is vested in the National Government under the Packaging Act. 

3.     The Madang Provincial Government is the defendant. Its lawyers, Thomas More Ilaisa Lawyers, represented it in five pre-trial hearings, at which the matter was set for trial. However,on the first day of the trial, those lawyers did not appear, and on the day set for making submissions, they also did not appear. The trial has thus been conducted without any evidence or submissions by Madang Provincial Government, despite ample opportunity given to it to participate fully in the proceedings. 

4.     The following issues arise:

1.	Does the Madang Provincial Executive Council have power to impose a ban on the sale of bottled liquor? 

2.	Do any other grounds of illegality have merit? 

3.	What orders should the Court make?

1 	DOES THE MADANG PROVINCIAL EXECUTIVE COUNCIL HAVE POWER TO IMPOSE A BAN ON SALE OF BOTTLED LIQUOR?

5.      The Madang Provincial Liquor Law 2009 (“the 2009 Law”) is the relevant law. It was made by the Madang Provincial Legislature as a provincial law, in the exercise of legislative power conferred by Section 42(1)(c) (law-making powers of the provincial legislatures) of the Organic Law on Provincial Governments and Local-level Governments. 

6.     There is no evidence or reasonable argument before the Court to defeat the plaintiff’s argument that the 2009 Law provides an exclusive code for the licensing and regulation of the sale and distribution of liquor in Madang Province. As explained in Veronica Mocke trading as AC Unann Bottle-Shop v Hon Peter Yama (2019) N7738, all licensing and other powers of regulation including the power to impose bans on the sale of liquor from licensed premises are conferred on the Provincial Liquor Commission.

7.     The Commission is established by Section 4 of the 2009 Law and by virtue of Section 5 consists of seven members: three ex officio members (the Provincial Administrator, the Provincial Police Commander and the Provincial Liquor Commissioner) and four other persons appointed by the Provincial Executive Council, each as a representative of prescribed “sectors and groups in the province”: the business sector, the community sector, women and churches. 

8.     The 2009 Law consists of 98 sections, divided into nine parts, and a set of forms contained in five schedules. Part 8 is entitled Liquor Bans. It contains Sections 86 to 90, which are in the following terms:

86.	Imposing a liquor ban

(1)	The Commission may impose a liquor ban if the Commission is satisfied that in the Province or a part of the Province:

(a)	law and order had deteriorated to such an extent that:
(i)	the local authorities cannot control the situation: or
(ii)	the local economy is being seriously disadvantaged; or

(b)	a significant threat to public health exists.

(2)	A liquor ban may:

(a)	    be imposed for the entire Province or part of the Province, and:

(b)	prohibit all licensees and permit holders in the Province, or those specified in the liquor ban, from selling, supplying or disposing of liquor on their licensed premises:

(3)	A liquor ban may be imposed:

(a)	     by notice displayed on a notice board at the entrance of the Commission’s office: or 
(b)	by notice broadcast on a radio service generally able to be received to persons in the liquor ban areas.

87. 	Period of liquor ban

(1)	The commission may impose a liquor ban for a period of 21 days.

(2)	A liquor ban imposed by a notice displayed on a notice board at the entrance of the Commission’s office takes effect from the day the notice is displayed.

(3)	A liquor ban imposed by a notice broadcast on a radio service takes effect from the day and time stated in the notice, being a day and time after the first radio broadcast of the notice.

(4)	A liquor ban remains in force until:

(a)	the period of the ban stated in the notice imposing the ban ends; or
(b)	the ban is cancelled,
whichever occurs first.

88. 	Extension of liquor ban

(1)	After consulting with representative of the Local Community to which a liquor ban applies, the Commission may extend a liquor ban if the Commission remains satisfied that in the Province or the part of the Province where the liquor than applies:

(a)	law and order has continued to deteriorate to such an extent that:
(i)	the local authorities remain unable to control the situation: or
(ii)	the local economy continues to be seriously disadvantaged; or

(b)	a significant threat to public health continues to exist.

(2)	The Commission may extend a liquor ban on one occasion for a period not exceeding 21 days and if the liquor ban has not expired.

(3)	A liquor ban may be extended:

(a)	     by notice displayed on a notice board at the entrance of the Commissioner’s office: or 
(b)	by notice broadcast on a radio service generally able to be received to persons in the liquor ban areas.

(4)	A liquor ban that has been extended remains in force until:

(a)	     the period of the ban stated in the notice imposing the ban ends: or
(b)	the ban is cancelled:

whichever occurs first.

89. 	Contravening liquor ban

If a licensee or permit holder sells, supplies or disposes of liquor on licensed premises in contravention of a liquor ban, the licensee or permit holder is guilty of an offence punishable on conviction by:

(a)	in the case of an individual, a fine not exceeding 5,000 kina or a term of imprisonment not exceeding 6 months: or
(b)	in any other case, a fine not exceeding 25,000 kina

90. 	Cancellation of liquor ban

(1)	If while a liquor ban is in force, the Commission considers the circumstances for which the ban was imposed have ceased to exist, the Commission must cancel the ban.

(2)	The cancellation may be made:

(a)	     by notice displayed on a notice board at the entrance of the Commission’s office: or
(b)	by notice broadcast on a radio service generally able to be received by persons in the liquor ban area.

9.     It will be observed that all powers to impose liquor bans and to determine the nature, extent, duration and geographical area of operation of a ban and the extension and cancellation of a ban are vested in the Provincial Liquor Commission. No mention is made of the Provincial Executive Council in Part 8, which is properly regarded as prescribing an exclusive code for imposition of liquor bans in the province.

10.     It is clear that the Provincial Executive Council has none of the powers it purported to exercise in imposing a banon the sale of bottled liquor. The decision to impose the ban was made ultra vires (beyond power). The ban on the sale of bottled liquoris unlawful.

2	DO ANY OTHER GROUNDS OF ILLEGALITY HAVE MERIT?  

11.     If it is presumed for the sake of argument that the Provincial Executive Council had power to impose a liquor ban of any sort, a ban of the nature and extent actually imposed would still be unlawful, for two reasons. First, the provincial liquor law does not confer power to ban the sale and other liquor in bottles. Secondly, a ban on the sale of beer and other liquor products in bottles can only be imposed by a National Government authority under the Packaging Act(Chapter 285).

3	WHAT ORDERS SHOULD THE COURT MAKE?

12.     The ban on the sale of bottled liquor is unlawful and,as I have heard no argument (for example based on the apparent delay in commencing the proceedings) to the contrary, appropriate declarations and orders will follow as a matter of course, in the exercise of the Court’s discretion.A declaration is a discretionary remedy. The court needs to be convinced that it is just and appropriate to declare the law or the legal status of the parties. It might not, for example, grant a declaration on a purely academic point of law or if the declaration would serve no useful purpose or if a plaintiff seeks the relief for some improper motive or where there has been an unwarranted delay in seeking relief or where other relief such as an order for damages would be more appropriately granted (Mudge v Secretary for Lands [1985] PNGLR 387, Zachary Gelu v Francis Damem (2004) N2762). 

13.     In this case, making a declaration of the law and the positions of the parties will serve a useful, practical purpose. I can detect no improper motive on the part of the plaintiff and I am not satisfied that it is guilty of unreasonable delay in commencing the proceedings. I will allow a period of one month for the Court’s orders to take effect as this will allow time for the orders to be fully publicised and in particular made known to the Provincial Police Commander and reduce the risk of any misunderstanding that might arise if the orders were expressed to have immediate effect. It is also a good thing to preserve the status quo during the festive season.Costs will follow the event. 

DECLARATIONS AND ORDERS

(1)	It is declared that: 

(a)	the decision of the Madang Provincial Executive Council at meeting No 3/2014, to impose a ban on the sale of bottled liquor in Madang Province was made ultra vires (without power) and contrary to law and is, subject to these orders, null and void and of no effect; and 

(b)	the public notice of that decision by the Provincial Administrator and Chief Provincial Liquor Licensing Commissioner, Daniel L Aloi, dated 15 December 2014, is, subject to these orders, null and void and of no effect. 

(2)	The ban on the sale of bottled liquor imposed through the decision of the Madang Provincial Executive Council at meeting No 3/2014, is annulled and ceases to have effect as at 12 noon on 11 January 2020.

(3)	The defendant shall pay the plaintiff’s costs of these proceedings on a party-party basis which shall, if not agreed, be taxed.

(4)	Time for entry of this order is abridged to the date of settlement by the Registrar, which shall take place forthwith; and the file is closed.

Judgment accordingly.
_______________________________________________________________
Johnny Kolkia Lawyers:  Lawyers for the Plaintiff	
Thomas More Ilaisa Lawyers:  Lawyers for the Defendant