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Honiara Liquor Licensing Board v Freeway Night Club [1999] SBCA 10; CA-CAC 17 of 1998 (4 June 1999)

IN THE SOLOMON ISLANDS COURT OF APPEAL

JUDGMENT

Refusal of the respondent’s a application for renewal of its licence

On 16 December 1997, the appellant Board purported to refuse an application by the respondent Club·for the renewal of its licence under the Liquor Act Cap.144 relating to premises on the ground floor of the Tongs Building on Gubby Street, Honiara. As its name suggests, the respondent carried on at those premises the business of a night club, providing entertainment and selling liquor and cigarettes. Its initial night club licence was granted in May 1996 and it opened for business in July of that year.

Shortly after the opening, the Club was closed by the Honiara Town and Country Planning Board on account of non-compliance with health standards. Following rectification of these matters, the Club re-opened for business in September 1996. In June 1997, the authorities required further rectification measures to be undertaken. These measures were carried out to the satisfaction of the health authorities. Subsequently, on 16 December 1997, the Board refused a renewal and by letter dated 19 December 1997 informed the respondent of its refusal. It seems that the Board, after considering adverse reports concerning the premises and the operation of the night club, decided that renewal should be refused on account of “particular concern regarding the situation of the Building”. This concern evidently related to the condition of the premises and the problem of fire hazard, though the decision itself does not identify these matters.

The appeal to the High Court against the Board’s decision

The respondent then sought to appeal to the High Court against the Board’s decision. Section 34 (1) of the Liquor Act provides that an applicant who is aggrieved by a decision of a licensing authority

“may, if dissatisfied with such decision as being erroneous in point of law, or as being in excess of jurisdiction, apply in writing within one month of the date of the decision to the licensing authority to state and sign a special case setting forth the facts and the grounds of such decision for the opinion thereon of the High Court .....”

The licensing authority may extend the period of one month “for good cause shown”.

Section 34 (2) then provides -

“upon receiving an application under sub-section (1), the licensing authority shall forthwith draw up a special case and transmit the same to the Registrar of the High Court, and thereafter such special case shall be disposed of mutatis mutandis, as though it were an appeal by case stated under Part I of the Criminal Procedure Code Act:

Provided that the decision of the High Court in respect of such application shall be final and conclusive and shall not be questioned in any proceedings whatsoever.”

Section 34 (3) provides that where a licensee whose licence has not been renewed applies for a special case, his icence shall be deemed to have been renewed until the decision of the High Court is made known.

The special case takes the form of a document dated 12 February 1998 signed by the Chairman of the Board, setting forth the materials before the Board when it made its decision and the ground of the decision, being the matter of particular concern already mentioned. The respondent’s solicitors later filed another document “Amended Appeal by Case Stated” on 11 June 1998 in which it set out the grounds on which it challenged the decision. Some grounds alleged errors of law by the Board in the making of the decision. However, ground 1 was that the Board lacked jurisdiction because it was not properly constituted. It was that ground that proved to be decisive in the hearing before Kabui J.

Section 1 6 of the Liquor Act provides for the composition of the Board. It is to consist of seven members, including a magistrate as chairman. Sub-section (3) provides -

“(3) The members shall be appointed by the Premier of the Province “[which expression is defined to include the President of the Honiara Town Council]” and hold office at the pleasure of the Premier for a period not exceeding one year commencing on the date they are appointed and are eligible for reappointment.”

Evidence of the composition of the Board was provided by two affidavits filed by the Board, one by Secretary of the Board, Mr. Bobby Kamausi, and the other by the President of the Honiara Town Council, Mr. Robert Wale. The case presented in those affidavits was that, shortly before the actual expiration of the term of appointment (1 year) of the existing Board on 22 November 1997, the President decided to re-appoint the existing members temporarily until he could consider other potential candidates. That temporary re-appointment was followed on or about 22 January 1998 by the appointment of the new Board which consisted of several new members as well as some former members.

The judgment of Kabui J was critical of the case presented in the affidavits. His Lordship said -

“In so far as the question of re-appointment is concerned, the President and the Secretary to the Board have said the same thing, that is to say, the same members of the Board had indeed been re-appointed after 22nd November, 1997. This may well be so. However, [neither] the President nor the Secretary to the Board has said how the same members of the Board were re-appointed. Were they re-appointed by letter or by word of mouth or were they telephoned by the President to tell them of their re-appointments. No letters of appointment have been produced to the Court. No affidavits by the re-appoint-ed members of the Board have been filed to confirm such re-appointments having been done· by word of mouth or by telephone calls.

It would be unsafe to assume that the President and Secretary to the Board are telling the truth. What they say in their sworn affidavits have not been tested by cross-examination. The Court has not had the opportunity of seeing them speak from the witness box·and being cross-examined by Counsel. There might have been indeed re-appointments but where is the evidence of the mode of appointment at least from minutes in the relevant File or a Diary book of some sort?”

In making these comments, Kabui J. unquestionably had in mind a Gazette notice No. 14 of 1998 which back-dated the January 1998 appointments to 22 November 1997 and the absence of any Gazette notice of the temporary appointments made in November 1997. In the result, his Lordship concluded that, on the balance of probability, the temporary appointments had not been made.

His Lordship further concluded that, in any event, s.16 of the Liquor Act did not confer power on the President to appoint a member for less than a one year term. Any such appointment was, on this view, necessarily invalid. His Lordship also held that there was no power to back-date an appointment.

In passing, we should state that, in our view, Kabui J. was correct in holding that there was no power to make an appointment to the extent that it had a retrospective operation. On the other hand, we do not agree that an appointment for less than one year cannot be made. So much was properly conceded by Mr. Nori, counsel for the respondent. Under s.16(3) an appointee holds office “at the pleasure of” the President but “for a period not exceeding one year”. One year is the maximum, not the prescribed, term of appointment.

Leave to appeal or right of appeal?

The Board applies for leave to appeal on grounds, which amount, in substance, to the denial of a fair hearing as mandated by s.10 (8) of the Constitution of the Solomon Islands and excess of jurisdiction arising from departure from the requirements of procedural fairness that denial and excess of jurisdiction, so it is argued, arises from the learned judge’s refusal to accept the evidence of the temporary appointment of the members of the Board.

In our view, leave to appeal is not required in this case by s.11 (2) of the Court of Appeal Act, Cap. 6. That is because the Board had a right of appeal from the decision of Kabui J. under s.11 (1) (a) of the Court of Appeal Act. In order to reach this conclusion, it is necessary to examine the provisions of s.34 of the Liquor Act and the nature of the jurisdiction which was exercised by Kabui J.

Mr. Nori for the respondent, in submitting that there is no appeal at all, relies on the finality clause contained in the proviso to s.34 (2) of the Liquor Act. The purpose of that provision, as we read it in the context in which it is to be found, is to provide that the decision of the High Court shall be final in terms of the grant or refusal of a licence. Section 34 (2) is linked to s.34 (1) which contemplates an application for a special case by an applicant for a licence or an objector setting forth the facts and the grounds of the decision of the Board “for the opinion thereon” of the High Court. In other words, s.34 (1) provides a mechanism for the review by the High Court of the grounds of a decision by the Board. The proviso to s.34 (2) then gives finality to the opinion of the Court on the question whether the decision of the Board was erroneous in point of law or in excess of jurisdiction.

The contention that the Board was not validly constituted on 16 December is not in our view, a matter which went to the jurisdiction of the Board or constituted an error of law on the part of the Board in making its decision. The contention that the Board was invalidly constituted therefore lay outside the special case procedure for which s.34 provided and the decision of Kabui J. on that question was not protected by the finality provision in s.34 (2).

Mr. Nori submits that, even if the special case procedure was not an appropriate vehicle for the determination of that question, the finality provision should be interpreted as applying to any High Court decision given as the result of the special case procedure. We cannot accept that submission. A finality provision should be given a purposive construction, so that it conforms closely to the object of the statute. Here it is evident that finality was to attach to a decision on questions which could be properly raised in a special case in accordance with s.34 (1) and not otherwise. There is nothing in the Liquor Act to suggest that finality should be given to a High Court decision the constitution of the Board, a matter which could possibly have wide ranging ramifications beyond the parties to the immediate litigation.

The respondent should have raised that matter in proceedings by way of judicial review, leaving other matters falling within the special case procedure to be dealt with accordingly, Although the respondent did not institute proceedings by way of judicial review, the proceedings and the determination made by Kabui J. must be taken to be an exercise of that jurisdiction, for that jurisdiction alone entitled his Lordship to deal with the matter as he did.

Once that conclusion is reached, it follows that the Board’s appeal arose under s.11 (1) (a) of the Court of Appeal Act and, further, that leave to appeal is not required.

Grounds of appeal

That brings us to a consideration of the substantive grounds of appeal, namely that the Board did not get a fair hearing and that the High Court exceeded its jurisdiction by departing from the rules of procedural fairness. In essence, the Board submits that Kabui J. was in error in rejecting parts of the two affidavits of Kamausi and Wale, because the deponents were neither cross-examined nor required to attend for cross- examination. Furthermore, the affidavit evidence was not contradicted by other evidence and the judge did not give counsel for the Board an opportunity to respond to the difficulties which the judge had with the affidavit evidence.

The difficulty with the two affidavits is that neither provides direct evidence of the temporary appointments which the Board claims were made. Kamausi’s affidavit does no more than refer to the explanation in Wale’s affidavit of the temporary appointment. That affidavit simply asserts.

“I therefore re-appointed the existing Board members In the meantime.”

The affidavit failed to state the way in which the re-appointment was made and when it was made. There is no reference to the execution of an instrument of appointment or even to the oral communication to the appointees of an appointment. Counsel for the respondent submitted to Kabui J that the evidence of re-appointment was inherently implausible. The judge was entitled to accept that submission and to conclude that temporary re-appointment of the existing members did not take place.

Mr. Johnson, counsel for the Board, conceded that he made no submission to his Lordship that he was not entitled to reject any part of the affidavit evidence in the absence of cross- examination of the deponents. Mr. Johnson also conceded that the affidavit evidence was the only evidence of temporary re-appointment available to the Board. There was no prospect of securing additional or more persuasive evidence. Cross-examination of the deponents would, in these circumstances, offer scant prospect of reinforcing the Board’s case. And, in any event, the judge was not bound to suggest that cross-examination was desirable. His Lordship was entitled, indeed bound, to determine the case on the evidence presented by the parties.

The initial onus rested with the respondent of establishing that the Board was not properly constituted. The presumption omnia praesumuntur rite acta esse applied. However, the respondent was in a position to prove by production of the Gazette notices that, absent a temporary re-appointment, there was a hiatus between the 1996 and the 1997 appointments for one year each; in other words, the respondent could show a prima facie case that the Board was not validly constituted on 16 December 1997 when it refused to renew the respondent’s
licence.

It was no doubt with a view to meeting such a potential prima facie case that the Board filed the affidavit evidence.

Unfortunately the evidence fell short of its intended purpose and enabled the judge to find that the Board was invalidly constituted.

What we have said disposes of the Board’s case. There was no denial of a fair hearing within the meaning of s. 10(8) of the Constitution and no departure from the rules of procedural fairness. Counsel did not draw any distinction between the constitutional concept of a fair hearing and the common law concept of procedural fairness or natural justice. For the purposes of this case the concepts appear to be identical.

We should make four additional comments. First, in a case like the present, where the jurisdiction of this Court is otherwise properly invoked by way of appeal under s.11, we see no reason why a constitutional provision such as s.10 (8) should not be applied by the Court in that appeal: see Director of Public Prosecutions -v- Sanau (1987) S.I.L.R. 1.

Secondly, reliance was not placed on s.34 of the Interpretations and General Provisions Act 1978, Cap. 85, to sustain the validity of the Board’s decision, notwithstanding the absence of a temporary appointment. This point was not argued before Kabui J nor raised as a ground of appeal.

Thirdly, the decision that the Board was not validly constituted at the relevant time is binding, inter partes only.

Fourthly, the respondent’s licence was subsequently renewed in 1998 and is still current.

The order of the Court is:

Appeal dismissed.

Appellant to pay the respondent’s costs of the appeal.

Mason P
Casey J.A
Awich J.A