040-SLLR-SLLR-1999-V-2-ASIA-SIYAKA-COMMODITIES-PVT-LTD-v.-FORBES-WALKER-TEA-BROKERS-PVT-LIM.pdf
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Asia Siyaka Commodities (Pvt) Ltd. v. Forbes & Walker
Tea Brokers (Pvt) Limited and Others
403
ASIA SIYAKA COMMODITIES (PVT) LTD
v.FORBES & WALKER TEA BROKERS (PVT) LIMITED AND
OTHERS
SUPREME COURTFERNANDO, J.,WEERASEKERA, J. ANDGUNASEKERA, J.
S.C. (SLA) NO. 226/98C.A. APPLICATION NO. 191/98JULY 21, 1999
Writ of certiorari – Special leave to appeal to the Supreme Court – Article 128(2) of the Constitution – Basis of granting leave.
The petitioner company (the petitioner) sought special leave to appeal to theSupreme Court against a judgment of the Court of Appeal which quashed thelicence issued to the petitioner under the Licensing of Produce Brokers Act,No. 9 of 1979. The 1st respondent Company applied for such quashing by wayof certiorari on the ground that upon the petitioner's application made in February,1998, a licence could legally have issued in terms of the relevant regulation onlyfor the year 1999 and not for 1998. The Court of Appeal upheld the 1 st respondent'sinterpretation and quashed the licence issued to the petitioner "for 1998 and 1999*.
Held:
Substantial questions of law are involved, and there is a live issue for determination;hence, the matter is fit for review by the Supreme Court.
Cases referred to:
Commissioner of Taxation for NSW v. Baxter – (1908) 24 Times LR 249.
State of Mysore v. Alexander – AIR 1970 SC 1024.
Sun Life Assurance Co. of Canada v. Jervis – (1944) 1 ALL ER 469.
Ainsbury v. Millington – (1987) 1 ALL ER 929.
Sundarkaran v. Bharath – (1989) 1 Sri LR 46.
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[1999] 2 Sri LR.
APPLICATION for Special Leave to Appeal from the judgment of the Court ofAppeal.
H. L de Silva, PC with D. S. Wijesinghe, PC, Gomin Dayasiri, Kushan de AMs,Dilan da Silva and P. Obeysekera for the petitioner.
K.N. Choksy, PC with Miss Kishan Wijetunga for the 1st respondent
S. Marsoof, PC, ASG with M. Gopallawa, SC for the 2nd and 3rd respondents.
Cur. adv. vutt.
September 24, 1999.
FERNANDO, J.
The 3rd respondent-petitioner-company (the petitioner) seeks specialleave to appeal against a judgment of the Court of Appeal whichquashed the licence issued to the petitioner under the Licensing ofProduce Brokers Act, No. 9 of 1979.
Regulations in respect of the business of broking of tea were firstmade under that Act on 27. 8. 79 ("the 1979 Regulations"), and wereamended on 2. 6. 81 (“the 1981 amendments").
The petitioner-company was incorporated in February, 1998, andits main object was to engage in the business of a produce brokerin tea. It applied for and obtained a licence in February, 1998. The1st respondent-company (the 1st respondent) applied to the Court ofAppeal for a writ of certiorari to quash that licence – on the groundthat upon the petitioner's application made in February, 1998, a licencecould legally have been issued only for the year 1999, and not for1998.
Regulation 8 of the 1979 regulations required an applicant for alicence to furnish certain information which an existing produce brokercould furnish, but which, obviously, a person entering the business
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of broking of tea for the first time (a new entrant) could not : forexample, “details of staff employed in the business of broking of teaexclusively", "evidence of the availability of adequate facilities to clientsof the applicant in regard to (i) market information, (ii) advice on themanufacture of tea. .
Regulation 11 provided that an application for a licence for aparticular year shall be made on or before the 30th of Septemberof the preceding year, and that the licensing authority shall determinesuch application on or before the 30th of October next. It made anexception only in the case of licences for the very first year (1979),for which year applications had to be made on or before the 30thof September of the same year, and determined before the 30th ofOctober next.
Prima facie, regulation 8 would have had the effect of stiflingcompetition, by preventing any new entrant entering the business. The1981 amendments changed the position. Not only was regulation 8amended, by expressly excluding new entrants from its purview, buta new regulation 8A was introduced specifying the information whicha new entrant should furnish: "details of staff to be employed . .“facilities which are proposed to be provided to clients . . .". etc.Another new regulation 11A required every application by a newentrant to be determined by the licensing authority within thirty days.
There is no dispute that the petitioner being a new entrant, itsapplication was subject to regulation 8A, and that regulation 8 wasinapplicable. It is also clear that regulation 11A applied, so that adetermination had to be made upon an application by a new entrantwithin thirty days. The crucial question which the Court of Appeal hadto decide was whether regulation 11 was also applicable, in whichevent a licence issued on the approval of the petitioner's application,although made as early as February, 1998, could not become legallyoperative until January of the following year.
Let me state the issue in more specific terms. The petitionercontended that its application made in February, 1998, had to bedetermined within thirty days, and if approved a licence, valid for the
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rest of 1998, had to be issued. The 1st respondent's submission,however, was that regulation 11A also applied; in order to obtain alicence for 1998, the petitioner should have made an application before30th September, 1997; further, the scheme of the regulations was thata licence could be issued only for a full year at a time, and not forpart of an year (except for 1979); and consequently, upon the February1998 application a licence could only have been issued to the petitionerfor the year 1999. It is a corollary of the 1st respondent's submissionsthat if an application had been made by a new entrant on, say, 5thOctober, 1998, and even if that application had been approved before30th October (or within the prescribed thirty days), nevertheless alicence could only have been issued for the year 2000 – not for 1999.
By its judgment dated 11. 11. 98, the Court of Appeal upheld the1st respondent's interpretation, and quashed the licence issued to thepetitioner.
Mr. H. L. de Silva, PC on behalf of the petitioner contended thatthe Court of Appeal was in error in its interpretation of the regulations,for several reasons. He urged that the purpose of the 1981 amend-ments was to make special provision for new entrants, and regulation11A had to be regarded as a special enactment which would overridethe general provisions in regulation 11 – because generalibus specialiaderogant. The Court of Appeal should have adopted a purposiveinterpretation. Properly interpreted, he submitted, regulation 11 couldnot be treated as applicable to a new entrant. The question also ariseswhether the right to carry on the business of a produce broker fallswithin Article 14 (1) (g) of the Constitution; if so, whether that rightcan be subject only to restrictions prescribed by law, and not bysubordinate legislation; and, in any event, whether the regulations asamended must be interpreted broadly – so as to enhance thefundamental right, rather than to curtail it.
In my view substantial questions of law are involved, and thematter is fit for review by this Court.
However, Mr. K. N. Choksy, PC, for the 1st respondent, submittedthat Article 128 (2) confers a discretion on this Court whether or notto grant special leave to appeal, and that this Court should not
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exercise that discretion, because, he claimed, there was no longera live issue. This, he said, was the result of a new regulation 11 A,introduced on 23. 11. 98, after and in consequence of the Court ofAppeal judgment. In a motion filed on 23. 6. 99 in this Court, on behalfof the 1st respondent, it was urged that that amendment was made"in order to change the law as it existed at the time of the institutionand decision of these proceedings in the Court of Appeal and to enablepersons in the position of the [petitioner] to qualify for licences". Thenew regulation 11A provides:
"Every application for a licence for a particular year made by[a new entrant] may, notwithstanding anything in regulation 11,be submitted to the Appropriate Authority at any time during theyear in respect of which the licence is applied for and shall bedetermined by the Appropriate Authority within thirty days of thedate on which such application is made, and such licence shallexpire on the thirty-first day of December of the year in which itwas so issued;
provided that, notwithstanding the provisions of regulation 10, anylicence issued under this regulation upon an application made onor after the first day of October in any year, [by a new entrant],shall expire on the thirty-first day of December of the succeedingyear."
In terms of that regulation a licence was issued on 27. 11. 98to the petitioner, the relevant portion of which is as follows:
"Licence for 1998 & 1999
In terms of section 2 (1) of Licensing of Produce Brokers Act,No. 9 of 1979 [the petitioner is] hereby authorised to carry on thebusiness of a Produce Broker for tea.
This licence shall be valid up to the thirty-first day of December,1999."
Mr. Choksy submitted that upon the introduction of the new regu-lation 11 A, regulation 11 ceased to apply to a new entrant; and that
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upon an application made in mid-year a licence could be issued forthe remainder of that year. Thus, whether the Court of Appeal wasright or wrong in its interpretation of the Regulations, the law is nowsettled for the future. Whether that Court erred in quashing thepetitioner's February 1998 licence was no longer a live issue. He citedHalsbury, Laws of England, (4th edition) volume 37, para 682 :
“An appeal does not lie where the question or issue raised forthe determination of the appellate court . . . has ceased to be a liveissue, or where the parties have no longer any real interest in theresult of the appeal, because of an agreement that the decision ofthe appellate court is not to affect their proprietary interests or forany other reasons. Nor does an appeal lie where the question or issueraised is or where the facts are hypothetical.
The Court of Appeal may refuse to entertain an appeal where theamount or issue at stake is trifling.0
By a motion dated 16. 7. 99, the petitioner submitted that the newregulation 11A was prospective only, and did not validate the licencegranted on 26. 2. 98 for the year ending 31. 12. 98, which had beenquashed by the Court of Appeal. Consequently, the petitioner whohad carried on business from 26. 2. 98 to 11. 11. 98 became liableto criminal prosecution for having contravened section 2 (1) of theAct; and also ran the risk of being sued in civil proceedings for lossand damage caused to other produce brokers by having conductedbusiness without a licence during that period. Further, it was assertedthat the petitioner had throughout acted lawfully and bona fide, andreserved the right to seek compensation in appropriate proceedingsfrom the 1st respondent for all loss caused to its business by reasonof the 1st respondent's conduct. Accordingly, it was essential to havea determination of the question of law on which special leave is sought.
Mr. Choksy cited five decisions to which I must now turn.
The first was Commissioners of Taxation for NSW v. Baxter. TheHigh Court of Australia held that income tax could not be levied uponthe salary paid to an officer of the Commonwealth under an Act ofan Australian State. The taxing authority sought special leave to appeal
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to the Privy Council. Before the hearing, there was passed an Act,of the Commonwealth expressly authorizing States to impose taxationof that kind. In those circumstances, the Privy Council held “that thecontroversy cannot be raised again"; that “the sums actually in disputeor indirectly affected are inconsiderable in amount"; and refused toadvise the grant of special leave. That decision depended on twoconditions being satisfied : that the controversy "cannot" be raisedagain; and that the amounts in dispute were trifling. I must observethat the taxpayer was thus allowed to retain a sum of money, whichhe might not legally have been entitled to, because that sum wasthought to be “inconsiderable” presumably from the point of view ofthe taxing authority. If the result of declining to entertain an appealwould have been to deprive the taxpayer of a sum of money, a differentview may very well have been taken.
State of Mysore v. Alexander<2) was similar. The High Court heldthat a statutory provision imposing a tax on "passenger transportoperators" was invalid, and declared them entitled to a refund. Pendingappeal to the Supreme Court, the impugned provision ceased to bein operation. The Supreme Court held that "the claims involved in theseappeals are by no means substantial . . . Hence, we do not thinkthat these are fit cases in which this Court should exercise its specialand discretionery jurisdiction …"
In Sun Life Assurance Co. of Canada v. Jervis,® the House ofLords declined to hear an appeal because the Court of Appeal grantedleave upon the appellant's undertaking both to pay the costs incurredin the House of Lords and not to ask for the return of any moneyordered to be paid under the judgment of the Court of Appeal. Thus,it became :
"… a matter of complete indifference to the respondent whetherthe appellant wins or loses; the respondent will be in exactly thesame position in either case. He has nothing to fight for, becausehe has already got everything that he can possibly get, howeverthe appeal turns out, and cannot be deprived of it."
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Ainsbury v. Millington,w was another illustration of the same prin-ciple. An unmarried couple who were living together obtained a jointtenancy of a house from the local authority. After they separated, andwhile they were litigating about the right to possession of the house,the local authority legally resumed possession of the house; thewoman was given another house; and (in other unconnected proceed-ings) the man was sentenced to imprisonment. The House of Lordsdeclined to hear an appeal because the joint tenancy had come toan end; and there remained not even an issue about costs, becauseboth parties were receiving legal aid, and so there was only a remotepossibility of any order for costs.
The fifth was Sundarkaran v. Bharath,<S) where this Court quashedthe decision of a Government Agent not to issue a liquor licence tothe petitioner for the year 1987, although that year had passed:granting a licence for 1987 was no longer possible. The principleslaid down in the Court's decision obviously had relevance to furtherapplications for licences. Mr. Choksy argued that whatever principlesthis Court may lay down in regard to the quashing of the February1998 licence would have no application to further applications forlicences.
Mr. Choksy submitted that the petitioner's apprehensions of criminalprosecution were groundless: because the licensing authority hadsupported the petitioner right along, and it was hardly likely that theAttorney-General would ever launch a prosecution. But, that does notsatisfy the tests laid down in the cases which he cited. Thus, it cannotbe said that “the controversy cannot be raised again"; or that whetherthe petitioner wins or loses he "will be in exactly the same position[and] has nothing to fight for, because he has already got everythingthat he can possibly get, however the appeal turns out"; or that "thesums actually in dispute or indirectly affected are inconsiderable inamount" – because the claims for compensation which can be madeby or against the petitioner will be affected if the order of the Courtof Appeal is set aside.
The suggestion was also made during the hearing that the licenceissued in November, 1998, was valid for the whole of 1999. It is true
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Tea Brokers (Pvt) .Limited and Others (Fernando, J.)411
that that licence is described as a "licence for 1998 & 1999", seeminglyimplying that it is valid for the whole of 1998. However, the newregulation 11A was introduced only on 23. 11. 98, and prima facieit would seem that neither the regulation nor any act done thereunderis retrospective. It was also suggested that if a prosecution is everinstituted against the petitioner, he can then plead that the Febru-ary, 1998, licence was valid. The question will then arise as to whetherthe original Court (or the High Court or the Court of Appeal) is bound(because of stare decisis, or res judicata, or otherwise) by the judg-ment now impugned. If that judgment would be binding at that stage,it seems to me inequitable that this Court should now decline toconsider the correctness of that judgment, but nevertheless allow itto be binding even if it were wrong. On the other hand, if that judgmentwould not be binding, then it means that the same controversy (iewhether the February, 1998, licence is valid or not) can be raisedagain.
For the above reasons, I hold that the decisions cited by Mr. Choksyare inapplicable, and that there is a live issue for determination.
I grant special leave to appeal upon the questions referred to earlierin this judgment (which are also referred to in paragraph 6 (a), (b),
and (g) of the petition dated 19. 11. 98.
If the petitioner succeeds in appeal, it will be entitled to the costsof this application, but the 1st respondent will not in any event beentitled to such costs. The petitioner and the respondents will file theirwritten submissions on 15. 11. 99 and 31. 12. 99, respectively, andthe date of hearing will be fixed forthwith by the Registrar afterconsulting counsel.
GUNASEKERA, J. – I agree.
WEERASEKERA, J. – I agree.
Special leave to appeal granted.