Speednet Communications Ltd v Public Utilities Commission

• Jurisdiction: Caribbean States
• Judge: Saunders, J.,Wit, J.,Hayton, J.,Anderson, J.,Rajnauth-Lee, J.
• Judgment Date: 09 December 2016
• Court: Caribbean Court of Justice
• Docket Number: CCJ Appeal No. BZCV 2015/001; BZ Civil Appeal No. 29 of 2012
• Date: 09 December 2016

Caribbean Court of Justice

Saunders, J.CCJ; Wit, J.CCJ; Hayton, J.CCJ; Anderson, J.CCJ; Rajnauth-Lee, J.CCJ

CCJ Appeal No. BZCV 2015/001; BZ Civil Appeal No. 29 of 2012

Speednet Communications Limited

and

Public Utilities Commission

Appearances

Mr. Eamon Courtenay SC and Mr. E Andrew Marshalleck SC for the appellant

Mr. Fred Lumor SC and Ms Sheena Pitts for the respondent

Statute - Interpretation — Ambiguity — Appeal — Meaning of “channel” — Whether ambiguity ought to be resolved by application of principle against ambiguous governmental imposition — Whether appellant unlawfully charged licence fee.

INTRODUCTION

1 Speednet Communications Limited (“Speednet”) is a private company duly formed and existing under the Laws of Belize and is a licenced telecommunications services provider to some 90,000 customers in Belize. Speednet's licence was issued to it in July, 2003 by the Public Utilities Commission (“the PUC”), a body corporate duly formed and existing under the Public Utilities Commission Act, 1999 (“the PUC Act of 1999”) [CAP 223.] and charged with the legislative duty to implement the policy of the Government relating to the telecommunications industry.

2 In 2010, Speednet applied to the PUC for frequency authorisation for the use of thirteen (13) Point-to-Point links. The PUC approved the application and initially advised that the annual fee to be paid by Speednet would be $238,000. The PUC arrived at that figure by multiplying the number of megahertz (“MHz”) contained in the totality of links by a charge of $1000 per MHz. Both parties quickly realised that this figure was erroneous. The governing subsidiary legislation specified that “$100 per channel” was payable as the licence fee, and not $1000 per MHz. The PUC then charged $792,500 as the annual Licence Fee. It argued that the radio frequency channels included 7,925 ‘voice’ channels and that the licence fee was to be calculated on the basis of $100 per ‘voice channel’. Speednet tendered, on a “without prejudice” basis, a cheque for “the total sum of $792,000 demanded” but contended that the annual fee payable for the 13 Point-to-Point links ought to have been $100 per ‘radio frequency’ channel amounting to a total charge of $1,300. As an aside, it was subsequently agreed by the parties that the frequency application by Speednet required fourteen (14), rather than 13, Point-to-Point links, but nothing of substance turns on this. Nor, for that matter, does anything turn on the fact that the cheque tendered was for $500 less than the sum demanded. What does matter is the meaning to be attributed to ‘channel’ as the criterion for determining the applicable licence fee.

3 The word ‘channel’ is used in the legislative enactment under which Speednet had made its application for the Point-to-Point links, namely, the Schedule to the Telecommunications (Licensing, Classification Authorisation and Fee Structure) Regulations 2002, [SI 2002/110.] herein referred to as “the Schedule” and “the Regulations” respectively. Unfortunately, ‘channel’ does not appear and therefore is not defined in the Regulations or its parent statute, the Belize Telecommunications Act 2002 [CAP 229.] (“the Telecoms Act of 2002”). The word does appear but is also not defined in the Schedule to the Regulations. Nevertheless, both the Supreme Court and the Court of Appeal accepted, albeit for different reasons, the contention of the PUC and held that ‘channel’ was to be construed as meaning ‘voice’ channel.

4 The parties agree that the substance of this appeal is to determine the correct interpretation to be given to the word ‘channel’ as it is used in the Schedule to the Regulations to specify the Licence Fees payable for Point-to-Point links. The legal issue is therefore narrowly circumscribed but has potentially significant implications for the telecommunications industry and the wider economy.

THE SUPREME COURT PROCEEDINGS

5 The Supreme Court proceedings were commenced by Fixed Date Claim Form and supporting Affidavit of Mr. Ernesto Torres, Chief Executive Officer of Speednet, both dated 14th November, 2011. [Record of Appeal, 335 – 359.] Speednet claimed that the PUC had wrongfully and unlawfully charged and collected $792,000 as the frequency authorisation licence fees for the 13 Point-to-Point links, and sought an order for the refund of this sum together with such other relief as the Court deemed just, and costs. Speednet supported this claim by arguing that the PUC had failed to define ‘channel’ in the Schedule as it relates to Point-to-Point links and, citing R v. Winstanley [[1831] Eng R 202; (1831) 1 C & J 434; 148 ER 1492.] and Inland Revenue Commissioners v. Ross and Coulter and Others (Bladnoch Distillery Co Ltd) [[1948] 1 All ER 616.], submitted that the word should therefore be construed against the PUC.

6 The PUC disputed Speednet's claim. By an Affidavit sworn to by Mr. John Avery, Chairman of the PUC, it alleged that the Licence Fees were to be calculated on the basis of $100 per ‘voice’ channel and not per ‘radio frequency’ channel. [Record of Appeal, 360-363.] The Third Affidavit of Mr. Avery was dedicated to simplifying and clarifying the concept of ‘radio frequency’ channel or ‘channel’. Speednet did not file an Affidavit in Response to Mr. Avery's Third Affidavit.

7 Legall J delivered judgment on 26th November 2012. The learned judge considered the mutually opposing contentions of Speednet and the PUC as set out in the affidavit evidence, the submissions made and the authorities cited to him by counsel. He was of the view that ‘channel’ could possibly bear the meaning of ‘voice’ or ‘radio frequency’ but as the Regulations were not made by the legislature but rather by a statutory corporation, the principle of statutory interpretation that ambiguous provisions in a taxing statute ought to be construed against the Crown did not apply. Accordingly, the judge dismissed Speednet's claim and ordered that each party should bear its own costs.

THE APPEAL IN THE COURT OF APPEAL

8 Both sides were dissatisfied with the decision of Legall J and appealed to the Court of Appeal. Speednet contended that the judge erred in holding that the Regulations were not made by the legislature so that the rules of statutory interpretation governing revenue provisions such as those set forth in R v. Winstanley and Inland Revenue Commissioners v. Ross and Coulter and Others (Bladnoch Distillery Co Ltd) did not apply. Further, the judge had misdirected himself by construing the Regulations to mean $100 per ‘voice’ channel on the basis of evidence of the PUC as opposed to construction as a matter of law of the words used in the Regulations. For its part, the PUC conceded that the Regulations were made by the legislature and that the principle enunciated in Winstanley and Ross (the so-called principle of doubtful penalisation) could in principle be applied to the Regulations. However, the PUC contended in its cross-appeal that there was no room for such application because, given the background usage in the industry standards and the provisions of section 12 of the Act, the word ‘channel’ in the Regulations clearly meant ‘voice’ channel.

9 The judgment of the Court of Appeal was delivered on 19th June 2015 by Sosa P. The learned President held that Speednet's appeal should be dismissed save to the extent that the Licence Fee payable for frequency authorisation of Point-to-Point links was not required by law to be paid in advance but rather at the end of the first year of authorisation. In consequence, the PUC was required to pay to Speednet interest at the rate of 6 per centum per annum on the sum of $792,000 from the date of payment of this sum to the date when payment should lawfully have been made. The claim for relief by the PUC was upheld and the decision of the trial judge varied to reflect that given the industry standards, customs and practices, and the provisions of section 12 of the Telecoms Act of 2002 the word ‘channel’ used in the Regulations had the clear meaning of ‘voice’ channel. The PUC was to be paid 80 per centum of its costs of the appeal. In all other respects the orders of Mr. Justice Legall were affirmed.

10 Sosa P arrived at these conclusions by first rejecting the concession made by the PUC as to the nature of the governing legislation. The President reasoned that there was a fundamental difference between a ‘tax’ and a ‘fee’. Accordingly, the principle against doubtful penalisation did not apply because,

“The concept of penalisation is, in my opinion, one utterly alien to statutory provisions which merely impose and fix the amount of a fee for frequency authorisation. The idea that a fee of such a kind constitutes a penalty is, with respect, entirely lacking in logic.” [ Speednet Communications Limited v. Public Utilities Commission (Court of Appeal of Belize, 19 June 2015) [40] (Sosa P); Record of Appeal, 299.]

Having found that the principle against doubtful penalisation did not apply, the Court rejected the interpretation of the word ‘channel’ advanced by Speednet thus, in effect, ending Speednet's appeal. The President then turned to consider the cross-appeal and accepted that the word ‘channel’ as used in the Regulations was a technical term and therefore evidence was admissible as to its meaning. He examined certain passages of viva voce evidence from the trial Court, and considered the definition of ‘channel’ given in a Wikipedia article. He summarized:

“In short, I have reached the conclusion, based on my understanding of the article in Wikipedia, read in light of the pertinent evidence adduced in the Court below, that ‘channel’ as used in the phrase ‘$100 per channel’ in the Schedule to the regulations means voice channel, that is to say a transmission or communication channel which, in the context of Belize, is of a bandwidth of 30 KHz and, hence, able to carry the human...