Shangrila (1982) Ltd v Grand Bahama Port Authority Ltd et Al

JurisdictionBahamas
CourtSupreme Court
JudgeAdams, J.
Judgment Date09 May 1982
Docket NumberEquity Side No. 154 of 1984

Supreme Court

Adams, J.

Equity Side No. 154 of 1984

Shangrila (1982) Ltd.
and
Grand Bahama Port Authority Ltd et al
Appearances:

Frederick Smith and Mr. Maurice Glinton for plaintiff.

Mr. Ralph Seligman and Miss Allyson Maynard for 1st defendant.

No appearance for 2nd defendant.

Administrative law - Administrative Acts — Validity — Procedural requirements

Licensing - Licence — Grant subject to Government approval — Whether condition valid

Adams, J.
1

This action was commenced by originating summons and the following relief was sought: –

  • “(1) A declaration that upon a true construction of the proviso contained in a sub clause 7 of Clause 3 of the Hawksbill Creek Agreement, (hereinafter referred to as “the Agreement” it is not a condition precedent to the Grand Bahama Port Authority (hereinafter referred to as “the Port Authority”) licencing any person firm or company to carry on any lawful business undertaking enterprise within “the Port Area” as defined in the said Agreement that the Port Authority or such person firm or company obtain the prior approval of the Government of the Commonwealth of the Bahamas (hereinafter referred to as “the Government”); and, or alternatively

  • (2) A declaration that upon a true construction of sub clause 28 of Clause 2 and sub clause 7 of Clause 3 of the said Agreement the imposition by the Government or the Port Authority of a condition precedent to the issuance of a licence by the Port Authority in pursuance of an approved licence application, that such approved licence application be submitted by the Port Authority to the Government for the Government's consideration and for the purposes of receiving the Government's approval prior to its issuance is discriminatory without legal justification unlawful void and of no effect; and or alternatively

  • (3) A declaration that subject to the provisoes contained in sub clause 23 of Clause 2 of the Agreement the Government and/or the Ministry of Finance is not by any law in the Commonwealth empowered authorized, or capable of reviewing or otherwise exercising the functions of a licencing authority directly or indirectly by veto or otherwise over upon or in connection with any licence application made by any person firm or Company to the Port Authority to carry on any lawful business undertaking or enterprise within the Port Area and that any such assumption or exercise of such authority by the Government and or the Ministry of Finance is ultra vires void illegal and of no effect, and, or alternatively

  • (4) A declaration that the practice of submitting approved licence applications or otherwise by the Port Authority to the Government and or the Ministry of Finance, for their consideration and prior approval to its issuance it discriminatory and contravenes Article 26 (1) of the Constitution of the said Commonwealth, or alternatively

  • (5) A declaration that the plaintiff is entitled to a licence from the Port Authority for the purpose of conducting its business.

  • (6) Such further or other relief as the court may seem just

  • (7) Costs.”

2

This action turn on the interpretation and effect of the Hawksbill Creek, Grand Bahama (Deep Water Harbour and Industrial Area) Act, 1955 (as amended) and the agreement and supplemental agreements between the Governor in Council and the Grand Bahama Port Authority, Limited, a company incorporated in the Bahamas by one Wallace Groves as authorised by the Act and its amendments.

3

Before considering the legal aspects, I shall summarise the facts.

4

Mr. Frederick Smith, who is a counsel and an attorney as well as a licensee of the Grand Bahama Port Authority Limited (hereinafter called the Port Authority) is the beneficial owner of the share capital and issued shares of Shangrila (1982) Limited, the plaintiff company.

5

On 28th July, 1982 Mr. Smith submitted an application to the Port Authority for a business licence for Shangri- La (1982) Limited to carry on in Freeport the business of boat chartering and all related water sports.

6

On 22nd October, 1982 the Port Authority wrote to the plaintiff a letter, in which it approved the grant of a licence subject to certain terms and conditions. As this letter subsequently became the centre of controversy between the plaintiff and the first defendant, I reproduce it below in its entirety: –

“Dear Sir:

We refer to your license application. This has now been considered by our Licensing Committee and we are pleased to advise you that we have approved the grant of a license to you subject to the following terms and conditions which, inter alia, would be embodied in our standard form of license agreement.

Terms and Conditions of Licence

Business: To carry on the business of the operation of charter fishing boats and all related tourist water sports.

Fee: B$2,500.00 per annum, payable in advance with adjustments every three (3) years to reflect an increase or decrease in the Cost of Living Index Number as published by the Bureau of Labour Statistics of the United States Department of Labour, Provided However, that in no event shall the said license fee at any time be less than B$2,500.00 per annum.

Term: The period of your occupation of approved premises or the expiration of the Government Agreement, whichever is the earlier date.

Approved To be sub-leased from the St. Tropez Marina, Bahamia.

Premises:

Conditions: (a) If the proposed licensed business is not included in the provisions of Clause 2 (23) (a) of the Hawksbill Creek Agreement, it is a condition precedent to the grant of this license that the grantee immediately applies to the Ministry of Finance, (Treasury Department), Sun Alliance Building, Freeport, Grand Bahama for and obtains a Business License from the Government of the Bahamas, which said Business License must be applied for and obtained annually in accordance with the provisions of the Business License Act, 1980.

  • (b) It is a condition precedent to the grant of this license that it also receives the approval of the Government of the Commonwealth of the Bahamas. In this regard, we will be forwarding your approved license application to them for further consideration. We will advise you of their decision as soon as we have received it.

  • (c) It is a condition to the grant of this license that after receipt of our letter advising that the Bahamas Government has approved the license application, the grantee provides this office with a copy of the sub-lease agreement with St. Tropez Marina.

  • (d) It is a strict condition to the grant of this license that the licensee carries a minimum of Public Liability Insurance of $250,000.00 per person for persons engaging in watersports. A copy of the insurance certificate must be forwarded to this office for our records.

  • (e) It is emphasized that only qualified persons operate and instruct in the watersports activities and that charters be operated by qualified Sea Captains,

  • (f) It is emphasized that the applicant should under no circumstances undertake financial commitments on the basis of this letter until the approval of the Bahamas Government has been received. The Port Authority can assume no responsibility for any loss or difficulty arising out of a refusal by the Bahamas Government to the grant of a license.

  • (g) It is understood and agreed that this licence is being offered subject to the clear understanding that the license sought is solely for your benefit or as otherwise disclosed and is not in airy way for the benefit of any undisclosed third party. In the event that the license is granted and at some subsequent date thereafter either the Bahamas Government or ourselves discover that the license was sought for persons other than yourself then such will immediately be cancelled.

  • (h) Upon notification of Government approval, the grantee shall have a period of ninety (90) days in which to activate the business offered herein (provided approved premises are available). Failure to do so shall result in the termination of this offer which shall then be null and void and of no further force and effect.

  • (i) It is a strict condition to the grant of this license that the grantee effects and maintains throughout the existence of this license with the Sun Alliance Assurance Group, any and all insurance taken out in respect of and in connection with the business for which this license is granted.

If you are in agreement with the above terms and conditions, please notify us accordingly within twenty-one (21) days of the date hereof at the same time forwarding your cheque for B$1,000.00, upon receipt of which your license application will be forwarded to Government for approval. Upon issuance of the license agreement, the deposit will be applied against the license fee due thereunder, otherwise the deposit will only be refunded to you in the event of Government's refusal of your application.

Yours faithfully

The Grand Bahama Port Authority, Limited”

7

It was condition (b) together with condition (f) which created an impasse between the parties. Condition (b) states: –

“(b) It is a condition precedent to the grant of the licence that it also receives the approval of the Government of the Commonwealth of the Bahamas. In this regard, we will be forwarding your approved licence application to them for their further consideration. We will advise you of their decision as soon as we have received it.”

8

Condition (f) says: –

“(f) It is emphasised that the applicant should under no circumstances undertake financial commitments on the basis of this letter until the approval of the Bahamas Government has been received. The Port Authority can assume no responsibility for any loss or difficulty arising out of a refusal by the Bahamas Government to the grant of a licence.”

9

Thus the grant of the licence was based upon the Government's decision. By telephone communication Mr. Smith objected to the said conditions of the...

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