G.R. No. 183173 - Chairman, Palawan Council for Sustainable Development vs. Lim

Case Summary (G.R. No. 183173)

Administrative issuances and their core content

A.O. No. 00-05 (2002) required that the transport of live fish from Palawan be allowed only through traders and carriers accredited by the PCSD. Resolution No. 03-211 amended A.O. No. 00-05 by expressly defining “CARRIER” to include any person or entity (except the Government) engaged in transport of live fish or other aquatic products, regardless of whether such persons/entities were common carriers under law, and by providing that a “CARRIER” must secure a PCSD Certificate of Accreditation before transporting live fish within or out of Palawan. The PCSD also issued a Notice of Violation and Show Cause Order to the respondent alleging multiple non‑accredited flights and threatening fines.

Factual background relevant to the dispute

The respondent continued transporting live fish from Palawan without obtaining PCSD accreditation. The Air Transportation Office (ATO) informed PCSD that ATO‑authorized carriers are common carriers and should be exempt from PCSD accreditation, attaching a list which included the respondent. The respondent asserted harassment by PCSD through Memorandum Circular No. 02, Series of 2002, which threatened severe sanctions. Despite communicating grievances to the Office of the President, respondent was served (allegedly not received) with a Notice of Violation alleging 19 flights in October 2002 and a P50,000 fine if he failed to justify his actions within 15 days. After Resolution No. 03-211, PCSD issued a subsequent show‑cause order (September 9, 2003) for continued noncompliance, and respondent alleged loss of income due to the enforcement of the accreditation requirement.

Procedural history up to the Supreme Court

The respondent filed a petition for prohibition with the Court of Appeals (CA). The CA issued a temporary restraining order, then, after petitioners failed to file a comment, granted a writ of preliminary injunction upon respondent’s posting of a P50,000 bond. The CA ultimately declared A.O. No. 00-05, Resolution No. 03-211, and related issuances null and void and made the injunction permanent (May 28, 2008). The PCSD petitioned to the Supreme Court for review on certiorari seeking reversal of the CA decision.

Issue presented on appeal

Whether the Court of Appeals erred in declaring A.O. No. 00-05, Resolution No. 03-211, and the Notice of Violation and Show Cause Order null and void on the ground that the PCSD acted in excess of its authority.

Petitioners’ principal contentions on appeal

Petitioners argued: (1) that sections 4, 6, 16, and 19 of RA 7611 do not limit PCSD’s rule‑making authority as interpreted by the CA; (2) that the PCSD did not usurp the legislative function of the Sangguniang Panlalawigan of Palawan; and (3) that A.O. No. 00-05 and its revisions were valid exercises of the PCSD’s rule‑making (quasi‑legislative) power and met requirements for valid administrative regulations.

Supreme Court’s procedural ruling regarding remedy and jurisdiction

The Court held that the assailed issuances were exercises of the PCSD’s quasi‑legislative power (rule‑making) and that the proper remedy to test the validity of such administrative rules is a declaratory relief action in the appropriate Regional Trial Court under Section 1, Rule 63 of the Rules of Court. A petition for prohibition is generally directed against judicial, quasi‑judicial, or ministerial acts and is not the ordinary remedy to challenge quasi‑legislative acts. The Court recognized, however, that procedural rules may be relaxed in the interest of substantial justice and proceeded to resolve the case on the merits despite the procedural irregularity.

Supreme Court’s substantive ruling on PCSD authority under RA 7611

The Court reversed the CA and held that A.O. No. 00-05, Resolution No. 03-211, and the Notice of Violation and Show Cause Order were valid exercises of the PCSD’s statutory authority under RA 7611. The Court emphasized that RA 7611 created the PCSD to govern, implement, and provide policy direction for the SEP, and Section 19 explicitly vests the PCSD with powers to formulate plans and policies, coordinate with local governments, call on government agencies and private entities for cooperation, recommend legislation, delegate powers (except those non‑delegable by law), adopt, amend and rescind rules and regulations and impose penalties for effective implementation of the SEP, and enforce the Act and complementary laws. Given this express delegation—specifically the power to “adopt, amend and rescind such rules and regulations and impose penalties therefor for the effective implementation of the SEP”—the PCSD had authority to promulgate accreditation requirements and accompanying sanctions applicable to carriers transporting live fish.

Rationale concerning the scope of quasi‑legislative power and non‑delegability

The Court reasoned that the PCSD’s issuance of the A.O. and resolution was within the confines of the enabling statute and constituted filling in details necessary for the implementation of the SEP. The Court found no impermissible delegation of legislative power because RA 7611 itself authorized the PCSD to adopt implementing regulations and penalties to effectuate statutory objectives. The amendments in Resolution No. 03-211, which broadened the definition of “CARRIER” and required accreditation for

Case Syllabus (G.R. No. 183173)

Citation and Case Information

Reported at 793 Phil. 690, First Division, G.R. No. 183173, decided August 24, 2016.
Decision authored by Justice Bersamin.
Case caption identifies petitioners as the Chairman and Executive Director of the Palawan Council for Sustainable Development (PCSD), and the PCSD itself; respondent is Ejercito Lim, doing business as Bonanza Air Services, represented by attorney-in-fact Capt. Ernesto Lim.
The Court of Appeals (CA) decision under review was promulgated May 28, 2008; the CA had granted the respondent’s petition for prohibition and declared the PCSD issuances null and void.

Nature of the Appeal

Petition for review on certiorari brought by the PCSD and its officials seeking reversal of the CA’s May 28, 2008 decision.
The narrow legal question presented: whether the CA erred in declaring Administrative Order (A.O.) No. 00-05, Series of 2002, Resolution No. 03-211, any and all of their revisions, and the Notice of Violation and Show Cause Order null and void for being issued in excess of the PCSD’s authority.

Antecedent Facts (Parties, Roles, and Operations)

Petitioners: Executive Director Winston G. Arzaga and Chairman Vicente A. Sandoval — public officials tasked with executing and implementing A.O. No. 00-05 and the Notice of Violation and Show Cause Order; PCSD — agency responsible for governance, implementation, and policy direction of the Strategic Environmental Plan (SEP) for Palawan.
Respondent: operator of a domestic air carrier, Bonanza Air Services, authorized to engage in non-scheduled air taxi transportation of passengers and cargo; primary business was transporting live fish from Palawan to fish traders.
PCSD issued A.O. No. 00-05 on February 25, 2002, ordaining that transport of live fish from Palawan would be allowed only through traders and carriers who had sought and secured accreditation from the PCSD.

Key Communications and Notices

On September 4, 2002, the Air Transportation Office (ATO) communicated to PCSD that ATO-authorized carriers are considered common carriers and should be exempt from PCSD accreditation; enclosed list of ATO-authorized carriers included respondent’s service.
PCSD Chairman issued Memorandum Circular No. 02, Series of 2002, which contained a penal clause imposing sanctions on use of transfer services by unaccredited aircraft carriers — sanctions included cancellation of PCSD accreditation and perpetual disqualification from engaging in live fish trading in Palawan (allegedly causing harassment of respondent’s clients).
Respondent alleges he sent a grievance letter to the Office of the President due to effects of the memorandum; PCSD Chairman maintained respondent’s business was not a common carrier and must obtain PCSD accreditation.
Respondent continued operations without securing PCSD accreditation until a customer showed him the PCSD Notice of Violation and Show Cause Order stating he had made 19 flights in October 2002 despite lack of accreditation and directing him to explain within 15 days or be fined P50,000.00.
Respondent asserted he had not received that Notice of Violation and Show Cause Order.

Administrative Revision Challenged — Resolution No. 03-211 (Salient Provisions)

Resolution No. 03-211 amended A.O. No. 00-05 by adding definitions and accreditation requirements; salient quoted text includes:
- Addition to Section 1 (new Paragraph 1.5) defining "CARRIER" broadly as:
  - “any natural or juridical person or entity, except the Government, that is engaged or involved in the transportation of live fish or any other aquatic fresh or saltwater products, whether or not on a daily or regular manner or schedule and whether or not for compensation, from any point within or out of the Province of Palawan under a contract or transportation, whether or not in writing, through the use of aircrafts, seacrafts, land vehicles or any other mode of transportation, whether or not registered, mechanical or motorized in nature, and whether or not such persons or entities are common carriers or not as defined by law and regardless of the place of registration of such persons or entities as well as the crafts and vehicles used or employed by them.”
- New Section 2 (Section 5 of the Resolution) requiring accreditation:
  - “Section 2. Accreditation. Before it can proceed with the transport or carriage of live fish or any other aquatic fresh or saltwater products within or out of the Province of Palawan, a CARRIER must secure a CERTIFICATE OF ACCREDITATION from the PCSD.”

Respondent’s Supplemental Allegations and Damages Claim

Respondent filed a supplemental petition alleging that implementation of Resolution No. 03-211 prevented his carriers from transporting/delivering fish from Palawan to clients, causing loss of income amounting to P132,000.00.
Respondent alleged the Resolution and subsequent notices were a scheme to circumvent the CA’s TRO and writ of preliminary injunction.

Lower Court Proceedings (Court of Appeals)

Respondent filed a petition for prohibition in the CA; the CA issued a temporary restraining order (TRO) upon his application after finding sufficient grounds.
Petitioners did not file comment despite notice; the CA issued the writ of preliminary injunction after respondent posted an injunction bond of P50,000.00.
CA’s May 28, 2008 decision: granted the petition, declared A.O. No. 00-05, Resolution No. 03-211, any and all revisions, and the Notice of Violation and Show Cause Order NULL and VOID, and made the injunctive writ permanent; costs assessed against petitioners.

Issues Presented on Appeal (as articulated by petitioners)

Whether the CA erred in interpreting Sections 4, 6, 16, and 19 of R.A. No. 7611 as limitations to the PCSD’s powe