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[2021] ZASCA 101
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Bertie Van Zyl (Pty) Ltd t/a ZZ2 and Others v Minister of Agriculture, Forestry and Fisheries and Others (549/2020) [2021] ZASCA 101; [2021] 4 All SA 1 (SCA) (14 July 2021)
Links to summary
THE SUPREME COURT OF
APPEAL OF SOUTH AFRICA
JUDGMENT
Reportable
Case
no: 549/2020
In
the matter between:
BERTIE VAN ZYL (PTY)
LIMITED
T/A
ZZ2
FIRST
APPELLANT
TOMATO PRODUCERS’
ORGANISATION
SECOND APPELLANT
NOORDELIKE
UIE KOMITEE THIRD
APPELLANT
FRESH PRODUCE
IMPORTERS’
ASSOCIATION
NPC FOURTH
APPELLANT
and
MINISTER OF
AGRICULTURE,
FORESTRY
AND FISHERIES
FIRST
RESPONDENT
PRODUCT CONTROL FOR
AGRICULTURE
SECOND
RESPONDENT
LEAF
SERVICES (PTY) LIMITED THIRD
RESPONDENT
NEJAMOGUL TECHNOLOGIES
&
AGRIC
SERVICES
FOURTH RESPONDENT
AGENCY FOR FOOD SAFETY
(PTY)
LIMITED
FIFTH
RESPONDENT
IMPUMELELO
AGRIBUSINESS
SOLUTIONS
(PTY) LTD SIXTH
RESPONDENT
PERISHABLE PRODUCTS
EXPORT
CONTROL BOARD SEVENTH
RESPONDENT
SOUTH AFRICAN MEAT
INDUSTRY
COMPANY EIGHTH
RESPONDENT
Neutral
citation:
Bertie Van Zyl (Pty) Ltd
t/a ZZ2 and Others v Minister of Agriculture, Forestry and Fisheries
and Others
(549/2020)
[2021] ZASCA 101
(14 July 2021)
Coram:
PETSE DP, and SALDULKER, MAKGOKA JJA and GOOSEN and UNTERHALTER
AJJA
Heard
:
10 May 2021
Delivered
:
This judgment was handed down electronically by circulation to the
parties’ representatives by email, publication on the
Supreme
Court of Appeal website and release to SAFLII. The date and time for
hand-down is deemed to be 14h00 on 14 July 2021.
Summary:
Constitutional challenge to the power
of an assignee to determine its fees – s 3(1A)
(b)
(ii)
of the Agricultural Product Standards Act 119 of 1990 – s 25(1)
of the Constitution – deprivation of property –
rule of
law – s 195(1) of the Constitution – judicial review –
procedural fairness – rationality review.
On
appeal from:
Gauteng Division of the
High Court, Pretoria (Baqwa J, sitting as the court of first
instance):
1.
The appeal is upheld with costs, including
the costs of two counsel, to the extent set out in 3.2 and 3.3
below.
2.
The appeal is otherwise dismissed.
3.
The order of the high court is set aside
and substituted with the following order:
‘
3.1
The application to declare s 3(1A)(
b
)(ii)
read with s3A(4) of the Agricultural Product Standards Act 119 of
1990 ( the Act) unconstitutional and invalid is dismissed.
3.2
The second respondent’s determination
of inspection fees in terms of s 3(1A)(
b
)(ii)
of the Act published as Notice 1 of 2017 in Government Gazette 40537
dated 6 January 2017 is reviewed and set aside.
3.3
The costs of the review are to be paid by the first, second, and
eighth respondents, including the costs of
two counsel, where so
employed.’
JUDGMENT
Unterhalter
AJA (Petse DP, and Saldulker, Makgoka JJA and Goosen AJA concurring):
Introduction
[1]
The first appellant, Bertie Van Zyl (Pty) Ltd t/a ZZ2, grows various
types of fruit. The second and
third appellants, Tomato Producers’
Organisation and Noordelike Uie Komitee, are voluntary associations,
which promote the
interests, respectively, of tomato and onion
growers. The fourth appellant, Fresh Produce Importers’
Association NPC, is
a ‘Not for Profit Corporation’; it
promotes the interests of fresh produce importers. The appellants
brought an application
in the Gauteng Division of the High Court,
Pretoria (the high court) for an order to declare s
3(1A)
(b)
(ii)
read with s 3A(4) of the Agricultural Product Standards Act 119 of
1990 (the Act) unconstitutional and invalid. The appellants
also
sought to review and set aside the determination of inspection fees
by the second respondent, Product Control for Agriculture
(Procon).
[2]
The Act controls the sale, export and import of certain agricultural
products. The first respondent
(the Minister) may prohibit the sale
of a prescribed product unless it complies with prescribed
classifications and standards.
In terms of s 2(1) of the Act, the
Minister may designate a person in the employ of the Department of
Agriculture (the Department)
as the executive officer to exercise the
powers and perform the duties conferred under the Act. The Minister
may also, in terms
of s 2(3)
(a)
,
designate a person, with regards to a particular product, for the
purposes of the application of the Act. A person so designated
is
styled an ‘assignee’ in respect of that particular
product. The Act permits the executive officer and an assignee
to
conduct inspections aimed at ensuring that certain agricultural
products meet the prescribed classifications and standards.
They
charge fees to do so. In the case of the executive officer the fee is
prescribed. In the case of the assignee, the Act stipulates,
in s
3(1A)
(b)
(ii),
that ‘the fee determined by such assignee shall be payable.’
I shall refer to this provision, read with s 3A(4),
which requires
the owner of the product to pay the fee, as ‘the challenged
provision’.
[3]
The appellants in their application before the high court cited the
assignees designated by the Minister.
Procon is an assignee. So too
is the seventh respondent, the Perishable Products Export Board (the
Board). The Board is recognised
as a juristic person in terms of the
Perishable Products Export Control Act 9 of 1983 (the PPEC Act). The
Board is tasked with
the orderly and efficient export of perishable
products. The Board has also been designated as an assignee under the
Act. The Minister,
Procon, the eighth respondent, South African Meat
Industry Company (Meatco), and the Board opposed the application,
though the
Board limited its opposition to the appellants’
constitutional challenge.
[4]
In the high court, the appellants contended that the challenged
provision is a deprivation of property
that infringes s 25 of the
Constitution. The challenged provision was also said to offend
against the rule of law and s 195(1)
of the Constitution.
[1]
Section 195(1) sets out the basic values and principles governing
public administration. The high court (per Baqwa J) dismissed
this
constitutional challenge. It also dismissed the review of Procon’s
fee determination on the basis that the appellants
had failed to
exhaust the remedy of appeal available to them in terms of s 10 of
the Act. An order for costs, including the costs
of two counsel, was
made in favour of Procon, the Board and Meatco. With the leave of the
high court, the appellants appeal to
this Court.
The constitutional
challenge
[5]
The constitutional challenge has a simple
premise. Section 2(3)
(a)
of
the Act permits the Minister, with regard to a particular product, to
designate a person, having particular knowledge of that
product, an
assignee for the purposes of the application of the Act. Procon and
other respondents were designated as assignees
by the Minister.
Section 3(1A) permits fees to be charged in respect of the powers
exercised and the duties performed by an assignee.
The fee that shall
be payable is the fee determined by the assignee. Among the powers
exercised by an assignee is the power of
inspection. It follows that
when the assignee exercises a power of inspection, a fee is payable
by the owner of the product inspected.
That fee is determined by the
assignee.
[6]
The appellants complained that the power of
the assignee to determine its fees is a unilateral determination, not
subject to supervision,
nor to ministerial or other control. Such an
untrammelled power, the appellants contended, cannot survive
constitutional scrutiny.
First, the challenged provision is a
deprivation of property that infringes s 25 of the Constitution.
Second, the challenged provision
offends against the rule of law and
s 195(1) of the Constitution. Although the appellants in their heads
of argument sought to
revive a challenge, not pursued before the high
court, based on s 217 of the Constitution, as to the legality of
Procon’s
appointment, this challenge was abandoned before us.
And nothing more need be said of it.
[7]
I commence with a consideration of the s 25
challenge. The appellants contended that the power of the assignee to
determine the
fees it may charge in respect of the powers conferred
upon it, without constraint or supervision, constitutes an arbitrary
deprivation
of property that infringes s 25 of the Constitution.
[8]
The
first issue that requires consideration is this. Does the
determination of a fee and the obligation to pay that fee, upon the
exercise by the assignee of its powers, constitute a deprivation of
property?
First
National Bank of SA Ltd t/a Westbank v Commissioner SARS and Another
(First National Bank)
[2]
has
long stood as the leading authority as to the conceptual components
that make up s 25. It proposes a capacious conception of
property,
while eschewing a comprehensive definition of deprivation. The cases
have tended to shy away from this terrain, and have
rather assumed a
deprivation of property, and then considered the more familiar
territory of arbitrariness. However, the Constitutional
Court has,
since
First
National Bank
,
explained that a constitutionally significant deprivation of property
requires an interference with a property right that is substantial,
in the sense that it ‘must be extensive to have a legally
significant impact on the rights of the affected party’.
[3]
With a somewhat different emphasis, O’Regan J put the matter
this way in
Mkontwana
v Nelson Mandela Metropolitan Municipality and Another
:
[4]
‘
There
can be no doubt that some deprivations of property rights, although
not depriving an owner of the property in its entirety,
or depriving
the holder of a real right of that real right, could nevertheless
constitute a significant impairment in the interest
that the owner or
real right holder has in the property.’
[9]
The appellants contended that the owner’s
liability to pay the assignee’s fee amounts to a deprivation of
property.
This contention encounters the following difficulty. The
appellants do not challenge the regulatory scheme of the Act in terms
of which certain agricultural products may only be sold according to
prescribed classes, grades or standards. Executive officers
and
assignees are appointed under the Act to carry out inspections so as
to enforce this regulatory scheme. The Act permits fees
to be charged
in respect of the powers exercised and the duties performed by
executive officers and assignees. The fees are charged
for the
service rendered by executive officers and assignees. Owners thus
receive consideration for the payment of fees –
the inspection
of their products to ensure that they may be sold in compliance with
the Act. That is not a deprivation of property
any more than the
payment of a price for goods sold and delivered constitutes such a
deprivation. To receive a service for a fee
is not a deprivation of
property.
[10]
It is of course the case that the
regulatory impost under the Act is not a voluntary exchange because
compliance with the Act is
not optional. But that was not the
appellants’ complaint. They do not say that the regime of
inspection and its object is
unnecessary or fails to secure something
of value, both for the public and the owners who sell agricultural
products regulated
under the Act. Nor, as I understand their case, do
the appellants contend that a fee should not be payable for the
inspections
that take place. No objection is raised to the prescribed
fees raised by the executive officers. Rather, their complaint is
that
the assignees are given the power to determine the fee for which
they carry out their duties. This demonstrates that it is not the
requirement that a fee is payable that constitutes the deprivation of
property. Rather, it is the power given to the assignee,
without
supervision, to determine the extent of the fee that is said to be
objectionable.
[11]
That too cannot amount to a deprivation of
property. First, if the power is exercised to determine a reasonable
fee for the service
given, there is no deprivation of property. The
owner gets fair value for the fee paid. But even if the fee is
considered excessive,
of what property is the owner deprived? To pay
more for something than it is thought to be worth may be a common
place experience,
but it is not a deprivation of property rights. It
is a bad regulatory bargain. It creates an obligation to pay more. It
is difficult
to conceptualise what specific property rights are
thereby encumbered or restricted. The owner’s liabilities
increase to
the extent of any excess, but no right to identifiable
property is thereby diminished.
[12]
Second,
if the appellants’ complaint is ultimately as to how an
assignee might exercise its power to determine a fee, without
oversight, then, even on the appellants’ argument, the power is
capable of being exercised in a manner wholly consistent
with s 25.
Therefore, it follows that there is no warrant to declare s
3(1A)
(b)
(ii)
unconstitutional and invalid. This is an application of the principle
articulated in
S
and Others v Van Rooyen and Others
:
[5]
any power is capable of being abused, but that has no bearing on the
constitutionality of the law concerned. The exercise of the
power by
an assignee, in a particular case, may give rise to complaint.
Though, for the reasons given, I am unpersuaded that it
is a
complaint that the owners have been deprived of their property within
the meaning of that concept in s 25.
[13]
Third,
the appellants’ case, on this score, suffers from a further
difficulty. If the property cannot be identified in respect
of which
the deprivation takes place, the consideration of arbitrary
deprivation in terms of s 25 cannot take place.
First
National Bank,
[6]
holds that an arbitrary deprivation is one where the law does not
provide a sufficient reason for the deprivation. That is determined
by considering the deprivation in question and the ends sought to be
achieved by the impugned law. But if the property rights affected
are
unclear, the extent of their deprivation cannot be ascertained, and
hence the question of arbitrariness cannot be determined.
[14]
I find, therefore, that the appellants have
not made out a case that s 3(1A)
(b)
(ii)
infringes s 25 of the Constitution.
[15]
The
appellants also contended that the challenged provision offends
against the rule of law and s 195(1) of the Constitution. This
contention cannot be sustained. Section 1
(c)
of the Constitution gives expression to the supremacy of the
Constitution and the rule of law. These values, so the Constitutional
Court has held, inform the Constitution, but do not give rise to
enforceable rights that permit of the invalidation of legislation.
[7]
This is also the proper characterisation of s 195 of the
Constitution. Section 195 sets out the basic values and principles
governing
public administration, but it does not contain enforceable
rights.
[8]
The appellants
submitted that they do not seek to vindicate any rights, but rather
that the challenged provision ‘runs afoul
of s 195(1)
(f)
of the Constitution’. Without justiciable rights to enforce,
there is no basis upon which this Court may declare invalid
a law
that is inconsistent with a value or principle. Accordingly, the
appellants’ constitutional challenge to s 3(1A)
(b
)(ii)
cannot prevail.
The review
[16]
The appellants brought under review the
appointment by the Minister of Procon as an assignee, and in the
alternative, sought to
review Procon’s determination of
inspection fees in terms of s 3(1A)
(b)
(ii)
of the Act. As to Procon’s determination of fees, the high
court held that the appellants had failed to exhaust their
internal
remedy in terms of s 10 of the Act, and consequently the high court
declined, in terms of s 7(2)
(a)
of the Promotion of Administrative Justice Act 3 of 2000 (PAJA), to
entertain the appellants’ review.
[17]
Section 10(1) of the Act provides as
follows:
‘
Any
person whose interests are affected by any decision or direction of
the executive officer or an assignee under this Act, may
appeal
against such decision or direction to the Director-General.’
The
issue is this: did the appellants enjoy a remedy under s 10(1) to
appeal their dissatisfaction with the fees determined by Procon?
[18]
The
appellants contended that they had no such remedy. A determination of
fees is not a direction. It is also not a decision, so
they argued,
because a decision means a decision that determines a dispute or
issue. Although a decision may also mean a decision
to do something,
the Afrikaans text of s 10(1) uses the word ‘beslissing’,
which connotes the adjudication of a dispute
or some issue.
[9]
Since the determination of a fee is not a decision, so defined, s
10(1) provided the appellants with no remedy.
[19]
The respondents opposing this aspect of the
appeal contended that the words ‘any decision’ in s 10(1)
should not be
read narrowly. Procon referenced meanings of
‘beslissing’ in an Afrikaans dictionary that include,
‘handeling
van te beslis’, and hence to make up one’s
mind. The respondents also submitted that a more generous reading of
a decision
would be a more sensible interpretation.
[20]
There are limits to the utility of semantic
contestation by recourse to dictionaries. Reading the Act as a whole
does not yield
a consistent use of language or concepts. Section
10(1) references any decision or direction. The scheme of the Act
designates
an executive officer or assignee as exercising powers and
performing duties. The actions resulting from such exercise or
performance
are not given uniform descriptions. As the inspections,
gradings and samplings contemplated in s 3A indicate, the exercise of
powers
by an assignee may variously result in classifications,
inspections, cancellations, and directions. It is not at all clear
that
the exercise of these powers strictly amounts to a direction or
a decision, in the sense of a determination of a dispute. But if
that
is so, then s 10(1) appears to have a very narrow remit and lacks
utility. However, if the exercise of the powers of an assignee
in s
3A does fall within the meaning of a decision in terms of s 10, it is
not clear why a fee determination is not also a decision.
[21]
It
is unnecessary, however, to express a definitive view. The high court
did not consider the application of s 7(2) of PAJA in the
light of
the Constitutional Court’s decision in
Koyabe.
[10]
The Constitutional Court there recognised that the duty to exhaust
internal remedies, though valuable, should not be rigidly imposed,
and that the exceptional circumstances referenced in s 7(2)
(c)
of
PAJA depend upon the facts and circumstances of the case.
[22]
In the present case, there is considerable
ambiguity as to whether a fee determination that may affect many
owners is the type of
decision contemplated by s 10(1) of the Act.
The appellants observe that an appeal in terms of s 10(1) must be
lodged in the prescribed
manner. The Minister promulgated prescribed
fees in respect of appeals concerning specific products, but not
against the determination
of fees by assignees. The Minister’s
understanding of s 10(1) does not determine its meaning. But it does
evidence the lack
of clarity as to the appeals that may be brought in
terms of s 10(1). Given these uncertainties, in my view, the failure
by the
appellants to appeal under s 10(1), even if this was an
available remedy, should not frustrate the appellants’ review.
Where
the right to appeal is not made plain in the legislation, and,
at best, it is cast as a right and not an obligation, the high court
should have permitted the appellants, in the interests of justice, to
proceed with their review. And I do so find.
[23]
I proceed to consider the merits of the
appellants’ review. The appellants’ review challenged
Procon’s determination
of fees on two principal grounds. First,
the appellants complained that the determination was procedurally
unfair. Second, the
appellants alleged that the determination was
irrational. I consider these challenges in turn.
[24]
The parties are in agreement that although
the challenged provision does not prescribe a procedure to be
followed so as to determine
a fee, the determination must comply with
the requirements of procedural fairness. Since it is also common
ground that the determination
of the fee is administrative action,
the parties are in agreement that s 4 of PAJA is of application.
Section 4 of PAJA sets out
what an administrator must decide so as to
give effect to the right to procedurally fair administrative action.
In this case, Procon
decided to follow a notice and comment
procedure.
[25]
The appellants complain that the notice and
comment procedure followed by Procon failed to result in a fee
determination that was
procedurally fair. They point out that the
Regulations on Fair Administrative Procedures, made in terms of s 10
of PAJA, require,
amongst other matters, that the notice calling for
comment by the public must be published in the Government Gazette and
in a newspaper
or newspapers that are distributed throughout the
country and that the notice must contain sufficient information about
the proposed
administrative action to enable members of the public to
submit meaningful comment. Furthermore, s 4(3)
(a)
of PAJA requires the administrator to take appropriate steps to
communicate the administrative action to those likely to be
materially
and adversely affected by it and call for comments from
them.
[26]
The appellants alleged that Procon fell
short. The proposed fees were published in the Government Gazette,
but in no newspaper,
nor over the radio and electronic media. The
publication was in English only. The publication of the proposed fees
did not disclose
the basis or methodology used to determine the
proposed fees. In particular, Procon failed to provide information as
to whether
the proposed fees were determined so as to recover costs
or allowed also for a profit to be earned. In sum, for the public to
make
meaningful comments, the public must be given sufficient
information. The public was not properly informed, and hence the
notice
and comment procedure was not fair.
[27]
Procon set out in its answering affidavit
the extensive consultative process that it followed with affected
parties, in the course
of which comments were received concerning the
proposed fees. The appellants participated in this process and
provided comments.
Procon avered that it took these comments into
account in making its fee determination. The fact that Procon did not
agree with
the methods of costing, reflected in certain of the
comments received, did not mean that these comments ‘were not
recognised
and considered’. In sum, the consultative process
afforded the appellants a reasonable opportunity to participate, and
it
was thus fair.
[28]
The record shows that there was indeed an
extensive consultative process followed. Procon received comments on
its proposed inspection
fees from numbers of affected persons. The
first appellant provided comments. But the yield of the process by
way of comments does
not meet the principal complaint made by the
appellants as to its fairness. Two notices inviting comments in
respect of Procon’s
proposed fees were published in the
Government Gazette: the first on 14 October 2016, and the second on
24 November 2016.
[29]
The proposed inspection fees in the first
notice reflected 3 categories. Each category listed various products.
The proposed inspection
fees were as follows: category 1, 1.8c per
kg; category 2, 1.6c per kg; category 3, 1.4c per kg. The notice
further indicated that
the levies per kilogram would be based on net
weight, and prices exclude VAT. A caveat was laid down: where an
inspection service
is delivered and levies are not sufficient to
cover costs, ‘[Procon] reserves the right to, at its
discretion, charge hourly
and /or kilometre rates. . .’. These
rates were then set out. In the second notice, certain revisions were
made to the rates
in each category, and the specified products listed
in categories 1 and 3 were reduced, with residual products listed in
category
3 as ‘unspecified vegetables’ at an inspection
fee of 1.4c per kg.
[30]
What is entirely absent from the two
notices was any indication as to how the inspection fee was arrived
at. Nor was there an explanation
as to what determined the
differential in the rates as between the categories in the first
notice, and within the categories in
the second notice. The first
notice, as indicated, does reference the risk that the levies may not
cover costs. But nothing is
said as to whether the fees are fixed to
recover costs or make a profit, and if so, how the rate expressed in
cents per kilogram,
in different categories, achieves that end.
[31]
In my view, these omissions irredeemably
compromise the fairness of the consultative process that was
followed. It is clear from
certain of the comments received that the
basis of the proposed fees was questioned. In one meeting, held on 27
September 2016
between the first appellant, Procon, and
representatives of the Department, the first appellant raised the
issue as to the basis
upon which Procon used a rate per kilogram when
products had different values unrelated to weight. The recorded
response
is that ‘[Procon] will engage with [the first
appellant] on the matter.’ What was required of Procon in the
notices
calling for comment was information as to the basis of a fee
based on weight, the rationale for the fee structure, the logic
underpinning
the categories, rate differentials and their relation to
cost recovery.
[32]
Absent this information, those affected by
the proposed fee determination, including the appellants, were not
placed in a position
to make meaningful and informed comments. As a
result, the consultative process did not meet the requirements of
procedural fairness.
The fee determination made by Procon cannot
stand, since it is the outcome of an unfair process. It must be
reviewed and set aside.
[33]
The
appellants also sought to review Procon’s determination of
inspection fees on the basis that it was irrational, arbitrary
and
capricious. The exercise of public power, including the power to
determine inspection fees by an assignee, must have a rational
basis.
In
Democratic
Alliance v President of South Africa,
[11]
the Constitutional Court framed rationality review thus:
‘
The
aim of the evaluation of the relationship is not to determine whether
some means will achieve the purpose better than others
but only
whether the means employed are rationally related to the purpose for
which the power was conferred’.
[34]
The essential complaint that the appellants
made in the founding affidavit is this. The determination of
inspection fees by Procon,
published in the Government Gazette on 6
January 2017, followed the revision of the proposed fees, described
above. In category
1, the listed products are charged an inspection
fee of 1.8c per kilogram. In category 2, the listed products attract
an inspection
fee of 1.6c per kilogram, save for cauliflower and
pumpkins that are charged a fee of 0.8c per kilogram. In category 3,
the inspection
fee for products, including ‘unspecified
vegetables’, is 1.4c per kilogram, save for cabbages that are
charged 0.8c
per kilogram. The appellants contend that to charge fees
in different categories according to weight means that products that
weigh
more attract a higher fee than products that weigh less,
although the services to be rendered in respect of the products are
the
same. Nor is there any evident basis for the differentiation in
fees as between and within categories. The determination of fees
is
accordingly irrational.
[35]
The powers and duties conferred upon
assignees in terms of the Act are public powers. Their purpose is to
enforce the regulatory
scheme of the Act. The regulatory scheme seeks
to control the sale, export and import of certain agricultural
products. The power
of an assignee to determine a fee is no different
from the characterisation of the assignee’s other powers and
duties. It
is a public power, conferred to permit the assignee to
carry out a public function, which is, to enforce the regulatory
scheme
of the Act. The purpose of the power of the assignee to
determine a fee is to permit the assignee to be compensated for the
cost
of carrying out its duties in a competent and efficient manner.
The question is then whether the fees determined by Procon are
rationally related to this purpose.
[36]
In its answering affidavit, Procon set out
a lengthy disquisition as to the methodology it used to calculate the
inspection fees.
The deponent explained that Procon calculated its
costs for each of the markets to be served, estimated the anticipated
volumes
of product in each market expressed in kilograms, and then
calculated the anticipated income it would need to derive, expressed
as a rate of cents per kilogram, so as to break-even.
[37]
What this exposition failed to explain was
how the anticipated number of inspections and the costs associated
with those inspections
is rationally expressed by reference to the
weight of the anticipated sales of products in each of the markets.
While the volume
of the products that require inspection is of
relevance to a determination of cost, wholly unexplained is how that
cost increases
with the unit weight of a particular product. Nor does
the deponent make intelligible how different products come to be
categorised
in categories 1, 2 or 3 and the differences in the fee,
expressed in cents per kilogram, both within and between categories.
[38]
The purpose of the power to determine
inspection fees, as I have explained, is to secure compensation
sufficient to meet the assignee’s
costs of carrying out its
public duties in a competent and efficient manner. The determination
of fees made by Procon is not rationally
related to this purpose. The
inspection fees, expressed in cents per kilogram for each product,
arranged in 3 categories, with
differential fees within and between
categories, have no discernible or cognisable connection to the costs
incurred by Procon so
as to carry out its duties in a competent and
efficient manner. The appellants’ rationality review is thus
established.
Conclusion
[39]
The appellants’ appeal succeeds in
part and fails in part. The appellants sought to have the challenged
provision declared
unconstitutional and invalid. The appellants, I
have found, cannot prevail on this issue. The appellants’
review of Procon’s
fee determination is however well founded.
The high court did not consider the merits of the review because it
found that the appellants
had failed to exhaust their internal
remedy. In that it erred, and the appeal in respect of the high
court’s order dismissing
the review succeeds.
[40]
As
to the question of costs, the appellants submitted that their
constitutional challenge should have been dealt with on the basis
of
the well-known principle in
Biowatch
Trust v Registrar, Genetic Resources and Others
.
[12]
An
unsuccessful litigant in constitutional litigation should ordinarily
not be ordered to pay the costs of litigation brought to
vindicate
their constitutional rights. The Board accepted the application of
this principle to the appellants’ constitutional
challenge,
should their appeal be unsuccessful. Procon and Meatco submitted that
because Procon is a ‘Not for Profit Company’,
without
state funding, it should be awarded costs, as the high court had
ordered. The Minister contended that the appellants, more
especially
the first appellant, were ‘financially driven’ in
bringing their constitutional challenge and hence the
litigation had
a commercial object and was not an attempt to vindicate a
constitutional right.
[41]
The submissions made by the Minister,
Procon and Meatco cannot be accepted. The identity of a respondent as
a ‘Not for Profit
Company’ does not alter the application
of the principle that a litigant seeking to vindicate its
constitutional rights should
not be discouraged from doing so by the
risk of an adverse costs order. Parties in the position of Procon and
Meatco must decide
whether to oppose a constitutional challenge in
the knowledge that their successful opposition carries a cost, and
the determination
of the constitutional question is a public good
that promotes our constitutional order. As to the Minister’s
submission,
the vindication of a constitutional right may be
commercially advantageous, but that does not detract from the
importance that
generally attaches to the freedom with which these
rights may be litigated.
[42]
It follows that, in my view, no costs order
should be made in respect of the failure by the appellants to prevail
in their appeal
on the constitutional challenge. So too, the high
court, which did not direct specific treatment to this issue in its
award of
costs, should have applied the
Biowatch
principle to the unsuccessful outcome
of the constitutional challenge. As to the outcome of the appeal in
respect of the review,
there is no reason why the costs should not
follow the result.
[43]
The following order is made:
1.
The appeal is upheld with costs, including the costs of two counsel
to the extent set out in 3.2
and 3.3 below.
2.
The appeal is otherwise dismissed.
3.
The order of the high court is set aside and substituted with the
following order:
‘
3.1
The application to declare s 3(1A)(b)(ii) read with s 3A(4) of the
Agricultural Product Standards Act 119 of 1990 (the
Act)
unconstitutional and invalid is dismissed.
3.2 The
second respondent’s determination of inspection fees in
terms of s 3(1A)(
b
)(ii) of the Act published as Notice 1 of
2017 in Government Gazette 40537 dated 6 January 2017 is reviewed and
set aside.
3.3
The costs of the review are to be paid by the first, second, and
eighth respondents, including the costs of
two counsel, where so
employed.’
DN UNTERHALTER
ACTING
JUDGE OF APPEAL
Appearances
For appellants: M C
Maritz SC (with him B C Stoop SC)
Instructed by: Bernhard
Van Der Hoven Attorneys, Pretoria
Rosendorff
Reitz Barry Attorneys, Bloemfontein.
For first respondent: C E
Puckrin SC (with him H C Janse van Rensburg)
State Attorney, Pretoria
Instructed
by: State Attorney, Bloemfontein.
For second, fifth
and eighth respondents: H
Epstein SC (with him M Mostert)
Instructed by:
Fairbridges Wertheim Becker, Johannesburg
Phatshoane
Henney Attorneys, Bloemfontein.
For seventh respondent: A
M Breitenbach SC
Instructed by: Mothle
Jooma Sabdia Inc., Pretoria
Matsepes,
Bloemfontein.
[1]
Constitution
of the Republic of South Africa, 1996.
[2]
First
National Bank of SA Ltd t/a Westbank v Commissioner SARS and Another
[2002] ZACC 5
;
2002 (4) SA 768
;
(2002) 7 BCLR 702
(CC)
(First
National Bank).
[3]
Jordaan
and Others v City of Tshwane Metropolitan Municipality and
Others
[2017] ZACC 31
;
2017 (11) BCLR 1370
;
2017 (6) SA 287
(CC) para 59.
[4]
Mkontwana
v Nelson Mandela Metropolitan Municipality and Another
[2004] ZACC 9
;
2005
(2) BCLR 150
;
2005 (1) SA 530
(CC) para 89.
[5]
S
and Others v Van Rooyen and Others
[2002] ZACC 8
;
2002
(8) BCLR 810
;
2002 (5) SA 246
(CC) para 37.
[6]
First
National Bank
para 100.
[7]
Minister
of Home Affairs v National Institute for Crime Prevention and the
Reintegration of Offenders (NICRO) & Others
[2004] ZACC 10
;
2004 (5) BCLR 445
;
2005 (3) SA 280
(CC) para 21.
[8]
Chirwa
v Transnet Ltd and Others
[2007]
ZACC 23
;
2008 (3) BCLR 251
2008 (4) SA 367
(CC) paras 74 -76.
[9]
The word ‘
beslissing’
was
so held to have this meaning in the interpretation of the
Medical
Schemes Act 131 of 1998
in
Bonitas
Medical Fund v The Council for Medical Schemes
[2016]
ZASCA 154
;
[2016] 4 All SA 648
(SCA) para 17.
[10]
Koyabe
and Others v Minister for Home Affairs and Others
[2009]
ZACC 23
;
2009 (12) BCLR 1192
2010 (4) SA 327
(CC) paras 38 –
40.
[11]
Democratic
Alliance v President of South Africa
[2012]
ZACC 24
;
2012 (12) BCLR 1297
;
2013 (1) SA 248
(CC) para 32.
[12]
Biowatch
Trust v Registrar, Genetic Resources and Others
[2009] ZACC 14
;
2009 (10) BCLR 1014
;
2009 (6) SA 232
(CC) at para
21.