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[2014] ZAGPPHC 154
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Associated Equipment Company CC v International Trade Administration Commission and Another (15201/2013) [2014] ZAGPPHC 154 (4 April 2014)
IN THE NORTH GAUTENG HIGH
COURT, PRETORIA
(REPUBLIC OF SOUTH AFRICA)
CASE NO: 15201/2013
DATE: 4 APRIL 2014
REPORTABLE
OF INTEREST TO OTHER JUDGES
In
the matter between:
ASSOCIATED
EQUIPMENT COMPANY CC
…………………………………
APPLICANT
and
THE INTERNATIONAL TRADE
ADMINISTRATION COMMISSION
…………………………………........……………………
...
1
st
RESPONDENT
THE
MINISTER FOR ECONOMIC DEVELOPMENT
………………
2
nd
RESPONDENT
JUDGMENT
MASETI
AJ:
[1]
The
applicant applies for the review of the decision of the first
respondent to refuse the applicant an import licence for the
importation of second-hand Tractor Loader Backhoes (“TLBs”)
and for the setting aside of the policy decision of the
first
respondent recorded in its letter dated 14 December 2012 that it will
not permit the importation of used or second-hand TLBs
while similar
or substitute TLBs are available from local manufacturers.
[2]
The grounds on which the
review is sought are the following:
2.1
the
decision to refuse the import permit was taken because irrelevant
considerations were taken into account or relevant considerations
were not considered and was arbitrary or capricious.
2.2
the
decision taken amounted to the exercise of a power or the performance
of a function which was so unreasonable that no reasonable
person
could have so exercised the power or so performed the function.
2.3
two further grounds for
review raised by the applicant are:
2.3.1
the
procedural unfairness as contemplated by section 3 of the Promotion
of Administrative Justice Act, 2000 (PAJA).
2.3.2
that
the administrative action was not rationally connected to the purpose
for which the decision was taken and or the reasons given
for it by
the first respondent as contemplated by section 6(f)(ii) of PAJA.
2.4
there
was a further allegation by the applicant that the first respondent
did not furnish full reasons in the record for its decision
to refuse
the import permit and only provided such reasons in the answering
affidavit.
[3]
The
applicant’s application for an import licence for TLBs was
refused by the first respondent in July 2012.
[4]
At
the request of the applicant the first respondent forwarded the
applicant reasons for the refusal of import licence on 14 September
2012.
[5]
According
to the applicant the reasons furnished were that: “the
prevailing import control policy entails that the importation
of used
or second-hand goods is allowed only in the event of similar or
substitute new goods not being available from local manufacturers.
According to the information at the disposal of ITAC, there are local
manufacturers of tractor loader backhoes (TLBs) for instance
Bell
Equipment Company.”
[6]
In
response to applicant’s notice of motion the first respondent
provided the record for purposes of review which comprised
of a
report approved by the Minister of Trade and Industry on 3 October
2007.
[7]
The report had two relevant
features which read:
“
It
is a general rule that the importation of used and second-hand goods
is not allowed in the event of similar or substitute new
goods being
available from local
manufacturers…
The control is exercised for environmental reasons, for healthy
reasons and for safety and
quality reasons and to ensure that the local manufacturing industry
is not eroded.”
[8]
In
the answering affidavit delivered on behalf of the first respondent
deposed to by one Collins, an import and export control manager
of
the first respondent the first respondent set out in general terms
the manner in which applications for permits were considered
granted
or refused. He explained why the first respondent had adopted the
general approach with reference to second hand and used
goods in
regard to TLBs. Collins gave additional reasons as to why the
applicant’s import permit was refused as follows:
[9]
In
June 2011, the Chief Commissioner of the first respondent approved a
research project with the aim of identifying local manufacturers
of
local agricultural and horticultural machinery, one of the main
objectives of which was to assist with the produce of adjudicating
import permit applications for used or second-hand machinery.
[10]
Collins
visited the factory of Bell Equipment Company SA (Pty) Ltd in
September 2011 as part of that project where the products
manufactured and the processes used by Bell were considered.
[11]
It
was during this visit that the first respondent became aware of the
fact that Bell was manufacturing TLBs something they had
started only
shortly before that visit. Bell had invested R400 million to expand
its local operation and create jobs locally.
[12]
Collins
claimed that the decision not to approve the applicant’s
application for an import permit in 2012 was as a result
of the facts
set out in regard to his visit to Bell in 2011 having taken into
account the following factors:
12.1
support
to local manufacturers.
12.2
impact
on job creation in South Africa and the economy in general.
12.3
erosion
of local industry by imported used or second-hand goods.
12.4
the
ability of local market to meet the demand.
12.5
no
monopoly is created by supporting local manufacturers since the
applicant or any would be applicants were fully entitled to import
new TLBs without obtaining import permits from the first respondent.
[13]
The
applicant’s contention was that Collins research project and
the reasons thereof stated in paragraph 12 above after the
research
were not disclosed when the applicant was furnished with the reasons
by the first respondent’s refusal to grant
the import permit
and only provided such reasons in the answering affidavit.
[14]
In
their response the respondents submitted that it is incorrect to say
that the full reasons for the refusal were only provided
in the
Answering affidavit. The reasons for refusal remained as set out in
the letter dated 14 September 2012 being that there
were local
manufacturers of TLBs and that the importation of used or second-hand
goods was only allowed in the event of similar
or substituted new
goods not being available from local manufacturers. The fact that
further ground was provided by Collins in
the first respondent’s
Answering affidavit did not alter the reason that was provided for
refusal of the permit.
[15]
The respondents further
contended that the grounds for renew as set out in paragraphs
2.2.1
and 2.2.2 of the
applicant’s Heads of Argument were nowhere to be found in
either the applicant’s founding or replying
affidavit.
[16]
The issues are:
16.1
whether
the decision taken by first respondent to refuse the import permit
constituted an administrative action which is reviewable
under the
Promotion of Administrative Justice Act 3 of 2000
on the grounds set
out in paragraph 2 above; and
16.2
whether
the policy decision of the first respondent recorded in its letter of
14 December 2012 should be set aside for lack of compliance
with
-PAJA.
[17]
Concerning
the Judicial review applicant’s Counsel referred the Court to
Council of Civil Service Unions and Others v Minister
of the Civil
Service
[1983] UKHL 6
;
1984 (3) All ER 935
at 9 5 Oh-95 Id
where it was stated that at
Common Law a judicial review of an administrative decision could be
based upon three categories namely;
illegality, irrationality and
procedural impropriety.
[18]
Applicant’s
Counsel further referred to Section 33 of the Constitution which
provides: “Every person has the right to
(a)
Lawful
administrative action where any of their rights or interests is
affected or threatened;
(b)
procedurally
fair administrative action where any of their rights on legitimate
expectations is affected or threatened;
(c)
be
furnished with reasons in writing for administrative action which
affects any of their rights or interests unless the reasons
for that
action have been made public and
(d)
administrative
action which is justifiable in relation to the reasons given for it
where any of their rights is affected or threatened.”
[19]
The
Constitutional Court in
President
of the Republic of South African and Others v South African Rugby
Football Union and Others 2000 (1) SA CC paragraphs
135 at page 65
had this to say: “Although
the right to just administrative action was entrenched in our
Constitution in recognition of the
importance of the Common Law
governing administrative review, it is not correct to see Section 33
as a mere codification of common
law principles. The right to just
administrative action is now entrenched as a Constitutional control
over the exercise of powers.
Principles previously established by the
Common Law will be important though not necessarily decisive in
determining not only the
scope of Section 33 but also its content.”
[20]
In
Bato Star
Fishing (Pty) Ltd v Minister of Environment Affairs and Others
[2004] ZACC 15
;
2004
(4) SA 490
(CC) at para 46 p.513
O’Regan J in
explaining deference cited with approval Professor Hoexters account
as follows:
“
(A) judicial willingness to
appreciate the legitimate and Constitutionally ordained province of
administrative agencies; to admit
the expertise of phone agencies
in policy - laden on polycentric
issues to record their interpretation of fact and law due respect;
and to be sensitive in general
to the interests legitimately pursued
by administrative bodies and the practical and financial constraints
under which they operate.
This type of deference is perfectly
consistent with a concern for individual rights and a refusal to
tolerate corruption and maladministration.
It ought to be shaped not
by an unwillingness to scrutinise administrative action, but by a
careful weighing up of the need for
and the consequences of judicial
intervention. Above all it ought to be shaped by a conscious
determination not to usurp the functions
of administrative agencies,
not to cross over from review to appeal.”
O’Regan J further referred
to Schutz JA in a Supreme Court of Appeal Case which calls for
judicial deference and said: “Judicial
deference does not imply
judicial timidity or an un-readiness to perform the judicial
function. I agree, the use of the word “deference”
may
give rise to misunderstanding as to the function of a review Court.
This can be avoided if it is realised that the need for
Courts to
treat decision makers with appropriate deference or respect flows not
from judicial courtesy or etiquette but from the
fundamental
constitutional principle of the separation of powers itself”
[21] In
Computer
Investors Group Inc and Another v Minister of Finance 1979 (I) SA 879
(T) at 898 C-E
it
was stated:
“
where a discretion has been
conferred upon a public body by a statutory provision such a body may
lay down a general principle for
its general guidance but it may not
treat this principle as a hard and fast rule to be applied invariably
in every case. At most
it can be only a guiding principle, in no way
decisive. Every case that is presented to the public for its decision
must be considered
on its merits. In considering the matter the
public body may have regard to a general principle, but only as a
guide, not as a
decisive factor. If the principle is regarded as a
decisive factor, then the public body will not have considered the
matter but
will have prejudged the case, without having regard to its
merits. The public body will not have applied the provisions of the
statutory enactment.”
[22]
In
National
Lotteries Board v SA Education and Environmental Project
2012 (4) SA
504
SCA in paragraph 28 at page 514
Chachalia JA had this to
say:
“
28
In the present matter the refusal of a funding application involves
the exercise of a discretion. This means that the board could
have
exercised its discretion by waiving the requirement for signed
statements in the guideline or simply condoning the failure
to comply
strictly with it. It failed to exercise its discretion properly by
applying the guideline dogmatically. The fact that
it may have had
other reasons for having come to that conclusion does not change the
fact that the board exercised its discretion
unlawfully when it made
the decision in fact it exercised no discretion at all. This cannot
be remedied by giving different reasons
after the fact. The High
Court, in my respectful view, got it right.”
[23]
In her legal
argument Counsel for respondents stated that it is trite law that all
necessary allegations upon which an applicant
relies must appear in
his or her founding affidavit. However the Court has a discretion to
allow a new matter in the replying affidavit
giving the respondent an
opportunity to deal with it in a second set of answering affidavits
and referred to
Titty’s Bar and Bottle Store (Pty) Ltd v ABC Garage (Pty) Ltd
and Others
1974 (4) SA 362
(T).
[24]
In
Titty’s case referred to by the respondent’s Counsel the
replying affidavit contained allegations which did not appear
in the
founding affidavit. In the founding affidavit the complaint simply
was that the respondents were illegally conducting business
which by
reason of its proximity to the applicant’s business caused
damage to the applicant. A completely new and irrelevant
matter
raised in the Replying affidavit was to the effect that the
respondents deliberately and improperly enticed the applicant’s
customers away from it. Viljoen J held that the Court was satisfied
that the respondent in the main application would be gravely
prejudiced if the allegations referred to were not struck off and the
new paragraphs on the replying affidavit were according struck
out.
[25]
In my view Titty’s
case does not seem to support the respondents’ case. Applicant
in the present case was not aware
of the research project by Collins
and could not have included the results of the research in her
founding affidavit since those
factors listed in paragraph 12 above
came into her knowledge only when served with the respondent’s
answering affidavit.
[26]
In
Johannesburg
Liquor Licensing Board
v Kuhn 1963
(4) SA (A) 666 (A) Witwatersrand Local Division
set aside on review
the appellant Board’s decision refusing a new licence for the
issue of a bottle store in a small township
that was dominated or
mostly inhabited by very poor coloured people. The Board questioned
as to who was going to buy liquor and
refused the application. On
review in
Kuhn
v Johannesburg Liquor Licensing Board
the High Court reversed the
Board’s decision. On appeal Holmes JA at pages 670-671 had this
to say: “It is necessary
at the outset to deal generally with
the function and procedure of a board and the statutory powers of the
Court on review. In
considering an application a board must bear in
mind, inter alia, the reasonable needs, convenience and amenities of
the public
and the community. The board as a judicial tribunal is not
bound by the strict rules of procedure and evidence, may rely on its
local knowledge and may make its own observations and investigations
subject of course to the considerations of fairness and natural
justice which quasi-judicial
bodies must observe. The
Board’s decisions are subject to review in terms of Section 29
(1) read with Section 29 (2) of the
Liquor Act No. 30 of 1928 which
enables the Court to grant relief on the grounds of arbitrariness,
mala fides on gross unreasonableness
coupled with substantial
prejudiced to the applicant. Arbitrariness connotes caprice, or the
exercise of the will instead of reason
or principle, without a
consideration of the merits. Gross unreasonableness does not have to
be such as to lead to an inference
of features such as mala fides.
Reasonableness means considering the matter as a reasonable man
normally would and then deciding
as a reasonable man normally would
decide.”
[27]
In
International
Trade Administration
v Scaw South
Africa (Pty) Ltd
2012 (4) SA 618
(CC)
the Constitutional Court
had to decide as whether, the North Gauteng High Court had the powers
to interdict and restrain the Minister
from accepting IT AC’S
recommendation and from requesting the Minister of Finance to
terminate the antidumping duty.
Moseneke DCJ in paragraph 90 at
page 652 referred to
First
Certification Judgment
1996 (4) SA 744
(CC)
and stated: “The
principle of separation of powers on the one hand recognises the
functional independence of branches of government.
On the other hand,
the principle of checks and balances focuses on the desirability of
ensuring that the Constitutional Order,
as a totality, prevents the
branches of government from usurping power from one another. In this
sense it anticipates the necessary
or unavoidable intrusion of one
branch on the terrain of another.”
[28]
In
Bato
Star Fishing (Pty) Ltd v Minister of Environmental Affairs and Others
[2004] ZACC 15
;
2004
(4)
SA 490
(CC)
the Constitutional Court
made a point that: a Court
B “should be careful not to
attribute to itself superior wisdom in relation to matters entrusted
to other branches of government.
A Court should thus give due weight
to findings, of fact and policy decisions made by those with special
expertise and experience
in the field.”
[29]
The
Court having read legal authorities and facts referred to by both
Counsel considered the facts and law and also referred to
Makhanya
N.O and Another v Goede Wellington Boedery (Pty) Ltd
2013 (1) SA 526
SCA
wherein
the Tribunal dismissed an appeal against the refusal by the then
Department of Water Affairs and Forestry to grant a water
licence to
the applicant. In an application for review to the North Gauteng High
Court, the High Court reviewed and set aside the
tribunal’s
dismissal of the application and upheld the appeal and thereafter
granted the water licence.
[30]
The
appeal was based on two issues. The first issue being whether the
Tribunal's decision constituted administrative action reviewable
under the Promotion of Administration of Justice Act (“PAJA”)
and whether it was appropriate for the Court a quo
when setting aside the
Tribunal's decision, to substitute its own, decision in place thereof
rather than remitting the matter to
the tribunal. Erasmus AJA at
p538- 539 paragraphs 40 had this to say: “The Act provided an
open and transparent means by
which applications must be assessed.
Although much is left to the discretion of the decision maker who is
allowed to take factors
into consideration not mentioned in the list
it is clear that Section 27(1 )(b) and indeed the rest of the Act
requires these factors
to be assessed by finding an appropriate
balance after evaluating all the factors expressly provided for and
others. Neither the
act nor the section attributes any significant
weight to any of the factors. And to my mind, a decision maker, who
would not be
able to elevate one factor to add factors to a closed
legislative list of factors, cannot on a whim decide to pre-eminence.
The
Court a quo
was,
therefore, correct in concluding that the decision not to grant
licence sought had been unlawful.'”
[31]
At
paragraph 35 page 537 the Learned Judge of Appeal said: ‘'Section
6(2)(h) of PAJA requires a simple test an administrative
decision
will be reviewable if it is one a reasonable decision maker could not
reach. In the instant case, there the administrator
was faced with a
balance to strike, it is constitutionally endorsed and opportune to
ask: did the administrator strike a balance
fairly and reasonably
open to him.”
[32]
At page 539 paragraph 41
the Learned Judge had this to say:
“
I
now turn to the substitution order made. PAJA provides that in
Judicial review proceedings a Court may grant any order that is
just
and equitable. It expressly provides for orders which are included
within the just and equitable rubric. An order setting
aside an
administrative action can be coupled with other remedies such as
remitting the matter for reconsideration; varying an
administrative
action and correcting a defect. PAJA further provides that it would
be just and equitable for a Court to substitute
an administrative
action with one of its own making in “exceptional
circumstances.”
[33]
In
terms of Section 6(2)(e)(iii) of PAJA an administrative action taken
because irrelevant considerations were taken into account
and
relevant considerations were not considered, such administrative
action is reviewable.
[34]
The
first respondent through Collin’s answering affidavit, stated
“after having taken all relevant factors into account”
it
did not approve the application for import licence.
[35]
The
answering affidavit of the first respondent through Collins reflected
that the following factors though not limited to them,
were taken
into account.
35.1
support
to local manufacturers.
35.2
the
impact on job creation in South Africa and the South African Economy
in general.
35.3
the
erosion of local industries by imported use of second-hand goods.
35.4
the
ability of local manufacturers to meet demand.
[36]
The above factors are not
supported by any evidence as they only appear to be guidelines. The
following needed explanation:
36.1
what
the impact on job creation would be and also on the South African
economy in general?
36.2
whether
Bell alone would be able to meet the demand for TLB’s or not?
Why the protection is only afforded to Bell by the policy
of the
first respondent?
36.3
whether the grant of import
permits would erode the local industry or not?
These unanswered questions clearly
showed that there was a lot of material factors that had not been
taken into account whatsoever
by the first respondent in refusing to
grant the import licence to the applicant.
[37]
When
the reasons for the refusal of the import licence were furnished on
14 September 2012 the first respondent failed to disclose
the
research project conducted by Collins and the conclusions arrived at
as a result of Collins project. This on its own constitutes
grounds
for review.
[38]
The
Court in arriving at a decision has considered the following factors:
38.1
The
applicant’s application for an import licence was refused in
July 2012 by the first respondent. The research by Collins
was
conducted in 2011 prior to the consideration of the application for
the licence. Then the reasons why the outcome of the project
research
and the conclusions arrived at were not communicated to the applicant
as one of the factors considered in refusing to
grant the import
licence still remain unknown.
38.2
The
applicant is entitled to involve the provisions of Section 33 of the
Constitution as her existing rights of importing second-hand
TLBs
were affected or threatened.
38.3
Where a
discretion has been conferred upon a public body such a body may lay
down a general principle for its general guidance but
it may not
treat this principle as a hard and fast rule to be applied invariable
in every case. See
Computer
Investors Group
case
in paragraph 21 above,
National
Lotteries Board case in paragraph 22
above as well as
Johannesburg
Liquor Licensing Board in paragraph 20 supra.
38.4
Concerning
the filing of further affidavits, Titty’s case referred to by
first respondent does not support the raising of
new facts in the
replying affidavit.
38.5
The
principle of checks and balances anticipates the unavoidable
intrusion of one branch on the terrain of another. In this regard
the
Courts have a duty to pronounce on the exercise of powers or the
performance of a function which is so unreasonable that no
reasonable
person could have so exercised. See
International
Trade Administration
v Scaw South
Africa
in
paragraph 27 above. Therefore this Court has the power to set aside
the policy decision of the first respondent recorded in its
letter
dated 14 December 2012.
38.6 This Court has the power to
review the decision of the first respondent which refused the
applicant an import licence for the
importation of second-hand
Tractor Loader Backhoes (TLBs) on the grounds of arbitrariness, mala
fides, gross unreasonableness coupled
with substantiated prejudice to
the applicant, illegality, irrationality and procedural impropriety
and for lack of fairness and
natural justice.
See
Makhanya N.O v Goede Wellington Boedery
cited in paragraph
29 above.
[39]
In
the premises the application for the review of the first respondent’s
decision to refuse the applicant the import licence
for the
importation of the second-hand tractor loader backhoes succeeds.
[40]
The
application for the setting aside of the policy decision of the first
respondent recorded in its letter dated 14 December 2012
succeeds.
[41]
I
now make the following order:
(a)
The
decision by the first respondent to refuse applicant an import
licence for the import of second-hand Tractor Loader Backhoes
(TLBs)
is reviewed and set aside.
(b)
The
policy decision of the first respondent recorded in its letter dated
14 December 2012 is set aside.
(c)
The
matter is remitted for re-consideration by the respondents. In
reconsidering the matter the respondents should consider a letter
of
no objection recorded in March 2013 by Rokebrand, a commercial
director of Bell Equipment SA (Pty) Ltd.
(d)
The
respondents should pay costs including costs of Senior Counsel.
PLC Maseti
Acting Judge of the Gauteng
Division, Pretoria
Date
of hearing: 13 March 2014
Date
of Judgment: 4 April 2014
For
the Applicant: Adv Van Blerk SC
Instructed
by: Friedland Hart Solomon & Nicolson
79 Steenbok Avenue Monument Park
Pretoria
For the Respondent: Adv Neukircher
SC
Instructed by: The State Attorney
255 CNR Thabo Sehume & Francis
Baard Streets
Pretoria.