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[2013] ZAGPPHC 311
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Metal Recylers Association of South Africa v Minister of Economic Development and Others (51410/13) [2013] ZAGPPHC 311 (28 October 2013)
REPORTABLE
GAUTENG
HIGH COURT REPUBLIC OF SOUTH AFRICA
CASE NO: 51410/13
DATE:28/10/2013
In
the matter between:
METAL
RECYLERS ASSOCIATION OF SOUTH
AFRICA.
......................................
Applicant
and
THE
MINISTER OF ECONOMIC
DEVELOPMENT
......................................
First
Respondent
THE
INTERNATIONAL
TRADE
..................................................................
Second
Respondent
ADMINISTRATION
COMMISSION
THE
NATIONAL UNION OF METAL
WORKERS
.........................................
Third
Respondent
OF
SOUTH AFRICA
THE
MINISTER OF TRADE AND
INDUSTRY
.............................................
Fourth
Respondent
THE
MINISTER OF WATER
AND
....................................................................
Fifth
Respondent
ENVIRONMENTAL
AFFAIRS
JUDGMENT
MOTHLE J
INTRODUCTION:
1.
This is an application for an interim interdict
pedente lite
, wherein an
order is sought to restrain the implementation of policy guidelines,
published to deal with the determination of prices
at which scrap
metal intended for exportation, will be sold domestically. The
guidelines as well as the ministerial directive,
whose policy informs
the guidelines, are a subject review in a pending application (Part B
of this application) The guidelines
and the export permits are issued
in terms of the International Trade Administration Act
1
(“ITA Act”).
The
application came by way of urgency in terms of rule 6 (12) of the
Uniform Rules of Court. It was set down for hearing on 6 September
2013. The presiding judge in the urgent applications court could not
adjudicate on the matter as the papers filed were prolix,
exceeding
1000 pages.
2
The Deputy Judge President was approached to refer this application a
special motion court. He
issued
special directives to the parties as to the delivery of outstanding
affidavits and heads of argument. In doing so, the normal
time frames
for delivery of these documents and the forms of service were
abridged. As at the date and time of the hearing of Part
A of this
application, all the parties, including intervening parties, had
filed their affidavits and heads of argument. The issue
of urgency
had thus become redundant as the matter was then ripe for hearing. It
thus became unnecessary to deal with the question
of urgency.
THE PARTIES:
3.
The Applicants are METAL REYCLERS ASSOCIATION OF SOUTH AFRICA
(“MRA'), a voluntary association whose members comprise 150
formal metal recycling companies, trading in the processing and
recycling of scrap metal for exportation and domestic sale.
4.
The First Respondent is THE MINISTER OF ECONOMIC
DEVELOPMENT
in the Government of the Republic of South Africa (“the
Minister)
3
.
The Minister is empowered by the ITA Act to issue Trade Policy
Statements or Directives in the course of implementing the objectives
of that statute.
5.
The Second Respondent is THE INTERNATIONAL TRADE ADMINISTRATION
COMMISSION ("ITAC"), established in terms of the ITA
Act.
ITAC is the body that published the guidelines under attack in Part A
and Part B of this application.
6.
The Third Respondent is THE NATIONAL UNION OF METAL
WORKERS
OF SOUTH AFRICA (“NUMSA”), which is the union
representing the workers in the scrap metal industry. Initially
NUMSA
was not cited in the proceedings. It later applied as an intervening
party to which there was no objection. NUMSA joined
the proceedings
as the third respondent.
7.
The Fourth Respondent is THE MINISTER OF TRADE AND INDUSTRY of the
Government of the Republic of South Africa ('Trade and Industry
Minister"'), whose portfolio in the department has direct
interest in the scrap metal industry.
8.
The Fifth Respondent is THE MINISTER OF WATER AND ENVIRONMENTAL
AFFAIRS of the Government of the Republic of South Africa ("Water
and Environmental Affairs Minister*'), whose portfolio and department
also has a direct interest in the scrap metal industry, in
particular
the environmental aspect of the government policy applicable in the
scrap metal industry.
9.
Both the fourth and fifth respondents were also not cited in the
proceedings and only jointed on application as intervening
parties.
THE ESSENCE OF THE APPLICATION
10.
The Minister published a policy directive, which obligates ITAC to
set conditions for time frames and control of prices at which
the
scrap metal exporters
4
should first offer the sale of scrap metal
5
intended for exportation, to domestic users. ITAC then published
guidelines, setting out the conditions and percentage discount
on the
price at which the scrap metal intended to be exported, should first
be offered for sale to domestic users.
6
11.
MRA contends in essence that the implementation of this policy will
result in its members suffering loss of income. It now seeks
to
obtain an interim interdict, restraining the implementation of the
policy guidelines, pending adjudication of a review application
concerning both the guidelines and the directives.
BACKGROUND:
12.
The scrap metal industry is one of the key sectors of economy in
South Africa. According to MRA, “It trades approximately
3.5
million tons of scrap metal annually, with an estimated value of
R17.5 billion”. The MRA’s members in particular
trade in
the processing and recycling, exporting and domestically supplying
recycled scrap metal. The chain of supply starts with
the collectors
of scrap metal
7
by peddlers, informal business operators (bucket shops) and the
collectors of metal scrap from offcuts in larger industries. All
these suppliers then sell such scrap metal to the recyclers. The
recyclers, including members of MRA, in turn recycle and process
the
scrap metal and either export it or sell it to the local steel mills,
mini mills and foundries. The local foundries then manufacture
and
sell vital steel and other products required by domestic entities,
amongst others in the mining, automotive, construction and
agricultural sectors.
13.
Up until the publication of the Directives by the Minister in May
2013, followed by the publication of the Guidelines by ITAC
in August
2013, the domestic price of exporting scrap metal, referred to as
export parity price, was determined by the free market
trade. The
price, at which the scrap metal is exported, determined by the
importers abroad, would have a bearing directly on the
price of the
scrap metal domestically. Basically, the markets determined the
export price and the domestic price of the sale of
recycled scrap
metal.
14.
It is common cause that in the last decade a number of steel mills,
secondary smelters and foundries, closed shop as a result
of being
unable to survive in the competitive scrap metal industry. According
to the Minister, this was caused by, amongst others,
their inability
to afford the prices at which the scrap metal was sold to them, being
the price at which the scrap metal was exported.
The foundries,
smelters and mills could thus not compete with the price set by
foreign importers of scrap metal from South Africa.
As a result, some
of the local foundries, smelters and mills closed shop. This led to
job losses in the industry and a reduction
in the supply of steel
products manufactured from recycled scrap metals for sale to the end
users such as mining houses.
15.
The Minister also contends that the exportation of scrap metal
resulted in the low supply of quality scrap metal domestically.
It is
further alleged that the recyclers exported mainly high quality scrap
metal and availed the low quality scrap metal for local
sales and
consumption. This situation, according to the Minister and NUMSA,
developed an economic crisis which reached a point
where the
government had to intervene.
16.
It appears to be common cause that the Minister conducted a
consultative process which involved a number of stakeholders,
including
trade unions and MRA members, in the process leading to the
publication of the Directives. MRA however contends that the Minister
did not give them a hearing on the written representations they
submitted. On the 10th February 2012 the Minister issued a notice
in
terms of section 6 of ITA Act, in terms whereof it was decided that
various categories of scrap metals may not be exported without
a
permit granted by ITAC.
17.
On 10 May 2013 the Minister issued a policy directive (“the
Directive”) in terms of section 5 of ITA Act, which
provides
that ferrous and non-ferrous waste and scrap metals should not be
exported from the Republic of South Africa, unless they
are first
offered to domestic users of scrap for a period determined by ITAC
and at a discounted price or by means of other formula
determined by
ITAC
8
.
The Directive also prescribes that all permit applications must have
a confirmation of quality, quantity and intended destination
of the
export, issued by a metallurgical engineer or suitably qualified
person. These are the Directives under attack from MRA
in Part B of
this application.
18.
Following the publication of the Directives, ITAC on 2 August 2013
published the Export Control Guidelines (“the Guidelines”)
in order to give expression to the policy stated in the Directives.
In the Guidelines, ITAC states that any scrap metals intended
for
exportation will first have to be offered for a determined period of
circulation, to the domestic market at a 20% discount
price of the
international market price determined in terms of Scrapindex.com,
9
prior to such exportation.
19.
MRA contends, on a number of grounds in terms of Section 6 of the
Promotion of Administrative Justice Act 2 of 2000 (“PAJA”),
that the Directives and Guidelines should be reviewed and set aside.
Pending the adjudication of the review application, MRA contends
that
ITAC must be interdicted from implementing the Guidelines. This is
Part A of the application which is before this Court.
20.
It was submitted in Court that the record of proceedings is still to
be filed for the review. There is therefore more evidence
which might
emerge, resulting in a possible amendment to the review grounds. It
seems to me that it may take some considerable
time before the review
application is heard.
THE DISPUTE:
21.
In essence the MRA contends that the preferential price system
concerning the exportation of scrap metal will have an impact
on the
domestic trade of scrap metal and therefore lead to price reduction
and loss of income. In support of that contention, MRA
submits that
the Directives and Guidelines are reviewable on a number of grounds
including the objection that the Minister, in
publishing the
Directives acted ultra vires; the contents of the published documents
violate international law; they infringe property
rights and are
unreasonable. It is further contended that the implementation of the
Guidelines pending the adjudication of the
review application would
lead to immediate loss, for example in the value of the stock at
hand. Such stock, while acquired at a
particular price will now have
to be sold at the market price less 20%, to the domestic user before
exportation. Such immediate
losses, it is argued, will result in
irreparable harm.
22.
The Respondents, on the other hand, are unanimous in their submission
that the intervention by the Minister in addressing the
price
distortions in the exportation of scrap metal is a policy matter
which is the terrain of the national executive and the court
is
ill-suited to intrude on such matters. In support of this contention
reference is made to the Constitutional Court judgments
in OUTA and
SCAW matters, referred to later in this judgment. The Respondents
further point out that for the purposes of this interim
interdict,
the MRA fails to make out a case of any irreparable harm that its
members may suffer, should the Guidelines be implemented.
Consequently, they argued, the balance of convenience favours the
refusal to grant the interdict sought by MRA.
23.
The nub of the dispute in my view centres on the price preferential
system as introduced by the Directives. In particular, and
for the
purposes of Part A, whether the implementation of this system by ITAC
on the basis of the percentage discount stated in
the Guidelines and
the application of the Scrapindex.com formula, will lead to immediate
irreparable harm which should justify
the granting of an interim
interdict.
THE SEPARATION OF POWERS PRINCIPLE
24.
In Gooi v Minister of Justice
10
,
the Court stated that where an applicant seeks to restrain a Minister
of government from exercising the powers vested in him by
an Act of
Parliament, the Courts should only exercise that jurisdiction in
exceptional circumstances and when a strong case is
made out for
relief. In the absence of any allegations of mala fldes, the court
should not readily grant such interdict.
25.
Two recent judgments of the Constitutional Court, featured
prominently in this case. The cases for these judgments are
International
Trade Administration Commission v SC AW South Africa
(Pty) Ltd
11
(“SCAW”),
and National Treasury and Others v Opposition to Urban Tolling
Alliance and others
12
(“OUTA”). In both judgments, the Constitutional Court
opines that courts should be cautious not to readily grant interim
interdicts, primarily in matters concerning the exercise of statutory
power and functions, where to do so, would invite the court
to
intrude into the terrain of other branches of government. Such
interim interdict should only be granted where a strong case
has been
made out and only in the clearest of cases.
26.
The Constitutional Court in SCAW and OUTA expanded on the principle
in Gool. In doing so it reiterated the principle that the
courts
should refrain from usurping the powers and functions of other
branches of government as to do so would frustrate the balance
of
power implied in the principle of separation of powers
13
.
These court decisions did not alter but rather expanded on the common
law requirements for interim interdicts, in so far as they
raise the
question of separation of powers, in OUTA
14
the Constitutional Court stated thus:
“
The
common law annotation to the Setlogelo
15
test is that courts grant temporary restraining orders against the
exercise of statutory power only in exceptional cases and when
a
strong case for that relief has been made out. ”
27.
In SCAW
16
the Constitutional Court emphasised that the
formulation
and implementation of international trade policy is a matter that
resides in the terrain of the national executive functions.
Similarly, “the power to formulate and implement domestic and
international trade policy... resides in the kraal of the national
executive authority.” Cautioning the courts against granting
orders of interim interdict, which may intrude in the terrain
of the
other branches of government, the learned Deputy Chief Justice
Moseneke, writing for the Constitutional Court in SCAW, stated
as
follows in paragraph 101 of the judgment:
“
When
a court is invited to intrude into the terrain of the executive,
especially when the decision-making process is uncompleted,
it must
do so in the clearest of the cases and only when irreparable harm is
likely to ensue if interdictory relief is not granted.
This is
particularly true when the decision entails multiple considerations
of national policy choices and specialist knowledge,
in regard to
which courts are ill-suited to judge."
28.
There is no doubt in my mind, nor is there any dispute that the
Directives
and the Guidelines raises questions of national economic policy and
related polycentric matters. What MRA contends for
in support of its
application for an interim interdict is based on the grounds of
review, in particular the Ultra Vires ground
that the Minister acted
unlawfully. Taken to its logical conclusion, the MRA submits, in
essence, that its objection on the Minister’s
alleged ultra
vires or unlawful conduct, makes out a proper and strong case as well
as one of the clearest of the cases where it
will be permissible for
the court to grant the interim interdict by intruding on to the
terrain of the national executive.
29.
Counsel for the Minister submits that the SCAW and OUTA principle
concerning harm to the separation of powers doctrine becomes
relevant
when the court considers the balance of convenience. I agree.
However, the Minister goes further to contend that in OUTA,
where a
similar defence of unlawfulness was raised, the Constitutional
Court"nevertheless pointed to the separation of powers
harm that
would arise from restraining the exercise of a statutory power before
it was ultimately found to be unlawful. ”
30.
It seems to me that with this contention, counsel interprets the OUTA
decision to mean that even in instances where a strong
case is made
out to demonstrate a clearest case of unlawful exercise of statutory
power, granting an interim interdict before the
review court has
finally adjudicated on the unlawfulness objection, would harm the
doctrine of separation of powers. I do not agree
with this
interpretation.
31.
In my view the judgment of the Constitutional Court in both matters,
sounds a word of extra caution to the courts, in adjudicating
on such
interim interdicts. The Constitutional Court cautions courts to be
“astute not to stop dead the exercise of executive
or
legislative power before the exercise has been successfully and
finally impugned on review. This approach accords well with
the
comity the courts owe to other branches of government, provided they
act lawfully.”
17
I
do not understand this statement as a prohibition to the courts that
pending final adjudication of a review application where
unlawful
exercise of power is raised, a court cannot grant an interim
interdict, even in the clearest of cases of unlawful exercise
of
power. The balance of convenience must be carefully considered,
particularly where such unlawful exercise of power would irreparably
harm a fundamental right.
32.
It seems to me, therefore that where Ultra Vires or unlawful
conduct
is raised as a ground or one of the grounds of review in a review
application, and the applicant elects to rely on the same
ground in
support of an application for an interim interdict pedente life, the
court adjudicating the latter application has a
duty to consider such
ground, together with the conspectus of the evidence available before
it, at that stage of the proceedings.
It does so in order to decide
in which direction the balance of convenience scale will tilt, on the
question of harm to the separation
of powers. Where it appears on the
evidence, that the applicant has strong prospects of success on the
ultra vires ground in the
review application, the court adjudicating
on the interim interdict application, should consider this fact in
assessing the probability
of irreparable harm to the separation of
powers if the application is granted; as against the irreparable harm
that may befall
the applicant, if the interim interdict is not
granted.
33.
In OUTA the Court declined to define what would constitute the
clearest
case, but opined as follows:
18
“One
important consideration would be whether the harm apprehended by the
claimant amounts to a breach of one or more fundamental
rights
warranted by the Bill of Rights. To approach the matter as the
Minister’s counsel submits, is to imply that the unlawful
exercise of statutory power, pending final review proceedings, is
immunised from judicial scrutiny, in order for the courts not
offend
the doctrine of separation of powers, even if it may possibly be at
the expense of irreparable harm to fundamental rights.
On a practical
level, it would make no sense for a court adjudicating on an interim
interdict, to wait for the review court in
due course to make a
finding on the objection of ultra vires, before it can decide on the
application for interim interdict.
34.
There is no doubt that this application for interim interdict invites
the court to intrude in the policy-laden and polycentric
terrain of
the national executive. Such invitation if accepted will also no
doubt harm the doctrine of separation of powers. The
question is
whether “a proper and strong case has been made out for the
relief, and even so, only (as) the clearest of cases.”
19
35.
I now turn to consider whether MRA’s application makes out a
strong case for relief and also whether this is the clearest
of the
cases that would outweigh the harm to the doctrine of separation of
powers.
DISCUSSION:
36.
It should be stated from the outset that when a Court adjudicates
and decides on an application for interim relief pendente
//Ye, care
should be taken not to anticipate the findings and decision of the
Court which will adjudicate the review application.
The difficulty
with this delicate balancing is compounded by the fact
that
an Applicant has to, in the course of establishing compliance with
the requirements for interim interdict, demonstrate on the
basis of
the review grounds which are to be adjudicated in due course, that a
prima facie case has been made out for the relief
sought, stated
otherwise there are prospects of success in the pending review
application.
37.
The trite and tested requirements for an applicant to successfully
obtain
relief in an application for an interim interdict are stated in the
seminal case of Setlogelo v Setiogelo,
20
and applied with approval and modification in many other subsequent
decisions
21
.
Essentially, the applicant must allege and prove:
37.1
A prima facie right to the relief sought;
37.2
A well grounded apprehension of irreparable harm, if the interim
relief is not granted;
37.3
The balance of convenience must favour the granting of interim
relief; and
37.4
There must be no other ordinary remedy that is available to give
adequate redress to the Applicant.
38.
In contending that the MRA had a prima facie right to obtain relief
by way of interim interdict, it was submitted that:
38.1
The Minister in issuing the directives acted ultra vires the powers
conferred on him in ITA Act;
38.2
The Directives as well as the Guidelines violate international law;
38.3
The implementation of the guidelines will infringe on the MRA
members’ rights to property as envisaged in Section 25
of the
Constitution
22
;
and
38.4
The Directives and the Guidelines are unreasonable.
Prima
facie right
39.
MRA’s contention is that the Minister, in issuing the
Directives, sought to control the price of sale of scrap metal in
South Africa, a power which the ITA Act does not confer on him.
Considering the provisions of the ITA Act, it seems to me that
Sections 2; 3 and 5 of ITA Act confers the Minister with authority
and power to develop and implement economic policy relating
to
exportation of goods from South Africa. Section 2 of ITA Act
provides:
“
2.
Object of Act - The object of the Act is to foster economic growth
and development in order to raise incomes and promote investment
and
employment in the Republic of South Africa and within the Common
Customs area by establishing an efficient and effective system
for
the administration of international trade subject to this Act and the
SACU agreement, ”
40.
ITAC, in particular is empowered by Section 27 (2) (b)
23
of ITA Act, that in issuing permits, it may decide on the prices
relating to exportation. In my view, the Minister’s Directives
appear to me to be giving expression to a policy concerning prices of
scrap metals that are only destined for exportation, not
all scrap
metals sold domestically.
41.
Section 3(1) of ITA Act provides that the Act applies to all economic
activity within or having an effect within the Republic.
The experts’
reports
24
support the view that trade policy dealing with exports will
invariably have an impact on the domestic economy. The export tariff
will have the effect of lowering domestic prices. On its own version,
MRA concedes that even before the Directives and the Guidelines
were
published, the export parity price had a direct effect on the
domestic price in the sale of scrap metal.
42.
It will thus be the choice of the metal recycler whether to sell
domestically or to export. If he sells domestically with no
intend to
export, the price will be determined by the impact of export parity
prices domestically as has been the case. If, however,
he decides to
export the scrap metal, the condition is that he has to first offer
it to the steel mills, mini mill and foundries
operating
domestically, at a price less 20% of the export price for a
determined period, before it may be exported.
43.
In New Clicks
25
the Constitutional Court recognised and accepted the legislative
authority and power to determine a price system as falling within
the
domain of the executive arm of government. Counsel for the Ministers
of Trade and Industry and Water and Environmental Affairs
submits
that between 1987 and 1996 a price preference system concerning
domestic sales of scrap metal was in force in South Africa.
Scrap
metal intended for export was first offered to domestic users at a
price less than the international price, before an export
permit was
issued. Section 2 of the Import and Export Control Act 45 of 1963
authorised the imposition of conditions on an export
permit, similar
to the powers now conferred on ITAC under section 27 (2) (h) of the
ITA Act.
44.
It seems to me that the policy intervention by the Minister to
introduce a price preference system is not new to South Africa.
Thus
the right or expectation as asserted by MRA to continue to trade on
the export parity price, pending the review application
cannot be
sustained.
45.
The ultra vires ground of review in so far as it relates to the
Directives; will be dealt with in detail by the court adjudicating
the review application. Of relevance to this application is the Ultra
Vires ground in so far as it may relate to the Guidelines.
46.
Section 60 of ITA Act provides that ITAC may issue Guidelines on the
Commission’s policy approach to any matter within
its
jurisdiction. Such Guideline must be published in the Gazette but is
not binding on the commission, any SACU institution or
any Court.
47.
I did not understand the MRA's case as contesting the authority of
iTAC to issue the Guidelines or the lawfulness or otherwise
of the
manner in which the Guidelines were issued. In fact the Directive
does not obligate ITAC to issue a Guideline. The decision
to issue a
Guideline and to apply the Scrapindex.com as a method of determining
export price is that of ITAC and it falls within
the ambit of its
statutory power. It seems to me that ITAC, independent of the
Directives, is authorised and empowered by section
27 (2) (b) and (h)
of ITA Act to prescribe the price at which goods may be imported or
exported as well as impose any other related
conditions.
48.
MRA criticises the Scrapindex.com on a number of grounds, including
that it does not contain price information for metals in
metric
tonnes. As at the time of the hearing of this case, ITAC had already
amended its Guidelines. The amendment publishes information
on prices
of certain categories of scrap metal in metric tonnes. Therefore in
my view, and at this stage of the proceedings, the
objection of ultra
vires or unlawful conduct against ITAC in the issuing of the
Guidelines is without merit.
49.
MRA contends further that the Directives and Guidelines violate
international law. Section 60 of ITA Act clearly prescribes
that the
guidelines issued by ITAC are neither binding on it nor on a SACU
Institution or a Court. Both the Directives and the
Guidelines make
provision for a clause which confer powers on ITAC to issue
exemptions in instances where violation of international
law may
arise. In essence ITAC may depart from those guidelines during the
process of implementation. The status of the Guidelines
therefore
becomes relevant as and when ITAC may choose to apply or not to apply
them. An administrative body may apply internal
policies as long as
it will not preclude the exercise of discretion.
26
50.
Further, as correctly submitted for ITAC, neither MRA nor any of its
members are parties to international agreements and treaties.
27
if indeed there is a breach of any of these treaties or agreements,
it is a matter which South Africa as a party to such treaties
will
have to answer for. It is my view that for the purposes of this
application, I need not go further than what I have already
stated in
regard to this ground of review, save to state that at this stage of
the proceedings, I am unable to see how the implementation
of the
Guideline, which is not binding on ITAC, should be restrained because
it is said not to accord with international agreements.
51.
On the question of the Applicant's contention that the guidelines
infringe
property rights, again the argument relating to whether the
Guidelines are binding or not, becomes relevant. It cannot
be said
that the Guidelines per se infringe or will infringe property rights
of the constituent members of MRA until such time
that ITAC chooses
to implement them. It is not correct, in my view, to seek to impugn
the Guidelines on the basis that they are
lacking in the processes
for recourse and appeal procedures. ITAC is not bound by the
Guidelines and may depart from them in appropriate
cases.
28
ITAC must first choose to apply the Guidelines in a specific case and
only then would its decision be subject to review on any
ground as
listed in section 6 of PAJA. The Guidelines per se do not deprive
anyone of a property right as these may or may not
apply in any
specific case.
Apprehension
of irreparable harm
52.
MRA contends that the implementation of the Guidelines by ITAC
pending the finalisation of the review case will cause its members
to
lose income which may not be recoverable, should they succeed in
their review application.
53.
On the question of harm, MRA raised two instances which are In my
view, destructive to their case. In the first instance MRA
argues
that any loss that may be suffered as a result of the 20% reduction
on the export price will be passed on to the scrap metal
suppliers
and collectors. MRA took the position to champion the cause of the
suppliers and collectors (referred to as the poorest
of the poor),
and positioned them as the ultimate losers in this new policy
initiative. MRA in effect informs this Court that such
harm will
attach to the suppliers and collectors; not to the recyclers.
54.
In the second instance, MRA in its own application argues that the
foundries in South Africa do not have the capacity and the
expertise
to absorb all scrap metal for domestic purposes. In that case, the
sale of such scrap metals at 20% less within South
Africa will not
slow down the exportation of scrap metal at market prices determined
abroad. Apart from the fact that in the affidavits
before court in
this application, there appears to be serious inconsistencies in
regard to the calculations of what would constitute
a loss on the
part of the MRA members, 1 am of the view that for the two reasons
stated above, the alleged apprehension of harm
on the part of the MRA
is speculative.
55.
As against the apprehension of harm contended by MRA, NUMSA points
out to the loss of employment which is being experienced
currently
and will continue if there is a delay in the implementation of the
policy Directive and the Guidelines. It is submitted,
that the
continued loss of employment and supply of recycled scrap metal
products is a public interest matter which should supersede
the
alleged harm experienced by MRA members, due to the 20% price
reduction of scrap metal exports.
56.
The introduction of price control measures as contained in the
Directives and the Guidelines was, according to submissions by
NUMSA
and the Minister, executed in the least intrusive manner. Further,
NUMSA submits that government had a choice of either putting
a hold
on exportation of such goods or levying taxes on such exportation,
either or both of which would have resulted in greater
harm to ail
the parties involved. The Minister opted for a less intrusive manner
of intervention which is aimed at striking a balance
between
developing the economy internally in controlling the export prices
instead of sitting back and allowing the demise of foundries
with the
consequences of job losses and decline in supply of metal products
for end users.
Balance
of Convenience
57.
The balance of convenience rests on where harm or prejudice will fall
should the application be granted or dismissed. In particular
in this
case, the bar to make out a successful case is lifted by the fact
that this application is an invitation to the court to
intrude in the
domain of the national executive. As already pointed out, it is not
in dispute that the Directives and the Guidelines
are an expression
of economic policy by the executive branch of government. This Court
is neither authorised nor suited to make
policy choices for the
national executive. In OUTA
29
the Court stated as follows:
“
When
it evaluates where the balance of convenience rests. a court must
recognise that it is invited to restrain the exercise of
statutory
power within the exclusive terrain of the executive or legislative
government. It must assess carefully how and to what
extent its
interdict will disrupt executive or legislative functions conferred
by the law and thus whether its restraining order
will implicate the
tenet of division of powers. While a court has a power to grant a
restraining order of that kind, it does not
readily do so, except
when a proper and strong case has been made out for the relief, and
even so, only in the clearest of cases.
”
58.
The grounds of review which were raised in support of this
application do not; at this stage of the proceedings outweigh the
considerations of avoiding harm to the doctrine of separation of
powers. Initially when this application was launched, it was intended
to restrain the implementation of the Guidelines scheduled for 16
September 2013. As at that date, this application had not being
heard. ITAC in the meantime had amended the original version of the
Guidelines and published the amendment in the Gazette. At this
stage,
the date of commencement of the implementation process has come and
gone. The policy is being implemented. It will thus
be inappropriate
at this stage to “stop dead” the implementation of a
policy addressing a public interest issue. In
my view this is not a
strong, exceptional or clearest case where the court should intervene
by granting an interim interdict. The
balance of convenience favours
the dismissal of this application.
No
alternative remedy
59.
The exportation of metal is not a compulsory option for MRA members.
They have a choice. They may either sell their products
in the local
market at market prices or where they choose to export scrap metal,
they have to first offer it to the local market
at a price less 20%.
In their own version, the bulk of the products envisaged for
exportation will not be absorbed by the local
market as the capacity
to do so is limited. It therefore goes without saying that if their
version is correct; the business of
exportation at market prices will
still thrive.
CONCLUSION
60.
MRA in my view has not, for reasons stated above, succeeded to make
out a strong case, justifying this Court to stop ITAC from
implementing the Guidelines, as and when it chooses to do so.
61.
Considering the evidence as a whole, as placed before me in support
of this application for interim relief, I am not persuaded
that this
is a instance where a strong case has been made out for this Court to
intervene and grant the order without offending
the doctrine of
separation of powers. The application should therefore fail.
COSTS:
62.
The Minister argued that the wasted costs of the appearance in the
urgent court should be mulcted against MRA. It seems to me
that MRA
is correct in stating that the reason why the matter did not proceed
on 6 September 2013 in the urgent Court is because
the Practice
Directives in this division do not permit the hearing of an
application in excess of 1000 pages in the urgent court.
The papers
in this application are prolix for an urgent court. It therefore
became necessary for the Deputy Judge President to
constitute a
special motion court to hear this application.
63.
Consequently, the fact that the matter did not proceed on that date
cannot be placed solely at the door of MRA. I am therefore
of the
view that the costs relating to the appearance on 6 September 2013
should be costs in the normal course of this application.
64.
MRA claims that this case raises constitutional issues and
consequently there should not be any adverse cost order, in the event
the application fails. I do not agree. As correctly submitted by
counsel for respondents, the principle in the Bio Watch
30
case does not apply in this instance. In Bio Watch the Constitutional
Court stated the need not to burden a litigant with costs
in matters
which raises constitutional issues. In this case, the constitutional
principles applicable are settled. This case concerns
the application
of those principles to the facts.
65.
As far as the rest of the costs are concerned, these should, as a
general rule, follow the result.
ORDER:
In
the premises I make the following order:
1.
This application for an interim interdict is dismissed.
2.
The Applicant is ordered to pay :
2.1
the costs of the applications to intervene;
2.2
the costs of all the Respondents including costs of junior and senior
counsel who appeared on record on behalf of each Respondent
in these
proceedings.
MOTHLE J ————
GAUTENG
HIGH COURT PRETORIA
Date
of Hearing:10-11 October 2013
Date
of Judgment: 28 October 2013
For
the Applicant: David Unterhalter SC
Paul
McNally SC Max Du Plessis Andreas Coutsoudis Sarah Pudifin-Jones
Instructed
by: EDWARD NATHAN SONNENBERGS
150
West Street Sandton
C/o
ELOFF BRINK ATTORNEYS
Lord
Charles Office Park Building A, 1st Floor,
North
Wing 337 Brooklyn Road Brooklyn Pretoria.
For
the First Respondent: Alfred Cockrell SC
Adrian
Friedman
Instructed
by: WEBBER WENZEL
10
Flicker Road lllovo Boulevard Johannesburg, 2196
For
the Second Respondent: Vincent Maleka SC
Seena
Yacoob Xola Stemeia
Instructed
by: THE STATE ATTORNEY
Ground
Floor, SALU Building 316 Andries Street Pretoria
For
the Third Respondent: Paul Kennedy SC
Nokukhanya
Jele
Instructed
by: CHEADLE THOMPSON & HAYSOM INC
7th
Floor, Braamfontein Center
23
Jorissen Street
Braamfontein
c/o
ADAMS and ADAMS
Lynnwood
Bridge Office Park
Daventry
Road, Lynnwood Manor.
Pretoria.
For
the fourth and fifth Respondents: Stephan Du Toit SC
Faizel
Ismail
Instructed
by: THE STATE ATTORNEY
Ground
Floor, SALU Building 316 Andries Street Pretoria
1
Act
71 of 2002.
2
According
to the Practice Directives of North Gauteng High Court, any
application in excess of 1000 pages cannot be heard in the
urgent
court due to the high volume of applications in that court.
Alternative arrangements have to be made with the Deputy Judge
President for allocation to another Judge.
3
The Minister has been entrusted by the President in terms of section
97 of the constitution of the Republic of South Africa,
1996
(“the
constitution"),
to administer the ITA Act which prior to that., was administered by
the Minister of Trade and Industry.
4
Some of whom are members of the Applicant.
5
Ferrous (predominantly iron) and non-ferrous (predominantly base
metals including copper, inc, aluminium, nickel, tin and lead.
6
Steel
producers, including foundries and steel mills.
7
Scrap metai is divided into production or industrial scrap, which is
a by-product generated by manufacturing sector; and obsolete
scrap,
which has achieved end-of-life status and is generated by State
utilities (Eskom, Transnet, Telkom), Industries in mining,
construction and agriculture.
8
In the papers, this new price control is referred to as the
"preferential price system”, to distinguish it from the
export parity price which has been in place before the publication
of the Directives and the Guidelines.
9
The formula to determine the preferential price system.
10
1955 2 SA 682
(C)
11
2012 4 SA 618
(CC).
12
2012
6 SA 223
(CC).
13
SCAW
supra
at para 95. The Court reiterated the earlier statement in Doctors
for Life International v Speaker of the National Assembly and
Others
[2006] ZACC 11
;
2006 6 SA 416
(CC)
14
OUTA
paragraph 43.
15
Setlogelo
v Setlogelo is the leading case on the requirements which must be
proved for a successful interdict.
16
SCAW
paragraphs 102 and 103.
17
OUTA
paragraph 26.
18
Paragraph
47
19
OUTA
paragraph 65
20
1914 AD 221
at p227,
21
Some of which are Ericson Motors Ltd v Protea Motors
1973 3 SA 685
(A) at 691 C-E;
Webster v Mitchell
1948
1 SA 1186
(W); Ladychin Investments v South African National
Roads Agency
2001 3 SA
344
(N) at 353 F-J
22
Constitution of the Republic of South Africa, 1996.
23
Section
2/ (2) (b) of iTA Act provides:
24
Econex Report page181 and Conningarth Report page1250.
25
Minister
of Health and Another NO v New Clicks South Africa (Pty) Limited and
Others (Treatment Action Campaign and Another as
amici curiae)
2006
2 SA 311
(CC) at
26
BP
Southern Africa (Pty) Ltd v MEC for Agriculture. Conservation,
Environment and Land Affairs
2004 5 SA 124
(W).
27
Progress
Office Machines CC v South African Revenue Service and Others
2008 2
SA 13
(SCA) at paragraph 6.
28
See
Bato Star Fishing (Pty) Ltd v Minister of Environmental Affairs and
others
[2004] ZACC 15
;
2004 4 SA 490
(CC) at paragraph 57.
29
OUTA
paragraph 65
30
Bio Watch Trust v Registrar Genetic Resources
2009 (6)
SA 232
(CC).