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[2009] ZAGPPHC 9
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Tecmed Africa (Pty) Ltd v Minister of Health and Another; Tecmed Africa (Pty) Ltd v Director General National Health and Others (25382/2008, 30841/2008) [2009] ZAGPPHC 9 (19 March 2009)
Not
reportable 19 March 2009
IN
THE HIGH COURT OF SOUTH AFRICA
[NORTH GAUTENG HIGH COURT, PRETORIA]
CASE NO: 25382/2008
In the matter between:
TECMED AFRICA (PTY) LTD
Applicant
and
MINISTER OF HEALTH
First Respondent
CANCARE (PTY) LTD
Second Respondent
AND
CASE NO: 30841/2008
In the matter between:
TECMED AFRICA (PTY) LTD
Applicant
and
THE DIRECTOR GENERAL: NATIONAL
HEALTH
First Respondent
CANCARE (PTY) LTD
Second Respondent
MINISTER OF HEALTH
Third Respondent
JUDGMENT
Delivered………………..
R
D CLAASSEN J
:
This
judgment concerns two applications, numbers 25382/08 and 30841/08.
Both are review applications to set aside certain decisions/actions
by the Director General and the Minister respectively of the
Department of Health. They were heard together because all were
agreed
that they are inexplicably linked. I shall refer to the
Respondents variously as the “Minister”, the “DG”
and “Cancare”. “
Respondents
”
shall mean the DG and the Minister.
In
Case No. 25382 the following relief is sought against the Minister.
“
1. (Urgency
– Not relevant)
2. 2.1 That
the decision of the First Respondent dated 23 May 2008 in respect of
the appeal to her by the Applicant dated 5 May
2008 in terms of
Section 6 of the Hazardous Substances Act 15 of 1973 (the Act) that:
(a) the
appeal
is
dismissed
;
(b) the
embargo
continues
to apply until such time that Tecmed complies with the requirements
for a licence to import or manufacture the listed electro-medical
products,
be
reviewed and set aside
2.2 That
the
appeal
by the Applicant to the First Respondent dated 5 May 2008 in terms of
Section 6 of the Act, be
upheld
.
3.
Alternatively,
to paragraph 2 supra:
3.1 Pending
a final determination of the relief sought in paragraph 2 above,
that:
3.1.1 The
decision of the Director General purportedly taken in terms of
Section 9A of the Act, to place an embargo on licences
held by the
Applicant; and
3.1.2 The
dismissal by the First Respondent of the appeal against the decision
referred to in paragraph 3.1.1 supra: are suspended.
4. Costs
of suit to be paid by the First Respondent.
”
(My
emphasis)
In
case number 30841 the following relief is sought:
“
1. (Urgency
– not relevant)
Exempting
the Applicant from any obligation which it may have to exhaust any
internal remedies which may exist or have existed
as contemplated in
Section 7(2)
of the
Promotion of Administrative Justice Act, 3 of
2000
;
3.1 That
the
decision
by the First Respondent
to
refuse
to issue to the Second Respondent a licence to sell, let, use,
operate or apply a Group III Hazardous Substance in terms of the
Second Respondent’s application dated 15 March 2008, be
reviewed
and set aside
.
3.2
Alternatively
to paragraph 3.1 supra
declaring
that the
grounds
advanced
by the First Respondent in refusing the Second Respondent a licence
for use of the Varian Clinac 2000 CR situated at Durban Oncology
in
relation to the purported transgressions by the Applicant, as
foreshadowed in the affidavits filed of record,
have
no foundation in fact and/or in law
.
3.3 Directing
the First Respondent to issue a licence to the Second Respondent, as
contemplated in
Section 41
of the
Hazardous Substances Act, 15 of
1973
for use of the Varian Clinac 2000 CR situated at Durban
Oncology.
Alternatively
to paragraph 3
supra, pending a final determination of the relief sought in
paragraph above, that the First Respondent is restrained from taking
any steps whatsoever towards prohibiting the Second Respondent from
utilising the Varian Clinac 2000 CR Linear Accelerator, situated
at
Durban Oncology.
Alternatively
to 3 and 4
above, pending a final determination of the relief sought in
paragraph 3.1 alternatively 3.2 above, that the First Respondent
issue a licence to the Second Respondent as contemplated in
Section
4(1)
of the
Hazardous Substances Act, 15 of 1973
for use of the
Varian Clinac 2000 CR situated at Durban Oncology.
Costs
of suit to be paid by the First Respondent.
”
(My
emphasis)
In
both cases the Second Respondent “
Cancare”
,
being a very interested party, supports the applications. I shall
refer to the first case, No. 25382, as the “
embargo
application
”
and to the second one as the “
licence
application
”.
In
the licence application the Minister is cited because of her interest
in the matter but no relief is sought against her. Her
interests may
lie therein that a possible appeal to her regarding the licence
application was not pursued by the Applicant, who
therefore did not
exhaust an internal remedy. More about this later.
The
Applicant bought, imported and refurbished a certain Varian Linear
Accelerator, and sold it to Cancare. This machine/unit falls
under,
and is regulated by the provisions of the
Hazardous Substances Act 15
of 1973
(“
the
Act
”).
It can therefore only be imported, refurbished, sold, installed and
used under a licence/licences issued in terms of
the Act and the
regulations and issued by the DG. Different licences are provided
for the different usages referred to above and
if need be, the
different entities. The conditions in each instance may also differ.
In this case the Applicant had to be licensed
with or without
concomitant conditions to import, refurbish, sell and install the
machine. Cancare, as purchaser of the machine,
had to obtain a
licence to use the machine i.e. a valid “
premises
”
licence.
It
is necessary to set out the legislative background to these issues,
including the definitions contained in the Act.
Section
1 of the Act contains the following definitions:
“
Manufacture
”
when
used as a noun, includes assembly, production, preparation,
processing, repair or any other manufacturing or maintenance
process and, when used as a verb, has a corresponding meaning;
“
Sell”
includes offer, advertise, keep, display, transmit, consign,
convey or deliver for sale, or exchange, or dispose of to any
person in any manner, whether for the consideration or otherwise,
or
manufacture
or
import
for use in the Republic; “Selling” and “Sale”
have a corresponding meaning;
(my
emphasis)
Section
4:
Licensing
Subject
to the provisions of this section the Director General may on
application in the prescribed manner and on payment of the
prescribed
fee (if any) and subject to the prescribed conditions and such
further conditions as the Director General may in each
case
determine, issue to any person a licence –
to
carry on business as a supplier of group I hazardous substances;
to
sell, let, use, operate or apply any group III hazardous
substance;
to
install a group III hazardous substance on any premises mentioned
in such licence.”
Section
7: Suspension and cancellation of licences
–
“
If
the holder of a licence under Section 4:
(a
) has
in or in connection with an application for a licence or renewal of a
licence furnished the Director General with any information
which to
the knowledge of such holder is untrue or misleading in any material
respects;
(b)
has
contravened or failed to comply with the conditions subject to which
the licence was issued;
(c)
has contravened or failed to comply with the provision of this Act;
(d)
….
(e)
……
the Director General may by way of a notice in writing call upon him
to show cause within the period specified in the notice,
which period
shall not be less than 20 days as from the date of the notice, why
the licence in question should not be suspended
or cancelled.”
Section
9A: Embargo
An
inspector may at any time place an embargo for an indefinite or
prescribed period on any grouped hazardous substance, appliance,
vehicle or other object, which is considered in or is on reasonable
grounds believed by him to be concerned in a contravention
or
suspected contravention of any provision of this Act, irrespective of
where or in whose possession he finds such substance,
appliance,
vehicle or object;
For the purposes of this Act, “
embargo
”
in relation to any grouped hazardous substance, appliance, vehicle or
other object, means a prohibition on the export, sale,
dumping,
lease, use, operation, application, or installation of any premises,
thereof
.
In
this context the word “
refurbish
”
is used often, and it is convenient to cite the dictionary meaning
thereof as found in Collins English Dictionary Millennium
Edition:
“
To
make neat, clean, or complete as by renovating, re-equipping, or
restoring
”.
Applicant
has at least since 1992 been importing, refurbishing and selling
machines of this nature to various hospitals and other
instances in
this country. The issue in both these applications started when
Cancare applied for a licence to use this particular
machine that it
had bought from Applicant. In the application for use of the
machine, Cancare described it as a
new
Varian Clinac 2100 C, manufactured in 2007. It transpired later,
after an inspection by one K J Smit (Smit), as representative
of the
DG, that the machine was in fact not new but “w
as
a pre-owned unit
”
manufactured in 1995 with serial number 793.
On
the basis of this information Smit wrote to Applicant on the 18
th
March 2008:
“
Notice
is hereby given that an embargo has been placed on the
licences
listed below for the importation of Varian Linear Accelerators, with
immediate effect: (a list of 12 licences are set out). This
action
has been taken for the following reasons:
On
1 December 2007 we received an application for the installation of a
new
Varian Clinac 2100 (year of manufacture 2007 and that the unit will
be supplied by Tecmed) at Durban Oncology.
Tecmed
is currently licensed to import
new
Clinac 2100’s;
During
an acceptance inspection by K J Smit on 10 March 2008 at Durban
Oncology Centre, it was established that this is a pre-owned
Varian
Clinac 2100 unit (date of manufacture 1994 or early 1995, serial
number 791) that was imported and rebuilt by Tecmed in
S.A. (this
was confirmed by Mr Wegere on 11.03.2008 in my office at Louville
Place Bellville);
Tecmed
has therefore
illegally
imported the pre-owned Clinac 2100 and provide false information on
Form RC003-1. (sic)
The
Department of Health will only consider withdrawing the embargo i
f:
Tecmed
export the Varian Clinac 2100 C (serial number 791) installed at
Durban Oncology
Centre, or;
Dismantle
the abovementioned unit.(sic)
P
lease
note that under an embargo, you may not import or install any group
III hazardous substances listed in the abovementioned
licences. The
term
sell
(in the) Hazardous Substances Act 1973 (Act 15 of 1973) is defined to
include offer, advertise, keep, display, transmit, consign,
convey or
deliver for sale, or exchange, or dispose of to any person in any
manner, whether for a consideration or otherwise, or
manufacture or
import
for use (for own use) in the Republic
and the selling and sale have a corresponding meaning.
”
(
Annexure
“FA2”, page 57, embargo application “EA”
)
This
decision/action on behalf of the DG brought on an urgent appeal to
the Minister in terms of the Act. The appeal was refused.
Hence
this application in the embargo application to have it set aside.
As
a result of this embargo
,
Cancare was for obvious reasons refused a licence to use the machine,
hence the licence application.
It
will be noted that in both instances Applicant is not the end user of
the machine, but only the seller/supplier thereof and installer
to
Cancare. Both applications started as urgent applications in the
middle of last year (between May and July 2008), but were struck
off
due to lack of urgency. The whole issue of urgency has fallen away
and only the merits are at issue at this stage. The Minister
and the
DG initially disputed Applicant’s
locus
standi
to bring this application. This point was not pursued in argument
and I think rightly so. The definition of an “
interested
party
”
in the Act is so wide it must include the Applicant in the
circumstances prevailing here.
As
for the licence application, a further point was taken by the DG:
that Applicant did not exhaust all internal remedies. Applicant’s
answer to this is that it would have served no purpose because the
Minister had already made up her mind and decided with regard
to the
embargo appeal. It must be axiomatic that while that decision stands
there is no way in the world that she could or would
have granted a
licence to Cancare to use the machine. For that simple reason
Applicant’s application for
condonation
for not following the internal appeal route, must succeed
,
an order which I hereby grant.
A
further issue that needs to be addressed is the fact that Applicant
in the licence application, filed a supplementary affidavit,
stating
simply that further developments had taken place since finalisation
of the papers and attach certain documents and correspondence
that
were exchanged between the parties. The Minister and the DG objected
to the admission thereof since:
No
condonation was sought for the filing of same;
The
intention for filing it and more particularly, the inferences and
facts to be deduced there from were not set out. Neither
were the
Respondents invited to answer thereto.
The
application in terms of Rule 30 for striking out of the supplementary
application as an irregular proceeding, did not reach
me prior to the
hearing of these applications. I did, however, on the morning before
the hearing, have an opportunity to read
same. It was eventually
agreed by all that the supplementary documents could stay in
,
and, as and when any reference thereto is made, the specific document
will be discussed and handled at that stage.
It
is, however, convenient to deal with those documents directly. As
evidenced from the letter quoted above, the DG put an immediate
embargo on the Applicant in respect of the twelve listed licences,
which obviously included the one relating to the machine at
issue.
In terms of Section 7, a licence can only be revoked or suspended on
20 days’ written notice. In terms of Section
9A of the Act an
embargo can only be imposed upon a “
Grouped
Hazardous Substance, appliance, vehicle or other object”.
It does not include a “
licence
”,
because that is clearly dealt with in Section 7. Clearly and on the
face of it this was an illegal embargo, because Applicant
was not
given 20 days to object to either a suspension or revocation, and
neither could a licence be embargoed.
In
spite of these issues being clearly set out in the appeal to the
Minist
er
in the embargo application, the appeal failed.
This
is where the supplementary affidavit of the Applicant becomes
relevant. Since the documents speak for themselves, it is important
that cognisance must be taken thereof and I overrule the objection in
respect of the documents. I shall refer to them later.
The reason
is that they go to the very heart of the embargo application. The
relevant documents show the following:
On
05.08.08
Smit writes to Applicants stating as follows:
“
Our
letter dated 18 March 2008 considering the embargo on the importation
of Varian Linear Accelerators refers.
Notice
is hereby given that the embargo that was placed on the importation
of Varian Linear Accelerators, dated 18 March 2008, has
been
withdrawn
with immediate effect.
”
(
Annexure
“SA2”, p 318, licence application (“LA”).)
O
n
the same date, i.e. 5/8/08, Smit again places an embargo, this time
on 14 Varian Clinac
machines
.
It is stated that the embargo will only be lifted if Applicant
exports the machine. (No reason is given why all the other
machines are also embargoed!) (
Annexure
“SA3” page 319 “LA”
).
On
16.10.2008 Smit again writes to Applicant giving notice of the
intention to suspend licence number 140/2233 in terms of Section
7(1) of the Act. Applicant is called upon to show cause within 20
days of date of the letter why the licence should not be
suspended
(
Annexure
“SA9” page 346 “LA”
).
On
17.11.2008 Applicant’s attorney files an answer objecting to
the intended suspension (
Annexure
“SA10”, page 347).
To date, as far as I know, no decision has as yet been taken.
EMBARGO
APPLICATION:
The
Applicant’s contention regarding this issue was that the DG was
not in law entitled to issue the embargo in respect of
licences. He
could only do so in respect of objects, etc. If he wanted to stop
the importation or selling of machines he had
to give notice in terms
of Section 7 with 20 days’ notice. He did none of this. The
embargo was thus illegal. The DG realised
this himself eventually
when a proper notice was given in respect of certain licences as
referred to already, and he withdrew the
abovementioned embargo.
In
respect of the appeal to the Minister the same issues were raised by
Applicant but the appeal was still refused by the Minister.
This
clearly shows that the embargo application must at least to that
extent succeed.
LICENCE
APPLICATION
The
issue here turns on the question of
what licence conditions obtained at what time, and whether the
specific machine was imported legally or not. It is therefore
important to analyse the various conditions that applied at various
times.
On
4.04.2001 the licence to sell was issued to the Applicant in terms of
Section 4(1)(b). The relevant condition read as follows:
“
A
licence to sell this model only permits the sale of refurbished units
by the approved dealer, i.e. it does not permit the sale
of either
new units or used units that have
not
been
refurbished.
(
Annexure
“B”, p 231, LA).
This
thus meant that the Applicant could import, refurbish
(i.e.”manufacture”), sell and install such a machine.
On
21 June 2001 new conditions were imposed. The new condition read as
follows:
“
T
he
licence to sell this model only permits the sale of new units by the
approved dealer, i.e. it does not permit the sale of either
refurbished units or used units that had
not
been refurbished. The definition of “sell” includes
offer, advertise, keep, display, transmit, consign, convey or
delivery for sale, or exchange, or dispose of to any person in any
manner, whether or consideration or otherwise, or
manufacture
or import
for the use in the Republic of South Africa; and selling and sale
have a corresponding meaning.”
P
237 LA
This
condition is somewhat ambiguous. On the one hand it only permits the
sale of new units by an approved dealer, but it does
not
permit the sale of either refurbished units or used units
that
have not been refurbished
.
It would therefore seem as if refurbished units may be sold. This
is a restrictive condition and therefore must be interpreted
restrictively as well. It therefore seems that a refurbished unit
whether old or new, may be sold (with all the
sequeulae
pertaining to the definition of the term “
sell
”,
if refurbished.) Therefore Applicant was entitled to import and
refurbish and sell the units.
On
30.10.2001 the Director of Radiation Control sent a copy of the group
licence to Applicant, as at that date.
See:
Annexure “FA5.2”
at
page 83 EA.
No
specific reference is made therein to the condition of 11.06.2001.
It only states that certain certifications must be provided.
On
11.10.2005 new conditions were published and sent to the Applicant.
In terms thereof, the Applicant had until 01.11.2005 to
supply
certain certificates to the Department relating to any unit falling
under the said licence.
From
the importation documents (attached to the embargo appeal to the
Minister) the following history regarding importation of the
unit can
be gleaned.
T
he
supplier’s invoice is dated 15.08.2005;
page
108/EA
);
T
he
“
arrival
notice
”
at Durban Harbour is dated 07.10.05,
page
110
EA;
“
Customs
release notification
”
is dated 13.10.05 (
page
105/EA
);
The
City Deep Terminal Manager’s stamp (Johannesburg) is dated
14.10.2005.
From
the above it is clear that the unit was bought and imported into
South Africa before the new licence conditions applied and
the
requisite certificates had only to be supplied by 01.11.2005. It is
so
that
Applicant’s deponent states in the affidavit supporting the
appeal to the Minister that the unit was imported on 28.10.2005.
However, that is a reference to the “
tax
invoice
”
delivered to Applicant by the cargo carriers (
FA6,
page 102
EA)
.
The documents referred to in paragraph 26 above are all part of
Annexure
“FA6”
.
Deponent refers to them as “
the
importation vouchers
”.
It is therefore clear that the actual importation occurred prior to
the date of the conditions.
From
the above and reading the provisions of the Act, the relevant
conditions and the importation documents a
ll
together, it is clear that the relevant unit was
not
imported illegally as alleged by the DG and the Minister. It is
therefore clear that the imposition of the embargo (already dealt
with) and the refusal to grant a licence for the installation and use
thereof at Cancare was unlawful, it being the main reason
to refuse
the licence.
Another
ground for refusing the licence
is that Applicant is only allowed to import
new
and
refurbished
machines. (Respondents’ heads of argument, para 18.1). the
Respondents’ attitude is that Applicant needs to be licensed
as
a
manufacturer
to do so. However, when one reads the definition of
sell
and/or manufacture and the dictionary meaning of refurbished, it is
clear that as it stands, the licence to
sell
includes manufacture (the nouns and verbs have corresponding meanings
in terms of the definitions section). It is difficult to
see how the
restrictive meaning proposed by the Respondents fit into those
definitions. This point can therefore not succeed.
The
next issue that arose is the question of the certification by
European standards of the Applicant to refurbish machines. Smit
was
initially satisfied with the certification provided to him. However,
the Respondents now maintain that the “EC”
(European
Community) certification issued to Varian
,
the manufacturer, in terms of the specific models, is not sufficient
for purposes in South Africa. Applicant must be directly
in
eo nomine
issued with the EC certificates as a “
manufacturer”
.
From
the facts set out on behalf of the Applicant in the appeal, which
were never specifically answered or disputed by the Respondent
s,
he sets out clearly the history of the importation of the machine.
After the importation in 2005 the machine was stored.
In 2007
Applicant did the refurbishing and sold it to Cancare. On 11.12.2007
Cancare was issued with a licence to install the
machine. This must
obviously be a licence to use the machine because only the premises
need to be licensed for use. This was
issued on the basis that it
was a
new
machine
.
Subsequently this licence was not actually issued, or withdrawn, it
is not clear which. The reasons are set out by Smit in
an e-mail to
Ms Hester Burger of the Durban Oncology Centre dated 11.03.2008. It
reads as follows:
“
The
situation with regard to the licensing of Varian Clinac 2100 at
Durban Oncology is as follows:
On
5
th
December 2007 we received an application for the installation of a
Varian Clinac 2100 (year of manufacture 2007 as well as that
it is a
new unit that will be supplied by Tecmed) at Durban Oncology;
A
licensed was issued on the 11 December 2007 for the installation of
the above, based on the assumption that this is a new unit;
Tecmed
is currently licensed to import new Clinac 2100’s. To obtain
a licence for importation, the importer must submit
documentation as
specified in 41BM-1;
Tecmed
has therefore illegally import (sic) the pre-owned Clinac 2100, and
under these circumstances the Department of Health
will not issue a
licence for use;
We
will demand that this unit be exported or be sold off as scrap;
……
As
already pointed out it was not a new machine but simply wrongly
described by Cancare in the application for a licence to use
it.
That was cleared up and as shown above, the machine was not illegally
imported.
Since
then the Department has also consistently required EC certification
of the Applicant itself. On 23.08 Applicant gave the
DG copies of
Varian’s EC accreditation and also Applicant’s
appointment as fully accredited agent of Varian (
Annexure
“FA17”, page 162 EA
).
The latter states the following in the second paragraph:
“
Refurbishing
Agreement is in place as of 03.08.2007 and covers all Quality and
Regulatory provision being part of all Varian products
and comply
with the US, Code of Federal Regulation (CFR) and Euro Norms (CE) and
all applicable aspects of US FDA and EN/ISO regulation
guidance and
precedent.
”
(
Annexure
“FA17”, p 163 EA
).
This
letter is addressed to the Applicant and sent by Varian Medical
Systems and dated 27 September 2007.
When
one looks at the licence requirements set by the Respondents it
requires the licence holder’s EC certification. The
question
is whether an agent is included under such certification.
This
question must also be viewed in the light of the surrounding
circumstances and facts. Initially the DG refused Cancare’s
licence because the unit was allegedly imported illegally. This
attitude was relinquished. Then it requested EC certification
to be
supplied by 1 November 2008. In an e-mail to the Applicant on
9.04.2008 (
Annexure
“F22”, page 174, E
A
)
Smit now states that unless the certification is provided by
16.02.2007 (sic it must be 2008), the licence will be cancelled.
This is obviously an illegal demand in terms of Section 7 of the Act
(where 20 days’ notice must be given of an
intention
to
cancel). This clearly contradicts the 1 November 2008 deadline. It
can therefore not be a legal demand.
In
the light of all that has happened regarding this machine it is clear
that the Department acted illegally and unlawfully. The
embargo was
illegal and the threat to cancel the licence in April 2008 was
illegal. This all prompted two urgent applications
which were
refused initially for want of urgency. However, having considered
the merits as set out above,
both applications must succeed, because the deadline of 1/11/08 only
expired after these applications were issued.
It
is common cause that costs should follow the result in both cases.
The only question is whether the Applicant is entitled to
the costs
of two counsel. Respondents had a single senior/junior advocate.
She said that if she could handle it alone, so could
Applicant’s
counsel. However, when one looks at the volume of the two
applications and the detail that had to be unravelled,
it points to
the use of two counsel. Then there is the importance of the matter
to the Applicant. It is uncontested that the use
of the machine is
not only worth many thousands of rands to the Applicant but the
machine itself is worth a few hundred thousand
rands. It is also
obviously of great importance to Cancare and more importantly to the
patients needing the treatment. It is
undenied that this machine is
a very good and useful machine in cancer treatment. In fact it is
undeniably a life saving unit.
In
the light of the above the costs of two counsel are justified.
I
therefore make the following orders:
In
application 25382/08
the
decision of the First Respondent dated 23 May 2008 in respect of the
appeal to her by the Applicant dated 5 May 2008 in terms
of
Section
6
of the
Hazardous Substances Act, 15 of 1973
, is reviewed and set
aside;
The
appeal by the Applicant to the First Respondent dated 5 May 2008 in
terms of Section 6 of the Act is upheld;
First
Respondent is to pay the costs of the application including the
costs of two counsel.
In
application 30841/2008
The
Applicant is exempted from any obligation it may have had to exhaust
any internal remedies as provided for in
Section 7(2)
of the
Promotion of Administrative Justice Act, Act
3 of 2000.
The
decision by the First Respondent to refuse to issue the Second
Respondent a licence to us a Group iii Hazardous Substance
in terms
of the Second Respondent’s application dated 15 March 2008 is
hereby reviewed and set aside
Respondent
is to pay the costs of the Applicant, including the costs of two
counsel.
_______________________
R
D CLAASSEN
Judge
of the High Court