Lesotho Poultry Co-operative Society Ltd and Another v Minister of Agriculture and Others (C of A (CIV) 26 of 94) [1994] LSCA 129 (28 July 1994)

C OF A (CIV) NO.26/94 IN THE COURT OF APPEAL OF LESOTHO In the Appeal of: LESOTHO POULTRY CO-OPERATIVE SOCIETY LTD BEREA POULTRY CO-OPERATIVE SOCIETY LTD 1st Appellant 2nd Appellant and THE MINISTER OF AGRICULTURE THE ATTORNEY-GENERAL THE PRINCIPAL SECRETARY - AGRICULTURE THE SENIOR MARKETING OFFICER - MOTSAMAI THE MARKETING OFFICER - MARATHANE 1st Respondent 2nd Respondent 3rd Respondent 4th Respondent 5th Respondent HELD AT MASERU CORAM: STEYN, A. P. KOTZE', J. A. TEBBUTT, A. J. A KOTZE' J. A. JUDGMENT The appellants (applicants in the Court a quo) applied for and obtained on 22nd March 1994 from Maqutu J. in the High Court a rule nisi calling upon the respondents inter alia to show cause why the first respondent and any of his officers shall not be directed to issue to the applicants ... permits in terms of the Agricultural Marketing (Egg Control) Regulations 1969 (the 1969 regulations) authorising the applicants to import eggs into Lesotho. On 25th April 1994 the same learned Judge discharged the rule each of the parties to bear its own costs. His reasons for discharging the rule will appear later. The 1969 regulations provide, so far as is relevant, that (a) No person shall import or bring eggs into Lesotho unless he is in possession of a permit issued by the Marketing officer and that no person shall purchase or acquire in any manner whatever, eggs imported or brought into Lesotho unless such eggs have been imported or brought into Lesotho under a permit issued by the Marketing officer; (b) Importation permits in terms of (a) are issued pursuant to applications submitted on a prescribed form and- considered by the Permanent Secretary for Agriculture; (c) Consideration in terms of (b) is to have regard to factors such as grade and quality standards, prevention of the spread of disease in poultry and available egg supplies in Lesotho. Reference is made in the judgment of the Court a quo to the Agricultural Marketing {Egg Trading ) Regulations 1973 {the 1973 regulations) in addition to the 1969 regulations. (Although the 19 7 3 regulations were repealed on 3 0th March 1994 with effect from 6th April, 1994 by Legal Notice No. 31 of 1994 they were still extant when the present proceedings were initiated in the Court a quo) . The 1973 regulations provide, so far as is relevant, that (a) No person shall purchase, acquire or receive any eggs from a producer on his behalf or on behalf of any other person; (b) Traders etc are required to acquire eggs for consumption, re-sale, or any other purpose solely from the first appellant or from a source authorised by the marketing officer (emphasis added); (c) Any producer shall sell eggs produced by him only to the first appellant or to a body authorised by the marketing officer, (emphasis added). Maqutu J. in his judgment in the Court a quo embarked upon a long-ranging discussion of what he terms "a continuing titanic struggle ... between the Ministry of Agriculture and the Lesotho Poultry Co-operative Association and its affiliates". Having done this the learned Judge comes to a somewhat abrupt conclusion that the 1973 regulations create a monopoly in favour of the first appellant and that as such were ultra vires the powers conferred upon the Minister by the enabling statutory provision viz. Section 4 of the Agricultural Marketing Act No. 26 of 1967 (the Act) . From this finding flows the ultimate conclusion a r r i v ed at by M a q u tu J. that the 1973 r e g u l a t i o ns being w i t h o ut force and effect "obliged" him to r e f u se c o n f i r m a t i on of the r u l e. I am of the v i ew that to regard the 197 3 r e g u l a t i o ns as creating a m o n o p o ly in favour of first a p p e l l a nt is to e x a g g e r a te their e f f e c t. A m o n o p o ly conveys the idea of an e x c l u s i ve p o s s e s s i on of the trade in some c o m m o d i ty (cf . T he Shorter O x f o rd English D i c t i o n a ry s.v. m o n o p o l y ). T he 1973 r e g u l a t i o ns do not go that f a r: they e n v i s a ge that the p r i v i l e ge of a c q u i r i ng or selling e g gs should rest in first a p p e l l a nt or in any o t h er source or b o dy authorised by the m a r k e t i ng officer in the Ministry of A g r i c u l t u r e. T he 1973 r e g u l a t i o ns do no m o re than to p r o v i de that the m a r k e t i n g, a c q u i s i t i on and sale of eggs h a ve to take p l a ce through the first a p p e l l a nt or source or b o dy authorised as aforesaid. In f r a m i ng the 197 3 r e g u l a t i o ns in these terms the M i n i s t er of A g r i c u l t u r e, C o - o p e r a t i v es and Marketing c l e a r ly exercised his p o w e rs w i t h in the confines of the following p o w e rs conferred u p on h im by s e c t i on 4 of the A c t. (a) to control and improve t h e . .. m a r k e t i ng of p r o d u c ts (sub-section (a)); (b) to p r o h i b it any p e r s on w ho is d e a l i ng in the c o u r se of trade from p u r c h a s i ng a p r o d u ct (sub-section (c) ); (c) to prohibit any p e r s on from selling a product or an amount of a product in excess of a specified quantity (sub-section (d) (i) ) ; (d) to prohibit any person dealing in the course of trade from purchasing a product or an amount of a product in excess of a specified quantity (sub-section (d) (ii) ). The above are extensive powers sufficiently wide to render the 1973 regulations which do not impose total prohibitions intra vires the enabling provisions of the Act. It follows that the decision arrived at by Maqutu J. cannot be upheld. But the above is not an end of the matter. Mr. Sello contended that first appellant was denied the right of being heard - a right to which it was entitled by virtue of the special interest created by the 1969 regulations. These regulations contemplate that importation permits have to be applied for in writing in terms of a prescribed form. As indicated above the Permanent Secretary is enjoined to consider such applications and in doing so to pay regard to certain prescribed criteria. That this has been done in the present case appears from a copy of a letter dated 1st March, 1994 addressed to the first appellant by the Permanent Secretary. It is clear from the said letter that a substantial reason for the refusal of the application is "that there are a lot of producers who have plenty of eggs in their farms". The letter furthermore advises first appellant that should it so desire, local sources of supply will be identified in a spirit of co-operation if requested. It is important to note, in this regard, that there is an undisputed allegation in the respondents main replying affidavit that "the application was rejected because there were plenty of eggs within the country". The issue of importation permits is an administrative function depending upon the exercise of a discretion by the Permanent Secretary for Agriculture. What is required in such a case is that the discretion should be exercised fairly and reasonably. The power to grant import permits is vested in the Permanent Secretary and in no one else. He is told what criteria to follow. In the present case in his capacity as the appropriate designated official he exercised the discretion conferred on him. He exercised his administrative discretion by having regard to an entirely relevant consideration viz. the available egg supplies in Lesotho. The decision was based on an undisputed adequate existing supply of eggs in the country. No right to an oral hearing exists Heatherdale Farms (Pty) Ltd. v. Deputy Minister of Agriculture, 1980 (3) SA 476(T) at 486. On the papers there is no suggestion of an unfair and unreasonable exercise of discretion, or a valid ground for disturbing same. Indeed the appellants received the precise type of hearing contemplated by the 1969 regulations. They were heard by the receipt and consideration of the prescribed application. There is no suggestion that they were not heard as envisaged by the 1969 regulations. On the contrary the dismissal on the ground of one of the enumerated criteria is persuasive proof of proper consideration by the Permanent Secretary. In my view the discharge of the rule was correctly granted albeit for a wrong reason. The appeal is dismissed with costs. I agree I agree G. P. C KOTZE' JUDGE OF APPEAL J. H. STEYN ACTING PRESIDENT P. H. TEBBUTT ACTING JUDGE OF APPEAL Delivered at Maseru This 28th Day of July 1994.