clr/1976/1976_3_293.pdf

(2)of the Imports (Regulation) Law, 1962 (Law 49 of 1962). Imports (Regulation) Law, 1962 (Law 49 of 1962)—Import licence— Policy statement by Minister ofCommerce and Industry restricting and regulating importation of certain goods including rubber gloves—Whether subsequent decision of officer of respondent Ministry, refusing import licence for rubber gloves, taken in a wrong exercise of the discretion vested in him under s. 4

(2)of the Law—See, also, under "Administrative Law". Administrative Law—Administrative decision—Due reasoning— Reasonsfor whicha decision is taken may appear in the file of the case—Not necessarythat everymaterialfactor taken intoconsideration should be specifically mentioned in the decision itself— Ample material in the file showing that sub judice decision a duly reasoned one taken after a proper, in the circumtances, inquiry. 293- REPUBLIC (MINISTRY O F COMMERCB THE REPUBLIC OF CYPRUS, THROUGH THE MINISTRY OF COMMERCE AND INDUSTRY, Respondent. 5 VASSOS EUADES LTD. AND INDUSTRY) 1976 Sept. 27 Byan order, made under section 3

(1)of the Imports (Regulation) Law, 1962,(Law49of 1962asamended by Law 7of1967), the Minister of Commerce and Industry restricted and regulated the importation of rubber gloves by adding same, together with other commodities, to the list contained in the basic Orders of 1968-

1. This order was made on the 15th May, 1975 and on that day bymeansofanofficial communique itwasexplained that "this measurewasconsidered necessary for theprotection of the local production and industries and falls within the announced wider policy of the Government for the reactivation of local industries". VASSOS EUADES LTD. V. REPUBLIC (MINISTRY O F COMMERCE AND INDUSTRY) 10 When the above decision was taken the Minister took, also, another decision (exhibit 11) the opening paragraph of which read as follows: " For the encouragement and protection of local industry the importation of the following goods is put under regulation and control up to the percentage recorded opposite each merchandise". So far as rubber gloves were concerned their importation could be restricted up to 100 per cent. Following representations by a local rubber gloves industry for protective measuresfor their industrytherespondent Ministry considered the matter and in a relevant memorandum* it was proposed that an import duty of 25% be imposed on imported rubber gloves. On August 9, 1975the applicants applied for a licence for the importation of 6000dozen rubber gloves of the value of£12,
2. This application was turned down by the respondent Ministry on the ground that "the importation of rubber gloves is subject to restriction and regulation for the purpose of protecting the local industry for the manufacture of such gloves and that at present no licences for the importation of such goods are granted". 15 20 25 30 Hence the present recourse. The sub judice decision was taken by Mr. Phylactou, Senior Officer, Research and Industrial Development in the Ministry, * Quoted at p. 298 post. 294 35 who is an officer duly authorised for the purpose under section 2* of Law 49/
3. Section 4

(1)of Law 49/1962reads as follows: "4

(1)Where under the provisions of any Order a licence is •required, the licence shall be in the prescribed form.

(2)The Minister may in his discretion— (

1. a)grant or refuse such licence; Counsel for the applicant contended: (
2. a)That by the decision contained in exhibit 11 (set out above) the Minister already made up.his mind and fettered his discretion before he was vested with any ' discretion in the matter. ΙΟ 15 20 •' 25 30 35 (
3. b)That there has been a wrong exercise of discretion; that the subjudice decision was not duly reasoned; that there was no proper inquiry in the sense that not all material factors were taken- into consideration, inasmuch as-the coup d' etat and the invasion were not at all considered, particularly whether the impact in the market·of the rubber gloves was examined and evaluated; and that• in• refusing to grant an import licence the respondents relied-on an inquiry that-dated back to May, 1973,·in the sense that the Minister at the timethesubjudicedecision was taken did not know whether a local industry existed, what was its capacity -and what protection, if at all, ·was -necessary and whether the·locally produced gloves were suitable or not, as far as their quality was concerned. Held, dismissing therecourse,

(1)thatin this case therewas an. in advance exercise of preventive hierarchical control in the form of a policy statement or circular which, as such, does.not have executory character (see,'also, Stasinopoulos Law of Admini­ strative Acts, 1951,p. 330); that there can be no wrong exercise of discretion by compliance to a hierarchical order; that this can only happenwhen thehierarchical ordercontains definitions contrary in substance to the law, when the corresponding to'it Section 2defines the "Minister" as "The Ministerof Commerce and Industry and includes any officer of his Ministry authorised in writing to act on his behalf for any of the purposes of this Law otherthan thoseof section 3". 295. 1976 Sept. 27 VASSOS ELIADES LTD. v. REPUBLIC (MINISTRY O F COMMERCE A*JD INDUSTRY) 1976 Sept. 27 VASSOS ELIADES LTD. v. REPUBLIC (MINISTRY O F COMMERCB AND INDUSTRY) act of the subordinate organ suffers with the same.illegality, and when the subordinate organ has mistaken knowledge of the contents of the hierarchical order (see Stasinopoulos, supra, P. 331).

(2)That though the Minister is vested with discretionary 5 power, there is express provision that he can delegate same in writing,under section2oftheLaw,toanyofficer ofhis Ministry, and in delegating his authority, hemay, in law, define the limits of such delegation; and that, moreover, the policy statement does not contain any definitions contrary in substance to the 10 law, as it allows the appropriate officer to exercise his discretion and restrict and control the imports within a range of "zero up to 100" and when the appropriate officer in the Ministry dealt with the matter and took the subjudicedecision, he did exercise hisowndiscretioninthematter anddecidedhimself,asitappears 15 from the inquiry he made before he reached it (Georghiades v. The Republic

(1966)3 C.L.R. 153 and Araouzos & Othersv. TheRepublic

(1968)3 C.L.R. 287 distinguished).

(3)That it is not necessary that every material factor taken into consideration should be specifically mentioned in the 20 decision itself; that there is ample material in the file to show that it is a duly reasoned decision taken after a proper, in the circumstances, inquiry; that the discretion under section 4 of Law 49/1962 was correctly exercised in reaching the sub judice decision and the respondent exercised such powers within the 25 proper limits; that thematerial in thefileand theletter bywhich the said decision wascommunicated to him (exh.4), shows that the individual case of the applicants was considered together with general policy considerations, and as stated in the case of Zittis v. The Republic

(1973)3 C.L.R. 37 at p. 45, "this was a 30 course which was reasonably open to the respondents". Application dismissed. Cases referred to: Georghiades v. TheRepublic

(1966)3 C.L.R. 153; Araouzosand Others v. TheRepublic

(1968)3 C.L.R. 287; 35 Zittis v. The Republic

(1973)3 C.L.R. 37 at p.45. Recourse. Recourse against the decision of the respondent to restrict and regulate the importation of rubber gloves. K. Chrysostomides with Chr. Mitsides, for the applicant. 40 N. Charalambous, Counsel of the Republic, for the respondent. Cur. adv. vult. 296 The following judgment* was delivered by:A. Loizou, J.: The Minister of Commerce and Industry by an order made under section 3

(1)of the Imports (Regulation) Law, 1962, (Law No. 49/62), as amendedby Law No. 7 of 1967, 5 published in the official Gazette of the 16th May, 1975 (Noti­ fication No. 102, Supplement No. 3), restricted and regulated the importation of rubber gloves by adding same, together with other commodities, to the list contained in the basicOrders of 1968-1974. This was done because it was thought necessary, 10 in the public interest, for the purposes mentioned in section 3 of the Law, namely, "for theencouragement of local production and manufacture, the improvement of the balance of trade, compliance with international obligations or the development of the economy of the Republic". 15 The publication of this order in the official Gazette was pre­ ceded by a communique of the Ministry of Commerce and In­ dustry released through the Public Information Office, on the 15th May, 1975 (exh. 3), the date upon which the order was also issued. In the said communique it is explained that "this 20 measure considered necessary for the protection of the local production and industries and falls within the announced wider policy of the Government for the reactivation of local indu­ stries". The interested importers were further advised how they should go about applying for import licences. Further a 25 list of controlled commodities which included rubber gloves, was set out therein. Obviously,thewider policy of the Government,already men­ tioned, was the one necessitated by the invasion and the- de­ structive consequences thatit had on theeconomy of the Island. 30 It is not far fetched to credit the administration, although it does not refer to it,that itwas aware of thesecircumstances and it had them in mind when it took the decision that led to the order in question. The protection, however, of the rubber gloves industry had been under consideration since 1972, as 35 shown from the relevant correspondence and the applications made to that effect by the Company D dc Κ Latex and Rubber Products. By letter dated the 29th March, 1972 (exhibit5), they asked for protective measures for their industry, setting out the reasons for such Governmentprotection. Theproblem was 40 considered by the Ministry and a memorandum running into For final judgment on appeal see

(1979)3 CL.R.

1. 297 1976 Sept. 27 VASSOS EUADES LTD. V. REPUBLIC (MINISTRY O F COMMERCE AND INDUSTRY) 1976 Sept. 27 VASSOS EUADES LTD. six pages containing a thorough study of every aspect of the problem was prepared by one of its officers (exh.6). Statistical figures and other analytical factors are to be found infiveAp­ pendices attached to this memorandum. The conclusions re­ ached and suggestions made were as follows: 5 REPUBLIC (MINISTRY O F COMMERCE AND INDUSTRY) "
2. From what has already been set out it may be stated summarily that D & Κ which is the only industry of its kind in Cyprus, can satisfy the local market (a) from the point of view of quality by the better exploitation of its existing mechanical equipment and if necessary its expan- 10 sion. Here we should note that the used mechanical equipment is made locally with the guidance of theDirector of D &K. (b)Fromthepricepoint ofview,sinceinfact the prices of the local products are lower than the prices of the imported ones. Also, D & Κ by its contribution to the 15 gross national product the engagement of labour force, the improvement of the balance of trade and the saving, in consequence thereof, of foreign exchange, etc. plays a not negligible role in the general economy of the land. From the aforesaid the conclusion may be drawn that 20 although the local industry may survive by the protection given at present, some form of increased protection if given, that is the imposition of import duty on the rubber gloves, is necessary so that the beneficial results on the ge­ neral economy of the country derived from the functioning 25 of this local industry, become bigger.
3. Suggestion. In view of the aforesaid conclusion, it is submitted thattheimportduty on theglovesimported from abroad around 25%(preferential and general) be imposed". It may be pointed here that until the 16th May, 1975,rubber 30 gloves which are in the Customs category
5. 10, were im­ ported free of duty. The said industry pursued its efforts for increased Govern­ ment protection after theTurkish invasion; there is correspond­ enceaddressed to the thenAg. President of the Republic, on the 35 16th September,
6. The matter was referred then to the Ministry of Commerceand Industry and eventually thedecision contained in the order was reached. The original suggestion for the protection of this industry by imposing an increased import duty on the imported ones taken at a time of economic 40 298 prosperity, had apparently to be reviewed in the light of thecalamity that had fallen on the Island in the meantime. This is tobededuced from thecommunique (exhibit 3)already referred to, which speaks of the already announced wider policy of the 5 Government for the reactivation of local industries. (See also exhibits7 and 10). When the decision for themaking of the order was taken on the 15th, the Minister took also another decision (exhibit11), the opening paragraph of which reads as follows: 10 " For the encouragement and protection of local industry the importation of the following goods is put under regulation and control up to the percentage recorded opposite each merchandise". There follows then an enumeration of the goods which include 15 those to be found in the order (exhibit12). They are in three columns, the first shows the customs classification, the second thedescription ofthegoodsand the third isheaded "percentage reduction on the basis of the average imports of the last three years"and oppositetheentry "rubber gloves",thereisthe figure 20 "100percent",which Itakeittomean that in sofar astherubber gloves are concerned, their importation could be restricted upto 100 per cent. 25 30 35 40 Theapplicants,afirmof importers whohave had commercial relations with a firm called London Rubber, had imported during theyears 1972,1973 and 1974,rubber glovestothevalue of£ 17,000 (exh.3, p.4). They applied on the 9th of August, 1975(exhibit 1) for a licence for the importation of 6000dozen rubber glovesofthevalueof£ 12,000,but samewasreturned to them onthe 13thAugust, 1975witha notethereon madebythe appropriate officer of the Ministry which reads: "Please give reasons why the locally made ones are not suitable". On the 5th September, 1975, the applicants explained their position (exh.2). The subjudice decision (exh. 15) was then taken on the 15th September, 1975 by Mr. Phylactou, Senior Officer, Research and Industrial Development in the Ministry, who is an officer ofthe Ministrydulyauthorised for thepurpose,under section 2of the Law,as it appears from exh.
7. The Minister isdefined bythesaid section as"The Minister ofCommerceand Industry and includes any officer of his Ministry authorised in writing to act on his behalf for any of the purposes of this Law other than those of section 3". 299 1976 Sept. 27 VASSOS ELIADES LTD. v. REPUBLIC* (MINISTRY O F COMMERCE AND INDUSTRY 1976 Sept. 27 VASSOS ELIADES LTD. v. REPUBLIC (MINISTRY O F COMMERCE AND INDUSTRY) Thisdecision wascommunicated totheapplicant and itreads: " I have been instructed to refer to your letter of the 5th September, 1975, on the subject of the importation of rubber gloves and to inform you that the importation of rubber gloves is subject to restriction and regulation for the purpose of 5 protecting the local industry for themanufacture of such gloves and that at present nolicencesfor theimportation ofsuchgoods are granted". Section 4

(1)of the Law reads as follows: "4.-(l) Where under the provisions of any Order a licence 10 is required, the licence shall be in the prescribed form.

(2)The Minister may in his discretion— (

1. a)grant or refuse such licence; (
2. b)make such licence subject to such conditions as he may deem fit; (
3. c)cancel, suspend or vary any such licence or any conditions thereof: No doubt thereisadiscretion tobeexercisedbythe Minister, and the first ground of law relied upon by the applicants is to theeffect that bythedecision contained inexhibit 11—described 20 in the course of the argument as a general policy instruction— hereinabove set out, the Minister already made up hismind and fettered his discretion before he was vested with any discretion in thematter, whichhappened upon thepublication ofthe order on thefollowing day. Wearefaced, therefore, inmyview,with 25 a situation where there is an in advance exercise of preventive hierarchical control intheform ofa policy statement or circular which, as such,does not haveexecutory character and which, as stated in Stasinopoulos, Law of Administrative Acts, 1951, p. 330, "Its force is directed inwards, that is to say, is confined 30 within the frame of thepublic service binding on principle only the persons connected bya service relation with the State A hierarchical order having a general character, does not constitute, as is generally accepted, a rule of law, but contains only rules ofadministrative nature. Consequently, ithasnot gotthe 35 power to create legal boundaries for the administrative discretion which, if exceeded, would make the administrative act illegal. It is possible that this violation may give rise to a dis300 15 10 15 20 25 30 35 40 ciplinary liability of the civil servant, if it is found that he acted contrary to his service duty. It cannot, however, make the act void, simply because it cannot bind the administrative discretion within certain limits". And as stated further by Stasinopoulos (supra)p. 331,"There can be no wrong exercise of discretion by compliance to a hierarchical order. This can only happen on two occasions, (
4. a)When the hierarchical order contains definitions contrary in substance to the law, when the corresponding to it act of the subordinate organ suffers with the same illegality and (
5. b)when the subordinate organ has mistaken knowledge of the contents of the hierarchical order and on account of this it exercised its discretion in a certain way in which it is not certain that it would do so, ifit had a different knowledge of the content of the hierarchical order". In our case, the Minister is vested with discretionary power, but there is express provision that he can delegate same in writing, under section 2 of the Law, to any officer of his Ministry— naturally a subordinate to him—and in my view, in delegating hisauthority, hemay, in law, define the limits of such delegation. Further, this policy statement does not contain any definitions contrary in substance to the law, as it allows the appropriate officer to exercise his discretion and restrict and control the imports within a range from zero upto 100 per cent and when the appropriate officer in the Ministry dealt with the matter and took the subjudice decision, he did exercise his own discretion in the matter and decided himself, as it appears from the inquiry he made before he reached it. (See the note on exh. 1 and the reply thereto by the applicants (exh. 2)). The present case has to be distinguished from that of YiannakisGeorghiades v. The Republic of Cyprus through the District Officer, Limassol

(1966)3 C.L.R. 153and the case of Louis Araouzos &Others v. The Republic through theDistrict Officerof Limassol, etc.

(1968)3 C.L.R. p. 287. There, the appropriate organ failed to exercise itself the discretion entrusted to it under the law there being no express provision to the contrary and not being a question with regard to the legality of the act—and the hierarchically superior organ could not assume or regulate discretionary powers vested by legislation in an inferior organ, whereas in our case, the discretionary powers are entrusted by.law to the hierarchically superior organ and there is only a delegation of the matter. - I shall take now the remaining grounds of lawtogether. They are to the effect that there has been a wrong exercise of discre301 1976 Sept. 27 VASSOS ELIADES LTD. V. REPUBLIC (MINISTRY O F COMMERCE AND INDUSTRY) 1976 Sept. 27 VASSOS ELIADES L T D . v. REPUBLIC (MINISTRY O F COMMERCE A N D INDUSTRY) tion, the decision is not duly reasoned, there was no proper inquiry in the sense that not all material factors were taken into consideration, inasmuch as the coup d'etat and the invasion were not at all considered, particularly whether their impact in the market of the rubber gloves was examined and evaluated, 5 and in refusing to grant an import licence the respondent relied on an inquiry that dated back to May, 1973, in the sense that the Minister at the time the subjudice decision was taken did not know whether a local industry existed, what was its capacity and what protection, if at all, was necessary and whe- 10 ther the locally produced gloves were suitable or not, as far as their quality was concerned. The material in the file which is to be found in exhibits 4-15 show that the reason for which the subjudice decision was taken was the protection of a local industry for the manufacture of 15 rubber gloves in respect of which industry a thorough inquiry had been carried out and where every aspect of it was examined, including the quality of the products and the production capacity of the industry in question, as well as its contribution to the national income. As stated time and again, it is not necessary that every material factor taken into consideration should be specifically mentioned in the decision itself, but there is ample material in the fileto show that it is a duly reasoned decision taken after a proper, in the circumstances, inquiry. The discretion under section 25 4 was correctly exercised in reaching the subjudice decision and the respondent exercised such powers within the proper limits. The material in thefileand the letter by which the said decision was communicated to him (exh. 4), shows that the individual case of the applicants was considered together with general 30 policy considerations, and as stated in the case of Zittis v. The Republic

(1973)3 C.L.R. 37 at p. 45, "this was a course which was reasonably open to the respondents". The application was not refused on the strength of exhibit II, but it was examined on its merits as shown by exhibit 1, the 35 note of the respondent thereon dated the 13th August, 1975,the letter of the applicants (exh. 2) in reply thereto and then, the decision and its communication to the applicants. For all the above reasons the present recourse fails, but in the circumstances 1make no order as to costs. 40 Application dismissed. No order as to costs. 302 20