clr/1988/1988_3_1073.pdf

(62)asamended—Orderplacingsafetymatches undercontrol—Differentiation between traditionalandnew importersReasonable. General principles of administrative law—Discretion ofadministration— Exerciseof—Judicialcontrol—Principlesapplicable. Imports—TheImports (Regulation) Law,1962 (Law49162)asamendedby Law7167,section3—OrderbyMinisterofCommerceandIndustryplacing safetymatchesundercontrol·—TheMinisterwasempoweredunderthesectiontomakesuchanorder. Ministers—The Public ServiceLaw, 1967(Law33167)—ItempowersaMinistertoactthroughtheDirector-GeneraloftheMinistry. 1073 Meridian v. Minister of Commerce

(1988)TheMinisterofCommerceandIndustryissuedanorderundersection3 ofLaw49/62,asamendedbyLaw7/67,placingsafety matcheswithincustomsclassification 36.06 under control.Consequently, their importation wassubjecttolicence. Theapplicantssubmitted atvarioustimesseveralapplications forthe importation of safety matches.Oneach occasion therespondentturned down theapplicationonthegroundof theneedtoprotectlocalindustry. TheMinisterexplained that theimportation wasregulatedbyquotasand thatlicenceswere grantedonly totraditional importers,i.e.personswho wereimportingmatchespriortothepublicationofthesaidorder. Bymeansofthisrecoursetheapplicantsimpugnedthevalidityofthe re- 10 rusalcommunicatedbyletterdated9.4.86. Theapplicantscontendedthattherefusal isnullandvoidbecause:a)It iscontrary toArticles23,25and28oftheConstitution,b)itwastakenby an unauthorized person, i.e. the Director- General of the Ministry,who signedthesaidletters,c)TheMinisterwasnotempoweredbylawtomake therestrictiveorder,hereinabovereferred to. ,^ Itmustfurther benotedthattheprayeroftherecourseisnotonly for annulmentoftherefusalof9.4.86,but,also,fortheannulmentofallpreviousand/orsubsequentrefusals. Held,dismissingtherecourse:

(1)Inthelightofsection3 oftheaforesaid lawthecontention thattheMinister wasnotempowered toissuethe saidOrderisuntenable.

(2)ThePublicServiceLaw, 1967(Law33/67)empowerstheMinister toactthroughtheDirector-GeneraloftheMinistry.

(3)Article23oftheConstitutionhasnobearingonthecase.

(4)Article25safeguards therighttopracticeanyprofessionortocarry 25 onanyoccupation,tradeorbusinesssubjecttosuchformalities,conditions orrestrictions,asprovidedbythelaw.Paragraph2ofArticle25recognizes the imposition of conditionsorrestrictionstosuchright,necessary,inter alia,inthepublicinterestThereisnodoubtthatinthemodemstateitis oftenfoundnecessarytosubjectcertaincommoditiestosomeformofgovernmentalcontrolforthepurposeof, interalia,theprotectionoflocalproducts and their marketability in the interest of thecountry as a whole. In the 30 presentcasetheapplicanthasfailed tosatisfy theCourtthattherestriction was not aimed at the abovepurpose and wasarbitrarily imposed by the MinisterofCommerceandIndustry.

(5)Therehasbeennoviolationoftheprincipleofequality,becausethe 1074 20 3 C.L.R. Meredian v. Minister of Commerce differentiation betweentraditionalimportersandnewimporterswasreasonableinthecircumstances. 5

(6)Allpreviousdecisionsoftherespondentinthepresentcasewerein respectofindependentexecutoryacts.Therefore,failureoftheapplicantsto challengeeach oneof them withinthedefined period of 75dayshasdeprivedhimof anylegitimateinterest tochallengethembythepresentrecourse. Recoursedismissedwith £100costsagainstapplicant. 10 Casesreferredto: Sofoctides andCo.Ltd.v.The Minister ofCommerce andIndustry and Another

(1986)3C.L.R.1302; Iacovidesv. TheRepublic

(1966)3C.L.R.212;. Constantinouv.TheRepublic

(1966)3C.L.R. 572. Recourse. 15 Recourseagainsttherefusal oftherespodentstogranttoapplicants alicencetoimport2,000cartonsof safety matches, A. Skordis, for applicants. 2Q A. Papasawas, Senior Counsel of the Republic, for the respondent. Cur. adv. vult. 25 SAVVlDES J. read the following judgment. By this recourse the applicants challenge the decision of therespondent communicated tothem by letter dated 9th April, 1986,refusing the grant of a licence to them to import into Cyprus 2,000 cartons of safety matches. 1075 Savvides J. Meridian v. Minister of Commerce

(1988)Infact by theirprayer they alsopray thatanyprevious and/or subsequent actand/ordecision tothesameeffect is nullandvoid. Ishall dealwith thispartof theprayerlaterinmyjudgment. The legal grounds onwhich therecourse is based are briefly thatLaw 49/62asamendedbyLaw 7/67onwhich thesubjudice 5 decision was based aswell astheOrderissued by the respondent under s. 3 of the said laws violate Articles 23,25 and28 of the Constitution;thatthesaid orderisultraviresthelaw; thatthesub judice decision was issued by aninappropriateorgan;itwas taken in abuse and/orexcessof power, itamounts,toanillegalexercise JO of discretionary powers; it was taken undera misconception of fact anditlacks duereasoning. The applicants are a company of limited liability engaged in trade. Respondent,relying on s. 3of the Imports (Regulation) Law, 1962 (Law 49/62) as amendedby law 7/67 issued anorder j<j published inSupplement No.3of theOfficial Gazette of the Re­ public dated 20th January, 1983,underNotification 7/83 where­ by theimportationof matchesfalling within customs classifica: tion 36.06 was placed under control and as such for its importationanimportlicencewas required. 20 Onor about March, 1983, theapplicants applied for the first timefor theimportation of matches andever since a numberof applications was submitted by them which, however, werere­ fused by therespondent.Thereason,as explained tothemforre­ fusing theirapplications was theprotectionof local productsof 2 ς thiskindandthattheimportationwas controlledandregulated by "quotas"andthatlicences weregrantedonly totraditional import­ ers. Infact thefirst application of theapplicants which was sub­ mittedonthe29thMarch, 1983,was for theimportationof 1,000 canons of matches from Bulgaria. The applicants submitted a new application on28th November, 1983,which was refused on 10thDecember, 1983.Bothapplicationswererefused for therea­ sonsexplained above. On 10thApril, 1984,theapplicant submit­ ted a new application which was refused again on 3rd May, 1984, for thesamereason astheirprevious applications. 35 1076 Ν 3 C.L.R. Meridian v.Minister of Commerce SavvidesJ. Theapplicantsrevertedonthematteron29thMay, 1984, re-. questingreconsiderationoftheirapplicationtowhichrespondent repliedon8thAugust, 1984,refusing sameonthegroundofprotectionoflocalindustry. 5 On17thSeptember, 1984,applicantssubmittedanewapplication which wasrefused on 21th September, 1984,for thesame reasons.Anewapplication dated 28thJanuary, 1985wasagain refused on4thApril,1985. Byletterdated20thApril, 1985,applicantsprotestedtothere10 peated refusals of therespondent toissuetothem apermitand statedthattheywerereservingtheirrightsandthattheyweregoingtoreferthecasetotheirlawyers. 15 20 25 By letter dated 5th June, 1985,therespondent informed the applicants that theirrequest was being considered and that he wouldcommunicatewiththemagain.After aletterofreminderby the applicants therespondent on 19th October, 1985, informed theapplicantsthattheapplicationcouldnotbegrantedforreasons ofprotectionofthelocalindustry.Hefurther informed themthat thegrantof permitsinrespectof which a "quota"hasbeenimposedandalso,applicationsbynewimporterswouldbereconsideredbytheendof 1985.Onthe4thDecember, 1985,theapplicants submitted anew application for the importation of 2,000 cartonsofmatchesfromBulgariawhichwasrefused againon9th April, 1986,for the.same reasons aspreviously mentioned, the mainonebeingthatoftheprotectionoflocalindustry.Asaresult applicantsfiledthepresentrecourse. By his written addresscounsel for applicants contended that Law49/62asamended byLaw7/67 totheextent thatitallows the imposition of restrictions of the importation of matches as well astheOrderissued bytherespondent in pursuance ofthe powervestedinhimbythesaidlawsareunconstitutional asviolatingArticles23and25oftheConstitution.Hecontendedthat Article23of theConstitution safeguards the.right.of acquisition andownershipofimmovablepropertyandArticle25 safeguards 1077 Savvides J. Meridian v.Minister of Commerce

(1988)freedomof trade. Any limitations totheexercise of therightof freedom.of trade,counsel submitted, canonly beimposed byleg­ islation enacted by theHouseof Representatives andcannotbe exercised by anorgan vested withexecutive powers by virtueof delegated legislation inthenatureof Ordersimposing restrictions. 5 Counsel further contended that assuming thatLaw 49/62 is constitutionalsuchpowerwas delegated totheMinisterasthe ap­ propriateorgan todecideanditcould notbedelegated by him to officers oremployees of theMinistry asithappenedinthe present case.Thesubjudice decision inthe presentcaseis signed by the IQ Director-General of the Ministry who was unauthorized toact. Thedelegation of thepower was madetotheMinisterandinany event being adelegatus hecouldnotdelegate hisauthorityto any­ body else. Counsel further expoundedonhisothergroundsof law inthat J5 there was an abuse of power as therestrictions imposed should have been based ongrounds which should have been published intheofficial Gazetteof theRepublic;thatthere was abusebythe respondentof his discretionary power inthatinstead of applying the same restictions toall importers themethodof imposing the «o "quotas" infavour of existingimportersandrefusing apermitto new importersamounted tounequaltreatmenttendingtopromote the interests of certain importersagainst others.Hefinally sub­ mittedthattherewas lackof duereasoning. Sub-section

(1)of section 3of Law 49/62,as setoutinsection 2<Ϊ 2of Law 7/67 by which itwas replaced,provides asfollows: "

(1)ΟΥπουργός δύναται,οσάκις καθίσταται αναγκαίονεντωδημοσίωσυμφέροντι,όπωςπεριορισθήκαι ρύθμισθήη εισαγωγήεμπορευμάτωνίνα ενθαρρυνθήη τοπική παραγωγήκαιβιομηχανία,βελτιωθή τοεμπορικόνισοζύ- ^ο γιον, τηρηθώσιναι διεθνείςυποχρεώσειςήαναπτυχθήη οικονομία τηςΔημοκρατίας διαΔιατάγματος δημοσιευο­ μένου εν τηεπισήμωεφημερίδιτης Δημοκρατίας,να περιορίζηκαιρυθμίζητηνεισαγωγήντωνεντωΔιατάγματι 1078 3 C.L.R. Meridian v. Ministr of Commerce Savvides J. καθοριζομένωνεμπορευμάτων." 5 10 15 20 25 ™ ("Whenever itbecames necessary, inthepublic interest, to restrict andregulate theimportationof goods for the encour­ agementof local productionandindustry,theimprovementof thebalanceof trade, compliancewith international obligations orthedevelopmentof theeconomyof theRepublic,the Mini­ stermay,by Orderpublished intheofficial gazette of the Re­ public,restrictandregulatethe importationof thegoods speci­ fiedinthe Order." Byvirtueof theabove powers which were vested inthe Minis­ terof CommerceandIndustry,theMinisterissued anorderpub­ lished in the official Gazetteof the Republic of 20th January, 1983 underNotification 7/83restrictingandregulating the impor­ tationof certain goods set outin theSchedules therein included, for reasons, as stated therein,of public interest for the purposes mentionedinsub-section

(1)of section 3of theImports(Regula­ tion)Law. Amongst thegoods sorestricted,as setoutinSchedu­ le 1 of theLaw,werematches. In thelight of theabove statutory provisions Ifind untenable thecontentionof counselfor applicantsthattheMinisterwasnot empowered by law to make an order such as the one in the presentcase. The question as to whether theimposition of restrictions on importsviolates Article 25 of theConstitutionwas recendy.considered by meincase No.570/84, Sofoclides andCo.Ltd. v. (I) TheMinisterof Commerce andIndustry,

(2)TheRepublicofCy­ prus through theAttorney-General

(1986)3 C.L.R. 1302 at pp. .1312-1316in which Ihadtheopportunity of explaining and re­ viewing theauthoritiesonthematter.Isaid thefollowing inmy saidjudgment which Ifully adoptfor thepurposes of thepresent case: "Thequestion as towhether theimposition of restrictions on imports violates Articles 25 of theConstitution, cameup 1079 Savvides J. Meridian v. Minister of Commerce

(1988)for considerationin anumberof casebothbefore the Supreme Constitutional Court and this Court.InHussein Irfan and4 others andTheRepublic, 3 R.S.C.C.39,theCourthadthisto say atpages 42,43: 'Intheopinionof theCourt, havingregardtotheimpacton 5 theeconomyof thecountry through thechangeof sovereignty and thecreation of the Republic, it cannotbe said thatsuch powers torestrict and regulate imports as those givenunder the Regulations in question were notnecessary in thepublic interestinthesense of paragraph 2of Article 25,atthetimeof thecoming intooperation of the Constitutionandat therele- 10 vant time,i.e.February 1961. Theperiod of timeduring which such Regulations would continuetobeconsidered as 'necessary' intheabove sense, is a question of fact which does notcall for a decision in this Case. 15 (c) Regulation 3 of the Defence (Importation of Goods) Regulations, 1956, lays down that the importation of any goods isprohibitedsaveundertheauthorityof alicenceforthe purpose.Therelevant power tograntorrefuse a licence,was 20 exercised, inthepresentcase,inthepublicinterest,i.e.forthe purposefor which itwas granted.Thefact thatby the exercise of suchpower theinterests of acertainpartof the population, i.e. thevine-growers, for whose protection theVineProducts Schemeexists,may have been served atsome expense tothe -ς interests of tradersandconsumers of sugar ingeneral,dueto the importationof themoreexpensive U.S.S.R. sugar,is not sufficient toleadtheCourttotheconclusion thatthepowerin question was exercised inabuseorexcess thereof.' InImpalexAgenciesLtd. v.Republic

(1970)3 C.L.R. 361 we readthefollowing in thejudgment of A. Loizou,J.atpp. , 371,372 and373. 'It would be observed thattheMinister of Commerceand 1080 ™ 3 C.L.R. Meridian v. Minister of Commerce Savvides J. Industry, haspower torestrict andregulate theimportation of goodsinto the Republic, by an order published in the official Gazette,after takingintoconsideration thepublicinterest,and quiterightlyin my view,counsel for theApplicants conceded that theregulationof theimportation of thepotato seedwasin thepublicinterest and wasapproved bytheApplicants. 10 15 20 Iwould liketobeginby statingthatinthemodem stateitis often found desirable to subject specified activities,to some form of Governmental control.The purposes of such controls will vary. Sometimes a control is imposed for the purpose of collectingrevenue;sometimes thetypeofactivity may besuch thatitisdesirablein thepublicinterest torestrictthenumberof persons who exercise it. In practice, one of the commonest methods whereby controlscan beimposed is the licence, and in thecasein hand, theapplicant company, like anyother importerwhodesires tocarry on with thebusinessof importation ofpotatoseed,isrequiredtosecurealicencefromtheMinister of Commerce andIndustry, whoisthe licensing authority under the provisions of s. 4

(1)of Law 49/62 (as amended). Theseimport licences, Imay add, are usually granted in pursuanceofprotectionist policies. The purpose of section 3

(1)of Law 49/62, and the order madeunderthat section isnottheregulation of any profession, occupation, trade or business, but theregulation and the control of importation of potato seed. The mere fact, therefore, that the importation of this commodity is a necessary means for thecarryingonofthebusinessofimportation,cannotjustify theconclusion that theregulation and control of thiscommodity and the refusal of the Minister interfere directly with the right, as such, of the applicant company to carry on the business of an importer. I would add that in this case, it is clear, that thecompany hasnot been granted a licencefor the. 1081 Savvides J. Meridian v. Minister of Commerce

(1988)importationofpotatoseed,simplybecauseitdidnotconform tothetestlaiddownbytheMinistry,andthatbecauseforaperiod of three years prior to thedecision of the Minister the Companydecidednottotradewiththiscommodityforreasons explained by Mr. Hadjisoteriou, one of the directors of the 5 company. Inmyjudgment,therefore,Ifind thatthedecisionoractof theMinisterisnotrepugnant totheprovisionsofArticle25of theConstitution. I would like, however, to state that even assuming that I 10 waswrongin thisfinding, andthatthedecisionoractofthe Minister directly interfered with theright of thecompanyto carryonthetradeorbusinessofimporterofpotatoseed,then againIwouldhavehadnodifficulty inmyjudgmenttomakea finding thatsuchformalities, conditionsorrestrictionswhich ^5 areprescribed bythis law, areonly necessary for theprotection oftherightsandlibertiesguaranteedbytheConstitution, asprovided for byparagraph 2ofArticle25of theConstitution.' In Psaras v. The Minister of Commerceand Industry 20

(1971)3 C.L.R. 151,the Court, had this to say at pp. 160, 161: 'In thelight of what has been stated hereinabove astothe relevancy of the CyprusPotatoMarketingLaw, 1964,tothe subjudice decisionIdonotfind thatthedetermination ofthe 25 constitutionalityofthislaworanypartthereofisnecessaryfor the purposes of these proceedings. Had it been necessary, however,toadjudicate upon it,Iwouldhavenohesitationin decidingthatthislawisnotunconstitutional,asitcomeswithintheambitofpara.3ofArticles25. ^ Thenextpointfordeterminationis(a)theunconstitutionalityornotof section 3of theImports(Regulation) Law,1962, andtheordermadethereunder,underwhichthedecisioncom1082 3 C.L.R. Meridian v. Minister of Commerce Savvides J. plainedofwastaken,and(b)theunconstitutionality ornotof thesaiddecision. 5 10 I- (a)Article25oftheConstitution safeguardstherightofthe individual topracticeanyprofession ortocarryonanyoccupation,tradeorbusiness.Paragraph2thereofprovidesthatthe exerciseofthisrightmaybesubjecttosuchformalities,conditionsorrestrictionsasareprescribed bylawandareinteralia necessary only in the public interest. It regulates, therefore, the conditions under which a profession, tradeor business maybeexercised.Therequirement of alicence for theimportationof aparticulartypeofgoodsdoesnotamount toaprohibition tocarry out aprofession oroccupation.One maystillbecomeanimporterinrespectofthesegoodsorother goods subject tocertainconditions which arenecessary inter aliain the'publicinterest'.Ihold,therefore, that section 3 of •Law49/1962 asamendedisconstitutionally valid solongas the restriction or regulation of the importation of goods is made,asitisthecaseunderconsideration,inthepublicinterestorforanyotheroftheobjects setoutinthesaidsectioni.e. theencouragement of localproduction and manufacture, the improvementofthebalanceoftrade,compliancewithinternational obligationsandthedevelopmentoftheeconomyofthe Republic, all being objects that bring it within the ambitof para.2ofArticles25,theverytermsofwhichrenderitmanifestly aprovisionoflawnecessaryinthepublicinterest. Withtheaboveinmind,Ifind myselfunabletoagreewith theargumentofcounselforapplicantsthatthedecisionoract oftheMinister inimposingrestrictionsontheimportationof cheeseiscontrarytotheprovisionsofArticle25oftheConstitution." 30 Article25safeguards therighttopracticeanyprofession orto carryonanyoccupation,tradeorbusinesssubjecttosuchformalities, conditions or restrictions, as provided by the Law. Paragraph 2ofArticle25recognizestheimposition ofconditionsor 35 restrictionstosuchright,necessary,interalia,inthepublicinter1083 Savvides J. Meridian v. Minister of Commerce

(1988)est. There is nodoubt that in themodern state it isoften found necessarytosubject certaincommoditiestosomeformofgovernmentalcontrolforthepurposeof, interalia,theprotectionoflocal productsandtheirmarketabilityintheinterestofthecountryasa whole.In thepresent casetheapplicant hasfailed to satisfy the 5 Courtthattherestriction wasnotaimedattheabovepurposeand wasarbitrarilyimposed bytheMinisterofCommerceandIndustry. Ithasbeenrepeatedly stressedthattheCourtwillnotinterfere by substituting itsown discretion for thatof the administration IQ eveniftheCourtwouldhavereachedadifferent conclusion(lacovidesv.TheRepublic

(1966)3C.L.R.212). InthecircumstancesofthepresentcaseIfind that: (a)Therestrictionsimposedbytherespondentwerewithinthe ambit ofparagraph 2of Article25of the Constitution and that 15 theydonotviolateArticle25oranyotherArticleoftheConstitution. (b)Therehas been noviolationof Article23of theConstitutionwhichinanyeventhasnobearinginthepresentcase. (c) The discretion of the respondent wasproperly exercised 20 andnocasehasbeenmadeforinterference bythisCourtwiththe exerciseofhisdiscretion. I come next toexamine the contention of counsel for applicants that an absolute prohibition is imposed on persons who werenotpreviouslyimportingsuchgoodsandwhowishedtodo 25 so whereas in the case of those who were importing similar goodspreviouslyinsteadofanabsoluteprohibition apermitwas grantedonthebasisofa"quota". In Constanttnou v.TheRepublic

(1966)3C.L.R.572it was saidatp.581: "Butaninstanceofdiscrimination canonlyariseif different 1084 30 3 C.L.R. Meridian v. Minister of Commerce Savvides J. treatmentis metedoutintwocases which aresimilar in allma­ terialrespects;" Inthepresentcase theapplicantdoesnotfall within thecatego­ ry of persons who were importing thesegoods prior totheimpo­ sition of the restriction. Therefore, he cannotcomplain of discriminationbetween him and importers of theothercategory as such differentiation was areasonable oneandit does not violate theprincipleof equality of treatment. 5 As to thecontentionof counsel for applicants that the letter containing the sub judice decision was signed by theDirectorGeneral of theMinistry and notby theMinister Ifind suchcon­ tention untenable, since under the Public Service Law, 1967 (Law 33 of 1967) the Minister is empowered to act through the Director-General of his Ministry. ,Λ 15 I also find thecontentionof counsel for the applicants about lack of duereasoning as unfounded.Thereasoning appears inthe decision itself but it could also be supplemented by thematerial -.which was intherelevantfileof theAdministration. ^* 20 «c Before concluding Ifind it necessary todeal briefly with that partof theprayerfor relief which isdirected against any previous decisions of therespondenttothesame effect. Itis well settledthatfor anacttocontinuetohave anyexecuto­ ry effect ithas tobe challenged within theperiodof 75 dayspro­ vided by Article 146

(3)of theConstitution. Failuretodo sodeprives a person of a legitimate interest to challenge same. All previous decisions of therespondent in thepresent case were in respect of independentexecutory actseach timeandthefailure of trie applicants to challenge each one of them within the defined period of 75 days has deprived him of any legitimate interest to challenge themby thepresentrecourse. In the result therecourse fails and is hereby dismissed with £100.-costs infavour of therespondent. Recourse dismissedwith £100.-costsagainstapplicant. 1085