3 C.L.R. , \ ! ' 1988June30 '•>'•>,: κ.' .. . · • . " - . · - " ' · t • '.'' tSTYLIANIDES; J.] _> j - 't r •' . y i . ' - - ' •• '. -. . ' · . " . INTHEMATTEROFARTICLE 146OFTHECONSTITUTION ι •, \\ •. I • * - •• > r t - . '' " ; .. THOMASSAVVIDES, , • . -,\- r , ; '' Applicant, •Λ . I. . " " ' 4 l , s • ' V. THEREPUBLICOFCYPRUS,THROUGH THEMINISTEROFCOMMERCEANDINDUSTRY, Respondents. 5 Importation of goods—The Imports (Regulation) Law, 1962 (Law, 49162), section 3,as amended by section 2 of Law 7/67—TheImports-Regulation (Control andRegulation of Goods) Order. 1968Reg. 3—Neither the law nor tfie regulations adopt'a distinction between "traditional" (παραδοσιακοί) andother importers—Theambitof section 3—TheMinis ter hasnopower beyond itsscope.' General principles of administrative law—Discretionary power—When deemedas exercisedinalawfulmanner. < "• , . · . , -..-> 10 15 "Fertilizers" were declared a "controlledcommodity" for protection of thelocalindustryG.C.I.Ltd.Theoperationof thelatter,however wassus pended "temporarily" in October 1983. For the following the suspension periodtheMinistrydecided toallow importation of limited quantities. The applicant's application for importation of fertilizers'was rejected oh the' groundthathewasnota "traditional importer" of fertilizers. Hencethisrecourse. , .,-. ι -ί > >' i Held,annulling the subjudice decision:
(1)The notion of traditional (παραδοσιακός) importer doesnotappearanywhere, eitherin theLaw,or theRegulationsmade thereunder. 20 '.::
(2)Inthepresentcaseno-oneof thegrounds setoutin section3of the Law exists.Therefusal tograntalicencetotheapplicant could notbevalid- 1359 Savvides v. Republic
(1988)lysaidthatitwasmadefortheencouragementoflocalproductionorindustry.Thelocal industry wasdefunct andnon-operative.Theneedforimportationledtotheissueofimportlicencesashereinabovesaid.
(3)Enactmentsallegedlyestablishingmonopolieshavetobeconstrued strictly.Therestrictionthatshouldbeimposedwasastothetotalquantity of fertilizers tobeimported.Theissueoflicencesonlytothosewhowere characterizedastraditionalimportersisoutsidetheambit,wording,orobjectoftheLaw. Subjudicedecisionannulled. Noorderastocosts. 10 Casesreferredto: Irfanandothersv. TheRepublic,3R.S.C.C. 39; ImpatexAgenciesLtd. v. TheRepublic
(1970)3 C.L.R. 361; Psarasv. TheMinistryofCommerceandIndustry
(1971)3C.L.R. 151; 15 SofoclidesandCo.Ltd. v.TheRepublic
(1986)3CX.R.1302; SofoclidesandCo.Ltd. v.TheRepublic
(1987)3C.L.R.15; TheDirectorUnitedStatesCableLtd. v.TheAnglo-American Telegraph CompanyLtd.[1877]2A.C.
- Recourse. 20 Recourse against the refusal of therespondents to grant applicant an import licence for fertilizers. Chr. Vakis, for the applicant. N. Charalambous, spondent. Senior Counsel of the Republic, for re25 Cur. adv. vult. 1360 3 C.L.R. Savvidesv.Republic :. , STYUANIDESJ. readthefollowingjudgment.Theapplicant, by meansof thisrecourse seekstheannulmentof thedecisionof the.Respondentscontainedinletterdated30thJuly, 1985,where-· by theyrejected hisapplicationforimportlicenceoffertilizers. .. 5 The Imports (Regulation) Law, 1962 (Law No. 49/62), sec tion3, as amended by section 2 of Law 7/67, provides that the Minister(of CommerceandIndustry)"whenever itbecomes nec essaryinthepublicinteresttorestrictandregulatetheimportation of goods for theencouragementof localproduction,andindustry,
- theimprovementofthebalanceoftrade, compliancewithinterna tionalobligations orthedevelopment of theeconomy of the Re public,may,by Orderpublished intheOfficial Gazetteofthe.Republic,restrictandregulate theimportationof thegoods specified inthe Order." ;•• . -• 15 20 By virtue of Regulation 3of theImportsRegulation(Control. andRegulationof Goods) Order,1968-(seeOfficial Gazette No. 654of 24thMay, 1968,"SupplementIII):.:.;;· - · "
- ΗεισαγωγήεντηΔημοκρατίαοιωνδήποτεεμπορευ- • μάτων δενεπιτρέπεται ειμήυπό,εισαγωγέως καικατόπιν αδείαςτουΥπουργού:" - Μ . '' ("
- TheimportationintotheRepublicof any goods isnot permittedsavethanby animporter andafter apermit bythe Minister.") , , . * ' . * • 25 30 InthefirstScheduletotheabove Orderjthere areincluded·the. goods.in respect of which animport licence is required. Oneof suchgoods is "fertilizers". They wereincludedinthefirstSched-; ule by means of Regulatory Administrative Act 170/82of'21st, May, 1982.,. ,,; ., ί · : ; . . . . · . " . -' '• * . According totheopposition of theRespondentsthe fertilizers weredeclared-a ''controlledcommodity.'.'fonthe purpose ofpro tection of the.local/industry, namely the" Ελληνικές Χημικές ΒιομηχανίεςΛτδ." (GreekChemicalIndustriesLtd.), (hereinaf1361 StylianidesJ. Sawidesv. Republic
(1988)terthelocalindustry).Thelocalindustrycommencedoperatingin 1982and'wasproducingthemixedorcompoundtypeoffertilizers,i.e. 16-20-0, 12-20-7and 15- 15-7,for thelocalmarket.Forthepurposeof protection of thesaidlocalindustrythe importationoftheabovetypeoffertilizers wasabsolutelyprohi- 5 bited. Theoperationofthelocalindustrywassuspended "temporarily"in Order 1983.Ithasnot asyetreoperated.Thequestionof viabilityandre-operationofthislocalindustryiscontinuously underconsideration bytheHouseofRepresentatives. 10 Duringtheperiod September 1982toOctober 1983thelocal industryproducedallormorethanthefertilizersnecessaryforthe satisfaction ofthelocalmarketsofarasquality,quantityandpriceswereconcerned. Fortheperiod 1983-1984theMinistryofCommerceandIn- 15 dustry decided to issue licences for the importation of limited quantitiesofmixedorcompoundfertilizers,inordertosatisfythe. needsof agriculturein thiscountry.Theobjectofsuchdecision wasthenon-importationoffertilizersmorethanactuallyneeded andinordertoavoidrenderingproblematic there-operationof 20 thefactory ofthelocalindustry.Thesamepolicyof limitedimportationwasfollowedforthenextfertilizingperiods. TheMinistry,inordertodeterminethequotafor licencesof importationtobeissued,askedthetraditionalimporterstosubmit astatementshowingthequantityofcompoundfertilizers import- 25 edbythemduring 1979,1980,and 1981.TheMinistry,inexerciseoftheirpowerundersection3ofLaw49/62asamendedby Law7/67,followed thepolicytotakeintoconsiderationtheimportationsinrespectofthethreeyearsprecedingthequantitative restriction. ~~ TheMinistry of Agriculture andNatural Resources assessed theyearlyneedsofthecountryincompoundfertilizers atabout 40,000tons. 1362 \ \ 3C.L.R. \ \ * \ Savyidesv.Republic Stylianides J. .Theapplicanton 10thJuly, 1985,submittedanapplicationfor licencefor theimportationof 3,000 tonsof,compound fertilizers from Rumania.His such applicationwas rejected onthe ground that import licences-are:issued only to "παραδοσιακούς 5 εισαγωγείς" (traditionalimporters)onthebasis.of theirprevious imports. Thesame Ministry on23rd November, 1982 issuedalicence tothe applicanttoimport.1,000 metrictonsof fertilizers - UREA ,46- 0-0\- fromPortugal. • , t -, y ' ., 10 ., .Itwas submittedbycounselfor theapplicantthat:- . 15 20 25 30 •• 1.Section 3(l);of theLaw does not^empowertheMinisterto selectorrestrict "theimporters"towhomimportlicenceswillbe granted.Thereference to "regulationof theimportation" cannot refer topersons anddoesnotempowertheselectionofpersons to whomimportlicences willbegiven.The restriction pf.licensees toimportersof theperiod 1979 -1981 is arbitrary andnotbased onanyauthorizationfor anyreason. 2.According totheMinistry theobject of therestrictions,was theprotection of thelocalindustry. Itis commongroundthat the localproduction,stoppedinOctober,J983,tbut therelevantOrder had notbeenrevoked.The subjudice refusal was notjustified, since there is nolocalproduction of the,commodityandthere werenopositiveprospectsof thereoperationofthe factory. 3.Theexerciseof theMinister'spower was madeonthebasis of non-existent facts because therewas riolocalproduction at thematerial time. 4.Thepolicyof imposingrestrictionsonthe importation:ofthe commoditywhichhasbeenproducedlocally for ashortperiodof time, inconjunctionwiththegranting of importlicencesonlyto personswhohaveeffected importationsinthedistantpast is'arbitrary,unjustified andpromotesmonopoly andlabours adversely tothe publicinterest. . . . . -. , 1363 StyIianides J. Savvides v. Republic
(1988)Importer is defined in the 1968 Regulations as follows:"εισαγωγεύς" (importer) σημαίνει(α)πάντα μόνιμον κάτοικοντηςΔημοκρατίαςενασκούνταεργασίανεντηΔημοκρατία,ή (β)πάνταοργανισμόν προσώπωναποτελούντανομικόν 5 πρόσωπον ήμηκαιενασκούνταεργασίανεντηΔημοκρα τία, όστις είναι μέλος Εμπορικού Επιμελητηρίου εγγε γραμμένου δυνάμει του άρθρου 20 του περί Εταιρειών Νόμου,αλλά 6εν περιλαμβάνει οιανδήποτε υπερπόντιον εταιρείαν εγγράψασαν γραφείον εραγασίας εν τη Δήμο- ίο κρατίαμετάτηνημερομηνίαντηςδημοσιεύσεως τουπαρόν τος Διατάγματος εν τη επισήμω εφημερίδι της Δημοκρα τίας." The notion of traditional (παραδοσιακός)importer does not appear anywere,either intheLaw, ortheRegulations made there- 15 under. TheMinister issuedimport licences tothetraditional importers as follows:(a)GentralCo-operativeBank 88% - 37,701metrictons. (b) N.P.Lanitis 8% -1,550metric tons. 20 (c)P.M.Tseriotis 3%- 200 metric tons. (d)VariousOthers -1%. In Hussein Irfan and Four Others and the Republic, 3 R.S.C.C., 39, atp.42 it was said:" (c)Regulation 3 of the Defence (Importation of Goods) 25 Regulations, 1956, lays down that the importation of any goodsisprohibited saveundertheauthority of alicence for the purpose.The relevantpower togrant orrefuse alicence, was 1364 3 C.L.R. Savvides v.Republic Stylianides J. exercised, in thepresent case,inthepublic^interest, i.e.forthe purpose forwhich itwasgranted.Thefact thatby theexercise of such powertheinterestsof acertain partof thepopulation, i.e.thevine-growers,for whoseprotection theVineProducts 5 ·' Scheme exists,may have been served at some expense tothe interests of traders and consumers of sugar in general, dueto the importation of the more expensive U.S.S.R. sugar, isnot sufficient toleadtheCourt totheconclusion thatthepowerin question wasexrcised inabuseorexcess thereof." 10 TheLaw 49/62wasjudicially considered inImpalexAgencies Ltd.'v.'Republic
(1970)3 C.L.R: , 361;Psards v. The Ministry of Commerce and Industry
(1971)3 C.L.R., 151;Sofoclides & ,Co.Ltd. v.Republic
(1986)3C.L.R. 1302 andon appeal
(1987)'3rC.L.R. 15. 15 .In thelast casetherestriction wasclearly imposed for theencouragement oflocalproduction andindustry.' 20 25 30 In thepresent case no-one of thegrounds setout insection 3 of the law exists. The refusal to grant a licence to the applicant could not bevalidly said thatitwasmade for the encouragement of local production or industry. The local industry was defunct and non -operative.The need for importation ledtothe issueof import licences asherein abovesaid. ' ' ' Counselfor theRespondents,bothinhisopposition andinhis written address,contended thattheMinistry1wasactingwithinthe ambit of section 3
(1)of Law 49/62 as amended byLaw 7/67 in taking into consideration the importation of goods for the last threeyears before issuing'licences andgrantingthequota. With respect, the Law does not give a general1unrestricted power tothe Minister.Hispoweris subject tothe specific provisionslaiddown in the.law. Enactments allegedly establishingmonopolies havetobeconstrued strictly -{TheDirector UnitedStatesCableCompany, ud. 1365 Stylianides J. Savvides v. Republic
(1988)v. TheAnglo -AmericanTelegraph Company, Ltd. [1877]2 A.C. 394, atp.412). Therestrictionthatshouldbeimposed was astothetotal quatityoffertilizers tobeimported. Theissueof licencesonly tothose whowerecharacterizedastraditionalimportersis outsidetheam- 5 bit,wording,orobject of theLaw. Tosum -upthelocal industry was notoperative. There was ascertained a need of importationof 40,000toneof fertilizers. The applicant in 1982 was issueda licence andimported 1,000 tonsof fertilizers - UREA. The Ministry issuedlicencesmainly - 10 99% - to three main importers whom they called as "παραδοσιακούς" (traditional) importers.Theydecidedtorefuse theapplicationof thisapplicantbecause hewas nota traditional importer. Thisdecision cannotbevalidlysustained underthe provisions of section 3of theImports(Regulation)Law, as itisoutsidethe scope andambitof theLaw, intendstoaffect theinterestof the public andtheindividual applicantconcerned.TheLaw merely restricts andregulates theimportation.TheRegulations limitthe rightof importationtoimportersonly. Theapplicantwas andis animporterinthesenseof theRegu lation. Thereis noreasoninginthePsorascase(supra)supportingthe administrativeactchallenged. The ground on which the subjudice decision was taken and 25 the differentiation of the importers is arbitrary unjustified, not supportedby Law and/oriscontrarytoLaw. It is a well established principle that a discretionary power mustbeexercised for thepurposefor which itwas given.It must be exercised, in a lawful manner.A discretion is exercised, of 30 course, inalawful manner, if initsexerciseallmaterialconsider1366 3 C.L.R. 5 Savvides v. Republic Stylianides J. ations have been taken intoaccount, due weight is given tomate rial facts, and has notbeen based on a misconception of Law or fact. A defective exercise of adiscretion may, therefore,amount to anexcess or (abuse of power - (Impalex Agencies Ltd. v. Republic
(1970)3 C.L.R , 361). Furthermoreitshould notbe lost sight of thefact that fertiliz ers were declared a control commodity for the sole purpose of protection of the local industry, which it ceased tooperatemore than two years priortothecomplained of decision. 10 Forall theabove reasons, thesubjudice decision is aproduct of misconception of fact andlaw and was taken inexcessandor abuse of power. xlt is hereby,declared null andvoid andof noeffect. Letthere be noorderas to costs. 15 Subjudice decisionannulled. Noorder as tocosts . ,ν. x > ·V \ " * -•" (I * 1367