IN THE COURT OF APPEAL OF LESOTHO
HELD AT MASERU
Civil Appeal No. 23/1999
In the matter between:
THE CENTRAL TENDER BOARD First Appellant
THE MINISTRY OF WORKS Second Appellant
ATTORNEY-GENERAL Third Appellant
CONSTRUCTION (PTY) LTD Respondent
10,13 April 2000
Coram: Van den Heever, JA
The appellants (the respondents in the court below) appeal an order (by Monapathi J) declaring "the finalisation of tenders for Peka staff houses .... null and void", that "the procedure in relation to the said traders (sic) is reversed and should start
de novo", ordering the second appellant to renew the respondent's trading licence
as a building contractor, and granting ancillary relief.
The court then proceeded to "clarify" the relief so granted in the following formulation (which I quote without correction of its several patent errors):
"(a) That the finalised tenders be declared null and void.
That tenders be re-submitted to allow for participation by the Applicant in the Peka staff have tender.
That the Applicant still retains his status as an A category building contractor.
That the Applicant still has licence to operate and if there are statutory changes which are proved or enacted then it shall be caused to pay up accordingly.
That while the procedure for re-registration, review, re-categorization would be to encourage a structure statutory scheme is to be put in place to provide for periodic procedure and payments. In the present circumstances Regulation 2115 seems inadequate. This is without prejudice to the need for contractors to comply with Trading Order about which there was not complaint.
While the declarations appear to relate to the circumstances of other contractors this judgment does not prescribe for them. But the Respondents would be encouraged to re-instate the status quo of all affected contractors as at the time of the issue of annexure "A". All this to be done to avoid confusion and unnecessary litigation. It appears just to do so until comprehensive regulations are put into effect".
It appears from the papers in a consequential application for stay of execution of these orders that the second appellant (the Ministry of Works) as a result was unable to award any building contracts, and that Government building activities have virtually come to a standstill.
The central issue in the matter is a crisp one. This is that the respondent from 1982 through to 1999 held a licence as a trader in the building construction industry in the "A" category in terms of regulation 2115 of the Financial Regulations, 1973. When, in April 1999, it sought to renew its licence, it was told that this would not be possible, as a new categorisation (with new application forms) would apply shortly. The respondent's stance in response was that its "status had long been categorised and cannot be re-categorised as indeed envisaged in the general note to the new forms".
The appellants' answer on the papers was that on 21 April 1999, a "Special Announcement" was made by the Director (Works Building Services) to all registered building contractors and new applicants. This draws attention to new "qualification statement and categorisation" forms, warns "ALL contractors" to complete the new forms and return them for processing, and warns "that ALL, including registered contractors will be reviewed in the new form and will
then be re-categorised accordingly".
The appellants' case is that regulation 2115 gives a power to grant the certificates in question and any other related documents, and that this includes the power to re-categorise the certificates so issued. The respondent's case is equally simple: that the appellants "cannot interfere with my status nor purport to re-categorise same as it exists subsequent to the initial categorisation". It contends that regulation 2115 "does not envisage re-registration nor re-categorisation", and that accordingly any act of the appellants to re-register and re-categorise contractors is ultra vires the regulation.
The learned judge a quo sustained the argument for the respondent. He did so in the following terms (which I again quote verbatim):
"20. The Minister of Finance has to he can amend the Financial Regulations 2115 to empower an official of Ministry of Works and Communications to do certain desirable things or if he decides to amend the Finance Order 1988 to be able to regulate building contractors in a certain streamlined and professional way by prescribing for use of forms and adoption of forms for annual licencing. I do not see that it is the right of the Director to seek to regulate already registered contractors without stipulating conditions under which their status can be prejudicially disturbed. This may be done but certainly not circular where a substantive statutory instrument would do the work. The special announcement was such a unhelpful circular and instrument whose value was overstated.
2.1 I concluded that without an empowering statutory arrangement the special announcement was nugatory and would not be a good legal foundation for having disqualified the Applicant. The value of circular is often overestimated. Where properly issued: 'They are therefore of great importance' and 'in themselves they have no legal effect whatever having no statutory authority. But they may be sued as a vehicle for conveying instructions to which some statute gives legal force........They may also contain legal advice of which the courts will take notice. Much confusion has been caused by failure to distinguish between the legal and non-legal elements in circulars.....".
Administrative Law - HWR Wade and CF Forsytth - pages 871-872.
With the criticism that I have put forward regarding the deficiencies of Regulation 2115 and the absence of licencing provision the above authority seems clearly to be on point on the issue of the weakness of the special announcement (circular).
2.2 I found that there was presently no reasonable ground for refusing the Applicant to receive tender forms and submit same to the First Respondent. That it had failed to fill in applications was not enough".
What is intended by this passage, riddled as it is with glaring errors and non sequiturs. is not in all respects clear. (It is unsatisfactory that court orders and judgments should not be carefully checked before signature). But this much is plain: the trial court considered that the Director had no power "to regulate already registered contractors" in a way which detracted from the status initially accorded to them. I cannot agree. In my respectful view, the court a quo erred in considering that the respondent, pursuant to a licence which in its very terms had no life beyond 31 May 1999, in some way had acquired a registration (and with
it, categorisation) which the appellants were powerless to vary. Its approach fundamentally misconceives the basic nature of a renewable licence (inherently subject to a permissive, regulatory mechanism), and confined on its face to a specific period.
Regulation 2115 states (in the amended form furnished to us by counsel):
"(1) The Ministry of Public Works and Transport shall maintain a register of contractors in which contractors shall be graded under the following headings -
Category A - Multi-storey complicated buildings or major works - over M800 000,00
Category B - General buildings or smaller works - M200 000,00 to M800 000,00
Category C - Simple buildings or work -M50 000,00 to M200 000,00
Category D - Trial category - 0 to M50 000,00
The register shall also contain, in respect of each contractor, brief details of his capabilities (eg. plant and equipment available, capital employed) and a complete record of his work as contractor for the Government. All entries in the register (including amendments) shall be notified to the Secretary of the Board".
There is nothing to suggest that a contractor, once graded during a particular licence year, could not be re-graded in future years. Common sense in the first
place suggests the converse. It would be an administratively ossified system if a contractor whose capacity (to which the regulation specifically refers) confines him at one stage to a "C" rating, subsequently expands his plant or personnel, such as to merit a "B" categorisation, but cannot be upgraded. Conversely, plant and equipment, expressly mentioned in sub-regulation (2), may become obsolete over the years. The very inclusion moreover of a trial category ("D") strongly indicates that a power to revise categories is authorised.
This interpretation is reinforced by the essential duty of "maintaining" a register. That is clearly a continuous act, contemplating revision from time to time. If an initial categorisation was intended to be once and for all, what would there be to "maintain"?
It is also a trite principle in the construction of statutes that as a general rule, when a power is granted for a particular purpose, it includes a power of revocation or variation. The licencing system such as this is clearly one which falls within that general principle.
It follows that the respondent's central contention that its categorisation in 1982 was final and immutable, and that any revisions of it would be ultra vires
Regulation 2115, is untenable.
In my view, accordingly, the approach adopted by the court a quo was wrong, and it erred in granting the relief sought. That, as a consequence, State building operations in Lesotho should have effectively been halted for nearly six months is most unfortunate.
The appeal is accordingly allowed, with costs. The judgment of the court below is set aside, and its orders substituted with the following order.
"1. The application is dismissed.
The applicant is directed to pay the respondents' costs".
Van den Heever, JA:
VAN DEN HEEVER JA
For the Appellants: Miss M. Mothepu
For the Respondents: G.G. Nthethe and Company