DAFF REVIEW OF LEGISLATION PROJECT


On Friday 29 June 2012 a hastily convened meeting was hosted by DAFF at 15 on Orange hotel in Cape Town centre.

The meeting was titled “DAFF Review of Legislation Project”. According to Mr Dennis Fredericks (the director of Inshore Resource Management) the reason for the meeting was in order to obtain input from stakeholders regarding amendments to be carried out to the Marine Living Resources Act (MLRA). Notwithstanding this those attending were advised that stakeholders would also have additional opportunities to make proposals and comments regarding amendments to the MLRA and it was also advised that a further meeting would be held to discuss such changes.

The main reasons for proposed amendments to the MLRA were given to be the following:

The Small Scale Fisheries Policy which had recently been gazetted on the 20 June 2012. It was explained that in order to implement the policy there was a requirement that the MLRA be amended;

  • There was a need to amend the MLRA in order to address the development of aquaculture. Having said this the presenter did state that it may be that amendments are not made to the MLRA but a separate statute is passed with regard to aquaculture;
  • There were no provisions in the MLRA for regulating fresh water or inland fishing;
  • There were a number of enforcement and judicial matters that needed to be addressed;
  • There were a number of “gaps and technical issues” which needed to be addressed;

Unfortunately the meeting was unhelpful with regard to the detail of any proposed amendments. As such from a stakeholders point of view it was very difficult to make off the cuff suggestions as to amendments to the MLRA where no drafts were presented at the meeting. This is particularly relevant with regard to the accommodating of the Small Scale Fisheries Policy into the MLRA. It is not for stakeholders and industry to propose draft legislation in this regard and it would have been more helpful for the Department to have presented a draft at the meeting in order to elicit valid and informed comments. In fact in my view the lack of any draft for comment purposes and the unreasonably short timeline given to stakeholders for input will result in stakeholders having little or no input in the envisaged legislative changes to the MLRA.

The timeline given for the intended amendments to the MLRA is that they need to be promulgated by March 2013. Given the administrative process of drafting, publishing for comment and ultimately promulgating the amendments, the Department will be hard pressed to achieve this deadline. Of importance for stakeholders, this deadline leaves very little opportunity for meaningful input and comment into the proposed changes.

Professor Nick Olivier from the University of Pretoria (law faculty) addressed the meeting to explain that they had been appointed as the dedicated service providers to DAFF with a mandate to update all DAFF related laws which totaled approximately 40 pieces of legislation including fisheries legislation. In fact they had been mandated to prioritize the review of fisheries legislation. In this regard he explained that they would receive proposed changes form DAFF along with any proposals from industry / interested parties which would all be considered before they made recommendations to DAFF as to how to “rationalize / constitutionalize” the change into the legislation.

The main problem of course with this approach is that the recommendations by DAFF and by industry / interested parties will be done independently and it would have been ideal for Professor Olivier to receive DAFF recommendations together with comments from industry on such recommendations, as industry input and knowledge is in our view critical with regard to the practical implementation of legislation.

The stakeholders were also advised that similar workshops would take place in the Eastern Cape and Kwazulu-Natal which now have apparently occurred.  At the meeting the Department gave until the 25 July 2012 to submit any proposals for amendments to the MLRA. DAFF advised that they intended presenting a draft of their proposed amendments to their service providers (The Law Faculty of the University of Pretoria) by the end of August 2012. Due to the extremely short timeline for DAFF to present proposed amendments, there was a view amongst stakeholders present that this suggested that in fact there was already a draft or working document in place containing proposed amendments. On DAFF being questioned on this they denied that any such draft amendments / working document existed and therefore nothing could be made available at this stage to the stakeholders for comment.

The opportunity to submit comments by the 25 July 2012 was only granted by DAFF after a request by stakeholders at the meeting for this opportunity, otherwise presumably no opportunity would have been given and DAFF may have viewed the workshop as being satisfactory input from stakeholders despite the extremely short notice period and no proposed amendments being displayed at the workshop.

After this initial discussion regarding DAFF’s need to amend the Act, comments from the floor were invited. The majority of the comments were not in respect of technical amendments to the Act but rather constituted statements concerning the suitability and impact of the introduction of the Small Scale Fisheries Sector.

There were however a number of useful comments regarding areas of possible amendments to the Act which are summarized as follows:

The Consultative Advisory Forum (CAF) should be reconvened;

  • CAF should be integrated and contain representatives with knowledge from all sectors;
  • Section 19 dealing with subsistence fishing should be removed if the Small Scale Fisheries Sector is included;
  • A definition of ‘rights holders’ should be included in the Act;
  • The definition of ‘fish processing establishment’ should be addressed and reconsidered;
  • Section 21(1) and Section 21(2) should be reconsidered in order to clarify the situation particularly with respect to the transfer of rights, the transfer of equity in rights holders and the impact of the Section on different types of entities including listed companies which have no control over the trading of their shares on the JSE.
  • Section 18(6) should be reconsidered in order to make provision for rights being allocated for a period of longer than 15 years;
  • Part 5 of the Act dealing with the Fisheries Transformation Council was raised in discussion as to whether it should be reconstituted or removed from the Act – other than confirming that the FTC was currently abolished, DAFF did not definitively confirm that this Section of the MLRA would be repealed.
  • Section 13 of the Act dealing with permits should be made less peremptory and should rather be an enabling section of the Act;

The meeting was closed shortly after this session.

In conclusion, in our view the meeting highlights the fact that the process that has been followed by DAFF with regard to the amendment of the MLRA is not as inclusive or open as it should be. This is no more apparent than from the extremely limited amount of time given for parties to consider amendments to the Act and the limited time set for DAFF to create a draft and for this draft to be considered and promulgated. As such, notwithstanding the importance of the amendments to the Act it is clear that a broad based consultation process cannot and will not take place should DAFF stick to the March 2013 deadline.

In addition to the this initiative to push through wholesale amendments to the MLRA by March 2013, the Department will also at the same time have to finalise a new general and  sector specific policy for the rights which terminate at the end of 2013. On top of this an allocation procedure will have to be developed and applications for further long term rights invited, processed and appeals finalised all before the end of December 2013. What are the options for the Minister if this deadline is not met? In the year 2000 an amendment was made to Section 18 of the MLRA which introduced a Section 6A to provide for the extension of the period of validity of fishing rights under certain circumstances. The relevant part of the Section reads as follows:

“6A(a) If the Minister has granted a right contemplated in subsection 6 to a person for a period not exceeding three years, the Minister may once only, at the expiration of such period, extend the period of validity of the right for a further period not exceeding two years on such terms and conditions as he or she may impose.”

As the current long term rights which terminate at the end of December 2013 are all for a period exceeding three years, this section cannot be utilized by the Minister to extend the period of validity of these fishing rights.

The only remaining option in our view for the Minister would be to use Section 81 of the MLRA which relates to the issuing of exemptions to extend fishing rights. This is not ideal and in our assessment would indicate an administrative failure by the Department in the allocation of future long terms rights. Perhaps in this regard the amendments to the MLRA which intend to be promulgated by March 2013 should include a further amendment to Section 18 to provide for the extension of the period of the current long term rights without the restriction imposed by the current Section 6A.

The net effect of all of this is that between now and the end of 2013, amidst internal investigations of corruption and other controversies, the Department aims to bring about substantial amendments to the MLRA, publish and finalise a general and sector specific policies, implement the small scale fisheries policy, invite applications for future long term rights, process such applications and the appeals thereafter so that fishing can continue from the 1 January 2014 onwards in those sectors which are affected.

A tall order indeed!



THE FOODCORP JUDGMENT UNPACKED


Welcome to 2011.  All of us here at Dawsons wish our clients, colleagues and service providers a fulfilling year.

This is the first of the Dawsons e-mail newsletter / newsflash for the year, and through this medium we intend to keep clients fully informed of developments and matters of interests that occur throughout the year.  Any comments or feedback would be most welcome.

Background

On the 15th November 2010, the Western Cape High Court heard the matter between Foodcorp and the Minister of Agriculture, Forestry and Fisheries.  The matter related to Foodcorp’s application to declare certain parts of the Minister’s Transfer of Fishing Rights Policy unlawful.  The policy in question was published by Government Gazette Notice on the 31st July 2009.

Foodcorp required the court to declare paragraph 6.2 and 6.3 of such policy as unlawful.  These paragraphs effectively provided that the Minister’s approval for the transfer of a right in terms of Section 21 was required where there was a sale of shares / members interest which resulted in a change of control of such company / close corporation or resulted in such company / close corporation not being as transformed as at date of allocation of the long term right.

What gave rise to Foodcorp’s challenge is that in or about March 2010 and as a result of what was labeled a “composite transaction” the shareholding of Foodcorp was materially altered which lead to the change of control of Foodcorp and the makeup of its shareholders.

Foodcorp’s main challenge to the aforesaid paragraphs of the transfer policy was based on the argument that such paragraphs were ultra vires (outside of the powers) the Minister’s powers in terms of Section 21(2) of the Marine Living Resources Act (“MLRA”).

Court Ruling

Judgment in this matter was handed down on the 6th December 2010 by the Honourable Judge Griesel.  After setting out the historical background and statutory framework, Judge Griesel started his consideration of the ultra vires (outside of the Minister’s powers) argument by referring to the Supreme Court of Appeal case of Akani Garden Route (Pty) Ltd v Pinnacle Point Casino (Pty) Ltd, 2001 (4) SA 501 SCA which confirmed that “policy determinations cannot override, amend or be in conflict with laws (including subordinate legislation)”.  Judge Griesel summarised that in the present case, sub-section 21(2) of the MLRA granted the Minister the power to approve the transfer of a commercial fishing right or a part thereof.  Foodcorp was contending that properly construed sub-sections 21(1) and 21(2) do not grant the Minister or the Department any power to approve a bona fide share sale transaction within a rights holding entity.  “In other words, the transfer of shares in a company does not equate to the transfer of commercial fishing rights”.  Judge Griesel stated that “reduced to its essentials, the Applicant’s argument relies on the trite principal that a company enjoys a separate legal existence from its shareholders”, and as such “the rights are thus held by a company and not its shareholders”.  Therefore, “a change in the shareholders of Foodcorp does not affect its status or the status of its rights”.

Judge Griesel found that “on a narrow company law approach, the Applicant’s argument appears to be unassailable”.  Notwithstanding, Judge Griesel found that this strict company law approach would be the incorrect approach to follow in the “present scenario”.

To justify his deviation from the strict company law approach, Judge Griesel gave a number of reasons.  Firstly, he found that by the wording of Section 21 “a wider, more extended meaning of transfer was intended by the legislature”.  In this regard he referred to the words “otherwise transferred” and stated that they extended the ordinary meaning of transfer so as to include within its ambit the lease or division of fishing rights.  The court found therefore that it would be wrong “to attach a narrow literal interpretation to the concept of transfer of fishing rights”.

The court also referred to the concession of Foodcorp that in fact, in certain circumstances, the Minister’s approval would be required for the transfer of shares.  This concession by Foodcorp in its papers has always been a strange one, and in my view diluted their entire ultra vires argument.

The court then referred to an approach taken in the Constitutional Court matter of Bato Star 2004 (4) SA 490 CC wherein statutory interpretation took into account the context in which the words occur.  Furthermore, the word “context” is not only referring to the actual dictionary language of the rest of the statute, but more importantly to the “apparent scope and purpose of the statute and within limits its background”.

The court continued that, with regard to the apparent scope and purpose of the MLRA, the Constitutional Court has made it abundantly clear that in the process of interpreting the MLRA, one must recognize that its policy was founded on the need both to preserve marine resources and to transform the fishing industry.  Therefore, the Act “unequivocally indicates the policy which the Minister is to follow”.  The court’s broad conclusion therefore is that when decisions are taken by the decision maker in terms of the MLRA, the need for transformation must be addressed.

The court therefore concluded that in the context of Foodcorp’s challenge, it was clear that the considerations contained in the transfer policy did not override or amend the policy as contained in the MLRA, nor were those considerations in the transfer policy in conflict with the policy embodied in the MLRA.  The court continued along this vain and found that the question of transformation had played a vital role in the allocation of fishing rights and in assessing transformation, the corporate veil had been “rendered completely transparent”.    Thus, during the rights allocation process, the Minister and the Department were entitled to look behind the legal entity in question to see the identities and profiles of those holding shares and interests in such entities.  Therefore a similar consideration should apply when it comes to the transfer of those very same rights.  Accordingly, on this issue, the transfer policy was in line with the policy embodied in the Act which policy in turn had been followed during the rights allocation process.  The purpose for these provisions in the policy was to avoid “regression in relation to transformation of the industry”.  According to the court, this is a perfectly legitimate policy consideration.

According to the court’s finding, if Foodcorp’s arguments were to be upheld, and the narrow company law approach adopted, then it would allow for a glaring loophole in the law which would permit shareholders or members in corporate rights holders to freely dispose of their shares or members interest without the approval of the Minister, “even where such transfer would have a drastic effect on the control and/or racial profile of the particular corporate entity”.  The court continued by stating that this “would also mean that the constitutional and statutory objectives regarding transformation could be easily circumvented or undermined” if there was such a loophole.  It could result in the Minister and the Department having no control over the transfer of shares or members interest in the periods between the allocation of rights.  The court accordingly held that this could not have been the intention of the legislature to allow for such a loophole.  Therefore, Foodcorp’s challenge to the transfer of shares / members interest provisions contained in 6.2 and 6.3 of the policy was dismissed and the court found that such provisions were not ultra vires (outside the powers) of the MLRA.

There were also other less important arguments raised by Foodcorp which were also rejected by the court and which I do not intend to discuss in this article.

Foodcorp are in the process of appealing this judgment.

WHERE DOES THAT LEAVE INDUSTRY?

It is clear from this judgment that a prudent purchaser or seller of shares or members interest within a rights holding entity must assume that where there is a change in control of shares / members interest or a reduction in black ownership due to a transfer of shares / members interest, then any such sale must be made subject to the Minister’s approval in terms of Section 21.  Any agreement therefore must make provision for such contingency.

This is all very well, but outside of the courts and the legal drafting arena, the clear conduct of the Department indicates that Section 21 transfer applications are simply not being processed or dealt with in any manner visible to industry.  In fact, recent “summits” held in Cape Town and in the Eastern Cape are apparently for the purposes of the Minister establishing what the reasons are why rights holders are wanting to transfer their rights.  This is a strange enquiry in light of the fact that neither the transfer policy nor the transfer application forms call for any reasons from the transferor of such rights.

It is submitted that these summits may be part of a process by the Minister to review the current transfer policy notwithstanding the fact that it has taken almost three years to publish in the first place and only a handful of transfers have been processed after such publication.  My submission is corroborated by the fact that in the Oceana Section 21 challenge which was set down for hearing on the same date as the Foodcorp challenge, the parties agreed a court order in terms of which the Minister has undertaken to reconsider the transfer policy.

If we put all of this in the melting pot, then it would appear that the current transfer applications which have been submitted to the Department may informally be placed on hold pending a total review of the transfer policy by the Minister.

What are the choices for industry players who are requiring Section 21 transfers to be processed?  Parties will either have to bring court applications in terms of the Promotion of Administrative Justice Act to force decisions from the Minister or delegated authority, or alternatively keep corresponding with the Department on an amicable basis in an attempt to push the process along until the Minister is in a position to make decisions on such applications.  Either way, one must not forget that in certain sectors long term rights terminate at the end of December 2013 and prior to that, provision needs to be made for a new rights allocation policy and process.  Time is accordingly of the essence.

P. A. EDWARDS



The Oceana Section 21 Challenge


The latest in this saga is that the State filed an answering affidavit on the 13th September 2010.

The first point of interest is that the affidavit is not deposed to by the Minister herself, but rather by the Acting Director of Legal Services at DAFF.  It may be that the Minister is “keeping her powder dry” at this stage due to the fact that the power to determine Section 21 applications along with many other powers in terms of the MLRA has been delegated to officials within the Department whereafter an applicant may appeal any such decision to the Minister herself.

This leads us to one of the main technical grounds upon which the State opposes the Oceana Challenge.  They allege that the challenge by Oceana on the policy is premature.  The relief sought by Oceana is to declare the transfer policy unlawful and invalid, alternatively a court order reviewing and setting aside the policy.  The State claims that these challenges have been brought prematurely and in the abstract.  This argument is based on the fact that the “Surmon” transfer which was declined by the Department is currently on appeal, and as such Oceana had not exhausted their internal remedy under the MLRA.  Accordingly, there is no evidence before the court as to how the Minister in fact has applied or will apply the transfer policy.

The further technical ground taken by the State is that the Promotion of Administrative Justice Act (“PAJA”) does not apply to the making of policy by the Minister.  The State claims that the making of the transfer policy was not administrative action and that the policy was made in the exercise of the Minister’s executive powers which are not administrative in nature and as such do not constitute a decision as defined in terms of PAJA.  The argument continues that the Minister in terms of the Constitution has the power to develop and implement national policy and the exercise of this power is excluded from the definition of administrative action under PAJA.

Of importance is that the State claims that the policy does not have direct, external legal effect.  The State concedes that although the MLRA allows the Minister to make regulations regarding transfers, the Minister has rather decided to adopt criteria for the transfer of rights in a policy document rather than by regulations.  The reason for this according to the State is that it allows the Department and the Minister the “necessary flexibility to deal on a case by case basis with the different types of considerations which may justify a transfer in a particular case”.  This concession by the State now raises the following confusion.  The definition of “regulation” under the MLRA includes “a notice issued under this Act”.  Furthermore, in the Pepper Bay Supreme Court of Appeal judgment, the court ruled that if a “general notice owes both its existence and authority to an empowering original law (the MRL Act) it should be regarded as subordinate or delegated legislation and interpreted accordingly”.  If the State’s argument is correct that the policy has “no external legal” effect and does not constitute a regulation or law by which a rights holder is bound, then with regard to the transfer of fishing rights one is left with only the provisions of Section 21(1) and (2) of the Act.  As these provisions do not deal with the transfer of shares within a rights holding entity, it may be difficult for the State to claim in future that a change in shareholder control of a rights holding entity without the Minister’s approval constitutes a breach of Section 21 and a ground for Section 28 rights revocation / reduction proceedings.

Other than the aforesaid technical grounds, the State also dealt with the main grounds of the Oceana attack being whether or not the State is bound to exclusively apply the B-BBEE Act in assessing transfers of fishing rights.  In its response the State reiterated the objectives and principals of Section 2 of the MLRA.  The State then focused on the need to restructure the fishing industry and the need to pay special attention to the transformation of the fishing industry.  The State claims that they are entitled to place special emphasis on these objectives due to the Bato Star Constitutional Court decision.  According to the State, the Constitutional Court finding in respect of the granting of rights should apply with even greater force to the transfer of commercial fishing rights.  The States reasons for this are as follows:

  • Rights are not allocated so that they may be traded freely in the market thereafter, thus a commercial fishing right is a statutory permission and it is the business of the Government to regulate the transfer of these permissions;
  • The transfer policy places the onus on the right holder to persuade the Department that a transfer will further the governmental objectives set out in the Act;
  • The impact of a transfer on transformation is the core criterion for a transfer of rights as issues such as job creation and investment are mostly neutral factors;
  • It would serve no purpose to promote transformation through a rights allocation process if the results could be undone thereafter through the transfer of rights.

Regarding the B-BEE Act argument, the State answers that the relevant codes and the Act can only be applied “as far as is reasonably possible” and that therefore due to the unique nature of the fishing industry the Minister is entitled to determine its own special criteria to be applied for the transfer of rights in addition to the B-BEE Act.  The State’s position is that it is not reasonably possible to measure transformation solely with reference to the codes for the purposes of the transfer of commercial fishing rights due to the following reasons:

  • Just as with the allocation of rights the fishing industry constitutes various and varying sectors and as such the codes cannot sensibly be applied in some sectors.  The diversity of the fishing industry therefore does not allow for the codes to be exclusively applied;
  • The exclusive application of the codes may result in the reversal of some of the progress achieved in respect of transformation.  Thus, the State wishes to protect the transformation achieved in the long term rights process;
  • The exclusive application of the codes is not appropriate in a competitive process such as the allocation of fishing rights;
  • The codes cannot sensibly be applied to the transfer of shares (as opposed to the transfer of the fishing right from one entity to another).

Oceana is due to file its response to the States reply very shortly and as at the date of  writing this article, the date set down for the hearing of this interesting application is the 15th November 2010.



The Foodcorp Section 21 Challenge


As if the Oceana Section 21 challenge was not enough to get one’s mind around, on the 3rd September 2010 Foodcorp launched its own challenge against the Section 21 policy.

Although similar issues are dealt with in their challenge, the focus of the challenge is different.  Foodcorp wish paragraph 6.2 and 6.3 of the policy to be declared unconstitutional, unlawful and invalid and for such paragraphs to be set aside.  Paragraph 6.2 and 6.3 of the policy deal with the situation where shares or members interest within a rights holding entity are transferred.  This is an age old issue for rights holders which have received mixed legal opinion over the years.

The further relief requested by Foodcorp is a declaration that Foodcorp is not required to obtain authorisation from the Minister for a share transaction on the 10th March 2010 in terms of which Foodcorp’s shareholding and corporate structure was rearranged.

Foodcorp concede that the share transfer and rearrangement transaction has lead to the change of control of the shareholders behind Foodcorp and secondly that the effective black ownership of Foodcorp has been reduced.

In terms of the transfer policy, in theory, Foodcorp require an approval for such a transaction from the Minister.  Although Foodcorp have submitted a Section 21 application on the 5th May 2010, in the court papers they claim that they cannot await an outcome of such application before launching proceedings to challenge the lawfulness of the requirements of paragraphs 6.2 and 6.3 of the policy.

The challenge of Foodcorp is in essence  a technical legal challenge.  Foodcorp’s first technical ground is that Section 21(2) only applies to the transfer of the right from one legal entity to another and does not apply to a share sale transaction.  They state that “properly construed Section 21(1) and (2) of the MLRA do not grant the Minister or the Department any power to approve bona fide share shale transactions in rights holders”.

The second point raised by Foodcorp is that the Minister is unlawfully laying down rules for the transfer of rights in a non-binding policy.  The argument is that the transfer policy does not amount to regulatory provisions and is at best a non-binding guiding policy which cannot extend the powers of the Minister and the Department or introduce inflexible requirements.  In summary Foodcorp argue that the introduction of “inflexible and peremptory approval processes in the transfer policy [relating to the transfer of shares within a rights holding entity] is thus plainly beyond the scope of such a policy document”.  Foodcorp consolidate this argument by stating that the long term rights letter sets out the terms of the long term rights allocation as well as the relevant permit conditions.  According to Foodcorp paragraph 6.2 and 6.3 of the transfer policy contradict the terms of the long term rights letter and permit conditions.

The third ground of attack is that the factors to be considered by the Minister for the approval of a share sale transaction are too vague.

The fourth ground of attack is based on the allegation that the transfer policy is irrational.  The policy does not set out what the consequences are if the Minister or the Department refuse to allow the transfer of shares.  In particular it does not give the Minister any power to prevent the sale of shares in circumstances where she refuses to give authorisation.

Another interesting argument under the irrationality heading is that the consequences of paragraph 6.3 of the policy would effectively lead to previously disadvantaged shareholders facing the obstacle of only being able to freely sell shares to other black shareholders or with the approval of the Department and the Minister, while white shareholders would not face the same obstacles.  This consequence would contradict the provisions of the General Policy which highlighted as an important factor “the beneficial ownership by black people in the form of unrestricted voting rights and economic interest associated with equity ownership”.  Foodcorp state that the transfer policy “ironically achieves the opposite of that which it set out to achieve”.  Although attempting to encourage the transformation of the fishing industry, the transfer policy in fact “undermines the value of beneficial black ownership of rights holding entities”.

Whether the State will apply for the Foodcorp application to be consolidated into one hearing with the Oceana application is yet to be seen.  If this does occur, then it is unlikely that the hearing will be on 15 November 2010.

These Section 21 battles are inevitable, but which need to be fought and resolved so that industry including small, medium and large rights holders of differing empowerment profiles may with certainty conduct their affairs going forward.



Minister defeats WCRLA and Oceana in Supreme Court of Appeal


On the 22nd September 2010 the Supreme Court of Appeal handed down a judgment in respect of the WCRLA and Oceana attack on the allocation by the Minister in 2007 and 2008 of a subsistence / recreational exemption to certain bona fide artisanal fishers which allowed them to catch and sell West Coast Rock Lobster.

The Cape Town High Court ruled against the WCRLA and Oceana and held that the Minister’s powers under Section 81 provided a wide discretion and that “no section remains untouchable or out of reach of the exemption power contained in Section 81”.

Accordingly the main thrust of the WCRLA and Oceana on appeal was that the Minister could not recategorise  subsistence fishers and pretend that they were recreational fishers in order to get around the already fully subscribed rights in the subsistence sector, and furthermore they contended that by employing Section 81 in a  manner that the Minister did, the Minister “was subverting the very purpose of the Act and that the granting of rights ought to be dealt with in terms of Section 18 of MLRA.

Unfortunately this question was not answered by the Court of Appeal and it found against Oceana and WCRL on the following two preliminary issues.

  • The issue to be decided was of academic interest in that the Equality Court orders upon which the Minister granted the allocations in terms of Section 81 had now expired and they were interim in nature.  As such the exemptions granted by the Minister were also interim in nature and had since expired.  The Equality Court had also ordered that the Minister finalise a new policy with respect to small scale subsistence fishers and to properly accommodate them in such policy.  The Appeal Court held that there was no indication on record as to how the subsistence fishers would be accommodated in future and in particular whether the interim measures previously granted by the Minister would be repeated when the new fishing season begins in November 2010.  Therefore, the question before it was hypothetical, abstract or academic.  The declaratory order requested would therefore have no practical effect.
  • Secondly, the Appeal Court held that the nature and the wording of the declaratory order requested were defective.  The court stated that “it appears that insufficient thought was given to the wording of the order sought. As such, if the order was granted as requested by Oceana the effect thereof would be inadvertently “to bar subsistence fishers as a class from an activity they can lawfully engage in albeit in a limited manner namely, the sale of part of their catch”.    The court held that the proposed order was in substance “a perpetual interdict purporting to prejudicially affect a whole class of persons (subsistence fishers), including persons who are not joined as parties to the litigation…”.

Finally, an interesting aspect of the court’s judgment is that it raised the jurisdictional question as to how orders of the Equality Court interplay with orders of the High Court.  The court held that legal “uncertainty arises and litigation abounds” due to this question which is the opposite of what was intended by the Promotion of Equality and Prevention of Unfair Discrimination Act.  The court therefore directed the Registrar to bring this judgment to the attention of the Chief’s State Law Advisor and the Minister for Justice and Constitutional Development.