Massive court blow for wool and mohair farmers
WOOL and mohair farmers were on Friday dealt a massive blow by the Court of Appeal which ordered the reinstatement of the controversial 2018 regulations which prohibited farmers from selling their produce from outside Lesotho as they had done for 44 years until 2018.
The net effect of the apex court ruling is that farmers will have to retrace their steps to the Lesotho Wool Centre (LWC) in Thaba Bosiu. The farmers prefer selling via South African brokers, BKB, saying they are assured of quick and higher payments than those from the LWC.
Despite the farmers’ vehement protests, the LWC enjoys the monopoly of exporting the wool and mohair on behalf of the farmers who have complained of delayed payment as well as lower prices for their produce compared to what they used to earn when it was sold from South Africa by that country’s brokers, BKB.
Zimbabwean judge, Justice Moses Chinhengo read out the apex court verdict which was prepared by the bench which included him as well as Namibia’s Justice Petrus Damaseb and another Zimbabwean, Justice Tafuma Mtshiya.
Justice Damaseb was presiding when the appeal was heard on 23 May 2019 but he had to leave early on Friday morning for his country where he is the Deputy Chief Justice of the Supreme Court of Namibia.
It was therefore left to Justice Chinhengo read the judgement which overturned the wool and farmers’ short-lived victory in their protracted fight with the government over the sale of their produce.
The Agricultural Marketing (Wool and Mohair Licensing) (Amendment) Regulations No. 65 of 2018, which prohibit the export of wool and mohair from outside Lesotho and trade in the wool and mohair without a licence from the Ministry of Small Business, Cooperatives and Marketing, were nullified by the High Court’s Justice Moroke Mokhesi in April this year.
And in the latest turn of events on Friday, the Court of Appeal upheld the Small Business ministry’s appeal against Justice Mokhesi’s judgement.
The apex court however, upheld Justice Mokhesi’s nullification of Regulation 11 of the regulations which prescribed penalties for who breached the rules governing the trade in wool and mohair.
“The application succeeds but the court has decided to strike out the regulation (Regulation 11) which creates penalties because those penalties contravene Section 4 (L) of the principal act (Agricultural Marketing Act of 1967),” Justice Moses Chinhengo said.
Regulation 11, which was struck off by the apex court, states that “a person who contravenes regulations of shearing and exporting (wool and mohair)…is liable, on conviction, to a fine of M50 000 or to be imprisoned for a period not exceeding two years or both”.
The apex court struck down Regulation 11 because it contravenes section 4 (L) of the Agricultural Marketing Act of 1967 which prescribes penalties of M200 or a maximum six months imprisonment or both for the first offence and an M2000 fine or a maximum 12 months imprisonment or both for a repeat offender.
In addition to rescinding the High Court judgement, the apex court ordered the Lesotho National Wool and Mohair Growers Association (LNWMGA) which brought the initial case against the government to pay the costs of the appeal to Mr Phori.
Mr Phori lodged an appeal in the apex court against Justice Mokhesi’s 4 April 2019 judgement which nullified the Agricultural Marketing (Wool and Mohair Licensing) (Amendment) Regulations No. 65 of 2018 which made it illegal for the farmers to sell their produce in South Africa through their preferred brokers, BKB.
In its appeal, the government argued that Justice Mokhesi misdirected himself in nullifying the entire regulations on the basis of Regulation 11 of the 2018 regulations.
In April, Justice Mokhesi ruled that the 2018 regulations could not stand the test of legality and the regulations were therefore null and void.
“It is uncontroverted (undeniable) that the applicant has been exporting wool and mohair for its members for over 40 years and has in the process established relationships with the broking company, BKB, to the extent of owning shares in the latter company. In my opinion, this clearly establishes that their right to export wool and mohair had indeed vested.
“The Minister (of Small Business) may only make regulations prohibiting any person from dealing in the course of trade with a product in Lesotho unless such a person has been licenced. It simply cannot be reasonably justified why a facility which, if found outside the country, can be regulated as the minister sought to do.
“It needs no elaboration that in prescribing punishments under Regulation 11, the Minister (Chalane Phori) exceeded the powers conferred on him by the 1967 act. It follows therefore that Regulation 11 is beyond powers of the act and has to be struck down.
“The question is whether without Regulation 11, the Agricultural Marketing (Wool and Mohair Licensing) (Amendment) Regulations N0. 65 of 2018 can stand on their own. My considered view is that they cannot stand on their own as without penal provisions the prohibitions contained in the regulations would merely be directory and not peremptory,” Justice Mokhesi ruled in April.
The Small Business ministry’s lawyer, Advocate Taeke Thejane, subsequently argued before the three apex court judges that even though the Small Business Minister (Phori) may have exceeded his powers by issuing Regulation 11 that did not mean the entire regulations should be declared null and void.
“The entire regulations were nullified because of Regulation 11 because the judge in the High Court says they cannot stand on their own without the regulation in question but I beg to differ,” Adv Thejane argued.
“We admit that in Regulation 11 the minister went beyond the scope of the principal act (Agricultural Marketing Act of 1967) when setting penalties but that does not mean if penal provisions (in Regulation 11) are declared ultra vires (beyond scope of the minister), the entire regulations cannot work without Regulation 11. The penalties may be left to the discretion of the court.
“Furthermore, Regulation six states that a holder of a licence (attained from the ministry) cannot export wool or mohair unless it is prepared in Lesotho. The judge ruled that the term ‘prepared’ was vague.
“We submit that he (Justice Mokhesi) erred while interpreting the term ‘prepared’ because he should have referred to the principal act (of 1967) which clearly describes preparation to include classing, testing, grading and packaging among others. The minister (Phori) did not go that far in the regulations because this is not a new industry and farmers are aware of the terms used because they have been in this trade for over 40 years,” Adv Thejane argued.
On the other hand, the LNWMGA’s lawyer, Adv Qhalehang Letsika argued that Minister Phori could not regulate testing of the wool and mohair and other activities that were conducted outside Lesotho.
“In his affidavit, the minister states that there are only four testing facilities in the world and the closest to Lesotho farmers is the one in Port Elizabeth in South Africa. We accept that the minister is entitled to regulate business in Lesotho but there are no testing facilities here.
“Furthermore, the farmers are not the ones who do the testing, so they cannot be expected to have testing licenses. It was unreasonable for the minister to prescribe testing in the regulations because that is done outside the country.
“The penalty provisions (in Regulation 11) cannot be separated from the minister because he cannot achieve his objective if the penalisation is removed from the regulations. We submit that the minister was also obliged to clearly set out the guidelines of preparations in the regulations for farmers to clearly know the requirements,” Adv Letsika argued.
The net effect of the apex court ruling is that farmers will have to retrace their steps to the LWC in Thaba Bosiu. Ever since the enactment of the wool and mohair regulations in 2018, the farmers have been forced to take their produce to the LWC which auctions the produce on their behalf. However, the farmers prefer selling via South African brokers, BKB, saying they are assured of quick and higher payments than those from the LWC.