COURT OF APPEAL OF LESOTHO
Appeal No. 23/1999
CENTRAL TENDER BOARD First Appellant
MINISTRY OF WORKS Second Appellant
(PTY) LTD Respondent
Van den Heever, JA
appellants (the respondents in the court below) appeal an order (by
Monapathi J) declaring "the finalisation of tenders
staff houses .... null and void", that "the procedure in
relation to the said traders (sic) is reversed and
ordering the second appellant to renew the respondent's trading
building contractor, and granting ancillary relief.
then proceeded to "clarify" the relief so granted in the
following formulation (which I quote without correction
several patent errors):
"(a) That the finalised tenders be declared null and void.
tenders be re-submitted to allow for participation by the Applicant
in the Peka staff have tender.
the Applicant still retains his status as an A category building
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.
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.
the declarations appear to relate to the circumstances of other
contractors this judgment does not prescribe for them. But
Respondents would be encouraged to re-instate the status quo of all
affected contractors as at the time of the issue of annexure
All this to be done to avoid confusion and unnecessary litigation.
It appears just to do so until comprehensive
regulations are put
appears from the papers in a consequential application for stay of
execution of these orders that the second appellant (the Ministry
Works) as a result was unable to award any building contracts, and
that Government building activities have virtually come to
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
the building construction industry in the "A" category in
terms of regulation 2115 of the Financial Regulations, 1973.
April 1999, it sought to renew its licence, it was told that this
would not be possible, as a new categorisation (with
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
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
"that ALL, including registered contractors will be reviewed in
the new form and will
appellants' case is that regulation 2115 gives a power to grant the
certificates in question and any other related documents,
this includes the power to re-categorise the certificates so issued.
The respondent's case is equally simple: that the
interfere with my status nor purport to re-categorise same as it
exists subsequent to the initial categorisation".
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.
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
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
I do not see that it is the right of the Director to seek
to regulate already registered contractors without stipulating
under which their status can be prejudicially disturbed.
This may be done but certainly not circular where a substantive
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
foundation for having disqualified the Applicant. The value of
circular is often overestimated. Where properly issued: 'They
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
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
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
First Respondent. That it had failed to fill in applications was not
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
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
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.
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
the following headings -
A - Multi-storey complicated buildings or major works - over M800
B - General buildings or smaller works - M200 000,00 to M800 000,00
C - Simple buildings or work -M50 000,00 to M200 000,00
D - Trial category - 0 to M50 000,00
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".
nothing to suggest that a contractor, once graded during a particular
licence year, could not be re-graded in future years.
Common sense in
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
a "B" categorisation, but cannot be upgraded. Conversely,
plant and equipment, expressly mentioned in sub-regulation
become obsolete over the years. The very inclusion moreover of a
trial category ("D") strongly indicates that
a power to
revise categories is authorised.
interpretation is reinforced by the essential duty of "maintaining"
a register. That is clearly a continuous act,
from time to time. If an initial categorisation was intended to be
once and for all, what would there be
also a trite principle in the construction of statutes that as a
general rule, when a power is granted for a particular purpose,
includes a power of revocation or variation. The licencing system
such as this is clearly one which falls within that general
follows that the respondent's central contention that its
categorisation in 1982 was final and immutable, and that any
of it would be ultra vires
2115, is untenable.
view, accordingly, the approach adopted by the court a quo was wrong,
and it erred in granting the relief sought. That, as
State building operations in Lesotho should have effectively been
halted for nearly six months is most unfortunate.
appeal is accordingly allowed, with costs. The judgment of the court
below is set aside, and its orders substituted with the
"1. The application is dismissed.
applicant is directed to pay the respondents' costs".
Appellants: Miss M. Mothepu
Respondents: G.G. Nthethe and Company
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