Top Lay Egg Co-op Limited and Another v Minister of Agriculture, Forestry and Fisheries and Others

The Minister of Agriculture, Forestry and Fisheries designated 'Agency for Food Safety' as an assignee under section 2(3) of the Agricultural Product Standards Act 119 of 1990 through a letter dated 9 December 2016. The letter designated the assignee for the application of sections 3(1) and 4A with respect to inspection of regulated animal products (poultry meat and eggs). The third respondent (Food Safety Agency (Pty) Ltd) traded as 'Agency for Food Safety' and mandated its wholly-owned subsidiary, the fourth respondent (Agency for Food Safety and Quality (Pty) Ltd), to conduct inspections and exercise assignee powers. The first appellant, Top Lay Egg Co-op Limited, is a primary co-operative marketing and selling eggs on behalf of 51 egg producer members. The second appellant, George Schwartzel Boerdery (Pty) Ltd, also produces and sells eggs. Both appellants challenged: (i) the identity of the designated assignee; (ii) the scope of powers conferred on the assignee; and (iii) the assignee's determination and charging of inspection fees as arbitrary, capricious and irrational. The appellants launched proceedings in the High Court in March 2018. Prior to this, there was correspondence in 2017 between the parties' attorneys clarifying the relationship between the assignee entities. The assignee held consultative workshops with industry role players in April and May 2017 to determine fees, which resulted in a reduction from R0.0015 to R0.0006 per egg. Monthly invoices were issued to the second appellant, which the appellants challenged.

• Whether the Minister's designation letter designated a non-existent entity, causing confusion as to the identity of the assignee
• Whether the Minister's designation letter conferred only the powers in sections 3(1) and 4A of the Act on the assignee, excluding powers under sections 3A, 3(1A), 7 and 8
• Whether the assignee had the power to conduct inspections and determine and charge fees for inspection services
• Whether the assignee's determination of fees was reviewable under PAJA on grounds of being arbitrary, capricious or irrational
• Whether the determination of fees complied with procedural fairness requirements under section 4 of PAJA

The appeal was dismissed with costs. The appellants were ordered to pay the respondents' costs of appeal, including the costs of two counsel where applicable.

1. Under section 2(3)(b) of the Agricultural Product Standards Act 119 of 1990, an assignee designated by the Minister shall, unless expressly provided otherwise, exercise all powers and perform all duties conferred upon or assigned to the Executive Officer under the Act in respect of the relevant product. 2. Interpretation of a statutory designation must follow the principles in Endumeni Municipality, having regard to the context provided by reading the provision in light of the document as a whole, the ordinary meaning of the language used, the apparent purpose, and the circumstances attendant upon its coming into existence. 3. Where a Minister's designation letter refers to specific sections for the 'inspection' of products, powers necessary and indispensable for conducting such inspections (including powers to enter premises, investigate, sample, seize and charge fees) are included in the designation, as they cannot be logically severed from the express powers conferred. 4. The determination of fees by an assignee under section 3(1A)(b)(ii) of the Act constitutes administrative action subject to review under PAJA, including the requirement of procedural fairness under section 4. 5. In the absence of prescribed regulations governing fee determination procedures, consultation with industry stakeholders that allows for meaningful input and leads to substantive consideration of proposals satisfies the procedural fairness requirements of PAJA. 6. A fee determination will not be arbitrary, capricious or irrational under section 6(2)(e)(ii) and (f) of PAJA where it is based on budgeted costs of providing the service, considers industry input, and responds to proposals by reducing initially proposed fees.

1. The Court observed that the absence of published Regulations prescribing procedures and methods for determining fees under the Act represents a lacuna in the legal framework, but such shortcomings cannot be attributed to the assignee where no order is sought against the Minister or Department. 2. The Court noted with apparent regret that an initiative by the Executive Officer to develop such Regulations 'came under attack as soon as the initial draft was published in the Government Gazette, and the initiative was sadly aborted.' 3. The Court indicated it would have been superfluous to deal with the procedural points in limine (lack of locus standi, delay in instituting review proceedings, and failure to exhaust internal remedies) given its findings on the merits, though both the high court and full court had ruled on these issues. 4. The Court distinguished the facts of the case from Bertie van Zyl (Pty) Ltd t/a ZZ2 and Others v Minister of Agriculture, Forestry and Fisheries and Others [2021] ZASCA 101, which the appellants had relied upon for a belatedly raised ground on procedural unfairness. 5. The Court's references to the Executive Officer appending '(Pty) Ltd' to the trade name in Government Gazettes suggested this may have created some initial confusion, lending 'some merit' to the appellants' contention on this narrow point, though this did not affect the ultimate finding that any confusion was subsequently dispelled.

This case is significant in South African administrative law for several reasons: 1. It clarifies the scope of powers conferred on assignees under the Agricultural Product Standards Act, affirming that unless expressly excluded, assignees exercise all powers conferred on the Executive Officer by operation of section 2(3)(b) of the Act. 2. It demonstrates the application of contextual interpretation principles from Endumeni Municipality to statutory instruments and administrative letters, emphasizing that interpretation must consider the context, apparent purpose, and language in light of the document as a whole. 3. It confirms that the power to determine fees under section 3(1A)(b)(ii) of the Act is a public power constituting administrative action subject to PAJA review, as established in Bertie van Zyl. 4. It provides guidance on what constitutes procedural fairness in fee determination in the absence of prescribed regulations, holding that consultation with industry role players can satisfy procedural fairness requirements under section 4 of PAJA. 5. It illustrates the principle that parties cannot rely on alleged confusion when they have been provided with clear documentary evidence clarifying matters, and when their own pleadings acknowledge the correct position. 6. It confirms the general procedural rule that new grounds of appeal cannot be raised in the appeal court without leave, particularly where not raised in the court below.