2014 SCJ 301

Record No. 95386

IN THE SUPREME COURT OF MAURITIUS

In the matter of:

Consolidated Steel Ltd

Plaintiff

v.

The State of Mauritius

Defendant

SUMMARY JUDGEMENT

Plaintiff (P) claimed damages from Defendant (D) for prejudice suffered from the alleged ‘faute’ of the D’s preposes- the officers of the Ministry of Commerce and Consumer Protection.

P’s case was the Ministry Officers were mistaken in the calculation of the mark-up and selling price of iron bars. The Ministry Officers refused to correct and adjust the price of the iron bars to reflect their true manufacturing price and as a result P was forced to sell incurring a loss of 14,112,832 rupees.

Salim Joonas (Witness) explained the P’s company was engaged in the manufacture and sale of iron bars. He produced a communique [Doc. A] which was issued by the Ministry of Commerce and fixed the sale price of iron bars with effect from 4th June 2004. He also produced a “price structure” [Doc. B] prepared by the Ministry which the P received by fax on 7th June 2004. Joonas believed there was a discrepancy in the price calculation since the mark- up of 10% for 8mm to 25mm iron bars has been wrongly calculated in the price structure. The mark- up of 10% should have been 1,900 rupees not 1,200 rupees. His company made representations to the Ministry on 17th June 2004 [Doc. C]. Despite communication and correspondence with the Ministry, no remedial action was undertaken to correct or adjust pricing.

At the P’s request, witness Dhanjee undertook a costing exercise, and explained how the P’s loss arising from the discrepancy in sale price of iron bars, between June 2004 and 30th August 2006, would amount to 14,112,846 rupees.

Witness Allykhan testified on the D’s behalf that Doc. B, the unsigned fax relied on by the P, was merely a working document and it is for the Minister to decide the mark-up. The mark- up of 1,200 rupees was determined and fixed by the Minister having taken into account windfall gains which local manufacturers, like the P, obtained under the applicable exchange rate following the depreciation of the USD towards the Mauritian rupee. Therefore there was no mistake or discrepancy in mark-up. The percentage or quantum of the mark-up is not fixed by law.

The Minister is delegated powers to make subsidiary legislation including for the fixing of prices, under Sections 3 and 35 of the enabling legislation: the Consumer Protection (Price and Supplies Control) Act “The Act”. Section 35 is the relevant part. This is significant as the statutory power to make legislation for fixing prices of iron bars has been delegated by Parliament to the Minister. Section 30 (3) of the Interpretation and General Clauses Act expresses in mandatory terms that such power is exercisable by the Minister alone. By virtue of the power vested in the Minister he fixed the selling price of iron bars with effect from 04 June 2004.

P’s action is misconceived and untenable. As set out in Dalloz Repertoire du Droit Public et Administratif V Responsabilite De la Puissance Publique, the P needed to establish the “lien de cause a effet” between the “faute” and resulting damage caused by such faute.

P’s action must fail as any loss or prejudice suffered as a result of price fixing was caused by the Minister and not the officers of the Ministry. Plus, the P failed to establish it suffered prejudice caused by the “faute” of the Ministry officers as averred in its plaint. The mark up and prices of iron bars have been fixed by the Minister in accordance with law, which was admitted by the P’s representative, witness Joonas who stated in Court it is the Minister who makes regulations and “decides what should be the price”. Therefore the Ministry officers cannot be held responsible for price fixing as this is a matter exclusively within the Minister’s province. As a result, the P’s action directed at the defendant should fail.

Furthermore there was no action against the Minister. Had the P’s case been that the “faute” was that of the Minister this should have been made clear by the P (Vikash Trading Co. Lts v The Ministry of Trade, Shipping, Price Consumer Protection [2001 MR 189]).

The testimony of witness Allykhan, which is accepted as correct, unequivocally establishes the Minister decided the mark- up of 1,200 rupees and selling price of iron bars having taken into account all relevant considerations, including the windfall gains. There was no error in the “mark- up” calculation as contended by the P and no obligation to fix the mark up at 1,900 as requested by the P. The unsigned fax [Doc. B] was no more than a working document which does not affect the power vested solely in the Minister to fix prices of iron bars by Regulations made under the Act.

No “faute” has been proved by the P against the D as commettant of the Ministry officers still less any “faute lourde” which would normally be required in such a situation. To be successful in proving liability for misfeasance of a public duty on the part of “preposes” of the State, the P would need to establish a “faute lourde”(Mauritius Housing Corporation v Cooroopdass [1991 MR 274] at p275) (vide, for instance, State v Sookna [2001 MR 7] at p12). This requirement is highlighted by Rene Chapus in Droit Administrafif General at paragraph 1462.The P has not proved any faute by the Ministry Officers as the “preposes” of the D and any “lien de cause a effet” between tortious act as the “fait generateur” on part of the Ministry officers which it had allegedly suffered.

Another reason why the P’s action should fail is that it is an action in private law based on “faute”. No action can lie in private law against the Ministers’ exercise of law-making powers when he enacted the regulation which he did for price fixing of iron bars under s.35 of the Act. The Minister was acting within the powers conferred to him by Parliament to enact secondary legislation. These regulations are subject to Parliamentary control and review [Section 122 of the Constitution]. With regards judicial scrutiny, the only remedy open to the P is in public not private law by way of a public law action. The decision to fix prices embodied in the Regulations can only be attacked and be quashed on the limited grounds of judicial or constitutional review. Delegated legislation may be challenged in public law, on the grounds that the making of the regulations was ultra vires or repugnant to the enabling legislation or Constitution or there was a procedural irregularity in the making of the Regulations. The present action is not in the public law domain, it is purely based in private law based on “faute” as set out in Article 1382 of the Civil Code. The P cannot succeed in a claim for damages by way of tortious action based on “faute” in respect of legislation or regulations. This is explicitly expressed in extracts from Dalloz Repetoire de Droit Public et Administratif V Responsibilite De la Puissance Publique . Note 265 specifies that no indemnity lies in respects of legislation which deals with price fixing. Lalou, in Traite Pratique de la Responsibilite Civile, 5eme edition reiterates the State cannot be held liable for damages in tort for a ministerial decision to fix the maximum price of a commodity. Dalloz Repertoire Pratique, V Responsabilite Civile further emphasises that no action for damages based on faute lies in respect of prejudice suffered from a legislative act.

For the above reasoning, the P has failed to establish a case against the D. Therefore the plaint is dismissed with costs.

A. Caunhye

Judge

25 August 2014

For Plantiff : Ms Attorney Z. Salajee

Mr S. Toorbuth, of Counsel

For Defendant: State Attorney

State Counsel

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