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Appeal Board Decision – Plant Breeders’ Rights Act – 01

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THE APPEAL BOARD APPOINTED

IN TERMS OF S 42(2) OF THE PLANT BREEDERS’ RIGHTS ACT, 15 OF 1976

DECISION

In the matter between:

AGRICULTURAL RESEARCH COUNCIL (“ARC”)                                               Appellant

and

REGISTRAR OF PLANT BREEDERS’ RIGHTS (“the Registrar’)           First Respondent

SUNKIST GROWERS INC (“SGI”)                                                       Second Respondent

 

ORDER

On appeal from a decision of the Registrar of Plant Breeders’ Rights:

The appeal is upheld and the decision of the Registrar of Plant Breeders’ Rights, conveyed on 17 February 2020, instructing the appellant to alter the SUN KISS denomination within 60 days, is set aside.

DECISION

  • This matter relates to an appeal from a decision of the Registrar of Plant Breeders’ Rights (the Registrar) in respect of South African Plant Breeder’s Right ZA 981943 for the Japanese plum variety bearing the denomination SUN KISS.
  • The Agricultural Research Council (the appellant) lodged an application for the grant of a plant breeder’s right for a Japanese plum variety bearing the denomination SUN KISS on 21 July 1997, in terms of the Plant Breeders’ Rights Act 15 of 1976 (the PBR Act). After examination of the application, the Registrar (the first respondent) issued a certificate of grant on 25 June 1998 for a South African plant breeder’s right under the registration number ZA 981943 for the SUN KISS Japanese plum variety. Subject to payment of the annual renewal fees, ZA 981943 will remain in force until 25 June
  • The grant of ZA 981943 was published in the Government Gazette 23066 of 1 February No objection to the grant of ZA 981943 was lodged in terms of S 17(1) of the PBR Act read together with Regulation 8(1)(a) within six months as prescribed.
  • In addition, the Directorate: Genetic Resources in the Department of Agriculture published the South African Special Plant Variety Journal in relation to Plant Breeders’ Rights valid in the Republic at 31 December This journal is published annually

inter alia to satisfy the requirements of The International Convention for the Protection of New Varieties of Plants (“UPOV”). Amongst others, the journal notified the UPOV community of the grant of a South African PBR in the SUN KISS variety.

  • In 2019, the second respondent became aware of the appellant’s use of the varietal name “SUN KISS” in respect of fresh plums when it encountered fruits under this name in the Hong Kong market. On 5 June 2019 the attorney for the second respondent wrote to the appellant advising the appellant that the second respondent is the proprietor in South Africa of the trademarks 1971/01366 SUNKIST in class 31 and 2005/23300 SUNKIST in class 31, with the specifications of these trademarks including fresh fruits and natural plants. It is not in contention that the trademark 1971/01366 SUNKIST in Class 31 was granted to the second respondent in respect of “fresh fruits and vegetables” (“the 1971 trade mark”) on 5 April
  • The second respondent asserted that its trade marks were being infringed by the SUN KISS denomination and called on the appellant, inter alia, to apply to the Registrar for alteration of the varietal denomination SUN KISS under Ss 32(1)(b) and 32(2), and Regulation 15, of the PBR Act.
  • Regulation 5, titled “Denominations for varieties”, is relevant here and sets out the prescribed Regulation 5(d) provides as follows:

Denominations for varieties

  1. (1) The denomination which is proposed for a variety in terms of regulation 3(2)(c) shall-

(d) subject to the provisions of sub-regulation (3) not be identical with or similar to, or liable to lead to confusion with a mark which enjoys the protection accorded thereto by the Trade Marks Act, 1963 (Act No. 62 of 1963), and which applies to propagating material or the use in connection therewith or in connection with a product thereof.

  • S 32 of the PBR Act governs the circumstances under which the Registrar may require the alteration or supplementation of an approved denomination:

“32. Alteration of denomination —

  • The denomination approved in respect of a variety may be altered or supplemented by the Registrar—
  • if ordered by the court on the application of a person who in law has a preferent claim to the use of the designation in question;
  • on the application of the holder of a plant breeder’s right in that variety;
  • if the information submitted to the Registrar in the application for the approval of, or in connection with, the denomination in question was incorrect and the Registrar is of the opinion that such denomination would not have been approved had he known that such information was incorrect; or
  • if information comes to light which, if discovered earlier, would in the opinion of the Registrar have resulted in the refusal of such
  • An application referred to in subsection (1) (b) shall be made to the Registrar in the prescribed manner and shall be accompanied by the prescribed application
  • If an alteration or supplementation becomes necessary on a ground referred to in paragraph (c) or (d) of subsection (1), the Registrar shall in writing inform the holder of the relevant plant breeder’s right thereof and give the grounds on which the alteration or supplementation is deemed necessary, and such holder shall submit proposals for an alteration or supplementation within 60 days from the date of the notice to him.

(7) The Registrar shall forthwith publish by notice in the Gazette the prescribed particulars relating to an alteration or supplementation ordered under subsection (1) (a).”

  • On 28 June 2019 the attorney for the appellant informed the attorney for the second respondent that the appellant refuses to apply to the Registrar for alteration of the varietal denomination SUN KISS.
  • On 26 July 2019 the attorney for the second respondent requested the Registrar to compel alteration of the varietal denomination SUN KISS to a denomination which is not similar to SUNKIST, on the basis of S 32(1)(d) of the PBR Act, which provides that denominations which have been approved in respect of a variety may be altered by the Registrar “if information comes to light which, if discovered earlier, would in the opinion of the registrar have resulted in the refusal of such denomination”.
  • Following several submissions by the attorney for the appellant and the attorney for the second respondent respectively, the Registrar informed the attorney for the appellant on 17 February 2020 that alteration of the denomination SUN KISS is necessary and requested the appellant to submit proposals for an alteration within 60
  • An extract from the Registrar’s decision reads as follows:

“6.         In terms of the afore-mentioned regulation the Registrar, before approving a denomination, must ensure that any denomination which is proposed for a variety is not identical with or similar to, or liable to lead to confusion with a mark which enjoys the protection accorded thereto by the Trade Marks Act, 1963 (Act No. 62 of 1963). It follows that the Registrar will have to ascertain whether there is a registered trademark protected in terms of section 63 of the Trade Marks Act.

  1. In the current matter, it is not clear whether the Registrar had at the time of registration of the variety denomination SUN KISS, in 1997, conducted a search to ascertain whether ‘SUN KISS’ was not similar to, or liable to lead to confusion with a protected Trade
  1. According to section 32(d) of the PBR Act, ‘The denomination approved in respect of a variety may be altered or supplemented by the Registrar if information in respect of a variety comes to light which, if discovered earlier, would in the opinion of the Registrar have resulted in the refusal of such ‘
  1. In July 2019, information was presented to the Registrar that ‘SUNKIST’ had already been registered as a Trade Mark at the time the variety denomination was

approved. This information was subsequently confirmed by conducting searches in both the South African Trade Marks register and the USPTO Trademark register.

  1. It is my view that the variety denomination ‘SUN KISS’ is similar to the registered Trade Mark ‘SUNKIST’, and if the then Registrar had considered the Trade Marks register at the time of considering the application in terms of section 19{1) of the Act, it would have resulted in the refusal of such
  1. Although Regulation (8)(1)(a) states that “An objection against an application for the grant of a plant breeder’s right shall be lodged with the Registrar in writing within six months from the date on which the particulars relating to the application concerned were published in terms of section 13(1) of the Act.” It is my view that the reason why no objection was lodged within these prescribed time frames is of no consequence. However, he may, in terms of section 32 of the Act, still alter or supplement a variety if he is requested to do
  1. In view of the above, ARC is herewith informed that alteration of the denomination, ‘SUN KISS’ is necessary and we therefore request ARC to submit proposals for an alteration within 60 days from the date of this ”
  • The Registrar’s decision was thus based on the Registrar having concluded that the denomination SUN KISS is similar to the registered trade marks for SUNKIST and that if the then Registrar had considered the trade marks register at the time of considering the plant breeder’s right application for the SUN KISS Japanese plum variety, the Registrar would have refused the denomination SUN KISS. In coming to her decision, the Registrar admitted that it was not clear whether the Registrar at the time of

registration of ZA 981943 had conducted a search to ascertain whether SUN KISS was not similar to, or liable to lead to confusion with a protected trade mark.

  • After some difficulty in obtaining a copy of the full content of the Registrar’s file for ZA 981943, and with the Registrar granting an extension until 20 May 2020 for lodging an appeal against her decision, the appellant lodged the appeal under consideration on 16 April 2020, based on four grounds, namely (i) that the Registrar was functus officio,

(ii) that the Registrar’s decision did not satisfy the jurisdictional requirements of S 32(1)(d) of the PBR Act, (iii) that SUN KISS and SUNKIST are not similar and (iv) that the Registrar’s decision was procedurally irregular.

  • The Minister of Agriculture, Land Reform and Rural Development appointed, during September 2020, an appeal board, consisting of a chairman and two additional members, in accordance with S 42(2) of the PBR Act to consider the appeal.
  • On 6 November 2020, a virtual pre-hearing conference was held between the three members of the appeal board and the legal representatives of the appellant and the second The first respondent did not take part in the appeal proceedings.
  • S 42(3)(d) of the PBR Act instructs that the procedure at the hearing of an appeal shall be as prescribed. However, neither the PBR Act nor the Regulations set out a procedure for an appeal. During the virtual pre-hearing conference, amongst other issues, a timeline for submission of appellant’s founding affidavit, second respondent’s answering affidavit, appellant’s replying affidavit, appellant’s heads of argument and authorities and second respondent’s heads of argument and authorities was agreed to between all Minutes of the virtual pre-hearing conference were prepared by

the appellant’s attorney, settled between all parties and signed by the attorneys of the appellant and the second respondent.

  • Shortly before the agreed date of 29 January 2021 for submission of the appellant’s founding affidavit, the appellant’s attorney wrote to the respondents and the appeal board, submitting that the substance of the second respondent’s contention in the matter of the variety denomination SUN KISS is based on a “preferent claim” within the meaning of S 32(1)(a) of the PBR Act, and that a preferent claim had to be in the form of a court order. The second respondent’s attorney replied that the objection to the denomination SUN KISS is based on S 32(1)(d), that a trade mark registration is a property right and not a claim, and that the objection to the SUN KISS denomination and the appeal do not involve S 32(1)(a) of the PBR Act. After consideration of the correspondence from the attorneys for the appellant and the second respondent, the appeal board advised the attorneys that the S 32(1)(a) issue is one that should be raised, if the appellant wishes to do so, during the appeal process before the appeal board, in accordance with the appeal procedure agreed to during the virtual pre-hearing The appeal board also invited the attorney for the appellant to lodge the appellant’s founding affidavit.
  • On 29 January 2021 the attorney for the appellant again wrote to the appeal board and the second respondent, demanding the second respondent discloses all evidence in support of a statement in a letter from the second respondent’s attorney, dated 26 July 2020, that the second respondent has learnt with surprise that the Registrar of Plant Breeders’ Rights does not conduct any searches for conflicting trade mark or other prior rights when approving varietal denominations. The letter from the attorney for the appellant also demanded that the second respondent and the appeal board concede that the second respondent’s reliance on S 32(1)(d) is unlawful, and that the appeal

proceedings be stayed, indicating that the appellant will approach the court for an application to stay the appeal proceedings if the demands are not met.

  • The attorney for the second respondent replied on 31 January 2021, insisting that the appellant proceed with the appeal brought by the appellant, following the process agreed to by the appellant’s attorney. In her letter of 31 January 2021, the attorney for the second respondent indicated that she would agree to proceed with the appeal on the basis of the record as prepared by the appellant (as the agreed upon deadline for submission of the appellant’s founding affidavit had passed).
  • The appeal board advised the attorney for the appellant on 4 February 2021 that the appeal board noted that the appellant elected to appeal the decision of the Registrar of 17 February 2020, that the appellant is dominus litis, and that the appellant agreed to the deadlines for submitting evidence, heads of argument, etc. The appeal board requested the appellant’s attorney to proceed with the appeal by submitting the appellant’s heads of argument and authorities by the agreed upon deadline of 29 April
  • The appellant’s attorney wrote to the Registrar on 12 February 2021 for an undertaking that the appellant would not be required to provide a new denomination until the final determination of a review by a court of the decision of the appeal board regarding the The attorney for the second respondent objected, pointing out that the Registrar is functus officio, and the Registrar replied on 15 February 2021, stating that the Department of Agriculture, Land Reform and Rural Development is awaiting the decision of the appeal board, without providing the requested undertaking.
  • The appellant did not lodge its heads of argument, but instead on 18 March 2021 lodged a semi-urgent application for a declaratory order, alternatively interim interdict, in the High Court of South Africa Gauteng Division, Pretoria. The appeal board advised that it would not take part in any High Court proceedings but would abide by any decision of the High Court.
  • On 30 April 2021, the appeal board was informed that the appellant and the second respondent had reached a settlement agreement, in terms of which the second respondent withdrew its objection to the SUN KISS denomination. The appellant and the second respondent requested the appeal board to make the settlement agreement an order of the appeal board, indicating that if the appeal board refused, or was not empowered to do so, the second respondent would confirm in writing to the Registrar and the appeal board that it withdraws its objection to the SUN KISS denomination and that it would support a finding by the appeal board in favour of the appellant to set aside the decision of the Registrar based on the objection by the second respondent and forming the subject matter of the appeal.
  • The appeal board considered the requests from the appellant and the second The appeal board concluded that it would not be appropriate for the appeal board to agree to the requests. Based on the apparent limited powers granted to the appeal board in S 42(6) of the PBR Act, the appeal board was not convinced that it has the power to make settlement agreements an order of the appeal board. The appeal board also did not believe that it is appropriate to set aside a decision of the Registrar, absent the matter having been argued before the appeal board. This would simply not be fair to the Registrar and would ignore the fact that a decision by the Registrar in terms of S 32(1)(d) to order a change in denomination, although in this case prompted by a request from the second respondent, does not require such a request to be lawful.

In other words, in the view of the appeal board, the fact that the appellant and the second respondent came to an agreement that the denomination SUN KISS does not have to be changed has no bearing on a decision by the Registrar in this regard.

  • During an informal virtual conference on 17 May 2021, the chairman of the appeal board informed the attorneys for the appellant and the second respondent of the appeal board’s views regarding the settlement agreement. After discussion, the attorney for the appellant indicated that he would take instructions from the appellant regarding proceeding with the appeal, possibly on more limited grounds of appeal, and the attorney for the second respondent advised that, if the appellant proceeds with the appeal on more limited grounds, her client would not be filing heads of argument.
  • On 31 May 2021, the attorney for the appellant removed the appellant’s application to the High Court from the urgent roll of 1 June 2021, and on 8 June 2021 the attorney for the appellant lodged the appellant’s heads of argument in the appeal before the appeal Although not abandoning any of its grounds of appeal, the appellant’s heads of argument focus on two grounds of appeal, namely (i) that the Registrar was functus officio and (ii) that the Registrar’s reliance on S 32(1)(d) of the PBR Act was misplaced. Perhaps wisely, the appellant did not actively pursue the ground of appeal that SUN KISS and SUNKIST are not similar. The appellant also did not actively pursue procedural grounds of appeal.
  • In the view of the appeal board, although these two grounds of appeal are not the same, there is significant overlap between the two. If it can be shown that the Registrar when approving the SUN KISS PBR in 1998 had constructive knowledge of the prior SGI trade mark (irrespective of whether the Registrar considered it or not), the existence of the trade mark is not ‘information [that came] to light’ for the Registrar to consider in

order to change the prior approval and hence the Registrar was not provided with new information in order for her to act in terms of s 32(1)(d). This question is also relevant to the issue whether the Registrar was functus officio as far as the Registrar’s decision to grant South African Plant Breeder’s Right ZA 981943 for a Japanese plum variety bearing the denomination “SUN KISS”.

The Registrar’s reliance on s 32(1)(d)

  • The appellant argues that, broken down to its essence, s 32(1)(d) may be invoked if all three of the following jurisdictional facts are present:
  • new information must emerge, or “come to light”;
  • such information could not have been “discovered” at the time of the original grant of the PBR; and
  • had such information not been concealed or undiscovered at the time of the original grant, it would, in the opinion of the Registrar, have resulted in the refusal of the grant of the
  • The appellant refers to the dictum from SA Defence and Aid Fund v Minister of Justice 1967 (1) SA 31 (C) in which jurisdictional facts in the context of the valid exercise of statutory powers have been explained as follows (at 34H-35A)

Upon a proper construction of the legislation concerned, a jurisdictional fact may fall into one or other of two broad categories. It may consist of a fact, or state of affairs, which objectively speaking, must have existed before the statutory power could validly be exercised. In such a case, the objective existence of the jurisdictional fact as a prelude to the exercise of that power in a particular case is justiciable in a Court of law. If the Court finds that objectively the fact did not exist it may then declare invalid

the purported exercise of the power (see eg Kellerman v Minister of Interior 1945

T.P.D. 179; Tefu v Minister of Justice 1953 (2) SA 61 (T).

  • According to the appellant, the Registrar’s reliance on s 32(1)(d) fails at a jurisdictional level because the information relied on by her as having emerged, was, in fact, and in law, in the public domain at the time of the grant of the PBR in 1998, the information was thus not hidden information susceptible to later discovery, and there is no information as to what was, or was not, known to the Registrar in 1998, and inference is no
  • In support of its contention that the Registrar’s reliance on s 32(1)(d) was misplaced, the appellant argues that the authority of the Registrar under the PBR Act is a continuing one, with the Minister designating a person to that office from time to time in terms of s 3(1) of the PBR Act, hence that knowledge possessed by the authority described as “the registrar” in the PBR Act, is continuing knowledge and not peculiar to the person who happens to fill the Office at any given time, that the register of trade marks is open for public inspection and hence that the existence of the 1971 trade mark was knowledge available to the public, including to the office of the Registrar when the Registrar was considering whether to grant South African Plant Breeder’s Right ZA 981943 and to allow the use of the denomination SUN KISS, that this was knowledge of which the office of the Registrar was deemed to have had constructive notice (the register of trade marks provides constructive notice to the public, including the

Registrar, of the existence of a trade mark1 and that it follows that this was not information that had come to light in 2019, but had been there since 1971.

  • The appellant further argues that, even if it is found that information might be “discovered” despite it having been of public record, then there is simply no evidence of what was known to the Registrar at the time of the approval of the SUN KISS According to the appellant, in 1998 Ms C J (Elna) de Bruyn was not the Registrar and it was therefore necessary to ascertain from the person who was the Registrar in 1998 (if he or she is still alive) what was or was not known at the time. The appellant points out that neither the Registrar, nor the second respondent, has placed any evidence before this appeal board regarding this question.
  • More specifically, the appellant points out that the second respondent stated in paragraph 2.2. of its letter of 5 June 2019 addressed to the appellant that “[o]ur client has learnt with surprise that the registrar of PBR’s in South Africa does not conduct any searches for conflicting trade mark or other prior rights when approving varietal denominations”, that the second respondent did not produce evidence to this effect, that the statement can in any event not be relied upon because it constitutes hearsay and it fails even to disclose the source of the hearsay evidence, and that the Registrar admitted of her own accord that she does not know what evidence was before her predecessor at the time, and that the Registrar’s constructive knowledge precludes the contention about it being new information.

1 Truworths Limited v Pepkor Retail (Pty) Ltd 2016 JDR 2201 (WCC) at [39] (overturned on appeal in Pepkor Retail (Proprietary) Limited v Truworths Limited (900/2015) [2016] ZASCA 146 (30 September 2016) but not on this point).

  • The appeal board, based on the arguments and evidence before it, agrees with the appellant that there is no evidence or legal substance to the contention that the existence of the trade mark was new information. It follows that, once it is accepted that the office of the Registrar had constructive knowledge of the existence of the 1971 trade mark, it is irrelevant what evidence was before the current Registrar’s predecessor at the time the decision was taken to grant ZA 981943 for the SUN KISS Japanese plum variety and there is no need to ascertain from the person who was the Registrar in 1998 (if he or she is still alive and/or reasonably able to recall) what was or was not known at the time.
  • According to the appellant, this is however not the end of the matter. The appellant argues that there is still the matter of the Registrar’s inference, articulated as follows in paragraph 10 of the Registrar’s decision, to be dealt with:

It is my view that the variety denomination SUN KISS is similar to the registered trademark “SUNKIST”, and if the then registrar had considered the trade marks register at the time of considering the application in terms of section 19(1) of the PBR Act, it would have resulted in the refusal of such denomination.

  • The appellant argues that the Registrar is incorrect in coming to the conclusion that the then Registrar would have thought the same way as the present Registrar, as the current Registrar’s conclusion allegedly fails the test for inferential reasoning that requires that an inference must be consistent with all the proven facts, and the more natural or plausible conclusion from amongst several conceivable ones.2 According to the appellant, this is not the most plausible conclusion to be drawn from the known facts

at 386.2 Govan v Skidmore 1952 (1) 732 (N) at 734 expressly approved in Smit v Arthur 1976 (3) SA 378 (A)

and the appellant points out that the previous Registrar may have been aware of the SUNKIST trade mark, and may equally plausibly have concluded that the names were not similar, or did not justify refusal of the denomination.

  • The appeal board does not necessarily agree with the appellant in this regard. The appeal board is however of the view that this question does not have to be decided by the appeal board, as it believes that, once it has been determined that the existence of the 1971 trade mark was not new information, the Registrar’s reliance on s 32(1)(d) was misplaced.
  • The appeal thus succeeds on this ground.

Functus officio

  • The appellant argues that, in reaching her decision, the Registrar was, in fact, seeking to substitute the previous incumbent’s decision with her According to the appellant, the Registrar is not entitled to revisit a decision previously made by her office (and upon which long and extensive reliance has been placed) merely because she speculates on the level of knowledge or information considered or not considered previously or that the decision was wrong, or that she would not have made the same decision herself. That would be, it is argued, a transgression of the principle of the doctrine of functus officio.
  • It is trite that when an administrative official has made a decision that bears directly upon an individual’s interest, that decision-maker has discharged his or her office and the decision may not be 3
  • The principles of the doctrine of functus officio are well established, although application of the doctrine is often fraught wit
  • In Retail Motor Industry Organisation & Another v Minister of Water & Environmental Affairs& Another 2014 (3) SA251 (SCA) at para 24, Plasket AJA held that: “Certainty and fairness have to be balanced against the equally important practical consideration that requires the re-assessment of decisions from time to time in order to achieve efficient and effective public administration in the public ”
  • In the Retail Motor Industry case, the Supreme Court of Appeal set out the applicability of four jurisdictional facts to demonstrate how the balance between certainty and flexibility ought to be achieved:

first, the principle applies only to final decisions; secondly, it usually applies where rights or benefits have been granted-and thus when it would be unfair to deprive a person of an entitlement that has already vested; thirdly, an administrative decision- maker may vary or revoke even such a decision if the empowering legislation authorises him or her to do so (although such a decision would be subject to procedural

3 Other than in heavily qualified circumstances not presently relevant (for example, if no third parties are affected, and the person deriving benefit from the decision consents thereto). See: Lawrence Baxter Administrative Law at 372-3; see also: West Rand Estates Ltd v New Zealand Insurance Co Ltd 1926 AD 173 at 176; FSB and Another v De Wet N.O. and Others 2002 (3) SA 525 (C) at [147]; and Carlson Investments Share Block (Pty) Ltd v Commissioner 2001 (3) SA 210 (W) at 232E.

fairness having been observed and any other conditions); fourthly, the functus officio

principle does not apply to the amendment or repeal of subordinate legislation.

  • It can be argued that a decision by the Registrar to grant a plant breeder’s right for a new variety under a particular denomination is not necessarily a final decision. S 32 of the PBR Act gives the Registrar the right later to alter or supplement the approved denomination under prescribed conditions. When these prescribed conditions are however absent, the Registrar’s decision without a doubt becomes a final
  • As set out in paragraphs [49] and [50] hereinafter, the appeal board is satisfied that the prescribed conditions set out in S 32 are, on the facts of this case, absent, so that the Registrar’s decision to grant ZA 981943 for a Japanese plum variety under the denomination SUN KISS was In the view of the appeal board, the first jurisdictional fact is thus present.
  • There appears to be no reason to believe that the Registrar’s decision does not relate to a right that has been granted – see for example s 23A(c) of the PBR Act, which allows the holder of a PBR to sue for infringement of the PBR if any person uses the approved denomination of a protected variety in relation to plants or propagating material of another variety for any purpose whatsoever. The second jurisdictional fact, in the view of the appeal board, is thus also present.
  • Clearly, also the fourth jurisdictional fact is present as there is no question here of the amendment or repeal of subordinate
  • The question arises then, in terms of the third jurisdictional fact, if the Registrar may in principle vary or revoke the earlier decision of 1998 because the PBR Act authorises

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