Hammarskjöld (Pty) Ltd and Indy Pendant Films (Pty) Ltd v Department of Trade, Industry and Competition, Acting-Director-General of Trade, Industry and Competition, Minister of Trade, Industry and Competition and Broad-Based Black Economic Empowerment Commission
High Court of South Africa (Western Cape Division, Cape Town)
Case No 19613/2022 – judgment delivered 17 July 2025
This judgment is reportable because it clarifies the interplay between the Department of Trade, Industry and Competition’s Film and Television Production Incentive Guidelines and the statutory framework created by the Broad-Based Black Economic Empowerment Act 53 of 2003. It is also significant for its application of the Promotion of Administrative Justice Act 3 of 2000 to incentive-based administrative decisions and for its detailed treatment of when a court may substitute its own decision for that of the administrator in terms of section 8(1)(c)(ii)(aa) of PAJA.
(The judgment does not record the citation of other authorities in the excerpt provided. No additional cases are therefore listed.)
Constitution of the Republic of South Africa, 1996
Promotion of Administrative Justice Act 3 of 2000
Broad-Based Black Economic Empowerment Act 53 of 2003
Companies Act 71 of 2008 (and its predecessor, Companies Act 61 of 1973)
Co-operatives Act 14 of 2005
No specific Rules of Court are referenced in the portion of the judgment supplied.
The applicants, two South African production companies, sought judicial review of the Department’s refusal to grant a foreign film and television production incentive for the feature film “Hammarskjöld”. They contended that the Department misinterpreted the B-BBEE compliance requirements in the applicable Incentive Guidelines, relied impermissibly on the B-BBEE Commission’s view, and failed to exercise its own discretion. After analysing the statutory and policy context, the High Court ruled that the Department had committed a material error of law, took irrelevant considerations into account, and failed to appreciate its own power to waive the “no-principal-photography-before-approval” rule.
The Court further found that, once the correct legal standard was applied, only one reasonable outcome was possible: the incentive had to be granted and the waiver authorised. It therefore reviewed and set aside the impugned decisions, substituted them with approvals, and ordered the Department to pay the incentive retrospectively.
Whether the Department’s refusal of the foreign film incentive was based on a material error of law relating to the interpretation of B-BBEE compliance requirements.
Whether the Department acted unlawfully in believing itself bound by the B-BBEE Commission’s stance instead of exercising an independent discretion.
Whether the Court was entitled, in terms of section 8 of PAJA, to substitute its own decision for that of the Department and to waive the principal-photography-before-approval requirement.
The Department’s decision was reviewable under sections 6(2)(d), (e)(iii), (f)(ii)(bb) and (i) of PAJA.
The B-BBEE compliance clauses in the Guidelines did not preclude approval where the holding company satisfied level-3 status and the SPCV satisfied level-4 status; the Department’s contrary view was wrong in law.
Because the outcome was a foregone conclusion once the correct law was applied, substitution was just and equitable. The Court ordered the Department to approve the application, waive the timing requirement retrospectively, and pay the R12 000 000 incentive.
Hammarskjöld (Pty) Ltd was incorporated as a special-purpose corporate vehicle to undertake all South African production and post-production activities for the feature film “Hammarskjöld”. Indy Pendant Films (Pty) Ltd, a 52 percent black-owned company, is the holding company. On 10 March 2022 the applicants lodged an incentive application with the Department’s film unit, complying with the requirement that applications be made no more than forty-five days before principal photography, scheduled for 28 June 2022.
The Guidelines required both the SPCV and its holding company to meet specified B-BBEE contribution levels and to file valid B-BBEE certificates. The applicants duly provided these. Nevertheless, after a series of e-mail exchanges in which departmental officials queried the production’s financing structure and the relationship between Indy and DO Productions, the Department rejected the application. It regarded Indy as insufficiently independent, questioned the purpose of using a newly-formed SPCV, and, most importantly, accepted the B-BBEE Commission’s view that the transaction constituted “fronting”.
In addition, because principal photography had begun before formal approval, the Department declined to waive the requirement that filming commence only after approval. That refusal effectively disqualified the applicants from any later incentive claim.
The Court had to decide whether the Department’s refusal was tainted by reviewable irregularities under PAJA, particularly a material error of law in construing the B-BBEE Act and the Incentive Guidelines. It also had to determine whether, if the refusal was invalid, it should remit the matter for reconsideration or substitute its own approval. A related question was whether the Department’s refusal to waive the “no-photography-before-approval” rule should likewise be reviewed and replaced with a retrospective waiver.
Ndita J began by confirming the Court’s jurisdiction under sections 1, 6 and 8 of PAJA. The relevant question was not whether the Department enjoyed a broad discretion but whether that discretion had been exercised in accordance with the law.
Interpreting the Guidelines in light of the B-BBEE Act and the Codes of Good Practice, the Court held that the incentive scheme merely requires the holding company to be at least a level-3 contributor and the SPCV to be at least level-4. The applicants met those thresholds. The Department’s belief that it was “bound” by the B-BBEE Commission’s adverse opinion ignored its own obligation to form an independent view. That abdication amounted to an error of law and a failure to apply its mind, triggering review under section 6(2)(d) and (e)(iii) of PAJA.
Turning to remedy, the Court weighed the separation-of-powers concerns that usually favour remittal. It stressed, however, that section 8(1)(c)(ii)(aa) of PAJA permits substitution where further delay would cause undue prejudice, the record is complete, and the outcome is inevitable once the correct legal principles are applied. Those conditions were satisfied. Granting the incentive was a foregone conclusion, and any remittal would serve no purpose but to prolong uncertainty and undermine investor confidence in South Africa’s film industry.
On the waiver issue, Ndita J observed that the Department’s guidelines explicitly allow waiver where strict compliance would defeat the incentive’s objectives. Because production had already begun, a refusal to waive would nullify the very aim of attracting foreign expenditure and creating local jobs. The refusal was therefore irrational and set aside.
The Court reviewed and set aside both the decision refusing the incentive and the decision refusing the waiver. It substituted them with orders:
– approving the applicants’ foreign film incentive application and authorising payment of R12 000 000 forthwith;
– retrospectively waiving the requirement that principal photography start only after approval;
– directing the Department and the Minister, jointly and severally, to pay the applicants’ costs, including the costs of two counsel.
An administrator commits a reviewable error under PAJA when it misconstrues its empowering provisions or treats another body’s opinion as binding, thereby failing to exercise an independent discretion.
Under section 8(1)(c)(ii)(aa) of PAJA a court may substitute its own decision for that of the administrator where the record is complete, the decision-maker has foregone the discretionary exercise of power through a material error of law, and it is in the interests of justice to avoid remittal.
The B-BBEE Act and Codes of Good Practice set baseline compliance requirements; they do not authorise an administrator to impose additional hurdles or to conflate black-ownership objectives with allegations of “fronting” unsupported by evidence.
Where adherence to a procedural prerequisite (such as delaying principal photography until approval) would defeat the statutory purpose of an incentive scheme, a rational administrator must consider waiving that requirement, and a failure to do so may be set aside as irrational under PAJA.