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[2021] ZAWCHC 242
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DFPT Finance NPC and Another v Vintage Distributors (Pty) Ltd (9095/18) [2021] ZAWCHC 242 (23 November 2021)
IN THE HIGH COURT OF
SOUTH AFRICA
(
WESTERN
CAPE DIVISION, CAPE TOWN
)
CASE NO: 9095/18
In
the matter between:
DFPT
FINANCE NPC
First Plaintiff / Respondent
HORTGRO
(PROPRIETARY) LIMITED
Second
Plaintiff / Respondent
and
VINTAGE
DISTRIBUTORS (PTY) LTD
Defendant / Applicant
Date
of hearing: 2 November 2021
Date
of Judgment: 23 November 2021 (delivered by email to the parties’
legal representatives. The Judgment shall be deemed
to have been
handed down at 12h30)
JUDGMENT
Henney,
J
Introduction
:
[1]
This is an interlocutory application for the delivery of trial
particulars, launched
by the defendant, to an action instituted by
the plaintiffs against the defendant, for a claim for levies which
the plaintiffs
are empowered to claim from the defendant. The
Minister of Agriculture, Forestry and Fisheries (“the
Minister”),
on 6 November 2015, acting under sections 13 and 15
of the Marketing of Agricultural Products Act 47 of 1996 (“the
Act”),
and notices in Government Gazette number 39375 (“the
notices”), established a statutory measure for the collection
of levies from producers of apples (R602) and pears (R606) in certain
regions. The defendant is a producer and exporter of
apples and
pears in the region of Vyeboom, Grabouw.
[2]
The levies are imposed and calculated according to volumes and
formulas, as defined
in paragraph 6 of the notices. The levies
are payable to the plaintiffs under paragraph 7 and 8 of the notices,
and the payment
is to be made not later than 60 days following the
month wherein a quantity of apples was delivered for export or sale.
[3]
The plaintiffs allege in their particulars of claim that over the
approximate period
from 1 October 2016 to 30 September 2017 levies in
the total amount of R1 120 959,92 were imposed on the defendant, of
which only
R500 000 has been paid, the balance of R620 959,92
remaining outstanding as of 30 April 2018. The plaintiffs
therefore allege
that the defendant is indebted to them in the amount
of R620 959,92. Mr Fagan SC, assisted by Ms Thiart, appears for
the
plaintiffs, and Mr Schreuder SC for the defendant.
The defendant’s
Plea
:
[4]
The defendant in its plea states that the payments made by it, had
been made under
the erroneous impression that the Minister was duly
authorised to establish statutory measures for the collection of
levies, from
producers of apples and pears in certain regions, and/or
were made under protest. It further contends that the establishment,
by
the Minister, of measures for the collection of levies from
producers of apples and pears in certain regions, as alleged in the
plaintiffs’ particulars of claim, was unauthorised and
accordingly null and void. The levies imposed on the defendant,
as referred to in paragraph 7 of the particulars of claim, were
accordingly unauthorised and unlawful.
[5]
In this regard, the defendant submits that sections 5 and 9 of the
Act provide for
the discussion, consideration and the taking of
decisions by the National Agricultural Marketing Council (“the
Council”),
regarding statutory measures to be submitted to the
Minister for consideration, in respect of statutory measures for the
collection
of levies from producers of apples and pears in certain
regions, by way of notice in the Government Gazette. Section
9(1)(f)
and 9(2) of the Act provides for reports to be compiled and
submitted to the Minister in respect of these statutory measures;
section
10 provides for a request in writing to the Minister for the
establishment, continuation, amendment or repeal of statutory
measures;
while section 11 provides for reports to be furnished by
the Council to the Minister; for adequate publication of notice to
affected
groups; for consideration of objections or representations
by affected groups; and for the appointment, if necessary, of a
committee
in terms of section 7, to consider such objections or
representations and to advise the Council.
[6]
The defendant submits that, having regard to these provisions of the
Act, the Minister
acted without authority when establishing statutory
measures and determining levies on apples and pears respectively, as
published
in Government Gazette 39375 on 6 November 2015.
Consequently, the defendant is not liable for payment of such
levies to the
plaintiffs.
[7]
The defendant, on 17 May 2019, also filed a counterclaim for
repayment of the amounts
it had paid as a result of the unlawful and
unauthorised imposition of the levies. In response thereto the
Plaintiffs filed
a special plea and plea in reconvention on 24 May
2019, wherein they, inter alia, for purposes of this application,
averred that,
based on the claim in reconvention (which is premised
on a finding by this court that the Minister and the Council acted
without
authority and unlawfully), the Minister and Council should
have been joined as parties, because they have a direct and
substantial
interest in the outcome of the claim in reconvention.
[8]
The plaintiffs then requested, inter alia, that the claim in
reconvention be stayed
pending the joinder of the Minister and the
Council, and that the defendant be directed to join those parties.
[9]
The defendant, in response, withdrew the claim in reconvention. The
plaintiffs
nevertheless insisted that the Minister and the Council
have a direct and substantial interest and, given the failure of the
defendant
to have continued with its claim in reconvention, and to
have joined the Minister and the Council as defendants in
reconvention
in respect of that claim, these issues cannot be
determined by this court by way of a collateral challenge.
[10]
In reply to this, on 19 June 2019, the defendant filed a rejoinder,
wherein it rejoined issue
with certain allegations the plaintiffs
made in their replication. In this regard the defendant stated
that: ‘Whilst
it is correct that the defendant withdrew its
claim in reconvention it is denied that it did so in response to the
plaintiffs’
allegation that the Minister and the Council have a
direct and substantial interest in the outcome of the matter.’
This application
:
[11]
As a result of the plea, on 14 January 2021, the defendant made a
request for trial particulars
[1]
,
in so far as the defendant launched a collateral challenge wherein it
disputed the legality of, and/or authority for, the establishment
by
the Minister of statutory measures for the collection of levies, as
alleged in paragraph 4 of the plaintiffs’ particulars
of claim,
and the imposition of levies on the defendant, as alleged in
paragraphs 7 to 11 of the plaintiffs’ particulars
of claim. In
this request for trial particulars, the defendant requests answers to
the following:
1)
Was a request in writing delivered to the
Minister, in terms of section 10 of the Act, by a directly affected
group, including the
first and /or the second plaintiff, to
establish, continue, amend, or repeal one or more statutory measures
before the Minister
established the statutory measures for the
collection of levies from producers of apples and pears, as alleged
by the plaintiffs?
If the answer to this question is in the
affirmative, a copy of such a request in writing is required and the
plaintiffs
are required to state when such a request was made.
2)
Did the Council publish a notice, terms of
section 11 of the Act, setting out the particulars of the request and
an explanation
in connection therewith in the Gazette, and such
magazines or newspapers as may be sufficient in order to bring the
request to
the attention of the directly affected groups, and
inviting such directly affected groups to lodge any objections or
presentations
relating to this request within a specific time? If
the answer to this question is in the affirmative, a copy of such
notice,
as published in the Gazette and magazines and newspapers, is
required and the plaintiffs are required to state when such notice
was published.
3)
Did either of the plaintiffs deliver a request,
in terms of section 11(1) of the Act, for the referral by the
Minister of a request
for the establishment of statutory measures to
the Council for investigation and for a report thereon? If the
answer to this
question is in the affirmative, copies of the request
and report are required and the plaintiffs are required the state
when the
request was made and the report delivered, respectively.
4)
Did the Council, in terms of section 11(6) of the
Act, send a copy of its recommendations regarding the introduction,
amendment
or appeal of a levy, to the parliamentary committees for
their information? If the answer to this question is in the
affirmative,
the plaintiffs are required to provide a copy of such
recommendations, state when they were sent to the parliamentary
committees,
and what response, if any, was received thereto.
[12]
Plaintiffs, in reply to this request, on 27 January 2021, stated
that: ‘None of the requests
for trial particulars arises from
allegations made by the plaintiffs in the particulars of claim as
amended. Instead they
arise from allegations made by the
defendant in its plea. The requests are therefore interrogatory
in nature, and the further
particularity that has been sought is
moreover not strictly necessary to enable the defendant to prepare
for the action. In
the premises, the plaintiffs decline to
provide the further particularity that has been sought.’
This resulted in the
launching of this application, by the defendant, on 4 August 2021.
[13]
The plaintiffs’ reasons for refusing to file trail particulars
as requested, apart from
what is stated above, are the following:
The plaintiffs
submit that when a plaintiff in proceedings relies on a publication
in the Government Gazette – be it a statute,
regulation or a
notice – it is not required to allege and prove that the
publication was valid. The plaintiffs submit
that, normally, if
reliance is for instance placed on a regulation, it is not necessary
to allege and prove that the cabinet Minister
who made the regulation
in question acted within the scope of her statutory authority when
doing so. Allegations of that
kind are simply not made; all
that would normally be alleged, is the fact that the regulations were
published in the Government
Gazette and therefore exist. They
submit that the reason why a plaintiff is not required to allege and
prove this, is because
of the fundamental legal principle of
omnia
praesumuntur rite et solemniter esse acta donec probetur in
contrarium
, which means that all acts are deemed to have been
performed lawfully unless the contrary is proved.
[14]
They submit that this does not mean that the validity of a statute,
regulation or notice published
in the Government Gazette cannot be
challenged. It can indeed be challenged in an inappropriate
case, and may be challenged
collaterally, but the onus is on the
party making the challenges to prove its invalidity. The
presumption of validity must
be rebutted and the contrary must be
proved. It is only once the invalidity of an administrative
action has been proved in
evidence, that the
omnia praesumuntur
principle ceases to have effect.
[15]
The plaintiffs in this action claim payment from the defendant of
levies payable by producers
and exporters of apples and pears, the
defendant being such a producer and exporter. The defendant’s
obligation to
pay levies arises from statutory measures for the
collection of levies from producers and/or exporters of apples and/or
pears.
The establishment by the Minister of these measures is
reflected in the notices published on 6 November 2015 in the
Government
Gazette. The publication of the notices by the
Minister is not in dispute in the pleadings. Accordingly,
omnia
praesumuntur
and the onus is on the defendant to allege and prove
the invalidity of the notices.
[16]
The defendant denies liability to pay the levies to the plaintiffs,
and this denial is amplified
by alleging that the establishment of
the statutory measures by the Minister was unauthorised, unlawful and
accordingly void.
It also alleges in this regard that there had
been a failure to comply with certain terms of the Act. According
to the plaintiffs,
the defendant sets out a shopping list of such
alleged failures pertaining to sections 10, 11, 11(1), 11(2)(c),
11(2)(d), 11(6)
and 13 of the Act and implicating not only the
Minister but also the Council.
[17]
The plaintiffs submit that the defendant in its plea, however, merely
sets out these relevant
provisions of the Act and alleges that the
Minister and the Council did not do whatever the provisions referred
to required them
to do. This the defendant does notwithstanding
its onus. According to the plaintiffs, the defendant’s
allegations
are lacking in any factual foundation and particularity
and, in an unusual attempt to remedy this shortcoming, the defendant
delivered
a request for trial particulars, wherein it requested the
plaintiffs to provide particulars as to the Minister’s and the
Council’s alleged failures to comply with the relevant
provisions of the Act. The plaintiffs submit that what the
defendant
is effectively doing, is asking the plaintiffs to provide
further particularity in the defendant’s allegations of
invalidity,
which is not the purpose of further particulars.
[18]
As an example, they submit that the defendant pleads, firstly, that
section 11(1) of the Act
‘provides, inter alia, for referral by
the Minister of requests for the establishment of statutory measures
[to] the Council
[for] investigation and the report thereon’
and alleges that ‘the Minister eager to receive such a request
and did
not refer such request to the Council [for] investigation and
the report thereof’
.
[19]
Secondly, the defendant also requested from the plaintiffs the
following further particularity:
‘Did either of the plaintiffs
deliver a request in terms of section 11(1) of the Act for referral
by the Minister of a request
for the establishment of statutory
measures to the Council for investigation and for a report thereon?
If the answer is in
the affirmative, copies of the request and
the report are required and the plaintiffs of the parties thereto
when the request was
made in the report delivered, respectively.’
[20]
The plaintiffs submit that the defendant says, extraordinarily so in
light of its pleaded case,
that it is ‘unable to determine the
extent to which the Minister followed the statutory prescriptions’.
The plaintiffs
submit that, by making this extraordinary statement, the defendant
thus acknowledges that its plea has no factual
foundation, and is
merely a shot in the dark. It is not permissible to make
allegations in a pleading that have no factual
foundation. According
to the plaintiffs, it is particularly not permissible to do so and
then to insist that the other party
should fill in the blanks.
[21]
The plaintiffs oppose the application to compel them to deliver trial
particulars on four grounds:
1)
Firstly, because it is incumbent upon the
defendant to prove the allegations made in its plea. The
plaintiffs’ case
is that they have come to court on the basis
that the statutory measures are valid, as they are entitled to do.
It is for
defendant to allege and prove that the statutory
measures are invalid due to the Minister’s or the council’s
failure
to have complied with certain provisions of the Act, and in
proving its defence, it is not open to the defendant to call on the
plaintiffs to give further particulars of the defendant’s
allegations pleaded in defence.
2)
Secondly, because the onus rest on the defendant
to prove the invalidity of the statutory measures, it is not required
of the plaintiff
to prove the validity thereof. The defendant’s
attempt to build its application to compel on the plaintiffs’
reliance on the statutory measures is misplaced. The
plaintiffs’ reliance is based on the fact of publication, by
merely
proving the existence of the notices. The
omnia
praesumuntur
principal permits of such
reliance without the need to adduce any evidence. The defendant
is relying on allegations of invalidity
of the statutory measures in
its own plea, as a foundation for the further particular sought,
which it is precluded from doing,
as it is not the function of
further particulars to assist a party to prove allegations which it
has itself made.
3)
Thirdly, the defendant is collaterally
challenging the wrong parties. Despite challenging the validity
of the statutory measures
based on the Minister’s and the
Council’s alleged failure to comply with certain provisions of
the Act, the defendant
has not taken any steps to join the Minister
and the Council in terms of these proceedings. The plaintiffs
submit that a
collateral challenge is available ‘only if the
right remedy is sought by the right person in the right proceedings’,
and absent the participation of the Minister and the Council these
are neither the right proceedings nor the right parties.
4)
Fourthly, because these are not the right
proceedings or the right of parties to a collateral challenge, the
defendant is now in
a position where it is seeking further
particulars from the wrong party. The plaintiffs submit that
they merely collect the
levies payable in terms of the statutory
measures. They are not the authors of the notices, nor did they
have anything to
do with the establishment of the statutory measures,
and they do not possess the requisite information. The
plaintiffs are
in a position in which they cannot respond to the
defendant’s request for further particulars, nor is it
appropriate that
they should be compelled to do so.
[22]
The Plaintiffs further submit that the defendant is purporting to
raise a collateral challenge
by hoping to defend itself in civil
proceedings, for payment of outstanding levies to the plaintiffs, by
challenging the validity
of the statutory measures.
[23]
They further submit that it is a well-established principle in our
law, as laid down in
Oudekraal
Estates (Pty) Ltd v City of Cape Town and others
[2]
(“
Oudekraal
”),
that ‘our law has always recognised that even an unlawful
administrative act is capable of producing legally valid
consequences
for so long as the unlawful act is not set aside.’
Further that it is
not impermissible for them to place reliance on this principle merely
because the defendant has a right, in the
present instance, to raise
a collateral challenge to the validity of the statutory measures,
where the defendant, because of its
failure to comply, is threatened
with coercive action by the plaintiffs. The plaintiffs submit,
as was held in Oudekraal,
that a collateral challenge to the validity
of an administrative action is only available when the right remedy
is sought by the
right person in the right proceedings, and submits
that this is not the case here.
[24]
The present action between the defendant and the plaintiffs is not
the ‘right proceedings,
nor are the parties the ‘right
persons’. This is so because the defendant is challenging
the validity of the
statutory measures based on the Minister’s
and the Council’s alleged failure to comply with certain
provisions of the
Act. The plaintiffs merely collect levies that are
payable in terms of the statutory measures. They are not the
authors of
the notices, nor did they have anything to do with the
establishment of the statutory measures. The defendant, despite
being
aware of this, because it was raised in the pleadings, has
failed to take steps to join the Minister or the Council.
[25]
They submit that the defendant’s reliance on the case of
City
of Tshwane Metropolitan Municipality v Cable City (Pty) Ltd
[3]
(“
Cable
City
”)
to support its submission that the joinder of the Minister was not
necessary, is misplaced for various reasons. These
are, inter
alia, that the administrative action complained of in that particular
case had already been found to be unlawful in
another judgment, based
on a previous finding that the particular notice that constituted the
administrative action in that case
was unlawful, and it was
considered to be a defence against a refusal to pay levies in terms
of that notice; Cable City in that
case was also not seeking a
declaration of constitutional invalidity, nor had it asked for the
notice to be set aside and accordingly
rule 10A did not find
application. In this particular case, the defendant is not
relying on a previous decision or settled
legal precedent as a ground
for refusing to pay levies. It is merely relying on the alleged
invalidity of the statutory measures,
which invalidity has not
previously been challenged or adjudicated upon.
[26]
The defendant in this case is also effectively challenging the
constitutional validity of the
statutory measures and rule 10A does
find application. In its replying affidavit, the defendant
alleges that the levies were
unlawfully imposed by the Minister who
exceeded his or her powers in terms of the enabling legislation and
because the statutory
measures made by the Minister to empower the
plaintiffs to collect levies are invalid. For the defendant to
succeed with
its defence that its refusal to pay levies is justified
because the statutory measures are invalid, the trial court will have
to
make such a finding, which is a constitutional finding as to the
validity of a law.
[27]
The plaintiffs submit that the Supreme Court of Appeal has on
occasion
[4]
found that it is
inappropriate for courts to make orders declaring policy directives
invalid without providing the relevant organs
of state an opportunity
to intervene, which is no different to the present matter. The
plaintiffs therefore submit that absent
the participation of the
Minister and the Council, these are not the right proceedings or the
right parties for the collateral
challenge raised by the defendant.
[28]
Therefore the plaintiffs submit that, because of the defendant’s
failure to join the Minister
and the Council, it has sought further
particulars from the wrong party. This was clearly stated by
the plaintiffs in their
answering affidavit, where they said that
they are not in possession of the record of decision-making that
resulted in the publication
of the notices and that they were not the
decision-makers. They therefore lacked the requisite
information and knowledge
to furnish the further particulars sought
by the defendant. The defendant is the party alleging that the
notices are invalid,
and the plaintiffs’ adversary in the
action. It is for the Minister and the Council to respond to
the allegations by
the defendant, who has failed to join them. The
plaintiffs submit that they are not in a position in which they can
be expected
to respond to defendant’s request for trial
particulars.
The defendant’s
submissions
:
[29]
The defendant submits that because of its general denial that the
statutory measures have been
lawfully and validly established by the
Minister, it remains for the plaintiffs to prove the validity of the
establishment of the
statutory measures, which is an essential
feature of their claim. Based on the cause of action pleaded by
the plaintiffs,
a collateral challenge to the validity of
administrative actions of the Minister and the Council is available
to the defendant.
In such a case, the court will have no
discretion to allow or disallow the raising of this defence.
[30]
It was for these reasons that the defendant requested the trial
particulars, on the basis of
the issues in respect of which the
defendant joined and rejoined in relation to crucial allegations
raised by the plaintiffs in
their amended particulars of claim and
replication, to which the defendant filed a request for trial
particulars. These trial
particulars were called for in so far
as the legality of, and/or authority for, the establishment by the
Minister of statutory
measures for the collection of levies, as
alleged in paragraph 4 of the plaintiffs’ amended particulars
of claim, and the
imposition of levies on the defendant, as alleged
in paragraphs 7 to 11 of the plaintiffs’ amended particulars of
claim,
are concerned.
[31]
The defendant submits that the first ground for the refusal of the
trial particulars requested
by them, which is that they do not arise
from allegations made by the plaintiffs in the amended particulars of
claim, falls to
be rejected, as the plaintiffs bear the onus of
proving the legality of the Minister’s determination of the
levies. In
this regard they submit that the plaintiffs rely on
a number of cases
[5]
for their
contention that they are not required to allege and prove that the
Minister’s regulations are valid. These
cases, the
defendant submits, do not deal with the onus, but instead with the
maxim
omnia
praesumuntur rite esse acta
.
[32]
The defendant submits that the SCA similarly did not express a view
on where the onus lies, but
confirmed the application of the maxim
omnia praesumuntur
in the case of
Phillips v SA Reserve
Bank
. According to Mr. Schreuder, in none of these cases,
the court determined that the onus was on the person challenging the
decision-maker’s authority.
[33]
The defendant also submits that, on the other hand, these cases
referred to by the plaintiffs
are to be distinguished from the
present one, and that the onus to prove authority on the part of the
Minister rests on the party
seeking to coercively enforce tariffs
which the Minister made on the strength of the impugned authority.
In this regard the
defendant relies on the case of
South
African Local Authorities Pension Fund v George Municipality
[6]
(“
George
Municipality
”).
According to the defendant, the other important basis on which
the authorities that the plaintiffs rely on fall
to be distinguished
from the present matter, is in the context of the debate regarding
the incidence of the onus, which is that
when a defendant launches a
collateral challenge to administrative action, it is not asking the
court to exercise its discretionary
powers to review and set aside as
invalid the administrative action, but is merely raising a defence to
the validity or otherwise
of the Minister’s and/or Council’s
power to make these statutory measures for the implementation and
enforcement of
the levies.
[34]
The defendant submits that from a procedural point of view, the steps
to be followed by the parties
in a matter such as the present
include:
1)
the defendant raises a collateral challenge in
its pleadings by raising as his defence the invalidity of the
decision-maker’s
decision because of the lack of a prescribed
statutory step;
2)
it is incumbent on the plaintiffs to prove at the
hearing that the requisite statutory step has been taken;
3)
the defendant will succeed with its collateral
challenge defence if the existence of the prerequisite statutory step
is not proved.
[35]
The defendant further submits that the question surrounding the onus
in collateral challenges
was categorically and unequivocally answered
by the SCA in
South
African Local Authorities Pension Fund v Msunduzi Municipality
[7]
(“
Msunduzi
Municipality
”)
.
The defendant also referred to
National
Industrial Council for the Iron, Steel, Engineering and Metallurgical
Industry v Photocircuit SA (Pty) Ltd and others
[8]
(“
Photocircuit
”)
and
Department
of Transport & Others v Tasima (Pty) Ltd
[9]
(“
Tasima
”)
.
[36]
The defendant therefore submits that based on these cases, from the
SCA as well as the CC, it
must follow that the maxim
omnia
praesumuntur
does not relieve the plaintiffs of the onus to prove
the validity of the levies which they seek to impose and enforce on
the defendant.
[37]
It further submits that the plaintiffs’ reliance on the case of
Magnificent
Mile Trading 30 (Pty) Ltd v Celliers NO and others
[10]
(“
Magnificent
Mile
”)
(where reference was made by Madlanga J to
Aquila
Steel (SA) (Pty) Ltd v Minister of Mineral Resources and Others
[11]
)
(“
Aquila
Steel
”)
for the contention that the onus is on the defendant to rebut the
presumption of validity, and that it could not call on
the plaintiffs
to give particulars which will assist in preparing a defence that it
has alleged and that it must prove, is flawed.
This being
because these cases were not concerned with collateral challenges
raised between the correct parties in the correct
proceedings in
which a coercive action was sought to be imposed on the party
challenging the invalidity of the administrative actions
in question.
Both these matters are concerned with the assertion of mineral
rights and of the party being faced with coercive
measures. It
submits that in
Magnificent
Mile
one of the pivotal questions to be answered was whether the rule in
Oudekraal
was
applicable, so that an invalid grant had to be set aside before
pre-existing old order rights could be asserted.
[38]
The defendant further submits that it may very well be that an
applicant in review proceedings,
which were launched to set aside an
invalid administrative act, may bear the onus to rebut the
presumption of validity on the same
basis as he bears the onus to
plead and prove his grounds for review.
[39]
The position is, however, quite the opposite when it comes to that of
a party raising a collateral
challenge, as was emphasised in
Msunduzi
, where it was said that it remained for the appellant
(in this case the plaintiffs) to prove the validity of the act which
is an
essential feature of their claim.
[40]
Regarding the second ground for the denial of the particulars as
requested, which is that they
are not strictly necessary to enable
the defendant to prepare for trial, the defendant submits it should
similarly be rejected,
as the defendant is entitled to be provided
with the requested particulars so as to prevent it being surprised at
the trial when
the plaintiffs prove their case regarding the
Minister’s authority and the legality of his/her determination
of levies.
I do not think it would be necessary to deal with
the issue non-joinder raised by the parties, as I am only requested
to deal with
this application on the basis of the provisions of rule
21(4).
Evaluation
:
[41]
In
Oudekraal
[12]
it was held that:
‘
It will generally avail a
person to mount a collateral challenge to the validity of an
administrative act where he is threatened
by a public authority with
coercive action precisely because the legal force of the coercive
action will most often depend upon
the legal validity of the
administrative act in question.’
A collateral
challenge to the validity of the administrative act will be
available, in other words, only ‘if the right remedy
is sought
by the right person in the right proceedings’. The court
further noted that it is important to bear in mind
that in those
cases in which the validity of an administrative act may be
challenged collaterally, a court has no discretion to
allow or
disallow the raising of that defence. The right to challenge
the validity of an administrative act collaterally
arises because the
validity of the administrative act constitutes the essential
prerequisites for the legal force of the action
that follows and,
ex
hypothesi
, the subject may therefore not be precluded from
challenging its validity. This is to be distinguished from
cases where a
court is asked to set aside an invalid administrative
act in proceedings for judicial review, where it has a discretion to
grant
or to withhold the remedy.
[42]
The court went on to say that it is that discretion that accords to
judicial review its essential
and pivotal role in administrative law,
for it constitutes the indispensable moderating tool for avoiding or
minimising injustice
when legality and certainty collide. Each
remedy (i.e. collateral challenge or judicial review) thus has its
separate application
to its appropriate circumstances and they ought
not to be seen as interchangeable manifestations of a singular remedy
that arises
whenever an administrative act is invalid. An
analysis of the problems that arise in relation to unlawful
administrative
action recognises the value of certainty in the modern
bureaucratic state, a value that the legislature should be taken to
have
in mind as a desirable objective when it enacts enabling
legislation, and it is also to give effect to the principle of
legality,
which is fundamental to our legal order. The court
went on to say that while the legislature might often, in the
interests
of certainty, provide for consequences to follow merely
from the fact of an administrative act, the rule of law dictates that
the
coercive power of the state cannot generally be against the
subject unless the initiating act is legally valid.
[43]
The defendant, based on these well-established principles and the
case it has pleaded, is entitled
to raise a collateral challenge to
the statutory measures upon which the plaintiffs base their claim for
the payment of the levies.
The questions thus to consider are,
firstly, whether the maxim
omnia praesumuntur rite esse acta
(“the maxim”) or the presumption of validity (“the
presumption”) is applicable in a matter such as this
where a
collateral challenge is raised. Secondly, on who does the onus
fall to prove the validity or invalidity of the statutory
measures.
Thirdly, if not on the plaintiffs, then whether plaintiffs are
obliged to supply the defendant with the trial particulars
on which
the basis of the collateral challenge rests.
The applicability
of the maxim
:
[44]
The maxim has a wide field of application where its use has through
precedent become compulsory
in certain factual situations; it
operates as a presumption of law, but for the rest is often used as a
presumption of fact, in
the sense that a court draws an inference on
the basis of accepting that matters have taken their regular
course.
[13]
Parties
often rely on presumptions to obviate the need to prove certain
facts.
[45]
The application of this presumption in this particular case is based
on the fact that when an
official performs an action in the course of
his or her duties, it is presumed that he/she was properly appointed
and that the
authority to perform that action was conferred on him or
her. This presumption further has as its effect that there has
been
compliance with all the formal requirements for regular or valid
government action. It is thus accepted, by relying on this
presumption, that, in the absence of evidence to the contrary, the
procedural requirements and other formalities have been complied
with, and also that any condition precedent to the validity of the
performance of an act by the authorised public official has
been
fulfilled.
[14]
In
S
v Thornhill
[15]
thus the following was said:
‘
The ambit of the
presumption of regularity expressed in the maxim
omnia
praesumuntur rite esse acta
is not well-defined. In Hoffman
and Zeffert
The South African Law of Evidence
4
th
ed
at 548 it is said that because of its indefinite scope, its limits
can only be illustrated by examples. The learned authors
nevertheless proceeded to define it thus –
“
If an official purports to
have exercised a power which is effective only upon compliance with
certain formalities, it will be presumed
that all the necessary
formalities have been observed.”’
[46]
In
Phillips
, referred to by Mr. Fagan, the practical effect of
the presumption was illustrated where the court said:
‘
I
am satisfied that it can be accepted that the notice was date-stamped
by the registrar’s representative and placed on the
notice
board designated for the purpose and that it remained there for 20
days. The maxim
omnia praesumuntur rite esse acta donec
probetur in contrarium
(all [official acts] are presumed to have
been duly performed until the contrary is proved), on which the
appellant’s counsel
relied, applies, as it did, for example, in
Cape Coast Exploration Ltd v Scholtz and Another
1933 AD 56.
In that case one of the issues was whether the first defendant
had been sent a letter from the Civil Commissioner for Namaqualand
notifying him that his diamond-prospecting certificate had been
withdrawn. A copy of the letter had been found in the
commissioner’s
office but no evidence was led to the effect
that the original had been posted. Wessels CJ said (at 76):
“
Absolute proof is
well-nigh impossible where the frail recollection of men is a factor,
and especially is this the case when we
have to deal with the
recollection of officials who almost automatically do much of their
routine work. Hence the importance
of the maxim
omnia
praesumuntur rite esse acta
. See
Byers v Chinn and
Another
(1928 A.D. at p. 332). We must presume that an
official will carry out the ordinary routine work of his office, for
in our
experience this is what usually occurs. Hence we must
presume that if an official letter is written and a copy filed, that
the former is dispatched in the ordinary course of business to the
person concerned and that he has received it.”’
It seems therefore
that this maxim has been applied for decades in our law, in cases
where a party is obliged to prove the authority
and the validity of
the official conduct that results in administrative action. It
does not relieve the party raising a collateral
challenge from the
evidential burden of proving the invalidity of the administrative
action, expressed by the maxim.
[47]
Mr Schreuder, appearing for the defendant, submitted that in
circumstances such as the present,
where a collateral challenge is
raised, this presumption finds no application, and he referred to a
number of cases to support
this proposition
[16]
.
But none of those cases was any reference made to the presumption.
In none of those cases was it relevant to the dispute,
was
there any reliance placed on the presumption, or did it find any
application.
[48]
In
Msunduzi Municipality
, the decision that was challenged as
administrative action was the amendment of the rules of a pension
fund, where the pension
fund did not, firstly, rely on the
presumption because it was not an administrative act performed by an
official in the course
of his or her duties. In that particular
case, it was purely a factual question in the face of a denial that
the pension
fund rules were properly amended, in the absence of any
evidence during trial to prove such an amendment. Secondly,
even
if the act of amending the pension fund rules by its board could
be considered an action by an official body in the course and scope
of its duties, there was no reliance placed on the maxim
omnia
praesumuntur rite esse acta
, for the court to hold, as Mr.
Schreuder contended, that the maxim or presumption does not apply in
cases where collateral challenges
are raised.
[49]
The court in
Msunduzi
Municipality
did not consider the issue, it was not relevant to the case and there
was no definitive decision that the presumption is not applicable.
On the facts of the case, in the absence of the decision-maker
(the fund) relying on the presumption, and where the decision-maker
accepted that there was an onus on it to prove the amendment of the
pension fund rules, the court found that it failed to do so
with the
evidence it had presented during the trial. This is evident
from a reading of the judgment where, particularly,
the following was
said about the evidence presented by the decision-maker:
[17]
‘
We are asked to glean from
various documents the existence of a rule amendment made pursuant to
a resolution that was approved by
the registrar. However, as
Gyanda J found, and as the Municipality argues, the Fund is unable to
show when the resolution
amending rule 4.2.2.1B, as now reflected in
the consolidated rules, was taken at a meeting of the Board of
Trustees. . .
. The annexures to the particulars of claim thus
do not bear out the claims made. And the evidence for the Fund
also did
not support the particulars. The Fund has failed
dismally in presenting its own case.’
And further at para
33:
‘
The Fund has not provided
any evidence at all that supports its claim that the amended rate of
contribution was agreed to by its
Board of Trustees and validly
approved by the registrar . . .’
All that these cases
seem to confirm is what was said in
Oudekraal
and the many
other cases regarding a person’s right in proceedings, other
than a review, to raise a collateral challenge
to administrative
action. It does not deal with the presumption and it does not
emphatically state that the presumption does
not find application in
matters where a collateral challenge is raised to the administrative
action.
[50]
The only relevance of these cases seems to be that it lays down the
principle that a person has
the right to challenge administrative
action collaterally, which the court has to accept or reject; none of
these cases state emphatically
that it absolves a party from proving
the invalidity of the contested administrative action. The
right to a collateral challenge
to administrative action is the right
to a specific remedy, which is a substantive right. It is a
right to raise an allegation
of invalidity to administrative action
that still needs to be proven. I agree with the plaintiffs’
submission that
the defendant’s reliance on the decision of
Merafong
City v AngloGold Ashanti Ltd
[18]
is misplaced, where they argued that, whereas the Constitutional
Court in that case held that it is not an absolute obligation
on
private citizens to take the initiative to invalidate decisions
affecting them and that there may be many occasions where an
administrative decision should be treated as invalid, even though no
action has been taken to strike it down, this does not mean
that the
Constitutional Court concluded that in the context of the
Oudekraal
decision the onus has shifted. I agree with the plaintiffs’
submission that the Constitutional Court was merely saying that
it is
not always necessary to bring an application to strike down
administrative action. The plaintiffs are also correct
that the
Constitutional Court did not say that when the validity of
administrative action is challenged the onus is on anyone other
than
the party challenging it. If this holds true and is the correct
legal position in matters like this, it would mean that
statutory
measures should be treated as invalid until the plaintiffs prove
otherwise.
[51]
I furthermore agree with the plaintiffs that if that were the
position, it would lead to chaos
if all administrative actions are
presumptively invalid. This is precisely the opposite of what
was held in
Oudekraal
and
Merafong
, which, in my view,
did not propose anything to the contrary. The rule in
Oudekraal
was discussed in the majority judgments in
Magnificent Mile
and
Aquila
Steel
, with specific reference to the
presumption, or the
Oudekraal
doctrine, by Madlanga J in the
Constitutional Court. Madlanga J in
Magnificent Mile
takes issue with the view of Jafta J, that the presumption that
administrative action is valid may be rebutted without any court
process and discusses the practical implications thereof. The
importance thereof for this case is that a mere allegation
of
invalidity of administrative action would not be enough to rebut the
presumption of validity without a court process. In
this
regard, Madlanga J states: ‘. . .
I understand the
qualification proposed by the concurring judgment to be that the
rebuttal of the presumption may take place without
any court
process. My immediate practical, if not legal, difficulties are
manifold. Who rebuts the presumption? Who
– outside of a
court process – determines that the invalidity of the
administrative action has been proven and that,
therefore, the
presumption that has been rebutted; and how do they do that? What
if there is disagreement on whether the
illegality has been proven?
The approach of the concurring judgment has the potential of
taking as to the very realm of uncertainty
from which the Oudekraal
rule removes us. It takes us to the real possibility of a
free-for-all
.’
[52]
In this regard Cameron J in
Aquila
Steel
,
with reference to the principle laid down in
Oudekraal
,
that an administrative decision is valid and binding until set aside
in judicial proceedings, says the following:
[19]
‘
But what the
Kirland
/
Oudekraal
doctrine does not do is to fossilise
constitutionally invalid administrative action as indefinitely
effective. For rule-of-law
reasons and for good administration,
the principle puts a provisional halt to determining invalidity,
without bringing the process
to an irreversible end. What it
requires is that the allegedly unlawful action be challenged by the
right actor in the right
proceedings. Until that happens, for
rule of law reasons, the decision stands. . . . [L]egal
remedies are the province
of the courts, and the courts alone. .
. . It is the court that must consider whether to undo the invalid
act, and its consequences,
before pronouncing the act invalid.’
(Internal footnotes omitted.)
[53]
From the above, it is quite clear that the presumption, in all
proceedings, even where a collateral
challenge is raised, would still
be applicable unless, as in some cases, the presumption is not relied
upon or relevant, and the
onus would be on the party relying on the
invalidity of the administrative action. In all cases where a
collateral challenge
is raised by a party raising such a defence or
challenge, the court has no discretion to allow or disallow the
raising of that
defence or challenge. The question that remains
is how and by who the presumption should be rebutted.
[54]
The mere fact that a party has a right to raise a collateral
challenge, and the court has no
discretion to allow or disallow the
raising of that as a defence, does not mean that the party raising
that defence or challenge
is absolved from proving the invalidity of
the administrative action. As has happened in
Msunduzi
Municipality
and
George Municipality
and where the
presumption is not relied upon or relevant to the dispute in issue,
the party relying on the administrative action
must prove the
validity thereof.
[55]
In coming back to this case, in my view, the presumption is
applicable, and the statutory measures
for the collection of the
levies, on which the plaintiffs’ claim is based, as published
in the Government Gazette, are presumed
to be valid. And based
on the maxim
omnia praesumuntur rite esse acta
, it is further
presumed that there has been compliance with all the formal
requirements as prescribed by the law and that any condition
precedent to the validity of the publishing of the statutory measures
in the Government Gazette has been fulfilled. The plaintiffs
therefore would not be required to allege and prove this fact, based
on this presumption.
[56]
There is no evidence, or a prima facie case, apart from the
allegations made by the defendant
in its plea, that the statutory
measures are invalid. The onus would therefore be on the
defendant to present evidence to
rebut the presumption, and it cannot
be expected of the plaintiffs to present them with the necessary
trial particulars to do so.
[57]
Given the conclusion I come to, for the purposes of the application
in terms of rule 21(4), there
is no need for me to decide whether the
Minister or the Council should have been joined as parties to these
proceedings.
That was also not the purpose of this application.
Order
[58]
In the result therefore I make the following order:
That the application
that the plaintiffs be directed to furnish the defendant with trial
particulars, as requested on 13 January
2021, is dismissed with
costs, including the costs of two counsel.
R.C.A. Henney
Judge of the High
Court
[1]
Pages 18 to 20 of the Index 4.
[2]
2004
(6) SA 222
(SCA) para 26.
[3]
2010 (3) SA 589 (SCA).
[4]
Dean of the Law Faculty, University of the North West, and others v
Masisi
2014 (6) SA 61
(SCA) para 10.
[5]
MEC for Health, Eastern Cape and another v Kirland Investments (Pty)
Ltd t/a Eye & Lazer Institute
2014 (3) SA 481
(CC) paras 102-103
and fn 75; Administrateur van Suidwes - Afrika en ‘n Ander v
Pieters
1973 (1) SA 850
(A) at 864 D; Philips v SA Reserve Bank and
others
2013 (6) SA 450
(SCA) para 48; Njongi v MEC, Department of
Welfare, Eastern Cape,
[2008] ZACC 4
;
2008 (4) SA 237
(CC) paras 44-46.
[6]
WCHC case number 20644/08.
[7]
2016 (4) SA 403
(SCA) para 37.
[8]
1993 (2) SA 245 (C).
[9]
2017 (2) SA 622
(CC) paras 82-96.
[10]
2020 (4) SA 375 (CC).
[11]
2019 (3) SA 621
(CC).
[12]
Fn 2 above, paras 35-37.
[13]
Schmidt and Rademeyer: ‘The Law of Evidence’
(LexisNexis, Durban) at 5-21, para 5322.
[14]
Ibid. at 5-22, para 53221.
[15]
1997 (2) SACR 626
(C) at 634.
[16]
See
cases referred to in para 33 and 35 supra
[17]
Fn 7 above, p
aras
29 – 31.
[18]
2017 (2) SA 211 (CC).
[19]
Fn 11
above, paras 95-96.