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[2016] ZAGPJHC 168
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R N Griffin Investments (Pty) Limited and Another v Sneech (19101/2014, 19450/2014) [2016] ZAGPJHC 168 (24 June 2016)
REPUBLIC
OF SOUTH AFRICA
IN
THE HIGH COURT OF SOUTH AFRICA
GAUTENG
LOCAL DIVISION, JOHANNESBURG
CASE
NO.:
19101/2014
CASE
NO.:
19450/2014
DATE:
24 JUNE 2016
In the
matter between:
R N
GRIFFIN INVESTMENTS (PTY)
LIMITED
.......................................................
First
Applicant
NOBRE,
RUI MIGUEL
RODRIGUES
......................................................................
Second
Applicant
And
SNEECH,
BARRY
HYLTON
...............................................................................................
Respondent
JUDGMENT
Van der Linde, J:
Synopsis
[1]
There are two applications before the
court, both in terms of s.31 of the Arbitration Act 42 of 1965 (“the
Act”) respectively
to make an arbitral award, and an arbitral
appeal award, orders of court. Costs on a punitive scale are sought.
In the way of the
applicants’ success stands two
counter-applications to set aside both the arbitral award a quo and
the arbitral appeal award
[1]
on the ground of perjury of the second applicant before the first
arbitral tribunal.
[2]
[2]
In
addition, the respondent submits that this court, in deciding whether
or not to make an arbitral award an order of court, does
not act as a
mere rubber stamp. Specifically, the respondent submits that this
court will not make an arbitral award an order of
court if it would
be contrary to public policy to do so.
[3]
The alleged perjury, said to be sustained
by evidence recently discovered, would justify this court not only
setting aside the two
awards, but would in any event also justify
declining the relief sought. Reliance on s.33 of the Act is expressly
eschewed.
[3]
[4]
Finally, in oral argument the respondent
submitted that it was illustratable on the material that was before
the arbitrator that
the second respondent had given false evidence;
and on that basis alone the arbitrator should refuse the applicants’
relief
claimed, since it would offend public policy.
The basic
facts
[5]
The basic facts that are relevant to
dispose of this matter are far simpler than the voluminous papers
[4]
suggest. They are succinctly collected and presented in the judgment
of Sutherland, J
[5]
when the learned judge was asked to decide whether to grant the
respondent’s application to review and set aside the arbitral
appeal award on the basis that the arbitrator and the appeal panel
had exceeded the pleadings and thus their power.
[6]
The
learned judge dismissed the application and made a special costs
order; and he dismissed the subsequent application for leave
to
appeal. An application to the Supreme Court of Appeal for leave to
appeal was also dismissed.
[7]
In
a nutshell, the respondent had sued the applicants for damages
arising from an alleged dishonest concealment of facts in the
face of
a legal duty to disclose. The respondent’s company, Hannington
Ltd, had sold its 50% shares in a private property-owning
company to
the first applicant, the other 50% shareholder. In broadly the same
time-frame the applicants were negotiating a financially
advantageous
fresh ten year lease with the tenant of the property, but did not
tell the respondent about it.
[8]
The
respondent says that had he been told about it, he would have not
have sold his shares. The initial arbitrator dismissed the
respondent’s claims, holding that the deal between the
applicants and the respondent was, in principle, done by mid-2003,
whereas the deal with the tenant was only negotiated in the second
half of 2003 and finally done in 2004. Any duty to disclose,
if
indeed there was such, had ceased to exist by mid-2003. The appeal
tribunal upheld the arbitrator.
[9]
The
respondent has now in fact sued the applicants under a different case
number for various forms of relief, including for damages
in excess
of R70m.
The
submissions more closely viewed
[10]There
were initially a number of procedural issues in the applications. The
respondent’s answering affidavits are out
of time; he filed a
supplementary answering affidavit without leave to do so; and he has
now filed two further affidavits without
leave.
[6]
The applicants have however abandoned their opposition to these
papers being admitted, but say that these remain relevant to costs.
[11]The
applicants submitted that their own onus for the relief in convention
was readily discharged. They needed to show only a
valid arbitration
agreement; the proper appointment of the arbitrators; and valid
awards within the terms of the reference. Since
these issues were
either common cause or
res judicata
,
[7]
the respondent bore the onus on all other issues.
[12]The applicants oppose the
substance of the respondent’s case on perjury. Not only do they
dispute that there was any perjury,
but they also resist the
admission of the four pieces of evidence relied on by the respondent
for his contention.
The
time-bar
[13]As an
a
priori
point, however, the applicants
contend that the respondent, to set aside the arbitral awards, must
bring himself within s.33 of
the Act or fail, and that section
requires of him to have done so within six weeks of the award. This
was not done. Although
there is provision in s.38 of the Act for a
court extending that period on good cause shown, there was no such
application here;
and in any event good cause has not been shown.
This therefore remains a live issue, and since it is in the nature of
a point
in limine
,
it is best dealt with now.
[14]
The respondent’s application in reconvention
for the setting aside of the arbitral awards is founded on the same
material
as his resistance to the application in convention, being
the fraud. The implication is that if he succeeds in resisting the
application
in convention, from a substantive point of view the
result is the close to being same: the applicants will have the
arbitral
awards still standing, but only notionally, since they will
not be capable of being enforced.
[8]
[15]
As
regards the main application then, as intimated above the respondent
contends that the enforcement of the awards will offend
public
policy, having regard to the fact that the awards were obtained
through fraud. By extension the argument for the respondent
is that
since he does not apply for relief under s.33 of the Act, the
time-bar does not apply to him.
[16]
Our courts may decline to enforce arbitral awards
if to do so would be contrary to public policy.
[9]
This concept of public policy is self-evidently one of wide berth,
and it has famously been described as an “
unruly
horse”
.
[10]
In Cool Ideas the majority of the Constitutional Court discusses the
issue at [53] and following.
[17]The majority was careful not
to lay it down as a general rule, because the countervailing public
policy consideration is to
respect parties’ choice of arbitral
proceedings to bring speedy finality to the resolution of their
disputes. But the
majority held that to uphold the award in
Cool Ideas would be to offend the principle of legality, a
foundational value of the
Constitution.
[18]The hypothesis of the present
discussion is an arbitral award obtained through an illustrated
fraud. If the courts are to respect
parties’ choice of the
arbitral process because it provides a speedy and final resolution of
their disputes, and it
is in the public interest that that
should be so, it is difficult to conceive that this should be at all
cost, even at the cost
of fraud, for the following reason.
[19]That
which is to be respected is the reasoning and conclusion of the
arbitrator applying an open mind to the matter before him/her.
His/her decision can hardly be worthy of protection if the award
would not have been arrived at had it not been for a fraud
perpetrated
on the arbitrator. That seems to pervert the very
objective sought to be protected by recognition of the public policy
consideration
referred to by the Constitutional Court in Lufuno
Mphaphuli.
[11]
[20]It
is relevant to observe that in Cool Ideas, as in this case, and
contrary to Lufuno Mphaphuli, the court was concerned with
an
application to enforce an arbitral award, not with an application to
set it aside under s.33. Put differently, the respondent
in each
instance was/is involved in a collateral challenge, not a direct
challenge, to the enforceability of the award. Different
considerations then come into play.
[12]
[21]The
case of an administrative act invalid for lack of power or failed
process is obviously not the same as an arbitral award
obtained by
fraud, but the direct enforcement dimension has this in common: in
both instances the respondent is threatened “
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.
”
[13]
[22]It follows that in my view
the time-bar in s.33(2) does not prevent the respondent from raising
the alleged fraud as a defence
to the applicants’ application
under s.31 of the Act.
[23]With that aspect out of the
way one can turn now to consider the arguments put up by the
respondent for admission of the contentious
material.
Is there
scope for the introduction of the new evidence now?
[24]Some background is necessary
to appreciate the proposed relevance of the new evidence. There are
two important time frames in
this arbitration. The first is
represented by the late 1990s, and the second by the year 2003. The
first time frame was when Messrs
Nobre, the second applicant, and the
respondent, through their respective companies, the first applicant
and Hannington Ltd, each
acquired one half of the issued shares in
Blue Dot Properties 56 (Pty) Ltd (“Blue Dot”). Blue Dot
then acquired fixed
property in Meadowdale, Germiston for R18,6m.
On 14 January 1999 Blue Dot let the property to Midas Ltd for ten
years, from
1 February 1999 to 31 December 2008.
[25]In the second time frame, the
year 2003, two important events occurred. First, Hannington,
represented by the respondent, sold
its shares in Blue Dot to the
first applicant, represented by the second applicant for R2.5m
payable in six instalments.
The written sale of share agreement
was dated 12 December 2003. Second, the second respondent negotiated
with Midas to terminate
the existing ten year lease and to substitute
for it, on favourable terms, a fresh lease commencing 1 March 2004 to
28 February
2014.
[26]The respondent was not told
about these negotiations; and since this new lease was so favourable,
the respondent contended that
had he known about it, he would not
have sold his shares. So he sued the applicants for damages for
misrepresentation in the form
of non-disclosure. The parties agreed
to go to arbitration, where it was further agreed first to have a
determination on the issue
of liability.
[27]The central issue before the
arbitrator was whether the applicants owed the respondent a legal
duty to tell him about these
negotiations.
The
arbitrator’s essential factual and legal findings
[28]The arbitrator held it common
cause that the second applicant did not make the disclosure to the
respondent. He held too that
on 6 August 2003 the second applicant
had met with Mr Odgers of Midas to put the new proposition to him,
and that on 22 October
2003 resolved to enter into the new lease with
Blue Dot. On 12 December 2003 ABSA approved the finance for the
transaction and
on 15 December 2003 the second applicant, on behalf
of Blue Dot, accepted the terms and conditions.
[29]The arbitrator held that the
respondent’s case was that the second applicant had approached
him only at around 10 December
2003, and that the deal was done two
days later on 12 December 2003. He held that the competing case of
the second respondent was
that he and the respondent had agreed in
March 2003 on the sale, subject to Hannington agreeing, and subject
to the agreement being
reduced to writing and signed.
[30]As to the alleged legal duty,
the arbitrator held that no partnership was established, whether as
between the two individuals
or as between their companies. He held
further however that had the negotiation between the second applicant
and Midas to extend
the lease been afoot in the period March 2003 to
6 June 2003, the second applicant would have been duty bound to
disclose them
to the respondent. But he held too that that duty did
not extend beyond 6 June 2003, for reasons referred to below.
[31]The arbitrator held that at a
meeting on 10 April 2003 between the second applicant, the respondent
and Mr Odgers, the latter,
who was called as a witness by the
respondent, was told that the second applicant had bought the
respondent’ shares in Blue
Dot. He held further that by 20 May
2003 a beefed-up draft sale of shares agreement was exchanged between
the protagonists.
[32]The arbitrator concluded that
by the end of May 2003 the respondent had indicated his agreement to
the then current draft agreement
but was secretly holding back from
committing himself in writing while exploring other more attractive
opportunities.
[33]The arbitrator accepted the
version of the second respondent to the effect that they had arranged
to meet on 5 June 2003 to
sign the final draft, but the respondent
did not turn up, but that by the next day, 6 June 2003, the second
applicant was justified
in accepting that there was a firm deal
between him and the respondent.
[34]The arbitrator held that the
second applicant’s version was generally the more plausible and
probable one than that of
the respondent, and that the deal never
broke down; it had simply taken longer to be finalised than had
originally been envisaged,
due to a delay caused by the respondent.
[35]The
arbitrator reached the same conclusion, that is the absence of a
legal duty to disclose, on the basis that the extension
of the lease
could not have occurred had the ABSA requirements not been met; and
those would not have been met had Hannington remained
as a
shareholder, since Hannington would not have been able to put up a
credible guarantee. Of this conclusion the arbitrator
said: “…
it … goes to whether …
there is any exigible duty to disclose in the first place.”
[14]
The
respondent’s more detailed submissions
[36]The
respondent in his written submissions expressly disavows any
imputation of dishonesty or improper conduct on the part of
any of
the legal representatives, or any of the arbitrators. He says the
lawyers and the arbitrators all were misled.
[15]
In oral submissions the respondent expressly disavowed any suggestion
that the awards were “
incorrect”
.
The attack, he submitted, “
had
nothing to do with the
Arbitration Act.”
The
court was informed that subsequent to the awards, the respondent has
been searching “
for ways in which
the arbitrator was misled”
.
[37]The
case that the respondent mounted is that “
fraud
cuts through everything.”
[16]
On the basis of that proposition it is contended that the alleged
perjury equals causative fraud in the proceedings, rendering
them
liable to be set aside.
[17]
To be fair, the respondent’s case is not that this court should
find that fraud. He argues that it is a matter for the trial
court,
already engaged in his pending suit; this court should simply refer
it there for determination.
[18]
[38]Assuming without deciding in
the respondent’s favour that this approach is legitimate, i.e.
to accept that fraud cannot
be found on these affidavits, but then to
resist the main relief by asking for a referral to the pending
action, it seems that
the correct approach at this stage is to
enquire whether there is at least a prima facie case for the
causative fraud that the
respondent avers. Only if there is, would
the deferment of making the awards orders of court be justified.
The four
pieces of new evidence
[39]The
respondent relies on four pieces of new evidence which it is
appropriate now to discuss. The first is a thread of emails
[19]
said to have been “
recently
unearthed”
.
[20]
These
are said to prove that as of April 2003 (they are dated 11 and 14
April 2003) there was no firm agreement yet on the sale
of shares, as
the second applicant had contended.
[40]The
respondent accepted in argument that he received the thread of emails
on 14 April 2003. He accepted too in argument that
since the
arbitrator found that the second applicant was entitled to believe
that by 6 June 2003 a firm oral agreement had been
reached, these
emails would not have mattered to the end result. That applies also
to the May 2003 emails.
[21]
[41]There was no answer to the
applicants’ argument that these emails were actually sent to
the respondent and therefor available
to the respondent at the time
of the arbitration, and that the applicants’ case before the
arbitrator was not a written but
an oral agreement reached in March
2003.
[42]The
second piece of new evidence is the schedule BS 11.
[22]
The purpose for which the respondent seeks to rely on it, is that the
fourth column, reflecting as it does an anticipated “
net
cost of reversion to market”
, is
said to show that by 14 April 2003, when the spreadsheet was created
by the second applicant, the second applicant was already
planning to
earn a cash surplus of R18 264 174 behind the respondent’s
back.
[23]
The respondent says that he could not open the spreadsheet at the
time.
[24]
[43]There
was however, in the respondent’s oral submissions, no answer to
the applicants’ submission that this piece
of evidence was
untruthful. The applicants pointed out that the spreadsheet was, in
hard copy, in the trial bundle before the arbitration.
[25]
[44]The
third piece of new evidence is the affidavit of Mr Odgers.
[26]
In
this affidavit, deposed to on 12 July 2014, he says that it was in
around May 2003 that he and the second applicant had reached
an
agreement on the new Midas lease.
[27]
He says too that on 5 June 2003 the respondent told him that the
second applicant had confirmed to him that he was not going to
take
up his right of pre-emption in terms of the offer that the respondent
had made to him.
[28]
[45]Again, there was no answer to
the applicants’ argument that Mr Odgers’ recent version
is contrary to what he said
in his evidence in 2008. It bears
reminding oneself that Mr Odgers was called by the respondent. There
was no answer also to the
applicants’ pointing out that even
the affidavit does not explain the change in version, nor why his
earlier version –
that it was in the third quarter that he met
with the second applicant to do the Midas deal - was wrong.
[46]Apart from these criticisms,
the admissibility of the affidavit evidence, insofar as it contains
self-corroboration, was not
addressed.
[47]The
fourth piece of new evidence is an extract of the respondent’s
diary.
[29]
The
object of the extract was to show that on 26 and 27 May 2003 the
second applicant sent him more versions of the draft sale of
shares
agreement. In oral argument the respondent submitted that the fact
that the respondent sent a new offer on 26 May 2003,
and again on 27
May 2003, proved that at that stage no firm agreement could have been
reached.
[48]There was no answer to the
applicants’ submissions that since this was an extract of the
respondent’s own diary
it was always available; and that it was
in any event consistent with the second applicant’s version
that after the meeting
of 26 May 2003 updated versions of the
agreement would be sent. In addition, the arbitrator held, as has
been pointed out, that
it was at 6 June 2003 that the second
applicant could have believed that the parties had reached a final
agreement.
Respondent’s
additional submissions
[49]After the lunch adjournment
the respondent followed a line of reasoning that was based on the
fact that the respondent remained
a director of Blue Dot at all
relevant times, and so neither the extension of the Midas lease nor
the transfer of shares in Blue
Dot could have occurred without his
approval. There was thus a duty in law to disclose these transactions
to him in that capacity,
according to the argument.
[50]Further, he submitted that
the applicants raised R64.5m from ABSA against Blue Dot assets
without board approval; they drew
R10.6m from Blue Dot without board
approval; and the second applicant used R2.5m of Blue Dot to pay for
the shares bought from
the respondent without board approval.
[51]The respondent accepts that
these arguments were available to him at the time of the arbitration,
but told the court that these
matters could only be extracted from
the record, upon post-award analysis conducted now. The respondent
submitted further that
the second applicant could not have believed
that by 6 June 2003 that he had a final deal with the respondent. For
this submission,
he argued, he relied both on material that was, and
was not, before the arbitrator.
[52]The respondent submitted too
that the arbitrator relied on an unpleaded case, never introduced or
put to the respondent, to
arrive at his award. This submission was
the lead-in to a series of submissions that after 5 June 2003 the
second applicant bore
a duty of disclosure; that it was the second
applicant that had withdrawn from the negotiations; that the
ownership clause 5.1
of the sale of shares agreement supported Mr
Odgers’ version now in his latest affidavit; that these issues
were all before
the arbitrator who disregarded them, and that it
would be an injustice now to ignore them; that since the
respondent never
signed the CM 29 form the second respondent could
not have avoided the legal duty of disclosure; that the second
applicant was
probably guilty of fraud, theft and insider trading;
and that the arbitral award failed to deal with the duties of a
director,
and this was fundamental.
[53]Where does all of this go?
How would
the four pieces of new evidence, and the further submissions of the
respondent, have affected the arbitrator’s findings?
[54]It
is accepted in our case law that a judgment obtained by the fraud of
a party cannot stand. But the cases also require that
the plaintiff
shows that the judgment would not have been obtained had it not been
for the fraud.
[30]
Apart from this requirement, I accept too
[31]
that a party who wishes to introduce new evidence to prove the fraud
would have to show why the evidence was not available earlier.
[55]
It
also stands to reason that it is impermissible now to re-argue the
merits, as the respondent has done to the extend indicated
above.
There was an appeal process, and it was exhausted. No appeal lies to
this court. It is equally impermissible to re-argue
the power
issue, as the respondent has done, again as indicated above. The
respondent has reviewed the arbitral awards in a court
on that basis,
and has been refused leave to appeal, twice, against the dismissal of
those grounds of review.
[56]That leaves the questions of
the admissibility of the new material, and of causation. As to the
first, it has been pointed out
above that in not one of the three
instances of documents that existed at the time of the arbitration
was the respondent able to
illustrate that the material was not
available to him then. In one of those cases, the spread sheet, the
respondent’s version
that he was unable to open it at the time,
has been illustrated not to be credible. In the case of the affidavit
of Mr Odgers,
no basis at all was made out for its admission.
[57]In these circumstances those
four new pieces of evidence accordingly cannot be admitted. That has
the consequence that there
is no material on which to find that there
is a prima facie case for resisting the relief applied for in
convention.
[58]I
should add that, even if the material were admitted, I would have
concluded that the respondent is not able to show that the
award
would have been any different, having regard to the arbitrator’s
indication that he would likely have come to the same
result, i.e. no
legal duty, along a different course, the factual basis for which was
not in contestation.
[32]
The application must accordingly succeed and the counter-application
must fail.
[59]The question of a punitive
costs order arises. In this regard there are the following
considerations. First, I have quoted some
of the respondent’s
submissions beyond those relative to the four pieces of new evidence
above, to illustrate an approach
which the respondent has adopted in
these proceedings. That approach was that all the bases on which the
arbitral awards have been
attacked before, and in addition the merits
of the awards, could legitimately be revisited before this court.
[60]That is of course not so. The
merits were definitively dealt with by the appeal tribunal. The lack
of power argument was definitively
dealt with by Sutherland, J, and
confirmed by the two refusals of leave to appeal. There was no scope
for any of these issues to
be raised again.
[61]Second,
the material in the two lengthy answering affidavits, as well as the
two further affidavits,
[33]
and was presented without regard to the distinction between fact,
submission and vexation.
[62]Third, the respondent has
ignored some of the fundamental rules of court in presenting his
case. The answering affidavit was
out of time; a further answering
affidavit was filed without leave; a notice of counter-application
was filed out of time; two
further affidavits were filed without
leave.
[63]Fourth, the case mounted by
the respondent is fraud. Such a case is regarded by our courts as
serious, so much so that groundless
allegations of fraud, even in a
formal litigious context, are actionable at defamation. In this
instance the respondent’s
case was found to have no merit at
all. These considerations, taken together, justify a special costs
order. The employment of
two counsel was a reasonable precaution.
[64]In the result I make the
following order:
(a)
The
arbitration award made on 22 December 2009 in the arbitration between
the respondent and the applicants which appears at pages
66/67,
paragraph 133 of the papers is made an order of court.
(b)
The
arbitration appeal award made on 13 June 2011 in the arbitration
appeal between the respondents and the applicants, which appears
at
page 83, paragraph [29] of the application papers, is made an order
of court.
(c)
The
respondent is to pay the costs of the applicants in the applications
under case numbers 19101/2014 and 19450/2014 on the scale
as between
attorney and client, such costs to include the costs of two counsel,
which costs are to include the costs reserved on
16 July 2014 and 20
August 2014.
(d)
The
respondent’s counter-application is dismissed with costs on the
scale as between attorney and client, such costs to include
the costs
of two counsel.
WHG van der
Linde
Judge,
High Court
For the
first and second applicants: Adv. A.R. Gautschi , SC
Adv.
R.S. Willis
Instructed
by: De Jongh Botes Inc
Unit B,
Third Floor
20 The
Piazza, Melrose Arch
Atholl
Oaklands Road
Johannesburg
Tel: 011 784 4430
Ref: A De
Jongh/GRI20/01+02
For the respondent:
Adv. R.G. Cohen
Instructed by: Glynnis
Cohen Attorney
53 Komatie Road
Emmarentia
Johannesburg
Tel: 011 646 4662
Date argued: 13 June
2016
Date judgment: 24
June 2016
[1]
At the outset of the proceedings, Mr Cohen for
the respondent moved for an amendment from the Bar
to
the notices of counter-application to make this clear; it was
unopposed and was granted. (Vol 3 page 250 should be read as
referring to both arbitral awards; vol 3, page 256 therefor no
longer serves any purpose, and vol 3, page 258 has been withdrawn
by
notice, at vol 9 page 817).
[2]
Respondent’s heads, paragraphs 15; 17.
[3]
Respondent’s heads, paragraphs 8; 28; 29;
and 30.
[4]
1000 pages at the last count, including the
respondent’s further affidavit dated 3 June 2016.
[5]
[2012] ZAGPJHC 125 (14 June 2012).
[6]
Apparently yet a further affidavit, by one Hulme,
would be tendered for admission, and the applicants remained opposed
to its
admission. Nothing came of it.
[7]
Referring here to the awards having been made
within the terms of reference.
[8]
They may still contend that, until set aside, the
arbitral award dispositively dealt with their dispute with the
respondent as
to the existence of a duty to have disclosed the Midas
lease extension, whether or not a court order is actually made.
[9]
Cool Ideas 1186 CC v Hubbard and Another, 2014
(4) SA 474 (CC).
[10]
Referred to as such by the then Chief Justice
Corbett, in Administrator, Transvaal and Others v Traub and Others,
[1989] ZASCA 90
;
1989 (4) SA 731
(A) at 761F – G.
[11]
Lufuno Mphaphuli & Associates (Pty) Ltd v
Andrews and Another,
2009 (4) SA 529
(CC) at [235].
[12]
Oudekraal Estates (Pty) Ltd v City of Cape Town
and Others,
2004 (6) SA 222
(SCA) at [35] – [36]:
“
[35] 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'. 28 Whether or
not it is the right remedy in
any particular proceedings will be determined by the proper
construction of the relevant statutory
instrument in the context of
principles of the rule of law.
[36] It is important to bear in
mind (and in this regard we respectfully differ from the Court a
quo) 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 prerequisite for the legal force of the action that
follows and ex hypothesi the
subject may not then be precluded from
challenging its validity. 29 On the other hand, a court
that is asked to set
aside an invalid administrative act in
proceedings for judicial review has a discretion whether to grant or
to withhold the remedy.
30 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 thus
has its separate application to its
appropriate circumstances and they ought not to be seen as
interchangeable manifestations
of a single remedy that arises
whenever an administrative act is invalid.”
[13]
Ibid.
[14]
Vol 1, pages 64, 65, paragraphs 124 to 130.
[15]
Respondent’s heads, paragraphs 27; 35.
[16]
Respondent’s heads, paragraph 39.
[17]
Respondent’s heads, paragraphs 20; 21. The
respondent refers to Viljoen v Federated Trust Ltd,
1971 (1) SA 750
(OPD), a judgment by MT Steyn, AJ. Reference may also be had to
Makings v Makings,
1958 (1) SA 338
(A) at 342 in fin, ff; and also
Rowe v Rowe, 1997 (4) SA 160 (SCA).
[18]
Compare respondent’s heads, paragraphs 18;
41.
[19]
Answering Affidavit, page 190.
[20]
Answering Affidavit, page 180, paragraph 3.
[21]
Answering affidavit, page 190, 191.
[22]
Answering Affidavit vol 3, pages 206 to 208.
[23]
Answering Affidavit, page184, paragraphs 18, 19.
[24]
Supplementary Answering Affidavit, page 282,
paragraph 60.
[25]
Pages 433 and 434, reproduced at vol 8 page 750,
751 in this matter.
[26]
Answering Affidavit, vol 3, pages 201 to 205.
[27]
Op cit, page 202, paragraph 11.
[28]
Op cit, page 203, paragraph 19.
[29]
Op cit, vol 3, page 198..
[30]
Compare Makings v Makings,
1958 (1) SA 338
(AD),
quoted by the respondent, and the cases annotated on it,
particularly Rowe v Rowe, 1997(4) SA 160 (SCA).
[31]
On the basis of the two judgments quoted in
paragraph 93 of the applicants’ heads of argument.
[32]
Vol 1, pages 64, 65, paragraphs 124 to 130.
[33]
Respectively at vol 9, pages 797 to 816, and vol
10, pages 820 to 1000.