Brief Summary

Administrative Law — Review of administrative action — Promotion of Administrative Justice Act 3 of 2000 — Jurisdiction of the Council for Debt Collectors — Validity of decision — First respondent's ruling on a complaint against a debt collector reviewed and set aside — Council's failure to adhere to procedural fairness and functus officio doctrine — Decision of 23 August 2021 invalid. The applicants, Mary Fisher and Silverbirch Estate Homeowners Association NPC, sought to review and set aside a decision made by the first respondent, Joseph Mokondo, regarding a complaint against the third respondent, Daimcon Financial Recovery’s & Tracing Agents (Pty) Limited, concerning an alleged extortion of R4500. The initial ruling ordered Daimcon to refund the amount, but a subsequent ruling attempted to alter this decision without proper authority or procedural fairness. The legal issue was whether Mokondo had the authority to revise his initial ruling and whether the procedural steps taken were fair as required by PAJA. The court held that Mokondo was functus officio after the initial ruling and lacked the power to issue the revised decision. The revised decision was declared invalid and set aside, reinstating the initial ruling that Daimcon must refund R4500 to Silverbirch.

Comprehensive Summary

Summary of Judgment

Introduction

The matter was an application brought in the High Court as a review of administrative action under the Promotion of Administrative Justice Act 3 of 2000 (PAJA). Although the dispute was materially about a sum of R4 500, the court dealt with it because the applicants framed the dispute as the review and setting aside of a decision by an administrative decision-maker rather than as an ordinary civil claim.

The first applicant was Ms Mary Fisher, a director of the second applicant, Silverbirch Estate Homeowners Association NPC (RF) (referred to in the judgment as Silverbirch). The first respondent was Mr Joseph Mokondo, the legal officer assigned to handle a complaint in his capacity under the second respondent, the Council for Debt Collectors (the Council), a statutory body established under the Debt Collectors Act. The third respondent was Daimcon Financial Recovery’s & Tracing Agents (Pty) Limited (Daimcon), a registered debt collector.

The procedural history began with Silverbirch lodging a complaint with the Council against Daimcon. Mr Mokondo issued a decision on 17 August 2021 directing Daimcon to refund R4 500. Following an objection by Daimcon, Mr Mokondo issued a further “review” or “reconsideration” decision on 23 August 2021, which effectively reversed the earlier outcome by stating that the dispute was a civil matter to be resolved between the parties. The applicants then approached the High Court to review and set aside the revised decision of 23 August 2021 and sought additional substantive relief against Daimcon.

The general subject-matter was therefore whether an official acting for the Council was empowered to revisit and change a final regulatory decision dealing with allegations of improper conduct by a debt collector, and whether the manner in which the revised decision was reached complied with PAJA’s requirements of procedural fairness.

Material Facts

Silverbirch, through Ms Fisher, lodged a complaint with the Council alleging improper conduct by Daimcon. The complaint asserted that Daimcon’s director, Ms Lynetta Verrall, had obtained R4 500 from Silverbirch in relation to proposed litigation steps (summonses) against levy defaulters, that the summonses presented were irregular, and that the law firm purportedly involved denied drafting or signing the summonses and denied receiving the R4 500.

Daimcon disputed the allegations in its response to the Council dated 20 July 2021. Daimcon contended that it followed appropriate procedure, that Mr Andrew Peens was its attorney, and that Ms Fisher had prepared summons and particulars of claim and wanted the attorney to sign them, which he allegedly refused to do. Daimcon denied any fraud or wrongdoing.

On 17 August 2021, Mr Mokondo issued a written ruling in which he directed Daimcon to refund Silverbirch the sum of R4 500 paid for “agreed service of summons and particulars of claim (POC’s) not rendered”, and stated that allegations of extortion, misrepresentation, or fraud would fall within the ambit of the South African Police Service if pursued. This ruling was communicated to both Silverbirch and Daimcon, and it purported to finalise the matter at the Council.

After this ruling, Daimcon communicated dissatisfaction with the outcome. On 19 August 2021, Daimcon emailed Mr Mokondo stating that it did not agree with the decision and provided comments. This communication was sent without copying Silverbirch. Mr Mokondo then requested further information from Daimcon for “possible review consideration”, again without copying Silverbirch, and Daimcon responded on 22 August 2021, also without copying Silverbirch.

On 23 August 2021, Mr Mokondo issued a revised “review” or “reconsideration” decision, this time addressed to both parties, stating that the Council regarded the dispute as a civil matter between the parties to be resolved amicably or in court, and that the Council’s file was closed. This revised decision effectively replaced the earlier directive that Daimcon refund the R4 500.

In the High Court proceedings, there were points in limine raised by Silverbirch and Daimcon aimed at disqualifying the opposing director (Ms Fisher or Ms Verrall) from representing the respective companies. The court considered these points to be without merit and, in any event, held it to be in the interests of justice to determine the merits without dwelling on those preliminary objections.

Legal Issues

The central legal question was whether the Council’s nominated official, Mr Mokondo, had lawful authority under the governing regulatory framework—particularly regulation 7(7) of the Regulations relating to Debt Collectors, 2003—to reconsider, vary, or revoke his earlier final ruling of 17 August 2021 and replace it with the revised decision of 23 August 2021.

A second central issue was whether the process leading to the revised decision of 23 August 2021 was procedurally fair as required by PAJA, especially given that Mr Mokondo engaged with Daimcon after the first decision and sought further submissions without notice to, or participation by, Silverbirch.

The dispute therefore primarily concerned questions of law (the scope of statutory/regulatory power; the effect of the functus officio doctrine; and PAJA compliance), applied to the established chronology of communications and decisions. It also involved application of law to fact in assessing procedural unfairness under section 6(2)(c) of PAJA.

Court’s Reasoning

The court began by locating the Council’s powers within the statutory scheme. The Council is established by section 2(1) of the Debt Collectors Act 114 of 1998, with objects including exercising control over the occupation of debt collector. It acts under powers such as those in section 3A (general powers to perform acts necessary or expedient to achieve its objects). Complaints of improper conduct are addressed under the Regulations, and regulation 7(7) provides that the Council must “consider the allegations and deal with it in the manner it deems fit.”

The court then characterised the Council, and Mr Mokondo acting under its authority, as an organ of state and an administrator for PAJA purposes. This followed from section 239 of the Constitution of the Republic of South Africa, 1996 (defining “organ of state” to include entities performing a public function in terms of legislation) and section 1 of PAJA (defining “administrative action” and “administrator”). As a result, Mr Mokondo’s rulings were treated as administrative decisions susceptible to judicial review under PAJA.

On the critical question of power to revisit the 17 August decision, the court applied the common-law functus officio doctrine, which provides that once an official has made a final decision in the exercise of official functions, the official is generally unable to change their mind and withdraw, revoke, or revisit the decision. The judgment emphasised that a decision becomes final when it is published to those affected, and that absent statutory authority permitting alteration after publication, the common-law position remains operative. The court further noted that the doctrine is especially relevant where a published decision has created rights and its alteration would affect those rights.

Against that framework, the court interpreted regulation 7(7) as not conferring (even implicitly) a power to vary or revoke a final decision already issued and communicated. While regulation 7(7) gives the Council a broad mandate to deal with allegations “in the manner it deems fit,” the court held that nothing in the Regulations expressly authorises a post-decision reconsideration mechanism of the kind Mr Mokondo undertook. Accordingly, the court concluded that Mr Mokondo was functus officio after issuing the decision of 17 August 2021 and therefore lacked legal competence to issue a revised decision on 23 August 2021.

The court also found that the process adopted by Mr Mokondo in entertaining Daimcon’s attempt to challenge the first ruling compounded the unlawfulness. The court reasoned that, after the 17 August ruling, Mr Mokondo engaged with Daimcon’s objections and sought further information while excluding Silverbirch from those communications, and then revised the decision without giving Silverbirch an opportunity to be heard. These steps were held to be procedurally unfair within the meaning of section 6(2)(c) of PAJA, which provides a ground of review where administrative action was procedurally unfair.

Having found that the 23 August 2021 decision was taken without power (because of functus officio) and through a procedurally unfair process, the court held the revised decision to be invalid and subject to being reviewed and set aside.

The court then addressed the additional relief sought beyond the review. It reasoned that, once the revised decision was set aside, Silverbirch could rely on the original 17 August 2021 ruling, which directed repayment of R4 500, and Daimcon would therefore be obliged to refund that amount. However, the court declined to order repayment of any further amounts because no further sums were part of Mr Mokondo’s 17 August ruling.

The court further declined the interdictory relief against alleged extortion, reasoning that there was no evidence of extortion before the court and that the requirements for a final interdict had not been pleaded or proved in the founding papers. Finally, as to the requested cancellation of Daimcon’s registration as a debt collector (and/or its director), the court held that this was a matter Silverbirch needed to take up with the Council, and that it was not appropriate for the High Court to entertain that relief on the papers before it.

Outcome and Relief

The court reviewed and set aside the first respondent’s revised decision/ruling of 23 August 2021.

The court did not itself grant additional substantive relief in the form of broader refunds, an interdict, or cancellation of Daimcon’s registration. The practical consequence identified by the court was that setting aside the 23 August decision meant Silverbirch would be entitled to rely on the Council’s earlier decision of 17 August 2021, under which Daimcon was directed to refund R4 500.

The court made no order as to costs.

Cases Cited

None.

Legislation Cited

Promotion of Administrative Justice Act 3 of 2000.

Debt Collectors Act 114 of 1998.

Constitution of the Republic of South Africa, 1996 (section 239).

Rules of Court Cited

None.

Held

The court held that the Council’s official, after issuing and communicating the decision of 17 August 2021, was functus officio and lacked authority under the Regulations relating to Debt Collectors, 2003 (including regulation 7(7)) to issue a revised decision on 23 August 2021.

The court also held that the manner in which the revised decision was reached—by entertaining submissions from Daimcon and communicating with it without copying Silverbirch, and by revising the decision without giving Silverbirch an opportunity to be heard—was procedurally unfair for purposes of section 6(2)(c) of PAJA.

Accordingly, the revised decision of 23 August 2021 was reviewed and set aside, with no costs order.

LEGAL PRINCIPLES

A statutory regulator or its authorised functionary exercising public power constitutes an organ of state/administrator for purposes of PAJA, and its decisions may constitute administrative action susceptible to judicial review.

Under the functus officio doctrine, once an administrator has made and published a final decision to affected parties, the administrator ordinarily lacks power to revisit, revoke, or vary that decision unless authorised by statute (expressly or by necessary implication). Broad enabling language to “deal with” a complaint does not, without more, confer a power to reopen and change a final outcome.

Administrative decision-making must comply with procedural fairness. Engaging one party after a decision, inviting further submissions from that party, and revising the decision without informing or hearing the other affected party may constitute procedural unfairness under section 6(2)(c) of PAJA, rendering the resulting decision reviewable and invalid.

Fisher, Mary And One Other vs Mokondo, Joseph And Two Others (2021/55430) [2023] ZAGPJHC 602 (6 June 2023)