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[2013] ZASCA 148
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Opposition to Urban Tolling Alliance and Others v The South African National Roads Agency Ltd and Others (90/2013) [2013] ZASCA 148; [2013] 4 All SA 639 (SCA) (9 October 2013)
THE SUPREME COURT OF APPEAL OF
SOUTH AFRICA
JUDGMENT
REPORTABLE
Case No: 90/2013
In
the matter between:
OPPOSITION
TO URBAN TOLLING ALLIANCE
................................
FIRST
APPELLANT
SOUTH
AFRICAN VEHICLE RENTING AND
LEASING
ASSOCIATION
...............................................................
SECOND
APPELLANT
QUADPARA
ASSOCIATION OF SOUTH AFRICA
.............................
THIRD
APPELLANT
SOUTH
AFRICAN NATIONAL CONSUMER UNION
......................
FOURTH
APPELLANT
and
THE
SOUTH AFRICAN NATIONAL ROADS
AGENCY
LIMITED
............................................................................
FIRST
RESPONDENT
THE
MINISTER, DEPARTMENT OF TRANSPORT
REPUBLIC
OF SOUTH AFRICA
.................................................
SECOND
RESPONDENT
THE
MEC, DEPARTMENT OF ROADS AND
TRANSPORT,
GAUTENG
................................................................
THIRD
RESPONDENT
THE
MEC, DEPARTMENT OF WATER AND
ENVIRONMENTAL
AFFAIRS
......................................................
FOURTH
RESPONDENT
THE
DIRECTOR-GENERAL, DEPARTMENT OF
WATER
AND ENVIRONMENTAL AFFAIRS
....................................
FIFTH
RESPONDENT
NATIONAL
CONSUMER COMMISSION
..........................................
SIXTH
RESPONDENT
NATIONAL
TREASURY
.............................................................
SEVENTH
RESPONDENT
Neutral citation:
Opposition
to Urban Tolling Alliance v The South African National Roads Agency
Limited
(90/2013)
[2013] ZASCA 148
(9 October 2013).
Coram:
Brand, Nugent, Petse
JJA, Van der Merwe and Swain AJJA
Heard:
25 September 2013
Delivered: 9 October 2013
Summary: Administrative review –
declaration of toll roads in terms of s 27 of Act 7 of 1998 –
180 day time limit
contemplated in s 7(1) of
Promotion of
Administrative Justice Act 3 of 2000
– extension of time limit
pursuant to
s 9(2)
considered.
___________________________________________________________________
ORDER
___________________________________________________________________
On appeal from:
North Gauteng
High Court, Pretoria (Vorster AJ sitting as court of first instance):
The appeal is refused with no order as
to costs, save that the order granted by the court a quo, directing
the appellants to pay
the respondents’ costs, is set aside and
replaced by an order that there be no order as to costs.
___________________________________________________________________
JUDGMENT
___________________________________________________________________
BRAND JA
(NUGENT, PETSE JJA,
VAN DER MERWE AND SWAIN AJJA concurring):
[1] This is the tale of seven toll
roads around two cities in the province of Gauteng. Since the
proposed method of toll collection
is through electronic operation,
the matter became dubbed by the media and in popular parlance as the
‘e-tolling case’.
The seven roads involved constitute the
main arteries around Johannesburg and Pretoria, which in turn form
the commercial hub of
South Africa. These roads form part of a larger
project for the infra-structural upgrading of Gauteng roads that has
become known
as the Gauteng Freeway Improvement Project or by the
acronym GFIP. The declarations of the roads as toll roads gave rise
to unprecedented
public and political debate. These declarations were
made by the South African Road Agency Limited (SANRAL) through
publication
in the Government Gazette following upon approval of
their decision to do so by the Minister of Transport (the Minister)
in accordance
with the procedure contemplated in s 27 of the
South African National Road Agency Act 7 of 1998 (the Act). Six of
these declarations
took effect by way of publications in the
Government Gazette of 28 March 2008. The seventh declaration,
pertaining to the R21 road,
was published in the Government Gazette
of 28 July 2008. The reason for the different treatment of the R21
was that it first had
to be transferred from the Gauteng Provincial
Government to the remit of SANRAL before it could be declared a toll
road under s 27
of the Act. But the difference in the dates of
publication is of no real consequence in this matter. Consequently I
shall henceforth
draw no distinction between the R21 and the other
six roads.
[2] Court proceedings started four
years after the declaration of the roads as toll roads, when the
appellants launched an application
against the respondents in the
North Gauteng High Court, Pretoria on 23 March 2012. The application
comprised of two parts. The
first part was for an urgent
pendente
lite
interdict precluding SANRAL from levying and collecting
tolls on the seven roads pending the final determination of the
application
in the second part. The application in the second part
was a review application under Court Rule 53 for the setting aside of
the
decisions by SANRAL and the Minister which gave rise to the
declarations of the roads as toll roads in 2008.
[3] The application in the first part
was heard by Prinsloo J as a matter of urgency and on Saturday 28
April 2012 he granted the
pendente lite
interdict sought. A
direct appeal by the respondents to the Constitutional Court was,
however, successful. In consequence, the interim
interdict was set
aside while the costs in those proceedings were ordered to be part of
the review application. The judgment of
the Constitutional Court has
since been reported as
National Treasury and others v Opposition
to Urban Tolling Alliance and others
2012 (6) SA 223
(CC). In due
course the review application in the second part came before Vorster
AJ. In the event he dismissed the application
with costs in favour of
the respondents, including the costs reserved by the Constitutional
Court. The present appeal against those
orders is with the leave of
the court a quo.
[4] The issues arising in the appeal
will be best understood against the background of s 27 of the
Act and the underlying facts.
The relevant part of s 27
provides:
‘
(1)
Subject to the provisions of this section, the Agency [ie SANRAL] –
(a)
with the Minister’s
approval –
(i)
may declare any specified national road or any specified portion
thereof, including any bridge or tunnel on a national road,
to be a
toll road for the purposes of this Act; and
(ii)
may amend or withdraw any declaration so made;
.
. .
(2)
A declaration, amendment, withdrawal, . . . under subsection (1),
will become effective only 14 days after a notice to that
effect by
the Agency has been published in the Gazette.
(3)
The amount of toll that may be levied under subsection (1), any
rebate thereon and any increase or reduction thereof –
(a)
is determined by the Minister on the recommendation of the Agency;
(b)
. . .
(c)
must be made known by the head of the Department by notice in the
Gazette;
(d)
. . .
(4)
The Minister will not give approval for the declaration of a toll
road under subsection (1)
(a)
, unless –
(a)
the Agency, in the prescribed manner, has given notice,
generally, of the proposed declaration, and in the notice –
(i)
has given an indication of the approximate position of the toll plaza
contemplated for the proposed toll road;
(ii)
has invited interested persons to comment and make representations on
the proposed declaration and the position of the toll
plaza, and has
directed them to furnish their written comments and representations
to the Agency not later than the date mentioned
in the notice.
However, a period of at least 30 days must be allowed for that
purpose;
(b)
the Agency in writing –
(i)
has requested the Premier in whose province the road proposed as a
toll road is situated, to comment on the proposed declaration
. . .
within a specified period (which may not be shorter than 60 days);
and
(ii)
has given every municipality in whose area of jurisdiction that road
is situated the same opportunity to so comment;
.
. . ‘
[5] As to the background facts, I find
it convenient to start the narrative with an introduction of the
parties. The first appellant
is the Opposition to Urban Tolling
Alliance (OUTA). It is a voluntary association which was established
on 12 March 2012 for the
sole purpose, so it said, of providing a
platform for individuals and other entities who seek to prevent the
e-tolling by SANRAL
on the seven toll roads. The members of OUTA
include the second appellant, which is the South African Vehicle and
Leasing Association
(SAVRALA) and the Automobile Association of South
Africa, together with 94 other businesses and 1831 individual
supporters. The
second appellant, SAVRALA, in turn represents 22
member companies including multinational car hire firms such as Avis
and Europcar.
The third appellant, Quadpara Association of South
Africa, is an organisation that protects and promotes the interests
of people
with disabilities, while the fourth appellant, the South
African National Consumer Union, promotes the rights of consumers.
[6] The appeal is opposed by the
first, second, third and seventh respondents. The first respondent is
SANRAL. The second and third
respondents – who are represented
by the same counsel and attorneys – are the Minister and the
MEC for Roads and Transport
in the Gauteng Provincial Government. The
seventh respondent is the National Treasury. SANRAL, which by the
nature of things took
centre stage in the proceedings, is a creature
of statute. It was created by s 2 of the Act. It also derives
its powers from
the Act. In terms of s 25(1) its main functions
are described thus:
‘
The
agency [SANRAL], within the framework of government policy, is
responsible for and is hereby given power to perform all strategic
planning with regard to the South African national roads system as
well as the planning, design, construction, operation, management,
control, maintenance and rehabilitation of national roads for the
Republic and it is responsible for the financing of all those
functions in accordance with its business and financial plan, so as
to ensure that Government’s goals and policy objectives
concerning national roads are achieved . . .’
[7] The financing options that are
available to SANRAL are set out in s 34(1) of the Act. Though
the section enumerates an
impressive list of twelve options, it is
not in dispute that for present purposes these were limited to three,
namely levies raised
on the sale of fuel (subsection (1)
(b)
);
tolls raised on toll roads (subsection (1)
(g)
); and monies
appropriated by Parliament (subsection (1)
(k)
). It is common
cause that the seven toll roads fall under the control of SANRAL.
Likewise it is common cause that the development
and improvement of
these roads, undertaken by SANRAL as part of the GFIP, were necessary
to alleviate congestion on the roads of
Gauteng and to facilitate
economic growth not only in that province, but in the country as a
whole. The debate between the appellants,
on the one hand, and the
respondents on the other, was therefore not whether it was prudent to
undertake the GFIP, but focussed
[] on how these improvements were to
be funded.
[8] The papers reveal that the funding
decision was a complex one. The starting-point of the GFIP was a
report, dated September
2006, which resulted from a joint initiative
by the various authorities involved, including SANRAL, the Department
of Transport
and the Gauteng Provincial Government. But it is clear
that this report had its origin in a much earlier White Paper on
national
transport policy, dating back to 1996. The White Paper
recognised that the South African transportation system was
inadequate to
meet the basic accessibility needs to work, healthcare,
schools and so forth in rural areas and that these needs were to be
addressed
in an accelerated manner. Because the rural communities
involved could not pay for it, resources made available by Parliament
were
to be allocated to these areas. This meant that in other areas,
where economically feasible, the principle of users pay through
tolling was to be regarded as the funding method of preference.
[9] The 2006 proposal was further
developed and in July 2007 the National Department of Transport
submitted the GFIP as a proposal
to Cabinet. The memorandum to
Cabinet was accompanied by a series of documents and a formal slide
presentation. The reports and
presentation show a clear appreciation
that solutions proffered should adhere to government policies, as
contemplated in s 25
of the Act. In this light the proposal to
Cabinet identified the most suitable funding mechanism for the GFIP
as a toll scheme
with electronic fare collection as a basis to ensure
free traffic flow. In motivating electronic toll collection it was
explained
that the density of traffic on the road network involved
was such that a conventional toll collection system through toll
gates
was simply not practically possible. The proposed toll
collection system would operate through overhead gantries, fitted
with toll
collection equipment that would identify vehicles passing
under the gantry by electronic transponders (e-tags) fitted to the
vehicle
or by its number plates. Since no physical toll booths were
involved, the electronic toll collection system would not impact on
traffic flow at all. The proposal indicated an appreciation that this
method of collection was sophisticated and expensive. Viability
studies by independent consultants retained by SANRAL, however,
showed that despite this expensive form of collection, e-toll funding
was a viable option for the GFIP. In the event the proposal was
approved by Cabinet.
[10] On 8 October 2007, the then
Minister of Transport officially announced the launch of the GFIP,
which was to be implemented
in accordance with the proposal approved
by Cabinet. At this launch, the general media (print, radio and TV)
was present. Apart
from the Minister’s keynote address, there
were several other presentations, including one by SANRAL. Copies of
the keynote
address and the presentations were made available to the
media. SANRAL’s presentation, inter alia, referred to an
estimated
tariff of between 50 cents and 30 cents per kilometre.
Following upon the presentation, coverage of the freeway tolling
concept,
the implementation of the project and the expected toll
tariff occurred in the printed media, radio and television.
[11] Some days later SANRAL published
its notice of intent to toll the relevant roads in the Government
Gazette, together with diagrams
of the relevant road sections. At the
same time the notices and diagrams were also published in a single
edition of about six newspapers
circulating in Gauteng. These notices
invited comments from the general public by 14 November 2007 –
approximately one month
from the date of publication of the notices –
which was in accordance with the minimum period of 30 days stipulated
in s 27(4)
(a)
(ii) of the Act. Letters detailing the same
information as the notices were also sent to the Premier and the MEC
for Transport of
Gauteng, as well as to the various municipalities
affected by the proposed declaration. The closing date for comments
by the authorities
was 14 December 2007, which was in accordance with
the minimum period of 60 days stipulated in s 27(4)
(b)
(i)
of the Act.
[12] On 15 January 2008 SANRAL applied
to the Minister to approve the declaration of the seven roads
involved as toll roads. In
accordance with s 27(4)
(c)
of
the SANRAL Act, this application was accompanied by a report from
SANRAL in which it summarised the main issues raised in the
representations received from the public as well as SANRAL’s
detailed responses to these issues. On 11 February 2008 the
Minister
granted his approval[]. Following upon this approval, SANRAL, as I
have said by way of introduction, declared six of these
roads as toll
roads by publication in the Government Gazette of 28 March 2008.
Subsequent to the declaration, SANRAL continued
its interaction with
interested representatives of civil society by delivering a number of
presentations over an extended period.
Notes taken at one of these
presentations on 7 July 2008 indicate that representatives of both
the second appellant, SAVRALA and
the AA, which are both members of
OUTA, were present. According to these notes Mr Nazir Alli, the chief
executive officer of SANRAL,
responded to a question by a SAVRALA
representative as to the anticipated toll tariff that ‘we are
looking at 50 cents per
kilometre but this will be discounted’.
[13] On 9 May 2008 SANRAL issued a
media release to the effect that it had awarded seven contracts for
the implementation of the
GFIP. On 24 June 2008 work commenced in
earnest on the project and continued for the next two years in order
to prepare certain
sections of the proposed toll road network for the
Fifa 2010 World Cup. After a three month period of inactivity during
the World
Cup, work on the freeway system recommenced and continued
into 2011. It involved a massive infra-structural development,
including
the construction of bridges, flyovers, on- and off-ramps,
and related services. It also included the construction of 42
overhead
gantries that became a feature of the Gauteng landscape in
the period following the World Cup in 2010. The costs incurred by
SANRAL
to finance this construction exceeded R20 billion. SANRAL
procured this funding from the money market by issuing bonds which
are
effectively repayable loans, repayment of which was guaranteed by
the South African government through the Treasury. Should SANRAL
fail
to collect tolls, so we are told, it will not be able to meet its
obligations under the loan. In practice this will mean that
the
guarantee by the government stands to be called up.
[14] On 11 February 2011 the
Director-General for Transport published the toll tariffs for the
toll network in terms of s 27(3)
(c)
of the SANRAL Act. At
that stage tolling was intended to commence on 23 June 2011. The
publication gave rise to a massive public
outcry. In response, the
Department of Transport suspended the implementation of tolling while
the Minister announced that a steering
committee would be formed to
address the public’s concerns. The mandate of the steering
committee was to review the amount
of the toll tariffs. It was not to
revisit the mechanism of tolling itself. Yet the appellants point out
that numerous parties,
including the appellants themselves, made
representations to the steering committee that tolling itself should
be discontinued,
in the belief, so they said, that SANRAL and the
Minister would reconsider and withdraw the implementation of the
tolling system
as a whole. This belief, so they explained, was
fuelled by the widespread and unparalleled public opposition to
tolling that even
crossed political dividing lines.
[15] The steering committee held
public hearings on several days. At every one of these hearings the
committee made it clear that
the principle of ‘user pays’
and the tolling of the proposed freeway network had been accepted in
principle and that
the discussions before the committee would be
limited to the proposed tariff only. In the event, the committee
recommended to government
that the proposed tariff be reduced from
about 66c to about 30c per kilometre, with a monthly cap of R550 for
e - tag
users. This recommendation was accepted by Cabinet.
On 23 October 2011, after further public outcry at the news that
tolling was
set to proceed on the reduced tariffs, the Minister of
Transport instructed SANRAL to halt the tolling process.
[16] According to the appellants,
their hope that SANRAL and the Minister would seriously reconsider
the raising of funds for the
GFIP through tolling was, however,
finally dashed by the budget speech of the Minister of Finance on 22
February 2012. What was
announced in that speech was a special
appropriation of R5.8 billion by Parliament to SANRAL, which would
facilitate the reduction
in the toll tariffs recommended by the
steering committee. But when the appellants’ application was
launched in the court
a quo in March 2012, the new toll tariff had
not as yet been published in terms of s 27(3)
(c)
of the
Act, after the withdrawal of the one published on 11 February 2011.
The new toll tariff was only published in the Government
Gazette of
13 April 2012. For some reason not explained on the papers, this
notice was also withdrawn on 31 May 2012. Rather obviously,
in the
circumstances, the appellants’ case was never aimed at the
review of toll tariffs – which had not yet been finally
determined. Instead, the sole focus of their review application was
the decisions that gave rise to the declaration of the seven
toll
roads under s 27(1) of the Act.
[17] The judgement of the
Constitutional Court on appeal against the interim interdict had a
pronounced effect on the central theme
of the appellants’
challenge. This occurred despite the Constitutional Court’s
caution that it did not propose to influence
the outcome of the
review application (see eg para 21 of the judgment). As appears from
what I have said by way of introduction,
the main focus of the debate
on the papers was directed at SANRAL’s election of e-tolling as
a method of funding the GFIP.
More particularly, the main thrust of
the appellant’s case was that SANRAL should have adopted a
method of funding other
than toll. Although the appellants disavowed
any intent to dictate a particular method of funding to the
authorities, they clearly
proposed a ring-fenced fuel levy as the
best option. As to this method of funding, they inter alia said:
‘
An
alternative method of funding which is favoured by many interested
parties (including the appellants) is a ring-fenced fuel levy.
This
option entails no costs of collection at all. When this is
considered, it becomes clear that the option of open road tolling
is
so unreasonable that it is not a decision that could have been taken
by a reasonable administrator.’
[18] In further support of their
funding method of choice the appellants contended that the choice of
open road tolling was unreasonable
within the meaning of s 6(2)
(h)
of the Promotion of Administrative Justice Act 3 of 2000 (PAJA) in
that the operation costs of e-tolling over the anticipated period
of
20 years will exceed the capital costs of the GFIP and because the
enforcement of the system will be practically impossible.
As to why
this would be so, the appellants predicted that there will be 800 000
users of the proposed toll roads every day,
of which only about 60
per cent will be voluntarily registered for e-tag and that, for the
rest, there would be a high percentage
of defaulters. This, they
forebode, will require SANRAL to issue up to 1 000 summonses per
day; which is simply not practically
feasible.
[19] But the judgment of the
Constitutional Court effectively derailed the challenge based on the
thesis that SANRAL and the Minister
opted for the wrong method of
funding the GFIP. Simply put, the Constitutional Court held that this
option was a policy decision
with which the courts will not
interfere. The court’s reasoning appears, for instance, from
the following statements in the
main judgment by Moseneke DCJ (at
paras 34-35):
‘
OUTA
points out, correctly in my view, that it does not seek to set aside
the cabinet’s approval of the GFIP in as much as
it was not
granted in terms of any specific statute. Also, the approval does not
amount to administrative action that is susceptible
to review under
PAJA. . . . Outa must be supported where it submits that the specific
decisions that are impugned were not made
by the cabinet or the
National Treasury. However, it is quite another matter to suggest
that the impugned decisions of the Transport
Minister and SANRAL had
nothing to do with the executive government’s policy, including
the policy that users of the upgraded
roads are the ones who must
pay. Or with the National Treasury’s domestic budgetary
responsibilities and its sovereign-debt
policy.’
And (at para 67):
‘
Thus,
the duty of determining how public resources are to be drawn upon and
reordered lies in the heartland of executive-government
function and
domain. What is more, absent any proof of unlawfulness or fraud or
corruption, the power and the prerogative to formulate
and implement
policy on how to finance public projects reside in the exclusive
domain of the national executive subject to budgetary
appropriations
by parliament.’
[20] Similar considerations were
expressed by Froneman J in his separate concurring judgment when he
said (at para 93):
‘
It
is undisputed that in July 2007 the cabinet approved the Gauteng
Freeway Improvement Project and the concomitant basis for its
funding, e-tolling, after extensive investigation and a report to it
on the issue. It is national executive and treasury policy
not to use
fuel-levy-type funding for these kinds of projects. None of this was,
or could be, attacked on review in this court.
The playing field for
the contestation of executive-government policy is the political
process, not the judicial one.’
And (at para 94):
‘
The
main thrust of the respondents’ [these being the appellants in
the present matter] review is the alleged unreasonableness
of the
decision to proclaim the toll roads. But unreasonable compared to
what? The premise of their unreasonableness argument is
that funding
by way of tolling is unreasonable because there are better funding
alternatives available, particularly fuel levies.
But that premise is
fatally flawed. The South African National Road Agency Ltd has to
make its decision within the framework of
government policy. That
policy excludes funding alternatives other than tolling. It is
unchallenged on review.’
[21] In this light the appellants were
compelled to shift the main focus of their challenge to one of
procedural unfairness. More
particularly, to the charge that on a
proper interpretation of s 27(4) of the Act and s 4 of
PAJA, SANRAL and the Minister
had failed to comply with the notice
and comment procedure prescribed by these legislative provisions,
albeit that on the face
of it the notices might have satisfied the
minimum requirements of s 27(4) of the Act. A second objection
to the impugned
decisions, which was raised by the appellants only
after the decision of the Constitutional Court, was that the tolling
of the
GFIP amounted to an unlawful deprivation of rights in property
– ie their money – and that it therefore fell foul of
s 25 of the Constitution. In addition to these two main grounds,
the appellants advanced three grounds in this court on which
the
decision of the court a quo should be reversed. These were:
(a) The alleged unreasonableness of
the decision to impose e-tolling because of its excessive operational
costs and the practical
impossibility of its enforcement.
(b) The alleged failure by the
Minister of Transport to consider the costs of toll collection.
(c) The alleged incorrectness of the
2006 estimate of the toll collection that formed the basis of the
impugned decision by the
Minister.
[22] Apart from contesting the
appellants’ challenge to the impugned decisions on its merits,
the respondents relied on what
has become known as the delay rule.
Despite the appellants’ contentions to the contrary and for
reasons that will become
apparent soon, I believe we are compelled to
follow the example set by this court in
Beweging vir Christelik
Volkseie Onderwys and others v Minister of Education and others
[2012] 2 All SA 462
(SCA) para 44, by dealing with the delay rule
first.
[23] Although the delay rule has its
origin in common law, it now finds its basis in s 7(1) of PAJA
which provides in relevant
part:
‘
1.
Any proceedings for judicial review in terms of section 6(1) must be
instituted without unreasonable delay and not later than
180 days
after the date –
(a)
. . .
(b)
. . . on which the person concerned was informed of the
administrative action, became aware of the action and the reasons for
it or might reasonably have been expected to have become aware of the
action and the reasons.’
[24] Section 9(1) provides, however,
that the 180-day period ‘may be extended for a fixed period, by
agreement between the
parties or, failing such agreement, by a court
or tribunal, on application by the person or administrator
concerned’. Section
9(2) provides that such an application may
be granted ‘where the interests of justice so require’.
[25] As to the purpose and function of
the delay rule under s 7(1) of PAJA and its common law
predecessor, Nugent JA explained
in
Gqwetha v Transkei Development
Corporation Ltd and others
2006 (2) SA 603
(SCA) paras 22-23:
‘
[22]
It is important for the efficient functioning of public bodies . . .
that a challenge to the validity of their decisions by
proceedings
for judicial review should be initiated without undue delay. The
rationale for that longstanding rule . . . is twofold:
First, the
failure to bring a review within a reasonable time may cause
prejudice to the respondent. Secondly, and in my view more
importantly, there is a public interest element in the finality of
administrative decisions and the exercise of administrative
functions. As pointed out by Miller JA in
Wolgroeiers
Afslaers (Edms) Bpk v Munisipaliteit van Kaapstad
1978
(1) SA 13 (A)
at
41E-F (my translation):
“
It
is desirable and important that finality should be arrived at within
a reasonable time in relation to judicial and administrative
decisions or acts. It can be contrary to the administration of
justice and the public interest to allow such decisions or acts
to be
set aside after an unreasonably long period of time has elapsed -
interest
reipublicae ut sit finis litium
.
. . . Considerations of this kind undoubtedly constitute part of the
underlying reasons for the existence of this rule.”
[23]
Underlying that latter aspect of the rationale is the inherent
potential for prejudice, both to the efficient functioning of
the
public body and to those who rely upon its decisions, if the validity
of its decisions remains uncertain. It is for that reason
in
particular that proof of actual prejudice to the respondent is not a
precondition for refusing to entertain review proceedings
by reason
of undue delay, although the extent to which prejudice has been shown
is a relevant consideration that might even be
decisive where the
delay has been relatively slight (
Wolgroeiers
Afslaers
,
above, at 42C).’
[26] At common law application of the
undue delay rule required a two stage enquiry. First, whether there
was an unreasonable delay
and, second, if so, whether the delay
should in all the circumstances be condoned (see eg
Associated
Institutions Pension Fund and others v Van Zyl and others
2005
(2) SA 302
(SCA) para 47). Up to a point, I think, s 7(1) of
PAJA requires the same two stage approach. The difference lies, as I
see
it, in the legislature’s determination of a delay exceeding
180 days as
per se
unreasonable. Before the effluxion of 180
days, the first enquiry in applying s 7(1) is still whether the
delay (if any) was
unreasonable. But after the 180 day period the
issue of unreasonableness is pre-determined by the legislature; it is
unreasonable
per se
. It follows that the court is only
empowered to entertain the review application if the interest of
justice dictates an extension
in terms of s 9. Absent such
extension the court has no authority to entertain the review
application at all. Whether or not
the decision was unlawful no
longer matters. The decision has been ‘validated’ by the
delay (see eg
Associated Institutions Pension Fund
para 46).
That of course does not mean that, after the 180 day period, an
enquiry into the reasonableness of the applicant’s
conduct
becomes entirely irrelevant. Whether or not the delay was
unreasonable and, if so, the extent of that unreasonableness
is still
a factor to be taken into account in determining whether an extension
should be granted or not (see eg
Camps Bay Ratepayers’ and
Residents’ Association v Harrison
[2010] 2 All SA 519
(SCA)
para 54).
[27] In its terms s 7(1) envisages
asking when ‘the person concerned’ was informed, or
became aware, or might reasonably
be expected to have become aware,
of the administrative action. This admits of an answer where the act
affects and is challenged
by an individual, but does not readily
admit of an answer where it affects the public at large. In that
situation it would be anomalous
– if not absurd – if an
administrative act were to be reviewable at the instance of one
member of the public, and not
at the instance of another, depending
upon the peculiar knowledge of each. It seems to me that in those
circumstances a court must
take a broad view of when the public at
large might reasonably be expected to have had knowledge of the
action, not dictated by
the knowledge, or lack of it, of the
particular member or members of the public who have chosen to
challenge the act.
[28] On the facts of this case there
is no dispute that the protagonists knew of the decision by no later
than 11 February 2011
– the date of publication of the toll
tariffs, which was the catalyst for the public outcry – but in
truth there was,
or might reasonably have been, public knowledge of
the decision far earlier than that. I have already said that as early
as 8 October
2007 the then Minister of Transport officially announced
the launch of the GFIP, followed shortly by presentations that
received
coverage in the media, and by notification to state
institutions representative of the public, and then by the
construction of
tolling gantries visible to the motoring public. It
is not necessary in this case to attempt any precise identification
of the
date the 180 day clock started ticking. It is sufficient to
say that by the time the application was launched on 23 March 2012
the public at large might reasonably be expected to have been aware
of the decision to toll for at least some two to three years,
which
is well outside the 180 period provided for in s 7(1). In
consequence, the appellants rightly believed they were compelled
to
apply for an extension under s 9.
[29] Explanations advanced for not
challenging the decision earlier centred mainly on the knowledge, or
lack of knowledge, of the
various parties from the time the
challenged decision was taken, but I have already said that in a case
of this kind, which raises
in truth a challenge by the public at
large, the particular knowledge of those who speak for the broader
public cannot be determinative
of when the clock starts to run or
whether the delay was reasonable. As for the period from the time the
tariffs were announced
– by which stage, at least, the
protagonists acknowledge they were pertinently aware of the decision
– the explanation
for further delay is, in essence, that they
sought to resolve the dispute through political channels before they
turned to the
courts. It is only when it became clear to them through
the budget speech of the Minister of Finance on 22 February 2012 that
the
political process was bound to fail them, so the appellants say,
that they decided to go to court. The respondents’ answer
to
this is that, as a matter of law, it is impermissible to invoke
political processes to justify the delay of instituting legal
proceedings. Indeed, there appears to be direct authority for this
proposition in English Law (see eg Michael Fordham
Judicial Review
Handbook
5
th
ed (2008) at 281 and the cases there
cited).
[30] But while that might be a
consideration to be taken account of in appropriate circumstances it
must nonetheless be evaluated
within the context of the particular
case. Had the challenge been only to the amount of the tariff that
was announced on 11 February
2011 – which had no material
consequences after that date – the fact that it was sought to
be resolved politically
for a time might have weighed in evaluating
whether that challenge was unduly delayed. But the challenge in this
case is to a decision
that was made some four years before the
proceedings were commenced – with all its profound consequences
having occurred
by the time the tariffs were announced – and it
is to those profound consequences that the delay rule is directed.
The announcement
of the tariffs was no doubt the catalyst for taking
action but by then the consequences had already occurred, and I
cannot see
that the explanation for delaying thereafter can play a
material role in determining whether the four year delay from the
time
the impugned decision to declare the toll roads was taken should
be overlooked.
[31] Whatever the explanations might
be, the fact remains that some five years have now elapsed since the
impugned decisions were
taken. During that period, vast and
significant upgrades to the GFIP highways and related
infrastructures, had been completed.
By all accounts these upgraded
roads are truly magnificent. The advantages are enjoyed primarily by
the motorists of Gauteng, but
they also benefit the economy of the
country as a whole. The downside is that this came at a cost of R20
billion. This amount had
been paid by SANRAL with borrowed money. The
interest on the loan is running at an alarming rate. SANRAL tells us
– and this
is not gainsaid – that if the impugned
decisions were challenged at the outset, these loans would not have
been incurred
and the roads would not have been built. There was no
plan B. In the absence of tolling there could thus be no GFIP.
Without the
anticipated income of toll, SANRAL simply does not have
the money to pay the interest on the loan, let alone the capital
amount
of R20 billion. Moreover, SANRAL has contractually committed
itself for the maintenance of the toll roads and the collection of
toll on the supposition that all this would be recovered from
tolling.
[32] In addition, so we are told,
there are backlogs for the maintenance of the national roads network
covering approximately 18 000
kilometres, for which SANRAL is
responsible, to the tune of about R149 billion. If this backlog is to
be addressed over the next
ten years, at least R15 billion will be
required each year. If the backlog is not addressed, the maintenance
cost will rise exponentially.
Apart from this, SANRAL estimates that
capacity improvements and new roads on the national road network will
require an additional
amount of R10.3 billion per year. If it is
obliged to fund the GFIP from its own resources, so SANRAL says, all
these projects
will come to an end. In consequence, the setting aside
of the impugned decisions will not only affect the GFIP. It will have
a
detrimental impact on the countrywide network of national roads as
a whole with a clear knock-on effect on the economy. Moreover,
at
this stage SANRAL is unable to pay the interest on the R20 billion
loan because it is foregoing the anticipated toll income
of R200
million per month. This in itself has already led to the downgrading
of SANRAL by Moody’s, a credit rating agency.
It follows that
the setting aside of the impugned declarations will render it
virtually impossible for SANRAL to borrow money at
all in the future.
[33] As to the effect of a setting
aside of the declarations on the Treasury, we know that the South
African government, acting
through Treasury, has guaranteed the R20
billion loan. The government had done so, we are told, on the
hypothesis that the roads
were validly declared toll roads and that
SANRAL would thus be able to meet its obligations under the loan
agreements through the
collection of tolls. Had the declarations been
challenged at the time, so Treasury says, government would not have
put up the guarantee.
If government is called upon to meet the
guarantee – which is bound to happen if there will be no
tolling – it will
have a deleterious effect on funding so
desperately needed by health care, educators, pensioners, those
dependent on social grants,
and so forth. Precisely what that effect
will be, we do not know. What we do know, however, is that the
reordering of public resources
inevitably has a polycentric effect.
‘Polycentric’ in a sense described with reference to the
image of a spider’s
web, where the pull on one strand
distributes tensions after a complicated pattern throughout the web
as a whole. It is ‘polycentric’
because it is ‘many
centred’ – each crossing of the strand is a distinct
centre for distributing tensions (see
Lawrence Baxter
Administrative
Law
at 86).
[34] The appellants’ argument as
to why the 180 day time limit should be extended despite the severe
prejudice that prevention
of tolling will hold for the respondent and
for the public as a whole were sixfold. First they contended that the
Gauteng freeways
would have been upgraded and expanded in any event.
But on the evidence we know that this is simply not so. In fact, the
evidence
of the respondents, which we are bound to accept, shows the
exact opposite. Without the anticipation of toll income, SANRAL could
not and would not have borrowed the R20 billion. And it is that loan
of R20 billion which would cause the immutable problem if
the
declarations were to be set aside.
[35] The appellants’ second
answer was that the upgrades will be paid for by the government in
any event. That is undoubtedly
so. In fact the upgrades have already
been paid for. Moreover, it is clear that even without toll money the
loan will eventually
be repaid by the government. But at what costs
and to whom? Again we know from the respondents’ evidence that
if the government
is compelled to pay, the burden will probably be
passed on to those who can least afford it. The appellants’
third answer,
closely linked to the second, is that the total debt of
R20 billion in public finance terms is relatively speaking very small
in
that it will constitute no more than 0,2 per cent of the South
African debt portfolio of R1 trillion. I find this argument somewhat
cynical. Relatively speaking, any amount can be trivialised depending
on the figure used by way of comparison. But the fact remains,
as I
have said, that the R20 billion will probably be passed on to those
who can least afford it and on whom the effect will by
no means be
trivial.
[36] The fourth basis invoked by the
appellants as to why the 180 day time bar should be extended was that
it is the requirement
of the rule of law that the exercise of all
public power should be lawful and that SANRAL and the government has
failed to act
legally. As I see it, however, the argument is
misconceived. While it is true that the principle of legality is
constitutionally
entrenched, the constitutional enjoinder to fair
administrative action, as it has been expressed through PAJA,
expressly recognises
that even unlawful administrative action may be
rendered unassailable by delay.
[37] The appellants’ fifth
contention as to why the 180 day period should be extended is that
the validity of the toll road
declarations will in any event arise at
the next stage of the determination by the toll tariff by the
Minister under s 27(3)
of the Act. This is so, their argument
went, because the tariff determination flows from and is necessarily
dependent on lawful
toll declarations in terms of s 27(1). It
follows, so the argument concluded, that the eventual toll tariff
determination
will be assailable on the basis of the unlawfulness of
the preceding toll road declaration, which means that a refusal of
the extension
of the 180 day period will not serve any dispositive
function. As the legal substructure for this line of argument, the
appellants
sought to rely on a statement of this court in
Oudekraal
Estates (Pty) Ltd v City of Cape Town and others
2004 (6) SA 222
(SCA) para 31.
[38] However, [] the passage in
Oudekraal
upon which the appellants rely is authority for the
contrary. That passage makes it clear that, unless an invalid
administrative
act is set aside by a competent court, it is regarded
as valid for the purpose of consequent acts. That is supported by the
following
statement in the unanimous judgment of the Constitutional
Court in
Camps Bay Ratepayers’ & Residents’
Association and another v Harrison and another
2011 (4) SA 42
(CC) para 62:
‘
As
was explained in
Oudekraal
Estates (Pty) Ltd v City of Cape Town and Others
[para
31] administrative decisions are often built on the supposition that
previous decisions were validly taken and, unless that
previous
decision is challenged and set aside by a competent court, its
substantive validity is accepted as a fact. Whether or
not it was
indeed valid is of no consequence.’
[39] The appellants’ sixth
argument as to why the 180 day period should be extended under s 9
was that the alleged unlawfulness
of the challenged decisions will in
any event give rise to a collateral challenge every time SANRAL seeks
to compel payment of
toll. But as I see it the argument negates the
fundamental differences between a collateral challenge, on the one
hand, and a direct
challenge by way of a review application, on the
other. Those differences were underscored by Howie and Nugent JJA in
Oudekraal Estates
para 36 when they said:
‘
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. On
the other hand, a court that is asked to set aside an invalid
administrative act in proceedings for judicial review [ie a direct
challenge] has a discretion whether to grant or to withhold
the
remedy. 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.’
[40] In this light it should be
apparent that the 180 day time bar in s 7(1) is confined to
direct challenges by way of proceedings
for judicial review. It does
not limit collateral challenges at all (see eg
Kouga Municipality
v Bellingan and others
2012 (2) SA 96
(SCA) paras 15-16). It is
therefore both unnecessary and inappropriate to extend the 180 day
time limit in order to provide for
potential collateral challenges.
Absent any extension under s 9, the 180 day time bar precludes
us from entertaining the direct
challenge by way of a review
application. We cannot avoid that limitation to our authority simply
because the same questions might
arise were there to be future
collateral challenges, the success of which is by no means certain,
that are not before us.
[41] After all is said and done, the
stark reality remains that because of the delay in bringing the
review application, five years
had elapsed since the impugned
decisions were taken, and that, during those five years, things have
happened that cannot be undone.
The delay rule gives expression to
the fact that there are circumstances in which it is contrary to the
public interest to attempt
to undo history. The clock cannot be
turned back to when the toll roads were declared, and I think it
would be contrary to the
interests of justice to attempt to do so. It
follows that the appellants’ application for an extension under
s 9(1)
should, in my view, be refused. The result, as I see it,
is that we are prevented by the provisions of s 7(1) of PAJA
from
embarking upon the merits of the review application.
[42] Finally the appellants contended,
in the alternative, that even if the interests of justice do not
justify the extension of
the 180 days in terms of s 9, the
review application should still be heard. Their argument in support
of this contention relied
on s 25(1) of the Constitution, which
provides that ‘no one may be deprived of property except in
terms of law of general
application’. Since this challenge is
not brought under s 6 of PAJA, so the appellants argued, it is
not subject to
the 180 day time limit. There is probably more than
one valid answer to this argument. So, for example, it could be said,
I think,
that tolling does not constitute deprivation because it is a
quid pro quo
for the use of the road. But be that as it may. I
think that on the facts of this case the argument based on
deprivation of property
is self-destructive. The appellants do not
contend that a toll validly imposed under s 27 of the Act would
constitute an infringement
of their rights under s 25(1) of the
Constitution. Toll could therefore, on the appellants’ own
argument, only constitute
a deprivation of property if it is
invalidly imposed. But unless and until the impugned declarations are
reviewed and set aside,
they are regarded as valid in law (see
Oudekraal Estates
para 31). In order to succeed the appellants
are therefore driven back to their application for the review of the
declarations under
s 6(1) of PAJA, which brings the 180 day time
limit into play.
[43] Hence I
believe that despite the appellants’ various arguments to the
contrary, we are not authorised to enter into the
merits of the
review application. Contrary to this approach, the court a quo first
dealt with the review application and dismissed
it on its merits. In
consequence the court found it unnecessary to consider the effect of
the delay rule. Although, for the reasons
I have given, I do not
agree with this approach, the conclusion I arrived at on the outcome
of the review application happens to
be the same, namely that it
could not succeed. This means that in substance the appeal must fail.
What remains are issues of costs.
In this regard the appellants
relied on what has become known as the
Biowatch
principle, after the decision of the
Constitutional Court in
Biowatch
Trust v Registrar, Genetic Resources and others
2009
(6) SA 232
(CC) paras 21-25. What the principle lays down in sum is
that in constitutional litigation an unsuccessful party in
proceedings
against the state ought not to be ordered to pay costs
lest litigants may be discouraged to vindicate their constitutional
rights.
Yet as the Constitutional Court also said, the principle is
not immutable. So, for example, it will not immunise an unsuccessful
applicant from an adverse costs order if the application is found to
be frivolous, vexatious or otherwise manifestly inappropriate.
[44] Despite the
respondents’ contentions to the contrary, I believe this is a
case where the
Biowatch
principle
should be applied. First, this is unquestionably constitutional
litigation. Secondly, the application was clearly brought
in the
public interest, albeit that some of the appellants may also have
been motivated by commercial considerations. Thirdly,
I do not
believe that the conduct of the appellants was manifestly
inappropriate so as to warrant a departure from the general
rule. The
court a quo awarded costs against the appellants. Yet it does not
appear from the court’s judgment that any consideration
was
given to the
Biowatch
principle when it made that order. In the light of the view that I
hold about costs, I believe we are obliged to replace the court
a
quo’s order with one of no order as to costs. To that limited
extent the appeal must therefore succeed. But as I see it,
this does
not mean that the appellants were substantially successful to the
extent that it justifies a costs order in their favour
on appeal. In
the result, I believe, the costs of appeal should, as in the court a
quo, also land where it falls, in accordance
with the
Biowatch
principle.
[45] In the result it is ordered:
The appeal is refused with no order as
to costs, save that the order granted by the court a quo, directing
the appellants to pay
the respondents’ costs, is set aside and
replaced by an order that there be no order as to costs.
____________
F D J BRAND
JUDGE OF APPEAL
APPEARANCES:
For
Appellants: M C Maritz SC
A
J D’Oliveira
K
D Iles
Instructed
by: Cliffe Dekker Hofmeyr Inc
SANDTON
Correspondents:
Webbers
BLOEMFONTEIN
For
First Respondent: D N Unterhalter SC
G
E Leech SC
Instructed
by: Werksmans Attorneys
SANDTON
Correspondents:
Symington & De Kock
BLOEMFONTEIN
For
Second and Third
Respondents:
I V Maleka SC
T
J V Bokaba SC
Instructed
by: The State Attorney
PRETORIA
Correspondents:
The State Attorney
BLOEMFONTEIN
For
Seventh Respondent: J J Gauntlett SC
T
N Ngcukaitobi
F
B Pelser
Instructed
by: The State Attorney
PRETORIA
Correspondents:
The State Attorney
BLOEMFONTEIN