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[2024] ZAECELLC 1
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Alpha Omega Youth Outreach v National Lotteries Commission and Another (EL94/2023) [2024] ZAECELLC 1 (9 January 2024)
IN THE HIGH COURT OF
SOUTH AFRICA
(EASTERN
CAPE DIVISION,
EAST LONDON CIRCUIT
COURT
)
Case no
:
EL94/2023
In
the matter between:
ALPHA
OMEGA YOUTH OUTREACH
Applicant
and
NATIONAL
LOTTERIES COMMISSION
1
st
Respondent
ARTS
AND CULTURE DISTRIBUTION AGENCY
2
nd
Respondent
JUDGMENT
GQAMANA J
[1]
In this application, the applicant, seeks the following order:
“
1. That the
late filing of applicant’s application be condoned, and the
period of 180 days be extended accordingly as provided
for in section
9(1) of the Promotion of Administrative Justice Act 3 of 2000
(“PAJA”).
2. That the applicant be
exempted from the obligation to exhaust internal remedy/remedies as
provided for in section 7(2) (e) of
PAJA.
3. That the respondents’
grant allocation to applicant in order project number 93382 dated 25
November 2019, be reviewed and
set aside.
4. That first respondent
be ordered to pay the sum of R1 571 540.10 to applicant as full and
final grant allocation in respect of
applicant’s 2015 grant
application under project number 93382.
5. That the respondents
be ordered to pay the costs of the application, jointly and
severally, on the attorney and client scale.”
[2]
As a short background, the applicant, Alpha Omega Youth Outreach is a
non-profit organisation whose main purpose is to
employ holistic
approaches in steering the youth away from crime and drugs, using
art, music and life skills.
[3]
The first respondent is the National Lottery Commission which is
established in terms of the Lotteries Act 57 of 1997
(“the
Act”). The second respondent, is the Arts and Culture
Distributing Agency. In terms of section 26B
(1)(a) of the Act,
second respondent is responsible for considering, evaluating, and
adjudicating applications for grants or recommendations
of funding of
worthy good causes received from the first respondent. The
grants are paid from the National Lottery Distribution
Trust Fund
established in terms of section 21 of the Act. The
administration of the fund is governed by section 22 of the
Act.
Further in terms of section 26 H(1) of the Act, a decision by the
distributing agency concerning an application for
a grant is subject
to review by the board on application by an aggrieved applicant.
[4]
It is common cause that on or about 20 October 2015, the applicant
applied for a grant of R897 093.60 under project 93382.
This
was in response to an invitation which was issued by the first
respondent on 14 September 2015, that was published in various
newspapers inviting applications for funding from Non Profit
Organisations (NPOs) for the 2016/2017 financial year. The
application was under the category arts, culture and national
heritage in terms of section 30 of the Act.
[5]
On 28 March 2017, the applicant was advised that the aforementioned
application was unsuccessful because the budget for
2016/2017
financial year had been depleted. The applicant, however, was
advised that its application would be considered
and adjudicated in
the new financial year, i.e. 2017/2018 year.
[6]
On 25 April 2017, the applicant was advised that its application in
respect of 2017/2018 financial year was unsuccessful
because the
dates of the financial year in the founding document were not aligned
to the date in the annual financial statements.
The applicant
appealed such ruling. It was advised of the outcome of the
appeal on 17 October 2017 that, it was unsuccessful.
That
resulted to the applicant launching an application for review in this
Court, which led to the judgment by
Smith
J delivered on 12
November 2019 in favour of the applicant. The effect of the
judgment was that, the decision of the respondents
refusing the
applicant’s grant application was reviewed and set aside, and
the matter was remitted to the respondents for
reconsideration.
[7]
Within few days after the judgment was delivered, the applicant’s
grant application was considered and a grant of
R227 000.00 was
allocated to the applicant. The applicant was advised of such
decision on 25 November 2019. Further
the applicant was
informed that, it has to sign a grant agreement within 30 days in
order for its grant to be processed further.
The applicant was
not satisfied with the aforesaid amount. It then engaged its
attorney, but cutting straight to the point,
such engagements yielded
no positive results. I deal with the steps taken by the
applicant until the present application
was launched later in this
judgment.
[8]
On or about 23 January 2023, the applicant launched this review
application seeking the relief mentioned in paragraph
1 above.
This application is opposed by the respondents. The issue of
condonation is hotly contested.
[9]
In light thereof, the first hurdle for the applicant to overcome is
the delay in launching the review proceedings.
In my view, the
issue of condonation would be dispositive of this matter in the event
the applicant is unable to persuade me in
that regard.
[10]
As a point of departure, section 7(1) of PAJA provides that:
“
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) subject
to subsection 2(c), on which any proceedings instituted in terms of
internal remedies as contemplated in
subsection (2)(a) have been
concluded; or
(b) where no
such remedies exist, 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 come aware of
the action and the reasons.”
[11]
It is common cause that the respondents are organs of state and
subject to the Constitution. The application is
brought in
terms of section 6 of PAJA.
[12]
Further, the parties are in agreement that the present review
application was not instituted within the 180-days from
the date of
the decision that is sought to be reviewed. However, they are
at loggerheads on the date as to when the 180-days
commenced.
Be that as it may, a court may extend the 180-days period, where
interest of justice so require.
[1]
In consideration of same, the court must first determine whether
there was an unreasonable delay and, if so, should the delay
in all
circumstances be condoned.
[2]
The enquiry depends on the facts of each case.
[13]
For purposes of section 7(1) of PAJA, the delay must be considered
from either the date that the applicant
was informed or became aware
or might reasonably be expected to have become aware of the
administrative decision.
[14]
Having said that, the first point of call is for me to locate such
date. The evidence shows that the
applicant was advised on 25
November 2019, that at a meeting of the second respondent its
application for the grant was considered
and that a decision was
taken to allocate a total grant of R227 000.00 to it. It is not
disputed that from the aforesaid
date the applicant was aware of the
impugned decision. From respondent’s submission, the
proverbial clock commenced
on 25 November 2019.
[15]
It is common cause that on 28 November 2019, Mr Bixa who is the Chief
Executive Officer of the applicant
and the deponent of the founding
affidavit visited the first respondent’s offices in East London
and queried the grant allocation
and also stated that he would engage
with the first respondent through its attorneys.
[16]
Subsequently thereto, on an unspecified date the applicant briefed
Sotenjwa Attorneys and the latter filed
on 5 March 2020, a request
for information in terms of the Promotion of Access to Information
Act 2 of 2000 (PAJA). Amongst the
information requested were the
minutes of the meeting where the impugned decision was taken as well
as the first respondent’s
financials.
[17]
Nothing happened from then until 24 August 2020, when the first
respondent refused to supply the information
requested on the basis
that PAJA is not applicable and that grant allocation process is
dealt with in terms of the regulations
to the Act. Furthermore,
in the aforesaid reply, the applicant was advised to return the
signed grant agreement by not later
than 30 days from the date of
receipt of such letter, failing which the grant would be withdrawn.
The applicant contends
that the proverbial clock only commenced on 25
October 2021.
[18]
I am at pains to understand and comprehend such contention, because
it is common cause that the applicant
was informed of the impugned
decision on 25 November 2019. In addition to that, the
applicant’s CEO attended to the
first respondent’s office
on 28 November 2019 and queried the grant allocated to the applicant
and stated that it will engage
the first respondent through its
attorney, Sotenjwa attorneys. Instead of engaging on the
internal review mechanism processes
sanctioned in terms of section
26H of the Act, which are the internal remedies as envisaged in
section 7(1)(a) and (2) of PAJA,
the applicant’s attorney filed
a request for information in terms of the PAIA.
[19]
In my view the fact that there was a request for information in terms
of PAIA does not change the factual
reality, i.e. the applicant was
aware of the decision on 25 November 2019. The 180-days period
would have been delayed only
if the applicant had engage the internal
remedies envisaged in section 7 (1) of PAJA. In the
circumstances, for purposes
of condonation, 25 November 2019 is the
date which the proverbial clock commenced. I now need consider
whether there was
an unreasonable delay in instituting the review
and, if so, whether the delay should in all circumstances be
condoned.
[20]
As foreshadowed above, the applicant was aware of the impugned
decision on 25 November 2019, therefore the
180-days expired in May
2020. The evidence shows that from the time the applicant
became aware of the impugned decision,
and the date that the 180-days
expired, the only action taken by it was to request information in
terms of PAIA and nothing else.
When no response was
forthcoming from the respondents about the requested information, no
action was taken by the applicant.
However, it was argued by
the applicant that the respondents “remarkably and
obstructively” refused to supply the information
sought and
therefore the respondents are to be partly blamed for the delay.
That submission makes no sense to me. The
applicant was
represented by an attorney (Sotenjwa attorneys), and the latter must
have been aware of the internal remedies available
to the applicant
as envisaged in section 26H of the Act. Furthermore, when no
response was forthcoming to its PAIA request,
no application to court
in terms of section 78 of the PAIA was instituted by the applicant.
In fact, the applicant sat back
and did nothing to pursue its request
for information until its erstwhile attorneys (Sotenjwa attorneys)
withdrew from the matter.
[21]
It is common cause that on 24 August 2020, the first respondent
refused to supply the information.
In the refusal notification,
the applicant was advised that PAIA does not apply and that grant
allocation process is dealt with
in terms of the regulations to the
Act. Still the applicant did nothing either to pursue the
internal processes or to issue
the review application.
[22]
After the withdrawal of Sotenjwa attorneys in August 2020, the
applicant replaced them with Clark Laing Inc.
in November 2020.
I am completely oblivious why it took more than two months for the
applicant to secure the services of
another attorney. There is
no allegation that the applicant lacked financial resources to
procure services of another attorney.
A party seeking
condonation has to set out all the facts so as to enable the court to
understand and assess the explanation for
its non-compliance with the
rules or the time frames.
[23]
Even after Clark Laing Inc. was on board representing the applicant
the latter still did nothing to issue
the review application.
Instead on 8 February 2021, Clark Laing Inc. requested copies of
various records, including details
of all grants allocated in the
Arts, Culture and National Heritage sectors for the financial years
2017–2020, the minutes
of the meetings of the second
respondents in relation to application for funding made by the
applicant, reports and documents that
informed the impugned decision,
budget and audited financial statements for the financial years
2017–2020, and approved financial
policies applicable to the
impugned decision.
[24]
The first respondent replied to such request on 24 May 2021, and
provided the applicant with the information
relating to the reports
and documents that informed the impugned decision, its budget and
audited financial statements for the
relevant periods and its
approved financial policies. However, it refused to supply the
applicant with the details of all
grant applications in the relevant
sector received during the financial years mentioned above and to the
minutes of all meetings
of the second respondent relevant to the
application for the grant application made by the applicant.
Still, the applicant
did nothing to issue the review application.
[25]
On an unspecified date Clark Laing Inc. withdrew as the attorneys of
the applicant because of lack of financial
instructions. However, on
6 July 2021, the applicant approached its present attorney of
record. Even when the present attorneys
came on board, no
review application was issued. The applicant must have been
advised by its attorneys of the time frame
set out in section 7(1) of
PAJA. Instead of bringing the review application, its present
attorneys of record apparently investigated
the affairs of the
respondents. It is averred by the applicant that through such
investigation it unearthed information about
“
systematic
corruption and collusion
” by the respondents. The
alleged corruption is that the respondents, (a) turned a blind eye to
NPOs with no mandatory
documents such as financial records, (b) they
did not follow the peremptory jurisdictional restrictions in that
NPOs and NGOs from
Gauteng would apply and receive grants from other
provinces, (c) the so called capped principle was ignored and (d) the
new kids
on the block with no proven track records and financial
records or annual returns were granted exorbitant funding. To
bolster
the corruption allegations, the applicant also placed
reliance on the proclamation which was issued by the President on 6
November
2020 requesting the Special Investigating Unit (SIU) to
investigate maladministration in the affairs of first respondent in
relation
to the allocation of funds in terms of the Act to
beneficiaries, the status report by the SIU to such investigation and
a newspaper
article by Daily Maverick dated 3 March 2022.
[26]
In terms of the aforementioned proclamation, the maladministration
which the SIU had to investigate is in
relation to: (a) the
investment of funds in the National Lottery Distribution Trust fund
contrary to the provision of the Act,
(b) allocation of money in the
fund to beneficiaries who were not entitled thereto and (c) any
improper or unlawful conduct by
the officials or employees of the
National Lotteries Commission (NLC). I will revert to these
reports and allegations of
corruption and collusion latter.
[27]
On 6 September 2021 the applicant’s present attorneys served ‘
a
letter of demand
’ to the first respondent. Within 10
days thereafter, on 16 September 2021, the first respondent responded
in detail
to the aforementioned letter of demand.
[28]
The first respondent in its response advised the applicant’s
attorneys that it had a limited budget
when the application for grant
was made and that, in each financial year there are new budgetary
allocations and there is no guarantee
that the amount which was
offered to the applicant was still available. It was further
pointed out to the applicant that,
its expectation of more than the
allocated amount (R227 000.00) was irrational, because its
application for grant was adjudicated
in 2019 under the 2019/2020
financial year budget. Further it was pointed out to the
applicant that the first respondent
budget allocation had significant
decrease from 2015 and as such the amount which was allocated to the
applicant was reasonable
having regard to the number of applications
received under the charity sector. Most importantly, it was
pointed out to the
applicant that, an applicant for grant allocation
is not entitled as of right to the amount it has applied for, because
in terms
of the regulation 9 of the 2015 Regulations to the Act, the
distributing agency has a discretion to determine the amount to be
made to each approved applicant based on its budgeting constraints
and the number of applications received.
[29]
Even then the applicant still did not issue the review application
until 23 January 2023. It is contended
by the applicant that
its investigation into the affairs of the first respondent was
ongoing up to 8 November 2022. The applicant
in its founding
affidavit has stated that the process of drafting the review
application started after 25 November 2021.
[3]
Counsel services were procured on 12 January 2022 and due to ill
health his brief was terminated on 23 March 2022.
Thereafter,
on the same date, Senior Counsel was briefed and his first available
date for consultation was on 12 May 2022.
Despite the clear
provision of section 7(1) of PAJA, it is averred by the applicant
that the Senior Counsel had a busy program
and only managed to work
on the brief from 11 July 2022 and managed to settle the papers on 29
December 2022.
[4]
[30]
What is glaring from the applicant’s founding affidavit is
that, it took 14 months to draft and settle
the review papers.
The founding affidavit is merely 26 pages long with 45 annexures
attached to it. On any body’s
standard, there was an
unreasonable delay in instituting the present review application,
which eventually was launched on 23 January
2023.
[31]
Having found that the delay was unreasonable, the next question is
whether, in the interests of justice the
delay should be condoned or
the 180-days should be extended in terms of section 9(2) of PAJA.
[32]
In
Gqwetha
v Transkei Development Corporation Ltd and Others
,
[5]
Nugent JA explained the purpose and function of the delay rule under
section 7(1) of PAJA and said:
“
[22] It is
important for the efficient functioning of the 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 long
standing rule is two-fold: 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 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 Municipaliteit van Kaapstad
1978 (1) at 41E-F (my translation).
“
It is desirable
and important that finally should be arrived at within a reasonable
time in relation to judicial and administrative
decisions or merits.
It can be contrary to the administration of justice and the public
interest to allow such decisions
or acts to be set aside after and
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.”
[33]
Mr
Pienaar
SC, counsel for the applicant argued with reference to
SANRAL
v Cape Town City
[6]
that, the merits of the case are a critical factor when a court
considers the delay for purposes of determining whether it will
be in
the interests of justice that such delay be condoned.
[34]
I was also referred to the decision of the Constitutional Court, in
Notyawa
v Makana Municipality
,
[7]
where the court expressed the view that, the nature of the illegality
raised in respect of the impugned decision constitutes a
weighty
factor in favour of overlooking a delay.
[35]
Further in
Minister
of Safety and Security v Jongwa
,
[8]
the delay in bringing the review application, although it was not
within the context of PAJA, but the court was persuaded that
given
the nature of the issues at stake it would be preferable to deal with
the application on its merits and not to dispose it
on the delay.
[36]
I must state that the explanation proffered by the applicant for the
delay is profoundly lacking. It
appears to me that there was a
lackadaisical approach in the manner in which the applicant dealt
with the matter. As indicated
above, it took the applicant more
than three years to institute the review application. There are
no complex issues involved
in this matter. Further, even after
the applicant’s attorneys started preparing on the review
papers on 25 November
2021, it took the applicant a period of almost
14 months to settle and finalise them.
[37]
The applicant submitted that because of the alleged corruption, the
matter requires the attention of the
court and that on the merits it
has strong prospects of success. Firstly, the alleged corrupt
activities are irrelevant to the
issues at hand. Further it
would be absolutely wrong for me to accept the investigation report
of the SIU without evidence
that the findings therein were indeed
correct. The allocation of grant to deserving beneficiaries is
a discretionary matter
and is informed by the available budget and
the number of applications received on each particular financial
year.
[38]
The applicant was advised that the amount which was allocated to it
was based on the available budget and
the applications received for
that sector. The applicant was informed that the first
respondent may in terms of regulations
5 of the Act, set a cap on the
amount an organization may apply for, irrespective of the number of
projects that may be specified
in such an application.
Therefore, the grant which was allocated to it was in line with the
capping principle.
[39]
In
Opposition
to Urban Tolling and Alliance and Others v South African National
Road Agency Ltd and Others
,
[9]
Brandt JA emphasised that, underlying the delay rule is the rationale
that there is inherent potential for prejudice, both to the
efficient
functioning of the public body and those who rely upon its decision,
if the validity of its decisions remain uncertain.
[40]
It is more than 3 years since the impugned decision was taken by the
first respondent. The payment
of such funds are based on the
available financial budget for each year and also based on the number
of applications received.
Having considered all the facts and
evidence herein, I am not persuaded that it will be in the interests
of justice to extend the
180-days’ time period.
[41]
With regard to costs, Mr
Pienaar
argued with reliance to
Biowatch
Trust v Registrar Genetic Resources and Others
[10]
that, the applicant should not be ordered to pay costs even if it is
unsuccessful. The general approach of not awarding costs
against an unsuccessful litigant in genuine constitutional
proceedings against organ of state should not easily be forsaken.
To fit the bill, the issues must be genuine constitutional matters
litigated in an acceptable fashion.
[11]
In
Lawyers
for Human Rights v Minister in the Presidency
,
[12]
the Constitutional Court made it clear that
Biowatch
does not imply ‘risk free constitutional litigation’ and
that costs may well be awarded where, for instance, the grounds
of
attack are frivolous vexatious, or a litigant has acted from improper
motives. The issues raised in this application are
not genuine
and substantive constitutional issues. The purpose of the
application was to assert the applicant’s purported
entitlement
to the grant allocation in terms of the Act. I have indicated
above the applicant was allocated an amount of
R227 000.00 because of
budget constraints and the number of applications received for that
sector in that particular financial
year. Therefore, there is
no reason why the general rule that, the costs follow the results
should not apply.
[42]
In the circumstances the order issued is the following:
1.
The application is dismissed with costs.
N
GQAMANA
JUDGE
OF THE HIGH COURT
APPEARANCES:
Counsel
for the Applicants
Adv
Pienaar
SC
Instructed
by
Singh
and Associates Attorneys
East
London
Counsel
for the 1
st
and 2
nd
Respondents
Adv
F J Nalane SC
Instructed
by
Diale
Attorneys
C/o
Mbabane & Maswazi Attorneys
East
London
Heard
on
9
November 2023
Judgment
Delivered on
9
January 2024
[1]
Section
9 (1) and (2) of PAJA.
[2]
Wolgroeiers
Afslaers (Edms) Bpk v Munisipalteit van Kaapstad
1978 (1) SA 13
(A)
at 39C-D.
[3]
Index
p 30 para 111.
[4]
Index
p 30 – 31 paras 112 to 119.
[5]
2006
(2) SA 603
(SCA) para 22.
[6]
2017
(1) SA 468
(SCA) at para 81.
[7]
[2020]
41 ILJ 169 (CC) at para 49.
[8]
2013
(3) SA 455 (ECG).
[9]
2013
All SA 639
(SCA) para [23].
[10]
2009
(6) SA 232 (CC).
[11]
Cora
Hoexter: Administrative Law in South Africa, 3
rd
edition.
[12]
2017
(1) SA 645
(CC) para 30.