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[2021] ZAKZPHC 72
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KZN Oncology Inc v KZN Province MEC for Health and Another (AR156/2020) [2021] ZAKZPHC 72 (19 March 2021)
THE HIGH COURT OF
SOUTH AFRICA
KWAZULU-NATAL
DIVISION, PIETERMARITZBURG
Not
Reportable
Case no: AR 156/2020
In
the matter between:
KZN
ONCOLOGY
INC APPELLANT
and
KZN
PROVINCE MEC FOR HEALTH FIRST
RESPONDENT
TECMED (PTY)
LTD SECOND
RESPONDENT
Coram:
MOODLEY
J, MNGUNI J and MOSSOP AJ
Heard
: 12
March 2021
Delivered
: 19
March 2021
This
judgment will be handed down in open court and delivered
electronically by circulation to the parties’ legal
representatives
by email publication. The date and time for hand-down
is deemed to be 09h30 on 19 March 2021.
ORDER
On
appeal from:
KwaZulu-Natal Division of
the High Court, Pietermaritzburg (Bezuidenhout J sitting as court of
first instance):
(a)
The
appeal is dismissed with costs, such to include those costs arising
out of the employment of two counsel;
(b)
As
regards the relief adjourned sine die in the court a quo:
(i)
the
appellant is directed to deliver an affidavit setting out in detail
all the expenditure that it incurred in terms of the contract,
supported by vouchers, by close of business on 16 April 2021;
(ii)
the
first respondent is directed to deliver its answering affidavit by
close of business on 14 May 2021; and
(iii)
the
appellant is directed to deliver its replying affidavit by close of
business on 15 June 2021.
JUDGMENT
Mossop
AJ (Moodley J and Mnguni J concurring)
[1]
This
is an appeal against a judgment of the high court in which a rule
nisi obtained by the appellant was discharged, with the first
respondent directed to pay the appellant’s costs, a
counter-application brought by the first respondent was granted, in
part, with the appellant ordered to pay the costs, and with certain
relief claimed therein adjourned sine die with directions.
[2]
The
facts of the matter are not complex. On 11 December 2015, a contract
was concluded between the appellant and the first respondent
(‘the
contract’) in terms of which the appellant was contracted to
repair two Varian Rapidarc Oncology machines (‘the
machines’)
located at Addington Hospital, Durban and to maintain them for a
period of five years. It appears that after the
conclusion of the
contract only one of the machines was repaired to the extent that it
was brought online and rendered operative.
The other machine, whilst
brought online, was not rendered operative as it required an
expensive part that the appellant was financially
incapable of
acquiring, and in respect of which the first respondent was
unwilling, or unable, to pay. The appellant was paid a
substantial
sum of money for the repair work that it did perform. The appellant
claims that it thereafter allegedly maintained
the machines for a
number of months, and submitted invoices each month for such
maintenance services to the first respondent for
payment but was
never paid. Eventually, the monthly maintenance stopped and the
inevitable occurred: the operative machine ceased
to function.
[3]
On
21 July 2017, the appellant was alerted by a news report that the
first respondent intended concluding an agreement with an entity,
namely Tecmed (Pty) Ltd (‘Tecmed’), the second respondent
in this application. Tecmed was apparently to be contracted
by the
first respondent to perform the services which the first respondent
had already agreed would be provided by the appellant
arising out of
the contract. In a series of letters directed to the first respondent
before launching its application, the appellant
sought, inter alia,
confirmation from the first respondent that it still regarded the
contract as being binding upon it. None of
the appellant’s
letters, of which there were four in total, received a substantive
response from the first respondent.
[4]
As
a consequence, the appellant launched an urgent application in which
it sought, in part A thereof, the following relief:
‘
2.
That the Honourable Court condone non-compliance, if any, with
Section 35 of the General Law Amendment
Act 62 of 1955 and that the
period prescribed be to [sic] reduced, the necessary, to enable a
hearing of this application on 01
August 2017.
3.
That a Rule Nisi be issued, returnable on a date and time to be
determined by the Honourable Court, operative
immediately, calling
upon the KwaZulu-Natal Provincial Department of Health and, the First
and Second Respondent(s) and/or any
other interested party, to show
cause why the following order should not be made final:
3.1
That the KwaZulu Natal Provincial Department of Health, First and
Second Respondent(s) and/or any other interested
party or entity, be
interdicted and restrained from concluding an agreement for the
Service, Repair and Maintenance of Oncology
machines named Linac 1
and Linac 2 at Addington Hospital, in Durban, within the
KwaZulu-Natal province, whilst the contract between
applicant and
KwaZulu-Natal Provincial Department of Health remains of full force
and legal effect.
3.2
In the
alternative
, in the event that the First and Second Respondent,
and/or any other entity have concluded a contract for the Service,
Repair and
Maintenance of Oncology machines named Linac 1 and Linac 2
at Addington Hospital, in Durban, within the KwaZulu-Natal province,
that the First, Second and/or any such entity, be interdicted and
restrained from implementing the terms of the purported contract
pending the final determination of the proceedings for the judicial
review and setting aside of contract, as outlined in part B
of this
application.
3.3 That the
KwaZulu-Natal Provincial Department of Health
alternatively
the First Respondent be directed to pay the costs of the
application.’
[5]
Part
B of the notice of motion read as follows:
‘
KINDLY
TAKE NOTICE THAT
, in the event that the
first and second respondents, and a/or any other entity have
concluded a contract for the Service, Repair
and Maintenance of
Oncology machines named Linac 1 and Linac 2 at Addington Hospital, in
Durban, within the KwaZulu-Natal province,
the above named Applicant
intends to make an application, to the above Honourable Court, on a
date to be determined by the Registrar,
at 10h00 hours or so soon
thereafter as Counsel for the Applicant may be heard, for an order in
the following terms:
1.
That
the contract concluded on behalf of the KwaZulu-Natal Provincial
Department of Health, between the First and Second Respondent
be
declared unlawful and void
ab initio
.
2.
That
the contract concluded on behalf of the KwaZulu-Natal Provincial
Department of Health, between the First and Second Respondents
be
reviewed and set aside.
3.
That
the KwaZulu-Natal Provincial Department of Health alternatively, the
First Respondent be directed to pay the costs of the application,
on
the scale as between Attorney and Client.’
[6]
The
application was opposed by the first respondent. On 4 August 2017,
Chetty J granted a rule nisi in favour of the appellant and
also
granted the appellant leave to withdraw its application against
Tecmed, it being accepted by the appellant that there was
no prospect
of the first respondent concluding a contract with Tecmed.
Subsequently, the first respondent delivered a counter-application
seeking the review of the decision to contract with the appellant,
the setting aside of the contract, and the repayment of the
amount of
approximately R5,7 million from the appellant which at the time the
first respondent had already paid to the appellant
pursuant to the
disputed contract. The basis of the review sought was that the first
respondent, in concluding the agreement, had
not followed certain
prescripts of the KwaZulu-Natal Provincial Treasury Regulations and
Practice Notes, and National Treasury
Practice Notes, and that the
contract was thus illegal.
[7]
On
12 December 2017, Chetty J granted an application to amend the first
respondent’s notice of counter-application in two
respects:
(a)
Firstly, the following paragraph was inserted in the notice of
counter-application (the first amendment):
‘
(b)
bis That insofar as it may be necessary the First Respondent is
granted an extension of time in terms of
section 9(1)(b)
of the
Promotion of Administrative Justice Act 3 of 2000
, until the filing
and service of this counter application in which to seek the relief
sought in terms of paragraph (a) and (b)
above;’
(b)
Secondly, a further paragraph was inserted to
include
a demand for the repayment of an amount of approximately R3,4 million
in addition to the amount of R5,7 million already
claimed.
[8]
The
matter ultimately came before Bezuidenhout J who, correctly in my
view, saw the resolution of the counter-application as being
potentially determinative of the fate of the appellant’s
application: if the counter-application was granted, the rule granted
in favour of the appellant could not be confirmed, although the issue
of costs would still need to be determined. If the
counter-application
was refused, the issue of whether the rule should
be confirmed would then need to be considered.
[9]
Bezuidenhout
J heard argument, and in his judgment delivered on 29 May 2019, he:
(a)
discharged
the rule nisi granted to the appellant and directed the first
respondent to pay the costs of the appellant’s application;
(b)
granted
the relief sought by the first respondent in its counter-application
in the following terms:
(i)
reviewing
and setting aside the decision of the head of the first respondent to
conclude the contract with the appellant for the
repair and
maintenance of the machines situated at Addington Hospital;
(ii)
declaring
the contract concluded between the appellant and the first respondent
on 17 December 2015 to be invalid and of no force
and effect; and
(iii)
ordering
the appellant to pay the costs of the counter-application.
(c)
directed
that the claim for the repayment of the amounts sought in the first
respondent’s counter-application be adjourned
sine die and gave
directions concerning the delivery of further affidavits in relation
thereto.
[10]
The
appellant thereafter sought leave to appeal against the judgment of
Bezuidenhout J. In summary, the issues upon which leave
to appeal was
sought can be broadly stated to fall into three grounds:
(a)
the
learned Judge erred in finding that the counter-application was not
based on the provisions of the Promotion of Administrative
Justice
Act 3 of 2000 (PAJA) and could proceed on the basis of a legality
review;
(b)
the
learned Judge erred in not determining whether a delay of 20 months
in bringing the review application could be condoned or
was
reasonable; and
(c)
the
learned Judge erred in directing that it was just and equitable that
further affidavits be delivered before deciding the issue
of the
repayment of the monies claimed by the first respondent.
[11]
No
leave to cross appeal was sought by the first respondent. The learned
Judge granted the application for leave to appeal. The
wording of
paragraph 4 of the learned Judge’s judgment on the application
for leave to appeal is instructive, where he stated
as follows:
‘
In
my view there is no reasonable prospect that another court will find
that it was not a legality review and that the filing of
further
affidavits were not justified. Although the contract was contrary to
the provisions of section 217 of the Constitution
I accept that
another court may find that I erred by not making a specific ruling
as to the delay in bringing the counter application.’
[12]
What
is now before us? Is the entire order granted in respect of the
counter-application before us or is it simply a discrete part
thereof
relating only to the issue of the delay in bring the
counter-application?
[13]
The
correct approach to interpreting a judgment of a court was discussed
in
Firestone
South Africa (Pty) Ltd v Genticuro AG
[1]
where
it was held that:
‘
[t]he
basic principles applicable to construing documents also apply to the
construction of a court's judgment or order: the court's
intention is
to be ascertained primarily from the language of the judgment or
order as construed according to the usual, well-known
rules. See
Garlick v Smartt and Another
,
1928 AD 82
at p. 87;
West Rand Estates
Ltd
. v
New
Zealand Insurance Co. Ltd
.,
1926 AD 173
at p. 188. Thus, as in the case of a document, the judgment or order
and the court's reasons for giving it must be read as a whole
in
order to ascertain its intention. If, on such a reading, the meaning
of the judgment or order is clear and unambiguous,
no extrinsic
fact or evidence is admissible to contradict, vary, qualify, or
supplement it. Indeed, it was common cause that in
such a case not
even the court that gave the judgment or order can be asked to state
what is subjective intention was in giving
it (cf.
Postmasburg
Motors (Edms.) Bpk
. v
Peens
en Andere
,
1970 (2) SA 35
(NC) at p.
39F - H). Of course, different considerations apply when, not the
construction, but the correction of a judgment or
order is sought by
way of an appeal against it or otherwise - see
infra
.
But if any uncertainty in meaning does emerge, the extrinsic
circumstances surrounding or leading up to the court's granting the
judgment or order may be investigated and regarded in order to
clarify it; for example, if the meaning of a judgment or order
granted on an appeal is uncertain, the judgment or order of the court
a quo
and
its reasons therefor, can be used to elucidate it. If, despite that,
the uncertainty still persists, other relevant extrinsic
facts or
evidence are admissible to resolve it. See
Garlick's
case,
supra
,
1928 AD at p. 87, read with
Delmas
Milling Co. Ltd
. v
Du
Plessis
,
1955 (3) SA 447
(AD) at pp.
454F - 455A;
Thomson v Belco (Pvt.) Ltd.
and Another
,
1960 (3) SA 809
(D).'
[14]
Applying
Firestone
to the facts of the matter, it appears to me that the judgment of the
learned Judge is clear and unambiguous in its meaning. He
regarded
his judgment on the issues identified in sub-paragraphs (a) and (c)
of paragraph 10 above as being unassailable, hence
his conclusion
that no other court would come to a different conclusion on those
points. Had the judgment ended at that point,
I would be constrained
to conclude that leave to appeal had been refused. But the judgment
did not end there. The learned Judge
went on to acknowledge that
another court might conclude that because he had not specifically
addressed the issue of the delay
by the first respondent in bringing
the review proceedings, being the ground identified in paragraph
10(b) above, such omission
could have amounted to an error on his
part. That acknowledgement by the learned Judge invites one to
conclude that this issue,
to the exclusion of all others, is the
issue in respect of which leave to appeal was actually granted. The
wording of the order
ultimately granted is simply that leave to
appeal was granted, without specifying in respect of which issue or
issues leave had
been granted. But the wording of the judgment leaves
the reader in no doubt that it was granted on a narrow issue, as the
learned
Judge was entitled to do in terms of the provisions of
section 17(5)
(a)
of the
Superior Courts Act 10 of 2013
. That issue is whether the
delay in bringing the review application vitiated the application. In
my view, this is the only issue
before us.
[15]
In
his heads of argument, Mr Sithole posits what he terms an ‘unusual
and unique’ issue, namely whether this court can
grant
condonation in respect of the first respondent’s application
for condonation, when this was allegedly not addressed
by the learned
Judge in his judgment in the court a quo. Counsel submitted that the
court erred in not adjudicating on the ‘condonation,
extension
of time or undue delay application’ contained in the first
respondent’s notice of counter-application. It
appears to me
that this point is taken in respect of the first amendment to the
notice of counter-application that was granted
by Chetty J. The
notice of counter-application prior to its amendment made no
reference to any of these issues. Subsequent to its
amendment, the
notice of counter-application sought an extension of the time limits
imposed in terms of PAJA ‘insofar as
it may be necessary’.
In evaluating this submission, it is necessary to
firstly consider whether the first respondent was required to
initially, and separately,
seek condonation.
[16] Bezuidenhout
J correctly found that an organ of state cannot utilise the
provisions of PAJA to review its
own conduct.
[2]
On the facts pleaded, he concluded that the review application was
capable of being construed as a legality review and dealt with
it on
that basis.
By virtue of this finding, the learned Judge was not required to
consider condonation in terms of, or the extension of time limits
contemplated by, PAJA. Having found that the review was a legality
review, the learned Judge would have been guided by the judgment
of
Theron J in
Buffalo
City Metropolitan Municipality v Asla Construction (Pty) Limited,
[3]
where
Theron J found that when
‘
assessing
[an allegation of delay] under the principle of legality no explicit
condonation application is required.
A
court can simply consider the delay, and then apply the
two-step
Khumalo
test
to
ascertain whether the delay is undue and, if so, whether it should be
overlooked.’
[4]
(Footnote
omitted.)
What
appeared in the first respondent’s papers was not an
application for condonation, but an explanation for the delay in
bringing its review application. This is perfectly in keeping with
the judgment in
Buffalo City
.
[17]
One
of the principal points raised by the appellant in its affidavit
marked ‘replying affidavit’, which appears to have
served
both as its replying affidavit in its own application, and its
answering affidavit in the counter-application, was the question
of
delay. In this regard, the appellant stated:
‘
The
application was initiated almost 2 years after the parties had
concluded the contract hopelessly out of time and as such the
first
respondent is obliged to obtain condonation for the inordinate delay
in initiating the review proceedings.’
[18]
The
issue of delay was thus conspicuous on the papers, and the learned
Judge would have been alive to it. In granting the
counter-application,
the learned Judge implicitly found that the
delay had been satisfactorily explained. In fact, in his judgment on
the application
for leave to appeal, he stated that the only issue
before him was the counter-application and in finding as he did:
‘
[i]t
does imply that the time delay was considered to be reasonable in the
circumstances.’
[19]
It
seems to me that where one of the principal issues in a matter is the
question of delay, but the relief sought is nonetheless
granted, it
must follow implicitly that the question of delay was either ignored
or not found to be an impediment to the relief
being granted. There
is nothing to suggest that the learned Judge ignored the question of
delay. Perhaps he ought to have said
something explicit in this
regard. But as was pointed out by Mr Pammenter SC, who appeared for
the first respondent together with
Ms Nako, in
R
v Dhlumayo
[5]
it was held that it is not the function of an appeal court to seek
‘reasons adverse to the conclusion’ of the judge
in the
court a quo, as ‘[n]o judgment can ever be perfect’ and
it does not ‘follow that, because something has
not been
mentioned’ in a judgment it has not been considered.
[6]
[20]
I
am of the view that the learned Judge did consider the question of
delay and found it to not to be undue. Was he however correct
in this
regard?
[21]
The
reason for requiring reviews to be instituted without undue delay is
to ensure certainty and promote legality: time is of utmost
importance. In
Merafong
City v AngloGold Ashanti Limited
,
[7]
Cameron J held that:
‘
The
rule against delay in instituting review exists for good reason:
to curb the potential prejudice that would ensue if the
lawfulness of
the decision remains uncertain. Protracted delays could give rise to
calamitous effects. Not just for those who rely
upon the decision but
also for the efficient functioning of the decision-making body
itself.
’
[8]
[22]
In
Khumalo
,
[9]
Skweyiya J, making reference to section 237 of the Constitution,
[10]
held that:
‘
Section 237
acknowledges the significance of timeous compliance with
constitutional prescripts. It elevates expeditious and diligent
compliance with constitutional duties to an obligation in itself. The
principle is thus a requirement of legality.’
[11]
(Footnote omitted.)
[23]
In
both its founding affidavit and in its replying affidavit in its
counter-application, the first respondent addressed the issue
of
delay. The contract was concluded on 11 December 2015. During June
2017, Deloitte and Touche completed a forensic investigation
into,
inter alia, the conclusion of the contract in question. On 26 July
2017, the appellant launched its application. On 4 August
2017 the
first respondent delivered its answering affidavit. The report of
Deloitte and Touche was received by the MEC for Finance
on 13 August
2017 (‘the forensic report’), and a decision was taken to
bring proceedings to set aside the contract.
This was done on 4
September 2017 when the first respondent delivered its
counter-application.
[24]
It
was explained in some detail by the first respondent that the person
who signed the contract with the appellant, being the head
of the
department, was the person who ought to have brought the review
proceedings. However, that person had been implicated in
the forensic
report with specific reference to wrongdoing in respect of the
contract in question in this application and disciplinary
steps were
recommended to be taken against him. Before this could occur, he
resigned. The next two most senior persons, who might
have taken the
contract on review, were also implicated with regard to the same
contract in the same forensic report. Given their
apparent
wrongdoing, there was no incentive for any of these three persons to
have taken any steps to review the contract. However,
once the
forensic report was received, the first respondent acted
expeditiously, and the review was brought collaterally as a
counter-application.
[25]
What
is an organ of state required to do if the very person who ought to
bring the review proceedings setting aside an unlawful
contract is in
fact the person who concluded the contract? The obvious answer is
that such official could not have been the only
person to have known
of the existence of the contract, and accordingly others with such
knowledge should take that step. But what
if the other people who
ought to have taken the matter on review were also implicated in the
awarding and conclusion of the unlawful
contract? In this case, none
of the persons involved in the awarding of the contract in question
had any incentive to review it
because their personal shortcomings
would have been revealed as a consequence. It appears to me that in
these circumstances, a
forensic investigation was a reasonable step
to take on the part of the first respondent. I acknowledge that in
Asla Construction
,
Swain JA said that:
‘
The
only explanation provided by the respondent for the delay, namely
that it only became aware of the alleged irregularities relating
to
the award of the Reeston contract, when a forensic report was
presented to it on 28 October 2015, was no explanation at all.’
[12]
[26]
However,
given the specific facts of this matter, the explanation of the first
respondent that the outcome of a forensic investigation
was awaited
is, in my view, an explanation worthy of consideration. Once the
forensic report had been received, there can be no
dispute that the
first respondent acted without undue delay. The learned Judge
obviously considered these factors and granted the
counter-application. In my view, he was correct in doing so.
[27]
At
the conclusion of argument, Mr Pammenter SC requested that we
consider fixing fresh time periods for the filing of the further
affidavits in respect of the relief adjourned sine die by
Bezuidenhout J. He proposed that each party be given a month within
which to file its affidavit. This request will be reflected in the
order granted.
[28]
I
would accordingly propose the following order:
(a)
The
appeal be dismissed with costs, such to include those costs arising
out of the employment of two counsel;
(b)
As
regards the relief adjourned sine die in the court a quo:
(i)
the
appellant is directed to deliver an affidavit setting out in detail
all the expenditure that it incurred in terms of the contract,
supported by vouchers, by close of business on 16 April 2021;
(ii)
the
first respondent is directed to deliver its answering affidavit by
close of business on 14 May 2021; and
(iii)
the
appellant is directed to deliver its replying affidavit by close of
business on 15 June 2021.
MOSSOP
AJ
I
agree.
MOODLEY
J
I
agree.
MNGUNI
J
APPEARANCES
Date
of Hearing: 12
March 2021
Date of
Judgment: 19
March
2021
Counsel for
Appellant: Mr
E Sithole and Mr P I Shai
Instructed
by: Austen
Smith Attorneys
033
3920 500
Ref:
Mr. Mchunu/Jolene
Counsel for
Respondent: Mr C Pammenter
SC and Ms N Nako
Instructed
by: PKX
Attorneys
033
347 5354
Ref:
M Potgieter
[1]
Firestone
South Africa (Pty) Ltd v Genticuro AG
1977
(4) SA 298
(A)
at 304D-H.
[2]
State
Information Technology Agency SOC Limited v Gijima Holdings (Pty)
Limited
2018
(2) SA 23 (CC).
[3]
Buffalo
City Metropolitan Municipality v Asla Construction (Pty) Limited
2019
(4) SA 331 (CC).
[4]
Ibid
para
51.
[5]
R
v Dhlumayo and another
1948
(2) SA 677 (A).
[6]
Ibid
at
706, point 12.
[7]
Merafong
City v AngloGold Ashanti Limited
[2016] ZACC 35; 2017 (2) SA 211 (CC).
[8]
Ibid
para 73.
[9]
Khumalo
and another v MEC for Education, KwaZulu-Natal
[2013]
ZACC 49
;
2014
(5) SA 579
(CC).
[10]
The
section provides as follows:
‘All
constitutional obligations must be performed diligently and without
delay.’
[11]
Khumalo
para
46.
[12]
Asla
Construction (Pty) Limited v Buffalo City Municipality and another
[
2017]
2 All SA 677
(SCA) para 15.