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[2019] ZAKZDHC 15
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Reaction Unit South Africa (Pty) Ltd and Another v Private Security Industry Regulatory Authority (D4698/2019) [2019] ZAKZDHC 15; 2020 (1) SA 281 (KZD) (6 September 2019)
REPORTABLE
/ NOT REPORTABLE
IN
THE HIGH COURT OF SOUTH AFRICA
KWAZULU-NATAL
LOCAL DIVISION, DURBAN
CASE
NO: D4698/2019
In
the matter between:
REACTION
UNIT SOUTH AFRICA (PTY) LTD
(Registration
No: 2011/103372/07)
FIRST APPLICANT
CLAUDE
MUNIEN
SECOND APPLICANT
and
PRIVATE
SECURITY INDUSTRY
REGULATORY
AUTHORITY
RESPONDENT
ORDER
I
make the following orders:
1.
The Rule Nisi granted by this
court on 24 June 2019 is discharged.
2.
The costs of the application,
excluding only those incurred by the drafting, delivery and
consideration of the notice of counter-application,
shall be paid by
the applicants, their liability being joint and several, the one
paying the other to be absolved.
3.
(a)
There shall be no order on the counter-application.
(b)
The costs incurred in the drawing, delivery and consideration of the
notice of counter-application
shall be paid by the respondent.
J U
D G M E N T
Delivered
on: FRIDAY, 06 SEPTEMBER 2019
Olsen
J
[1]
By letters dated 10 June 2019 the respondent, the Private Security
Industry Regulatory
Authority, informed each of the first and second
applicants that their registrations as security service providers
were suspended.
The first and second applicants (Reaction Unit
South Africa (Pty) Limited and Mr Claude Munien) received these
letters on 11 June
2019. At about 10pm that night the founding
papers in this application was served on the respondent by email, and
the following
morning a Rule Nisi was issued without the respondent
having been given an opportunity to deliver answering papers.
In its
material part the Rule Nisi called upon the respondent to show
cause on 24 June 2019 why an order should not be made:
‘
that
the first and second applicants are permitted to continue to engage
in business as security service providers as contemplated
in the
Private Security Industry Regulation Act 56 of 2001, pending the
outcome of an appeal with the appeal committee of the respondent
in
terms of s 30 of the abovementioned Act, which will be lodged by not
later than 14 June 2019 (
sic
of
the granting of this order) and further pending the outcome of a
review to this Honourable Court, in the event of such appeal
being
dismissed’.
Interim
relief in those terms was granted. Answering and replying
papers were subsequently delivered and the matter argued.
This
judgment concerns the question as to whether the Rule Nisi should be
confirmed (in amended or original form).
[2]
The first applicant is a company which conducts business rendering
security services
to a large number of customers. It employs some 400
security guards to that end. The second applicant is its sole
director.
In terms of the Private Security Industry Regulation
Act 56 of 2001 (the “Act”) the first applicant cannot
lawfully
conduct the business of rendering security services unless
it and its directorate (i.e. the second applicant) are registered
under
the Act. The suspension of the registrations of the first
and second applicants accordingly brought about that for the duration
thereof the first applicant would not be entitled to carry on its
business.
THE
STATUTORY REGIME
[3]
It is not in dispute in these proceedings that the respondent has the
power to suspend
the registration of a provider of security
services. It is necessary to consider the statutory framework
within which that
power may be exercised in order to decide whether
the court may and should intervene when the power is exercised.
Upon the
assumption that the court may intervene, the question is
whether the applicants have made out a case justifying this court’s
intervention. I take the view that it is necessary first to
consider the context within which the statutory provisions reside
in
order to understand their purpose, and to assess the scope of their
operation. The issue of the context of the statute has been
dealt
with by both the Supreme Court of Appeal and the Constitutional
Court. It is appropriate to quote passages from three
cases.
[4]
The first is the judgment of Howie P in
Private
Security Industry Regulatory Authority & others v Association of
Independent Contractors & another
2005
(5) SA 416
(SCA). Paragraph 1 of the judgment reads as follows:
‘
The
private security industry has work for more people than the police
and defence forces combined. The security officers
who operate
in the industry provide personal and property protection. They
secure enjoyment of others’ fundamental
rights. In
carrying out their functions they often wear uniforms, bear arms and
are granted access to homes and other landed
property. The
Legislature considered that in these circumstances it was necessary
to regulate the industry to monitor security
service providers.
To ensure the integrity and reliability of their service it enacted
the [Act], which requires security
service providers to be
registered.’
[5]
The following appears in para 24 of the judgment of Maya JA in
Private Security Industry Regulatory Authority v Anglo Platinum
Management Services Ltd & others
[2007] 1 All SA 154
(SCA):
‘
It
is so that there is a legitimate and compelling public interest in
the control of the large and enormously powerful private security
industry. This is to ensure, for example, that security
officers have no links to criminal activities, are properly trained
and are subject to proper disciplinary and regulatory standards and
avoid any abuses which might be perpetrated by security officers
against the vulnerable public. There is therefore a compelling need
for vigilance on the Authority’s part to ensure that
the
objects of the Act are not undermined.’ (Footnote omitted.)
[6]
In
Bertie Van Zyl (Pty) Ltd & another v Minister for Safety
and Security & others
2010 (2) SA 181
(CC) at paras 34 and 35
the judgment of Mokgoro J reads as follows:
‘
[34]
The private security industry in South Africa is large and powerful.
Although it is not a substitute
for State security services, it plays
a vital role in complementing those services. According to the
Authority, the industry
“consists of more than 310 000 active
individual security service providers and approximately 5000 active
security businesses”
and grows at a rate of between 12 and 15%
each year. Its members “by far outnumber the combined
number of members of
the South African Police Service and the
National Defence Force”.
[35]
The sheer size of the private security industry, as well as the
coercive power it wields during
the regular conduct of its business,
underscores the need for regulation and adherence to appropriate
standards. Close control
and management of this massive
industry is imperative. This ensures a sound balance between
complying with the rule of law
on the one hand, and exercising their
coercive power in protecting the safety and security rights of the
public, as well as those
of members of the private security industry
itself, on the other.’
(Paragraph
35 then goes on to quote the passage from the judgment of Maya JA
reproduced above.)
(See
also the passage from the unreported judgment in
Probe Security CC
v The Security Officers’ Board and Another (WLD)
, Case No
98/13943, 17 August 1998, quoted in para [40] of the judgment in
Union of Refugee Women v Director: Security Industry Authority
2007 (4) SA 395
(CC).)
[7]
The respondent (which is called the “Authority” in the
Act) was established
as a juristic person in terms of s 2 of the
Act. Its objects are stated in s 3 of the Act. They
include the promotion
of a legitimate private security industry which
acts in terms of principles contained in the Constitution and other
applicable
law. The respondent is to ensure that security
service providers “act in the public and national interest in
the rendering of security services”. It must “promote
a private security industry which is characterized by
professionalism,
transparency, accountability, equity and
accessibility”. It must “promote and encourage
trustworthiness of security
service providers”. It must
“determine and enforce minimum standards of occupational
conduct in respect of security
providers”. The respondent
must also “ensure that compliance with existing legislation by
security service providers
is being promoted and controlled through a
process of active monitoring and investigation of the affairs of
security service providers”.
In mentioning these objects,
I have selected those from the list of objects in s 3 of the Act
which appear to me to be the most
material ones in light of the facts
which need to be considered in this case.
[8]
In terms of s 28 of the Act the Minister for Safety and Security must
prescribe a
code of conduct for security service providers. It
is binding on all security service providers. Sub-section
28(3)(a)
of the Act is to the effect that the code of conduct must
contains rules:
‘
that
security service providers must obey in order to promote, achieve and
maintain-
(i)
a
trustworthy and professional private security industry which acts in
terms of the law applicable to the members of the industry;
(ii)
compliance
by security service providers with a set of minimum standards of
conduct which is necessary to realise the objects of
the Authority;
and
(iii)
compliance
by security service providers with their obligations towards the
State, the Authority, consumers of security services,
the public and
the private security industry in general’.
[9]
The code of conduct was published in February 2003 and amended in
June 2016.
The code of conduct is a comprehensive document
which seeks to cover every facet of the security industry. In
particular,
it recognises the pressing need for regulation of the
industry which is the subject of the passages from the judgments
referred
to earlier. In the present context I think it
necessary to draw specific attention only to clauses 8(2)(b), (3) and
(4) of
the code, clause 8 being headed “General Obligations
towards the Public and the Private Security Industry”.
‘
8.
(2)
A security service provider may not infringe any right of a person as
provided for
in the Bill of Rights and, without derogating from the
generality of the foregoing-
(a)
…
(b)
may
not break open or enter premises, conduct a search, seize property,
arrest, detain, restrain, interrogate, delay, threaten,
injure or
cause the death of any person, demand information or documentation
from any person, or infringe the privacy of the communications
of any
person, unless such conduct is reasonably necessary in the
circumstances and is permitted in terms of law.
(3)
Every security service provider must endeavour to prevent crime,
effectively protect
persons and property and to refrain from
conducting himself or herself in a manner which will or may in any
manner whatsoever further
or encourage the commission of an offence
or which may unlawfully engage the safety or security of any person
or property.
(4)
A security service provider may only use force when the use of force
as well as the
nature and extent thereof is reasonably necessary in
the circumstances and is permitted in terms of law.’
[10]
Section 29 of the Act provides for what it calls “Improper
conduct proceedings” which
may be instituted by the respondent
against a service provider “on account of an allegation of
improper conduct”.
[11]
The Minister has, in terms of s 35 of the Act, made regulations
governing improper conduct proceedings.
[12]
Chapter 5 of the Act is headed “Monitoring and Investigation”
and it provides for
the appointment of inspectors. They are
entitled to “inspect” the affairs or any part of the
affairs of a security
service provider and make reports thereon.
They are given extensive investigatory powers.
[13]
Section 26 of the Act is headed “Suspension, withdrawal and
lapsing of registration”.
Sub-section 4 allows the
respondent to withdraw (i.e. cancel) the registration of a security
service provider inter alia on the
grounds that it is found guilty of
improper conduct. (In context what that means is that it is
found guilty in so-called
“improper conduct proceedings”
held under s 29 of the Act.) Sub-sections 26(1), (2) and (3) of
the Act deal with
the question of suspension which is at the centre
of the present proceedings. Those three sub-sections read as follows:
‘
(1)
If there is a
prima
facie
case of improper conduct in terms of this Act, or of the commission
of an offence referred to in the Schedule, against a security
service
provider, the Authority may suspend the registration of the security
service provider-
(a)
pending
the conclusion of an investigation or enquiry by the Authority into
the alleged improper conduct; or
(b)
pending
the conclusion of the criminal investigation by the State into the
offence in respect of that security service provider,
or a
determination by the prosecuting authority or the finalisation of
criminal proceedings in regard to the offence.
(2)
The Authority may suspend the registration of a security business if
any of the grounds
contemplated in subsection (1) pertain to a
natural person referred to in section 20 (2).
(3)
The effect of a suspension of registration is that the security
service provider whose
registration is suspended may not render any
security service, unless the prior written permission of the
Authority has been obtained,
but during the period of such suspension
the security service provider is still bound by all the obligations
of a registered security
service provider provided for in this Act
and in the Levies Act’.
[14]
In terms of s 1 of the Act a “security service provider”
means a person “who
renders a security service to another for a
remuneration, reward, fee or benefit” and the word “person”
is defined
to include a company. It is not disputed that the
first applicant is a security service provider.
[15]
Section 30 of the Act provides for appeals against decisions. A
person aggrieved by a suspension
of registration as a security
service provider may appeal against the decision to impose a
suspension. (Appeals against other
decisions are also
available, including an appeal against a withdrawal of registration.)
THE
FACTS ON THE FOUNDING PAPERS
[16]
For an initial foray into the facts of this case I turn to the
founding affidavit of the second
applicant. No authority is
required for the proposition that it is required to state the grounds
upon which relief is sought,
and consequently the case which the
respondent is called upon to answer.
[17]
Aside from drawing attention to the fact that it has some 6000
clients and some 400 employees,
the founding affidavit commences its
account of the facts by referring to two letters dated 23 April 2019,
one of which was addressed
to the first applicant and the other to
the second applicant. (For some reason the one was received on
30 April 2019 and
the other on 2 May 2019.) The letter to the
first applicant drew attention to a case in which a number of its
employees had
allegedly assaulted a member of the public, resulting
in an investigation by the South African Police Services. It
stated
that the matter was being investigated also by the respondent,
which regarded the allegations as disturbing, and in breach of the
minimum standards of conduct required of the first applicant.
The letter then referred to relevant provisions of the code
of
conduct and stated that consequent upon all these matters the
respondent had initiated an investigation relating to improper
conduct against the first applicant. The letter then drew the
attention of the first applicant to s 26(1) of the Act and
offered
the applicant an opportunity to submit what it called “written
replication” within seven days, stating why
the registration of
the first applicant should not be suspended. The case number of
the criminal investigation relating to
the complaint in question was
stated in the letter.
[18]
The second letter, the one addressed to the second applicant, was in
similar vein. It also
referred to the case number and stated
that the second applicant was subject to “criminal
investigation for assault with
intent to cause grievous bodily
harm”. The second applicant was likewise afforded an
opportunity to state why his registration
should not be suspended.
[19]
The applicants’ attorneys responded to the letter addressed to
the first applicant, stating
that it regarded the letter as vague,
and that the first applicant required further details “to
support the allegations”
before responding. The same
attorneys later responded to the letter addressed to the second
applicant by stating that he
had no knowledge of any criminal
investigation under the case number and required information relating
thereto in order to make
a response.
[20]
In response to the request for further information made on behalf of
the first applicant, the
respondent sent a letter dated 10 May 2019.
It named six employees of the first applicant who were subject to
investigation
on the allegation of assault with intent to do grievous
bodily harm under the case number referred to in the letters of 23
April
2019. It drew attention to the fact that five of those
six employees were also subject to investigation in other cases with
regard to which the case numbers were furnished in each instance.
There is no need in this judgment to name the employees,
and I simply
list the additional allegations then being investigated. In the
case of the first of the five it is a matter
of attempted murder.
In the case of the second it is attempted murder and compelled rape.
In the case of the third
it is attempted murder. In the case of
the fourth it is murder. In the case of the fifth employee the
additional criminal
investigation is on a complaint of assault.
In addition to the aforegoing the letter drew attention to the fact
that another
two employees were at the time under investigation by
the respondent on complaints of intimidation.
[21]
The founding affidavit goes on to state that the first applicant’s
attorneys then responded
by letter dated 14 May 2019. Regarding
the assaults with intent to cause grievous bodily harm which were
mentioned in the
letter dated 23 April 2019, the letter recorded that
none of those allegedly involved had been charged as yet, and that
they denied
the charges, their contention being that members of the
public had assaulted the complainant. These statements were
preceded
by the observation that “there is no evidence or proof
before any court of law …” with respect to the charges.
In relation to the other matters the letter stated consistently that
guilt is denied by the employees concerned and that none of
the
employees had yet been charged. The tone of the letter appears
to me to be consistent with the tone of the founding affidavit,
and
is reflected in these two statements made in the letter:
(a)
‘
Our
client Reaction Unit SA, maintains the stance all accused members are
innocent until proven guilty by a court of law’.
(b)
‘
The
alleged complaints against the employees of our client have yet to be
proven and all persons are innocent until proven guilty’.
The
letter contained no denial of the fact that the complaints being
investigated were with regard to the alleged conduct of the
first
applicant’s employees in the course and scope of their
employment. The letter implies that the first applicant
(and
obviously the second as its directing mind) adopts the view that the
respondent is powerless to act in terms of the statutory
provisions
already referred to when the breaches of the code are so serious that
they involve criminal conduct of the kind just
described, unless the
first applicant’s employees have been convicted by a court of
law.
[22]
The founding affidavit then speaks to a letter dated 17 May 2019
which the second applicant received
from the respondent drawing the
former’s attention to a charge dating from 2010 that he was
involved in the unlawful selling
or supply of a firearm or
ammunition. His attorney replied stating that the charge had been
withdrawn. This statement was
repeated by the second applicant
in the founding affidavit where he said that the charge had been
withdrawn shortly after it had
been laid. (There is a dispute
about this. According to the respondent’s research the
charge was withdrawn in
June 2018 and was due to be reinstated in
June 2019.)
[23]
The founding affidavit then records the receipt of the letters dated
10 June 2019 conveying the
suspensions which are the subject of the
application. Subject to one qualification, which I will mention
shortly, the so-called
grounds upon which the applicants seek an
order in effect setting aside the suspension of registration imposed
by the respondent
are then contained in two paragraphs of the
founding affidavit. They read as follows:
‘
19.
In
my respectful submission, it is clear from the aforegoing that the
respondent has grossly and gravely misdirected itself in suspending
the first applicant and I from rendering such security services.
The rendering of such security services is our livelihood
and through
it, some four hundred of our employees generate their sole sources of
income and without which they and members of
their families would be
destitute. In addition, such suspension will force upon the
first applicant and I the closure of
our security business.
20.
The
relief that we seek is simply to allow the first applicant to
continue trading in the security service sphere and for me to
continue providing security services, pending the outcome of an
internal appeal and failing which, a review to this Honourable
Court’.
[24]
The relief sought, that the court should interfere with the
suspension rulings made by the respondent,
is sought in the first
instance pending the appeal. Any lingering doubt which may
remain after a reading of the founding
affidavit, about the basis
upon which the applicants contend that the respondent got it wrong
when it suspended the applicants,
is extinguished by the notice of
appeal which the applicants delivered on the same day as this court
granted the Rule Nisi with
interim relief. In the case of the second
applicant, notwithstanding the fact that he was the sole director and
therefore the guiding
mind of the first applicant, the notice is
restricted to the proposition that the charge relating to the supply
of firearms was
withdrawn. In the case of the first applicant
and its various employees whose registrations were also suspended
(which employees
are not party to this litigation) it is said that
the respondent’s reliance on the criminal investigations
against them is
“misplaced and unfounded as in terms of South
African law, a person is presumed to be innocent until proven
guilty”.
It is also said that the respondent misdirected
itself in the case of some of those employees by not taking into
account that there
had been a lapse of about a year since the alleged
crimes were committed, and they were not yet charged.
[25]
It has not been argued before me, nor could it have been argued, that
conduct on the part of
security personnel of the type which is the
subject of the complaints being investigated by the police (and the
respondent) would
not constitute serious breaches of the code of
conduct applicable in the security industry. Neither was it
argued, upon the
assumption that the allegations against the
particular security personnel were true, that the first applicant as
employer was not
itself affected by the breaches of the code.
The complaints in question are of a type which might be expected to
be made
against an employer in the security industry which fails in
its duty properly to regulate the conduct of its employees. It
is conduct of this type which generates what Maya JA called the
“legitimate and compelling public interest in the control
of
the large and enormously powerful private security industry.”
(See
Anglo Platinum
Management
quoted in para 5
above.)
[26]
The issue of what might be called the standard proof in the
anticipated improper conduct proceedings
against the applicants is
not an issue before me. I simply make the observation, lest my
views should be misunderstood, that
if factual findings can only be
made in improper conduct proceedings upon the basis that they be
proved beyond a reasonable doubt,
then the laudable aims of the
legislation spoken to by the Supreme Court Appeal and the
Constitutional Court would be substantially
undermined.
[27]
The standard this case is concerned with is the one set by s 26 of
the Act, which empowers the
respondent to suspend the registration of
security service providers if, in the view of the respondent, there
is a
prima facie
case of improper conduct. In the pending appeal, the appeal
body will not concern itself with the question as to whether
the
conduct complained of has been proved beyond a reasonable doubt.
[28]
I mentioned earlier that there is one other feature of the founding
affidavit which is obviously
mentioned in the hope that it could
constitute a ground for relief. It is stated in the founding
affidavit that on 11 June
2019 (the day the applicants received the
letters advising them of the suspensions of registration) an employee
of the first applicant
received a telephone call from a female who
claimed to be from the respondent and who said that upon payment of
R500 000,
the first applicant’s suspension would be
withdrawn and all the first applicant’s problems would “go
away”.
That this happened at the instance of the respondent (if
it happened at all) is denied by the respondent. And the
respondent
points out that if one has regard to the record of the
investigations of the first applicant and its employees, and its
prominence
in the respondent’s offices, the notion that anyone
taking a bribe could put a stop to everything is absurd. That
alleged
ground of relief was not argued, and I do not propose to deal
with it any further.
THE
APPLICABLE TEST AND PRELIMINARY EVALUATION
[29]
The Rule Nisi issued in this case calls upon the respondent to show
cause why its decisions as
to the suspension of the two registrations
should not be operative not only pending the administrative appeal,
but also pending
any subsequent review if the appeal should be
unsuccessful. There are presently no review proceedings
underway. It
is uncertain that such proceedings will be
instituted. It is accordingly not possible to make any
assessment of what qualities
the proceedings may have. For
these reasons counsel who appeared for the applicants conceded that
if the Rule Nisi is to
be confirmed, its provisions can only operate
pending the decision in the appeal.
[30]
It is a peculiar feature of this case that we are dealing with the
conduct of an administrative
body which is empowered not only to make
the final decisions required of it by the regulatory structure within
which it operates,
but also to deal with what we would ordinarily
term “interim relief”. The court is asked to
override the
decision of the respondent by granting permission to the
applicants to continue as registered providers of security services
pending
the administrative appeal. It strikes me as arguable that the
fact that the applicants seek their relief pending the appeal,
instead
of pending the conclusion of the misconduct proceedings, does
not necessarily make this a case to be judged according to the test
for the grant or refusal of interim interdicts. It is not the
case of the applicants that the respondent erred by not awaiting
the
outcome of the appeal before suspending the registrations of the
applicants. On the founding papers, the case for the
applicants
(to the extent that one is made) is that the suspension order (which
operates well beyond the appeal decision, assuming
the appeal goes
against the applicants) was reviewable when it was made. On
that footing it appears to me to be arguable
that what is sought is
final relief, despite the fact that the applicants ask the court to
confine its interference with the administrative
decision of the
respondent for only part of the period during which that decision was
to operate. It will be apparent from
the observations already
made that in my view the founding papers failed dismally to make out
a case for final relief. However,
I propose to say no more
about this aspect of the matter as counsel for the respondent was
content to argue on the basis that this
application may be treated as
one in which the applicants seek an interim interdict.
[31]
The applicants seek a temporary restraining order against the
exercise of statutory power.
Counsel for the respondent argued
that the test to be applied in such a case is that set out in paras
41 to 47 of the judgment
in
National Treasury & others v
Opposition to Urban Tolling Alliance & others
2012 (11) BCLR
1148
(CC). The essential elements of the treatment of the issue
in that case may be summarised as follows:
(a)
The test set out in
Setlogelo v Setlogelo
1914 AD 221
, subject
to its
adaptation by case law, remains a
“handy and ready guide”.
(b)
The two adaptations specially
mentioned in
National
Treasury
are the refinement
of the test in
Webster v
Mitchell
1948 (1) SA 1186
(W) and the decision in
Gool
v Minister of Justice & another
1955 (2) SA 682
(C).
(c)
Gool’s
case
established the common law position: - “…courts grant
temporary restraining orders against the exercise of statutory
power
only in exceptional cases and when a strong case for that relief has
been made out.”
(d)
The Constitution imposes an
added restraint, under the doctrine of separation of powers, that the
court should consider carefully
“whether and to which extent
the restraining order will probably intrude into the exclusive
terrain of another branch of
Government”; (i.e. “separation
of powers harm”).
(e)
If the right sought to be
enforced is derived from the Constitution an inquiry into its
existence is redundant; but when considering
the balance of
convenience the court must consider the “probable impact of the
restraining order on the constitutional and
statutory powers and
duties of the state functionary or organ of State against which the
interim order is sought.”
(f)
The court will temporarily
restrain the exercise of statutory powers only in the clearest of
cases.
[32]
It is worth observing that the test stated in
National
Treasury
is consistent with
the judgment of Kotze JA in
Airoadexpress
(Pty) Ltd v Chairman, Local Road Transportation Board, Durban, and
Others
,
[1986] ZASCA 6
;
1986 (2) SA 663
(A). This case concerns principles which were considered in
Airoadexpress
,
where (at 676 A-D) it was held that the court could intervene where
“a strong
prima facie
case is established” and where exceptional circumstances are
present.
[33]
The context in this case is quite different to the one under
consideration in
National
Treasury
. The respondent is
ultimately an administrative functionary. It takes administrative
decisions and the implementation of them is
likewise administrative
action. That is not in dispute. The provisions of the
Promotion of Administrative Justice Act
3 of 2000 (“PAJA”)
are engaged and its remedies available if the respondent deviates
from the standard set by PAJA
in taking administrative action.
[34]
At the same time the provisions of s 26 of the Act are concerned with
the performance of a statutory
duty. The word “may”
signifies that the respondent is given a discretionary power to
suspend registration. But
it appears to me that the power given
is one coupled with a duty to exercise it if the decision of the
respondent is that the circumstances
at hand require a suspension of
registration. Allowing a provider of security services to
continue unchecked despite the
fact that the respondent has
determined that a suspension of registration is required would
constitute a dereliction of the respondent’s
duty. I have
already dealt with the way in which our courts have described the
performance of the respondent’s duties
as one fundamentally
necessary and important in our society, and within the framework of
the constitutional rights to be enjoyed
by all. Failure in the
performance of the respondent’s duties is self-evidently of
more significance, and is likely
to be more detrimental to our
society, than shortcomings in the performance of other more prosaic
administrative functions.
[35]
Nevertheless, I take the view that the present matter, when compared
to the facts and circumstances
under consideration in
National
Treasury
, is not one which brings “separation of powers
harm” to the fore. Professor Cora Hoexter (
Administrative
Law in South Africa
2 ed (2012) at 148) makes the point that:
‘
The
discourse of deference is ineluctably bound up with the separation of
powers and the area of competence associated with each
of the three
branches of government.’ (Footnote omitted.)
In
my view a court confronted with a case like the present must consider
judicial deference, and must bring to account the fact
that it is
asked to countermand the performance of a statutory duty by a State
functionary. These considerations have a bearing
both on the
merits of the case made by the applicants, and on an assessment of
what in this case should properly be called the
balance of harm (as
opposed to the balance of convenience).
[36]
Given the dearth of allegations in the founding papers supporting a
claim that the applicants’
rights to just administrative action
under s 33 of the Constitution have been offended by the respondent,
and the emphasis placed
in the founding papers on the fact that the
suspensions of registration interfere with the applicants’
right to trade, one
might think that the applicants’ case
engages rights under s 22 of the Constitution which reads as follows:
‘
Every
citizen has the right to choose their trade, occupation or profession
freely. The practice of a trade, occupation or
profession may
be regulated by law.’
I
do not propose to dwell on this for a number reasons. It is
questionable as to whether the right in question is given to
a
company. The right is given subject to regulation by law. (See
generally
Mukaddam &
others v Pioneer Foods (Pty) Ltd & others
2013
(2) SA 254
(SCA) paras 7 and 8 and para 72 of the judgment of the
Constitutional Court in the same matter: -
2013 (5) SA 89
(CC); and
Law Society of the Transvaal
v Machaka & others
(No.
2)
1998 (4) SA 413
(T) at 416C.) The regulatory provisions of
the Act, and in particular s 26 of the Act, have not been challenged
as to their
constitutional validity. Whilst interference with
trade is raised in the founding affidavit, s 22 of the Constitution
is
not.
[37]
However the point is properly and well made by the applicants that
the suspension of the registration
of especially the first applicant
causes considerable harm. It may be that, given the time of its
endurance, it will bring
about the demise of the first applicant.
In the case of the second applicant, (and the other security
personnel who were
also suspended, but who do not feature in this
litigation) rights to be gainfully employed in the security industry
are suspended.
The applicants point to the 400 jobs said to be
at stake during the suspension of the first applicant, and the
security interests
of the first applicant’s approximately 6000
customers or clients. Whilst these latter interests cannot be
put aside
as insignificant, there is no evidence at all that the
security industry does not have the capacity to take up the slack
generated
by the suspension of the first applicant by servicing any
client of the first applicant who may seek assistance elsewhere;
which
in turn suggests that work would be available for trained
security guards in that area.
[38]
Whilst s 26 of the Act empowers the respondent to suspend the
registration of a security service
provider if there is a
prima
facie
case of improper conduct, the existence of the
prima
facie
case is not sufficient on its own to justify suspension.
In my view it is undoubtedly implicit in the provision that in
deciding
whether it is appropriate to impose the sanction of
suspension, the respondent must:
(a)
consider whether it is reasonably necessary for the performance of
its functions and the
achievements of its objects that a suspension
should be imposed; and if it should decide that question in the
affirmative
(b)
balance the harm it seeks to avert against the harm that will befall
the service provider
if a suspension is imposed.
In
doing so, however, it should not overlook that it is the respondent’s
statutory duty to ensure that security officers are
“subject to
proper disciplinary and regulatory standards”; to see to the
avoidance of “any abuses which might
be perpetrated by security
officers against the vulnerable public” (
Anglo Platinum
Management,
supra, para 24); and to see to close control and
management of the industry and the adherence of the industry to
appropriate standards
(
Bertie Van Zyl,
supra, para 35).
THE
ANSWERING AND REPLYING AFFIDAVITS
[39]
I turn to what emerges from the answering and replying affidavits,
following the approach set
out in
Webster
v Mitchell
supra.
[40]
The respondent’s answering affidavit reveals that a Mr Sarel
Botha was appointed as the
lead investigator into complaints received
regarding the conduct of the first applicant and its employees. His
investigation commenced
in March 2019 when he was informed of three
criminal investigations against the first applicant and some of its
employees.
The founding papers, without saying as much, create
the impression that the first request for an explanation for the
conduct of
the applicants’ business was by way of the letters
of 23 April 2019 referred to earlier. However, a report by Mr
Botha
reveals that during his inspection on 12 March 2019 “the
company was requested to provide detailed reports in respect of the
various incidents and allegations against the security officers in
its employ”. Later in the same report it is recorded
that
the company was required to give a written reply in order to justify
its alleged involvement in a shooting incident at Phoenix
Industrial
Park, the matter of a rape suspect in Tongaat, an assault at Mount
Edgecombe, a shooting at Eastbury, and a complaint
of sexual assault
at Phoenix Industrial Park. There is no record of a response.
The first applicant’s receipt
of the report was acknowledged by
a signature placed on the document on its behalf.
[41]
In conducting his investigations Mr Botha liaised with various
offices of the South African Police.
In April 2019 he became
aware of two complaints of attempted murder and one of murder and
SAPS revealed complaints of compelled
rape and armed robbery, one of
common assault, and one of assault with intent to do grievous bodily
harm. The investigations
in April followed a meeting of the
respondent’s regulatory sub-committee on 27 March where the
question was raised as to
whether the first applicant was managing
its employees correctly. The committee resolved that further
investigation should
be conducted. On 18 April 2019 the
committee resolved to issue what the minutes called “intention
to suspend”
letters. Investigations in May revealed two
further cases of assault being investigated by the police, one of
which was with
intent to cause grievous bodily harm. It appears
that at about this time the allegation against the second applicant
dating
from 2010, concerning the illegal supply or possession of
firearms, was revealed, and Mr Botha came under the impression that
the
charge would be resubmitted during June 2019.
[42]
On 15 May 2019 the committee met again and requested Mr Botha’s
task team to confirm what
progress had been made in the criminal
matters. A decision on suspension was put off pending that
report. A similar
decision was made on 22 May 2019, presumably
because Mr Botha’s report was not yet complete.
[43]
In the last week of May criminal complaints which appear to have been
connected to the employment
by the first applicant of unregistered
security officers were laid against a number of persons. The
decision to suspend registrations
was then made on 7 June 2019.
[44]
In its answering affidavit the respondent disclosed that it was
unable in these proceedings to
disclose all of the product of its
investigation and all the evidence that it gathered. The
deponent explained that a number
of matters due to be dealt with in
the improper conduct proceedings overlap with pending criminal
investigations. The affidavit
continued as follows:
‘
The
respondent holds the well-founded apprehension that the publication
of the identities of certain witnesses and detailed reference
to
evidence at this stage where the investigation has not yet been
brought to finality, will endanger the lives of the relevant
witnesses, subject them to possible intimidation (which forms part of
the complaints directed at the first applicant and its employees)
and
the possibility of destruction of evidence.’
[45]
The respondent has put up copies of extracts from the Facebook page
of the first applicant.
These extracts include photographs of
persons who have been arrested, an example being one of a man lying
on the ground, bloodied
and handcuffed. They were undoubtedly
loaded onto the page in order to illustrate what the first applicant
presumably regards
as the successful execution of its functions.
Most of the comments generated on the Facebook page emanate from
members of
the community who take a view of the security industry
which is somewhat different to what the Act and the Constitution
embrace.
Some comments are frankly disgusting. Examples
mentioned in the answering affidavit go as follows:
‘
Shoot
him again. We won’t tell anyone.’ and ‘pity
the community didn’t kill them’ and
‘Reaction Unit
South Africa, please advise why his face has not been rearranged’.
[46]
The deponent to the answering affidavit points out that the Facebook
profile is a public forum.
There is no evidence of the first
applicant or its management (and the second applicant must occupy the
top of the list of its
management) distancing themselves from the
content of the page. The fact that comments of the type
mentioned above were not
taken down supports the conclusion that the
first applicant sanctioned what the deponent calls “the level
of incitement caused
by the publications”.
[47]
I do not propose to dwell on the replying affidavits. The responses
to the allegations of misconduct
set out in the answering affidavit
are very much of the “he said, she said” variety.
What these responses have
to commend them is the fact that in some
respects, but not necessarily in all, they constitute an attempt to
disclose what the
applicants contend to be the true position
regarding the matters under investigation by the South African Police
and the respondent.
Equally, however, those responses stand as
testimony to the fact that until the replying affidavit was
delivered, the accounts
of the various events giving rise to the
complaints were withheld from the respondent, which was treated with
apparent disdain.
The applicants disregarded their duties under the
regulatory regime which governs them.
[48]
As counsel for the respondent has pointed out, the right of appeal
which is being exercised by
the applicants is an appeal in the wide
sense of the word. It is not for this court to decide whether
the material concerning
the complaints offered in the replying
affidavit negates the conclusion the respondent reached in June 2019
that there was a
prima facie
case of breaches of the code of
conduct which justified the suspension of the registrations of the
applicants. That is a
matter for the Appeal Tribunal appointed
under the Act.
[49]
This court must take into account the provisions of clause 6(1) of
the code of conduct which
reads as follows:
‘
A
security service provider must, within his or her ability, render all
reasonable assistance to and co-operate with the Authority
to enable
the Authority to perform any function which it may lawfully perform.’
For
reasons which are apparent from what I have already said, I take the
view that on these papers the applicants were in flagrant
disregard
of their obligations under clause 6(1) of the code of conduct prior
to the decision by the respondent to suspend the
registrations of the
applicants. The first applicant was asked as early as March
2019, some three months before the decision
to suspend was made, for
written explanations concerning five of the complaints. None
was forthcoming.
[50]
The replying affidavit purports to introduce grounds of review which
were not advanced in the
founding affidavit. They have
accordingly not been dealt with by the respondent. It is said
that the decisions to suspend
registrations were unreasonable,
irrational, arbitrary, and taken without due regard to the
audi
alterem partem
rule.
It is however implicit in the respondent’s answering affidavit
that it contends that its decisions to suspend
the registrations were
not characterised by any such deviations from the requirements of
just administrative action.
[51]
I propose to pay no heed to generalised and speculative allegations
in the replying affidavit,
such as the contention that the
respondent’s decisions to suspend were motivated by outside
forces, and in particular by
a certain person previously employed by
the respondent, who is exerting undue influence on the respondent to
close down the first
applicant’s business.
CONCLUSION
[52]
I have already made some comments concerning the balance of harm,
with specific reference to
the position of the applicants. As
the regulatory authority the respondent is obviously fully aware of
the implications of
suspending the registration especially of a
company like the first applicant. The respondent’s
minutes’ reveal
that it did not act precipitously; the matter
served before the respondent over a period of some two and a half
months, and it
insisted on the investigations being completed before
it took the decision to suspend the registrations. The
respondent has
pointed out that the applicants concede that the first
applicant faces competition, and that there is no reason to suppose
that
the suspension of the applicants would deprive the community of
security services.
[53]
In my view the submissions made by the applicants about the harm or
prejudice they face as a
result of the suspensions overlooks the fact
that a security business (which would ordinarily, like the first
applicant, be a company)
cannot claim on those grounds to be immune
from the regulatory regime, and especially, in this case, the
provisions for interim
suspension set out in s 26 of the Act. A
company such as the first applicant is responsible for the conduct of
its employees
in the course and scope of their employment. It
has an obligation both to train and discipline its employees so that
the
conduct of its security business is in accordance with the Act
and the code of conduct. It cannot claim immunity, either for
itself or for its employees, when it falls short of the required
standard. The issue as to whether specific complaints evidence
a failure by the applicants to meet the obligations of an employer in
the security industry is one for the respondent, in which
the
expertise generated by experience in the field resides, and to which
the legislature has allocated the decision making power.
On the
papers before me I cannot fault the respondent’s decision.
A consideration of the harm caused to the applicants
by the
respondent’s decision must to some extent be tempered by the
observation that, on these papers, the decision was generated
not
only by the complaints made with regard to criminal conduct, but also
through the somewhat cavalier attitude adopted by the
applicants to
their obligations under the Act and the code of conduct.
[54]
The importance of regulation of the security industry has already
been mentioned earlier in this
judgment. What this case
illustrates is that the task is not only important but also
difficult. It is not for courts
of law to make it even more
difficult by simply second guessing the decisions made by the
respondent. In my view the founding
papers in this matter
invited the court to do just that. Having considered the
answering and the replying affidavits I remain
of the view that this
is not a case in which the court should countermand the decisions
made by the regulatory authority.
That is to be done only in
the clearest of cases, and this is not one of them.
[55]
The answering affidavit reveals that the decision of the respondent
was to suspend the applicants
registration pending the conclusion of
the improper conduct proceedings. The letters to the applicants
of 10 June convey
that the suspensions would also last until the
conclusion of the criminal proceedings (see s 26(1)(b) of the Act), a
period which
might be considerably longer. In my view the error
in the letters should be formally corrected.
[56]
Finally I turn to something not yet mentioned, namely a conditional
counter-application made
by the respondent. In the
counter-application the respondent seeks an order that the applicants
be interdicted and restrained
from performing any security services
pending finalisation of the code of conduct inquiry, and asks for
that order conditionally
upon the dismissal of the main application
and:
‘
a
finding that the applicants notice dated 13 June 2019, to appeal the
respondent’s decision to suspend the applicants pending
finalisation of the code of conduct inquiry to be instituted, is
automatically suspended against the noting of such appeal’.
[57]
In its replying affidavit the applicants asked for the conditional
counter-application to be
dismissed with costs “as it does not
make/establish a case for the relief sought therein”.
Unsurprisingly, I
heard no argument from the applicants’
counsel for the proposition that the noting of the applicants’
administrative
appeal automatically suspended the respondent’s
decision to suspend the registration of the applicants. It is
an implied
premise of the main application that there is no such
automatic suspension, as the main application would have been quite
unnecessary
if there was.
[58]
On the respondent’s side the view was expressed that the
applicants were correct in proceeding
on the basis that their appeal
did not automatically suspend the respondent’s decisions.
I heard no argument from respondent’s
counsel to the effect
that the lodging of the appeal did automatically suspend the decision
of the respondent to suspend the registration
of the applicants.
[59]
As I have heard no argument on the central premise of the
counter-application I propose to make
no order on it. The costs
occasioned by it are minuscule in the context of the entire case.
ORDER
I
make the following orders:
1.
The Rule Nisi granted by this court on 24 June 2019 is discharged.
2.
The costs of the application, excluding only those incurred by the
drafting,
delivery and consideration of the notice of
counter-application, shall be paid by the applicants, their liability
being joint and
several, the one paying the other to be absolved.
3.
(a) There shall be no order on
the counter-application.
(b)
The costs incurred in the drawing, delivery and consideration of the
notice of counter-application
shall be paid by the respondent.
______________
Olsen J
Date of Hearing:
MONDAY, 22 JULY 2019
Date
of Judgment:
FRIDAY, 06 SEPTEMBER 2019
For
the Applicants:
Ms A Gabriel SC with Mr MC Tucker
Instructed
by:
Godfrey and Associates
Applicants’
Attorneys
Suite 6, Bagman
Centre
301 Main Road
Tongaat…KZN
(Ref.: Mr GN
Pillay/JN/R462)
(Tel.: 032 –
945 3000)
Email:
godfrey6@mweb.co.za
godconv@mweb.co.za
For
the Respondent:
Ms A Annandale SC with Mr De Beer
Instructed
by:
Edward Nathan Sonnenbergs
Inc.
Respondent’s
Attorneys
The Marc, Tower 1
129 Rivonia Road
Sandton
(Ref.: D
Lambert/W Ndabambi)
(Tel.: 011 –
269 7600)
c/o
ENSafrica, Durban
1 Richefond Circle
Ridgeside Office
Park
Umhlanga
Durban
(Tel.: 031 –
536 8600)
(Ref.: Mr A
Lombard / 0460356)