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[2017] ZALMPPHC 39
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Meridian Operations Company NPC and Others v MEC for Limpopo Department of Education and Another (4582/2016) [2017] ZALMPPHC 39 (27 November 2017)
REPUBLIC
OF SOUTH AFRICA
IN
THE HIGH COURT OF SOUTH AFRICA
(LIMPOPO
DIVISION, POLOKWANE)
CASE
NO: 4582/2016
Reportable
Of
interest to other judges
Revised.
27/11/2017
In
the matter between:
MERIDIAN
OPERATIONS COMPANY NPC
FIRST
APPLICANT
MERIDIAN
COLLEGE POLOKWANE
SECOND
APPLICANT
NORTHERN
ACADEMY PRIMARY SCHOOL
THIRD
APPLICANT
NORTHERN
ACADEMY SECONDARY SCHOOL
FOURTH
APPLICANT
and
THE
MEC FOR LIMPOPO DEPARTMENT
FIRST
RESPONDENT
OF
EDUCATION
THE
HEAD OF THE LIMPOPO DEPARTMENT
SECOND
RESPONDENT
OF
EDUCATION
JUDGMENT
MAKGOBA
JP
[1]
This is a review application in terms of the provisions of the
Promotion of Administrative Justice Act 3 of 2000 (“PAJA”).
The application concerns two reliefs sought by the Applicants.
[2]
First, the review and setting aside of the decision that was taken by
the First Respondent on or about 6 April 2016 to dismiss
the appeal
that had been made to him by the Second, Third and Fourth Applicants
in terms of
section 48(5)
of the
South African Schools Act 84 of 1996
and the substitution thereof with a decision that the appeal is
upheld.
[3]
Second, and consequent upon a demand for payment being made by the
Limpopo Department of Education, the issue of a declaratory
order
that the second, third and fourth Applicants are not liable to repay
the subsidies that were paid to them by the Limpopo
Department of
Education in terms of
section 48
of the
South African Schools Act 84
of 1996
in respect of the period 15 July 2013 to 14 February 2014 in
the amounts of R 543 028.74, R 973 440.00 and R
1 311 840.00
respectively.
[4]
The First Applicant, Meridian Operations Company NPC, is a non-profit
company incorporated in terms of the Companies Act 71
of 2008 (“the
Companies Act&rdquo
;). The First Applicant is also a non-profit
organization duly registered with the Department of Social
Development in terms of
the Non-Profit Organisations Act 71 of 1997
(“the NPO Act”) with registration number 116-433NPO. The
First Applicant
owns the Second, Third and Fourth Applicants, the
three being independent schools duly registered as such with the
Second Respondent
in terms of section 46 of the South African Schools
Act 84 of 1996 (“the Schools Act”).
[5]
The Second, Third and Fourth Applicants were recipients of subsidies
from the Limpopo Department of Education (“the Department”)
in terms of section 48 of the Schools Act including the period 15
July 2013 to 14 February 2014. The three Applicants were the
Appellants in an appeal that was made to the First Respondent in
terms of section 48(5) of the Schools Act. Their unsuccessful
appeal
is the subject matter of the present review application.
[6]
According to the Norms and Standards for School Funding published in
GN 869 of 31 August 2006 (“the Norms and Standards”)
the
conditions for eligibility for an independent school to be considered
for subsidy are that the independent school concerned
(a)
is registered by the Provincial Education Department (PED);
(b)
has made an application to the PED in the prescribed manner;
(c)
has been operational for one full school year;
(d)
is a registered non-profit organisation in terms of the Non-Profit
Organisations
Act 71 of 1997;
(e)
is managed successfully according to a management checklist
determined
by the PED;
(f)
agrees to unannounced inspection visits by officials of the PED or
person
duly authorised by the PED and
(g)
has not been established in direct competition with a nearby
uncrowded
public school of equivalent quality.
Factual
Matrix
[7]
The only condition that is presently of moment in the present review
application is condition (d), which concerns the NPO Act.
[8]
On 22 November 2012 the First Applicant (Meridian Operations Company
NPC) purchased the school business comprising of the Third
and Fourth
Applicants as going concern. A company known as Capmac (then known as
Business Venture Investments NO 1606 (Pty) Ltd)
purchased the
immovable properties together with the buildings thereon at which the
schools were operated. A company called Curro
Holdings Ltd (“Curro”)
held 65% of the shares of Capmac. The remaining 35% of the shares in
Capmac was held by the
Schools and Education Investment Impact Fund
(“SEIIF”) and Old Mutual Life Assurance Company South
Africa (“OMLASCA”).
[9]
A management agreement was concluded between the First Applicant,
Capmac, SEIIF and Curro. This agreement provided
inter
alia
that
the schools owned by the First Applicant would provide tuition to
learners at the schools in question and accommodation to
learners at
Capmac boarding houses. Capmac would, with the consent of the
schools, appoint Curro in terms of Management Agreement
to manage the
schools businesses and affairs. In terms of the said agreement Curro,
SEIIF and OMLACSA had become the sole shareholders
of Capmac.
[10]
A facilities Provision Agreement was concluded between Capmac and the
First Applicant. This agreement regulated the allocation
of school
fees paid by parents of learners who attended the schools in
question.
It
is mentioned that the funding of the schools consists of the school
fees paid by learners and the subsidy which should be received
from
the Department. The agreement provided that school fees income was
split so that 40% of the fees were apportioned to Capmac
in respect
of the provision of its services and the making available of movable
and immovable assets in order to conduct the schooling
activities,
and 60% of the fees were apportioned to the school. The income
received by the school was utilized for payment of the
teachers’
remuneration, operational expenses and to pay management fees to
Curro. It is mentioned that 80% of the total management
fees charged
by Curro are paid by Capmac and the balance of 20% by the schools in
question.
[11]
Accordingly, by way of the aforesaid agreements, the First Applicant
became the owner of the schools business comprising of
the Second,
Third and Fourth Applicants and Capmac became the owner of the
immovable properties together with the buildings thereon
at which the
schools are operated. The aforesaid agreements make it apparent that
Curro’s relation to the school business
comprising of the
Second, Third and Fourth Applicants is limited to the provision of
management services to the schools in question,
for which it is paid
a management fee by the First Applicant, and that Curro does not own
the schools in question.
[12]
On 7 June 2013 and after the First Applicant purchased the Second,
Third and Fourth Applicants, Curro informed the Department
in writing
that Curro had purchased same. The Applicants contend that such
information communicated to the Department was incorrect
and that the
error occurred because the author of the aforesaid letter did not
properly understand the correct relationship between
Curro, Capmac
and the First Applicant, as well as the other three Applicants.
[13]
On 15 April 2014 the Department sent a copy of an internal memorandum
to the Applicants recording that the schools in question
had been
bought by Curro in 2012; that Curro was a profit making organisation
which was listed on the Johannesburg Stock Exchange
(“JSE”)
and that a query was raised regarding the payment of subsidies in
terms of section 48 of the Schools Act to
unqualified schools. The
memorandum recommended that the payment of the subsidies be placed on
hold.
[14]
The aforesaid memorandum was followed by a letter dated 17 April 2014
from the Department. In this letter the Department recorded
that the
schools in question had been purchased by Curro; that Curro was
listed on the JSE “as an education company”
and that the
schools in question did not qualify for subsidies in terms of section
48 of the Schools Act and / or section 176 of
the Norms and Standards
for subsidies in respect of the years 2013 and 2014. The Department
accordingly demanded repayment of the
subsidies that were paid to the
Second, Third and Fourth Applicants during 2013 and 2014 in the
amounts of R 543 028.74, R
973 440.00 and R 1 311 840.00
respectively.
[15]
In subsequent correspondence to the Department Curro made an attempt
to correct the said error and informed the Department
that the First
Applicant had in fact purchased the schools in question.
Representatives of Curro also met with representatives
of the
Department on 30 July 2014 and 9 October 2014 in an effort to explain
the true facts to the Department. Notwithstanding
the efforts by
Curro the Applicants received a letter from the Department dated 11
May 2015 conveying to the Applicants that consequent
upon finding
that the schools in question did not qualify for subsidies, the
subsidies were terminated.
[16]
The Applicants were dissatisfied with the finding that the schools in
question did not qualify for subsidies and the termination
of the
subsidies, and on 8 June 2015 the Second, Third and Fourth Applicants
lodged an appeal with the First Respondent in terms
of section 48 (5)
of the Schools Act.
[17]
On or about 6 April 2016 the Applicants’ attorneys received a
letter from the First Respondent advising that the Second,
Third and
Fourth Respondents’ appeal had been dismissed. The First
Respondent gave the following reasons for the dismissal
of the
appeal:
“
3.
The reason for the dismissal of the appeal is that Curro Holdings, a
company listed on the JSE owns Meridian College Polokwane,
Northern
Academy Primary and Northern Academy Secondary Schools.
4.
The three (3) schools mentioned herein were bought by Meridian
Company and Curro Holdings is the holding company of the Meridian
Company, Curro Holdings is listed on the JSE, therefore it does not
qualify for government subsidy”
[18]
The effect of the dismissal of the appeal by the First Respondent was
that the Second, Third and Fourth Applicants would no
longer receive
subsidies from the Department in terms of section 48 of the Schools
Act.
In
this review application the Applicants seek an order that the
impugned decision be reviewed and set aside, and be substituted
with
a decision that the appeal be upheld.
Grounds
of Review
[19]
The grounds of review upon which the Applicants rely regarding the
impugned decision are one, more or all of the following:
19.1.
The impugned decision was taken upon one, more or all of the
following errors of fact, alternatively, errors of mixed
fact and
law, namely
19.1.1.
That the Second Respondent has determined that the Applicants, or any
one of them, are not registered non-profit organisations
in terms of
the NPO Act, and withdrew subsidies to them on the strength of that
finding;
19.1.2.
That Curro owns the Second, Third and Fourth Applicants and
19.1.3.
That Curro is the holding company of the First Applicant.
19.2.
That the decision was materially influenced by these errors as per
section 6(2)(d) of PAJA.
Points
in
limine
[20]
The Respondents raised the following points
in
limine
and
argued that the review application should be dismissed on these
grounds alone:
20.1.
That the founding affidavit as well as its confirmatory affidavit are
are irregular in that they have not been properly
sworn to and
attested as required in terms of the Regulations promulgated in terms
of the Justice of the Peace and Commissioners
of Oaths Act 16 of
1963.
20.2.
That the Second, Third and Fourth Applicants did not have
locus
standi
to
lodge an appeal in terms of section 48(5) of the Schools Act; that
the First Applicant should have lodged the appeal and therefore
the
appeal did not comply with section 48(5) of the Schools Act and was
defective.
[21]
For the sake of convenience I shall deal with and decide on the
points
in lime
towards the end of my judgment in this matter.
Legal
Framework
[22]
The First Applicant is a non-profit company duly incorporated in
terms of the
Companies Act 71 of 2008
. Over and above that the First
Applicant is a non-profit organisation duly registered in terms of
section 13
of the
Non-Profit Organisations Act 71 of 1997
.
[23]
The provisions concerning non-profit companies are set out in
Schedule 1 of the
Companies Act which
provides the following:
1
.
Objects
and policies –
“
(1)
The Memorandum
of
Incorporation of a non-profit company must -
(a)
Set
out at least one object of the company, and each such object must be
either -
(i)
a
public benefit object, or
(ii)
an
object relating to one or more cultural or social activities, or
communal or group interests;
(2) A non-profit
company –
(a)
must apply all of its assets and income, however derived, to advance
its stated objects, as set
out
in its Memorandum of Incorporation and
(b)
Subject
to paragraph (a) may –
(i)
acquire
and hold securities issued by a profit company; or
(ii)
directly
or indirectly, alone or with any other person, carry any business,
trade or undertaking consistent with or ancillary to
its stated
objects.
(3)
A non-profit company must not, directly or indirectly, pay any
portion of its income or
transfer
any of its assets, regardless of how the income or asset was
derived, to any person who is or was an incorporator
of the
company, or who is a member or director,
or
person appointing a director of the company, except –
(a)
as
reasonable
(i)
remuneration
of goods delivered or services rendered to or at the direction of,
the company; or
(ii)
payment
of, or reimbursement for, expenses incurred to advance a stated
object of the company.
(b)
as
a payment of an amount due and payable by the company in terms of a
bona fide agreement between the company and that person or
another;
(c)
as
payment in respect of any rights of that person, to the extent that
such rights are administered by the company in order to advance
a
stated object of the company; or
(d)
in
respect of any legal obligation binding the company.
[24]
2.
Fundamental
transactions
-
“
(1)
A non-profit company may not –
(a)
amalgamate
or merge with, or convert to, a profit company; or
(b)
dispose
of any part of its assets, undertaking or business to a profit
company, other than for fair value, except to the extent
that such a
disposition of an asset occurs in the ordinary course of the
activities of the non-profit company.
[25]
A non-profit company is not required to have members but if its
Memorandum of Incorporation provides for the company to have
members,
the company may allow for membership to be held by juristic persons,
including profit companies. In
casu
it
is common cause that the First Applicant is a subsidiary of Curro in
terms of
section 3(1)(a)(ii)
of the
Companies Act.
[26]
The Respondents (ie the Department) stated in their correspondence to
the Applicants that the latter did not comply with the
requirement of
section 176(d)
of the National Norms and Standards for School Funding
which state that “ an independent school may be considered for
a subsidy
if it ….. is a registered non-profit organisation in
terms of the
Non-Profit Organisations Act 71 of 1997
.” Section
1 of the NPO Act defines “non-profit organisation” as
meaning “a trust, company or other association
of persons –
(a)
established for a public purpose and
(b)
the income and property of which are not distributed to its members
or
office-bearers except as reasonable compensation for services
rendered.”
[27]
The NPO Act defines a “Registered non-profit organisation”
as “a non-profit organisation registered in terms
of section
13” and section 13 makes provision for the application for
registration of a non-profit organisation. Section
13(2) obliges the
Director of non-profit organisation to register an applicant as a
non-profit organisation “if satisfied
that the applicant
complies with the requirements for registration.”
Section
16(1) of the NPO Act provides that a certificate of registration of a
non-profit organisation is sufficient proof that the
organisation,
inter
alia,
has
met all the requirements for registration and has been registered in
terms of the Act.
[28]
In
casu
the First Applicant (Meridian Operations Company NPC)
who owns the Second, Third and Fourth Applicants, has been issued
with a certificate
of registration as a non-profit organisation in
terms of the NPO Act. A copy of the registration certificate is
attached to the
Applicants’ founding affidavit and marked
annexure MOC 3. This certificate is sufficient proof that the
Applicants have met
all the requirements for registration as
non-profit organisations. It is therefore wrong for the Respondents
to second guess the
Applicants with regard to their status as
non-profit organisations. Consequently any decision taken by the
Department to terminate
or withdraw the subsidies on the stated basis
that the Applicants are not NPOs is on a material error of fact
and law and
would be susceptible to being set aside on this narrow
issue alone.
[29]
The ownership structure and the contractual relationships of the
Applicants and the various entities which had a bearing on
the
functioning of the schools have been set out in the factual
background above. Various agreements were entered into to regulate
the relationships between Curro, the Applicants and Capmac. Capmac is
a property holding and investment company. It is the owner
of the
assets (both immovable and movable) upon which the Applicants
(schools) operate. Curro is not the owner of the Applicants.
Curro
provides management services as an expert in management and
operations of schools and its facilities to the Applicants is
in
terms of written agreements and is therefore paid management fees by
the Applicants and Capmac. The First Applicant (Meridian
Operations
Company NPC) is a registered NPO that does not derive a profit for
distribution to its owners / members. It is the registered
owner and
operator of the Second, Third and Fourth Applicants (the schools).
Issues
to be determined
[30]
The main issues to be determined in this application are:
30.1.
Whether or not the decision that was taken by the First Respondent on
or about 6 April 2016 to dismiss the appeal that
had been made to him
by the Second, Third and Fourth Applicants in terms of section 48(5)
of the Schools Act falls to be reviewed
in terms of PAJA and / or the
principle of legality, set aside, and substituted with a decision
that the appeal is upheld.
30.2.
Whether or not a declaratory order falls to be made that the Second,
Third and Fourth Applicants are not liable to repay
the subsidies
that were paid to them by the Second Respondent in terms of section
48 of the Schools Act in respect of the period
15 July 2013 to 14
February 2014 in the amounts of R 543 028.74,
R
973 440.00 and R 1 311 840.00 respectively.
Submissions
and findings
[31]
As a reason for termination of the subsidies and the subsequent
dismissal of the appeal made to it, the First Respondent had
concluded that Curro owned the Second, Third and Fourth Applicant.
Such a conclusion was based on the letter from Curro to the
Department dated 6 June 2013. The relevant portion of the said letter
states:
“
RE:
Registering of change of Ownership of an independent school in
Limpopo Department of Education, Capricorn District – Nothern
Academy Primary (EMIS NO: 2010009) and Northern Academy Secondary
(EMIS NO: 2010046
)
“
Meridian
Polokwane was bought by Curro Holdings in 2012 from the previous
owner, Mr Martin Christo Van Breda and Ms Maria Elizabeth
Grobler.
Meridian Polokwane is already registered with the Department of
Education in Limpopo Province and is currently providing
education to
learners from Gr R – Gr 12.”
[32]
The Applicants contend that the aforesaid letter contained incorrect
information. They stated that the error occurred because
the author
of the said letter did not properly understand the correct
relationship between Curro, Capmac and the First Applicant
as well as
the Second, Third and Fourth Applicants. The First Applicant’s
response is contained in its letter dated 29 April
2014 in which it
stated the following:
“
Recovery
of 2013/2014 Subsidy Paid
Your
letter dated 17 April 2014 regarding subsidy payments to the Northern
Academy Schools and former Meridian College Polokwane
refers.
It
appears as if there has been a misunderstanding regarding the
ownership of the Northern Academy. Curro Holdings does not own
Northern Academy. The operational side of the school is owned by the
Meridian Operations Company NPO (registration number 116 –
433
NPO). This NPO is also a registered Public Benefit Organisation
registered with SARS. The land and buildings and other capital
assets
are owned by Capmac and Property Management Company which is a
registered company which employs funds, invested in it by
the Public
Investment Corporation (PIC) to fund affordable, independent quality
education.
Curro
Holdings provides certain management functions to the Meridian
Operations Company to ensure good financial governance and
to make
sure that the most up to date and effective curriculum management
practices are being administered (e.g the use of tablets
and other
methodologies in the classroom).”
[33]
The Applicant’s explanation of the error as outlined above has
not been challenged by the Respondents in their papers
before this
Court. The explanation is therefore accepted and the Respondents’
conclusion that Curro owns the Second, Third
and Fourth Applicants
does not stand.
[34]
Counsel for the Applicants submitted that whilst it is correct that
Curro is listed on the JSE and that Curro did not qualify
for the
subsidy, the issue in the appeal before the First Respondent was
whether Second, Third and Fourth Applicants qualified
for the subsidy
and not whether Curro qualified for same. Accordingly, the finding by
the First Respondent that Curro did not qualify
for the subsidy bore
no relation to the issue in the appeal that served before the First
Respondent, and the finding did not answer
that issue. I agree.
[35]
Whilst it is correct that in law the First Applicant is a subsidiary
of Curro, the finding by the First Respondent that Curro
therefore
owned the Second, Third and Fourth Applicant is legally and factually
incorrect.
It
is trite law that a company is a legal persona and that property
vests in the company itself, and not, for example, in its
shareholders
or in its holding company. Accordingly in
casu,
it
is the First Applicant, which has bought the Second, Third, and
Fourth Applicants, and not Curro.
In
Dadoo Ltd and Others v Krugersdorp Municipal Council
1920 AD 530
at 550
the Court held that:
“
A
registered company is a legal persona distinct from the members who
compose it, the company is at law a different person altogether
from
the subscribers to its Memorandum, and though it may be that, after
incorporation, the business is precisely the same as it
was before,
and the same persons are managers, and the same hands receive
profits, the company is not in law the agent of the subscribers
or a
trustee for them. That result follows from the separate legal
existence with which such corporations are by statute endowed,
and
the principle has been accepted in our practice. Nor is the position
affected by the circumstances that a controlling interest
in the
concern may be held by a single member. This conception of the
existence of a company as a separate entity distinct from
its
shareholders is no merely artificial and technical thing. It is a
matter of substances; property vested in the company is not,
and
cannot be, regarded as vested in all or any of its members.”
[36]
Section 29 of the Constitution is relevant in this case. The
appropriate provisions are as follows:
29.
Education
(1) Everyone has a right -
(a)
to
a basic education, including adult basic education; and
(b)
to
further education, which the state, through reasonable measures, must
make progressively available and accessible.
(1)
…………………………………
(2)
Everyone
has the right to establish and maintain, at their own expense,
independent educational institutions that -
(a)
do not discriminate on the basis of race;
(b)
are registered with the State; and
(c)
maintain standards that are not inferior to standards at comparable
public educational institutions.
(3)
Subsection
(3) does not preclude state subsidies for independent educational
institutions.
[37]
The Respondents’ conduct in terminating the subsidies in
respect of the Applicants herein was in breach of the right
of
Applicants, in terms of section 29(3) and (4) of the Constitution
read with section 48 of the Schools Act regarding subsidies
and to
just administrative action in terms of section 33 of the Constitution
read with PAJA. The Respondents are also in breach
of the rights of
the schools’ learners to basic education in terms of section
29(1)(a) of the Constitution.
These
breaches, in my view cannot be saved by the exceptions and / or
limitations set out in section 36(1) of the Constitution.
See:
KwaZulu-Natal
Joint Liason Committee v MEC Department of
Education
KwaZulu-Natal and Others
2013 (4) SA 262
(CC)
[38]
In the answering affidavit the Respondents seek to introduce what
appears to be a new ground for termination of the subsidies.
They
seek to introduce an argument in defence of the impugned decision to
the effect that either the Department has some form of
a discretion
regarding subsidies, or that the law permits some form of exception
regarding subsidies, based upon considerations
such as “the
achievement of equality, legislative and other measures designed to
protect or advance persons or categories
of persons disadvantaged by
unfair discrimination”
[39]
In my view it is impermissible and not open to the Respondents to
raise and place reliance on the aforesaid arguments in the
answering
affidavit in this review application, so as to bolster the decision,
in circumstances where same did not form part of
the reasons advanced
by the First Respondent when dismissing the appeal. The aforesaid
arguments constitute new grounds and do
not qualify for
consideration.
In
Jicama
17 (Pty) Ltd v West Coast District Municipality
2006 (1)
SA
116
(C)
the
Court found that new reasons which are put forward for the first time
in answering papers cannot answer a review application.
The principle
in
Jicama
supra
was reiterated, accepted and approved by the Supreme Court of Appeal
in
National
Lotteries Board v South African Education and Environment Project
2012 (4) SA 504
(SCA) at par [24]
.
[40]
I come to the conclusion that the impugned decision, insofar as it
constitutes an administrative action in terms of PAJA, falls
to be
reviewed and set aside. Insofar as the impugned decision did not
constitute administrative action in terms of PAJA, it did
constitute
an exercise of public power by the First Respondent and it is thus
subject to review on the basis of the principle of
legality.
Relief
sought consequent upon the Review
[41]
Consequent upon the review of the impugned decision, same falls to be
set aside in terms of section 8(1)(c) of PAJA.
The
section provides that
“
8(1)
The Court or tribunal, in proceedings for judicial review in terms of
section 6(1), may grant any order that is just and equitable,
including orders –
(a)
…………………
(b)
…………………
(c)
Setting
aside the administrative action and –
(i)
remitting
the matter for reconsideration by the administrator, with or without
directions; or
(ii) in
exceptional cases -
(aa)
substituting or varying the administrative action or correcting a
defect resulting
from
the administrative action…”
[42]
In
casu
the Applicants pray for an order in terms of section
8(1)(c)(ii)(aa) of PAJA, that is substitution or variation of the
administrative
action. The Applicants acknowledge that the power of a
Court provided in section 8(1)(c)(ii)(aa) is extraordinary and is
exercised
sparingly. The Applicants submit that the circumstances of
this case are exceptional within the ambit of section 8(1)(c)(ii)(aa)
of PAJA and that the Court should substitute the First Respondent’s
decision with a decision that the appeal be upheld rather
than remit
the matter to the First Respondent for reconsideration.
See:
Gauteng
Gambling Board v Silverstar Development Ltd and
Others
2005 (4) SA 67
(SCA) at pars [28] – [29]
.
[43]
In the more recent and authoritative decision of the Constitutional
Court in
Trencon Construction (Pty) Ltd v Industrial Development
Corporation of South Africa Ltd and Another
2015 (5) SA 245
(CC)
it
was held that the factors to be taken into account in deciding if a
case is exceptional are:
(1)
whether the Court would be in as good a position as the
administrator
to make the decision;
(2)
whether the decision is a foregone conclusion;
(3)
the delay caused by the litigation has to be considered; and
(4)
bias or incompetence on the part of the administrator.
[44]
In
casu,
I am of the opinion that there are exceptional
circumstances to justify substitution of the First Respondent’s
decision and
these are that
(a)
the First Respondent was faced with only two outcomes, namely to
grant
the appeal or dismiss it;
(b)
the First Respondent decided the incorrect outcome where the correct
outcome was self – evident;
(c)
this Court has all the relevant information at its disposal to the
extent
that the outcome is a foregone conclusion; and
(d)
it
would serve no purpose to remit the matter to the First
Respondent for reconsideration just so that he can decide
on the
correct outcome.
[45]
It is noted that the Department made a demand for repayment of the
subsidies in respect of the period 15 July 2013 to 14 February
2014
in the amounts of R 543 028.74, R 973 440.00 and R
1 311 840.00 respectively.
The
demand for repayment was premised upon the incorrect basis that Curro
had bought and owned the Second, Third and Fourth Applicants
and that
Curro did not qualify for subsidy. This is contrary to the correct
facts as shown in this judgment. I agree with the Applicants’
submission that it would be appropriate for this Court to grant a
declaratory order that the Applicants are not liable to repay
the
subsidies to the Department in terms of section 8(1)(d) PAJA.
Technical
Arguments by Respondents
[46]
The Respondents have raised two technical arguments in the form of
points
in
limine
.
The Respondents contend that the Applicants’ founding
affidavits are irregular in that they have not been properly sworn
to
and attested as required in terms of the Regulations promulgated in
terms of the Justice of the Peace and Commissioners of Oaths
Act 16
of 1963. That it is not apparent from the attestation clause whether
the deponent is a male or female in as much as the
words “he /
she” appear on the affidavit without indicating whether the
deponent is male or female. That either “he”
or “she”
should have been cancelled to indicate the gender of the deponent. In
response the Applicants contend that
the argument is overly technical
and falls to be dismissed. I agree with the Applicants contention.
[47]
The Respondents rely on the authority in
Absa Bank Ltd v Botha NO
and Others
2013 (5) SA 563
(GNP)
for the proposition that the
failure to differentiate between male and female (or “she /
he”) in the attestation of
an affidavit renders the affidavit
irregular. In my view that case is distinguishable from the present
matter. The case relied
upon by the Respondents concerned a verifying
affidavit in a summary judgment application where the Defendants
objected to the
application by notice in terms of Rule 30, as an
irregular proceeding on the grounds that the Plaintiff’s
affidavit in support
of summary judgment did not constitute an
affidavit as contemplated in Rule 32(2). The present matter concerns
a review and not
summary judgment and in the present matter the
Respondents have not resorted to the provisions of Rule 30.
In
addition, the Respondents have not indicated that they were
prejudiced by the purported defect in the aforesaid affidavits but
instead chose to accept the validity of the affidavits and answered
same.
[48]
In any event the Court has a discretion to refuse an affidavit which
does not comply with the Regulations. See:
Absa Bank Ltd v Botha
NO and Others supra at para [8]
.
In
Standard
Bank v Dlamini and Another (42232/2015) [2016] ZAGPPHC 26 (22 January
2016)
it was held that the requirements as contained in the Regulations are
not peremptory but merely directory. See also
Lohrman
v Vaal Ontwikkelingsmaatskappy (Edms) Bpk
1979 (3) SA 391
(T)
.
The point
in
limine
is accordingly dismissed.
[49]
The second point
in limine
raised by the Respondents is that
the Second, Third and Fourth Applicants did not have
locus standi
to lodge an appeal in terms of section 48(5) of the Schools Act;
that the First Applicant should have lodged the appeal. That the
appeal did not therefore comply with section 48(5) of the Schools Act
and was defective. The Respondents’ argument in this
regard has
no merit. The First Respondent, to whom the appeal was lodged, never
raised this issue when the Applicants’ appeal
was adjudicated,
but determined the appeal on the basis that they did have
locus
standi
.
Conclusion
[50]
The review application falls to succeed and the following orders are
granted:
(a)
That the decision that was taken by the First Respondent on or about
6 April 2016 to dismiss the appeal that had been made to
him by the
Second, Third and Fourth Applicants in terms of section 48(5) of the
Schools Act is reviewed and set aside and substituted
with a decision
that the appeal is upheld.
(b)
It is declared that the Second, Third and Fourth Applicants are not
liable to repay the subsidies that were paid to them by
the Limpopo
Department of Education in terms of section 48 of the Schools Act in
respect of the period 15 July 2013 to 14 February
2014.
(c)
That the Respondents shall pay the costs of this application jointly
and severally, the one paying the other to be absolved,
such costs to
include the costs of two Counsel.
________________________
E
M MAKGOBA
JUDGE
PRESIDENT OF THE
HIGH
COURT, LIMPOPO
DIVISION,
POLOKWANE
APPEARANCES
Heard
on: 30 October 2017
Judgment
Delivered: 28 November 2017
For
Applicants: Adv. J P Vorster SC
Adv.
C P Wesley
Instructed
by: De Klerk & Van Gend Attorneys
c/o
DDKK Attorneys
Polokwane
For
Respondents: Adv. E K Tsatsi
Adv.
M Masindi
Instructed:
State Attorney
Polokwane