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[2016] ZAGPPHC 222
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State Information Technology Agency SOC Ltd v ELCB Information Services (Pty) Ltd and Another (34104/14) [2016] ZAGPPHC 222 (15 April 2016)
IN THE HIGH COURT OF
SOUTH AFRICA
GAUTENG DIVISION,
PRETORIA
CASE NUMBER: 34104/14
DATE: 15 April 2016
Not reportable
Not of interest to other
judges
Revised.
STATE INFORMATION
TECHNOLOGY AGENCY SOC LTD Applicant
v
ELCB INFORMATION SERVICES
(PTY) LTD First
Respondent
LEON DICKER
N.O. Second
Respondent
JUDGMENT
MABUSE J:
[1] By notice of motion
issued on 13 May 2014 by the Registrar of this Court, the Applicant,
a public entity duly established as
such in terms of the State
Information Technology Agency Act 1998 ("SITA"), seeks the
following orders against the First
Respondent, a private company with
limited liability duly registered as such in terms of the company
laws of this country and the
Second Respondent, an adult male
advocate who practises as such in Pretoria:
1.1.
an order reviewing and setting aside the
arbitration award made by the Second Respondent in arbitration
proceedings between the
Applicant and the First Respondent conducted
under the auspices of the Arbitration Foundation of South Africa
under case number
AFSAPTA01072012;
1.2.
declaring that the agreement concluded between
the Applicant and the Respondent on 13 March 2006 ("the first
agreement")
is constitutionally invalid and is unenforceable
against the Applicant;
1.3.
declaring that the process which was followed by
the Applicant to procure goods and services from the respondent in
terms of the
first agreement was constitutionally invalid and
unlawful;
1.4.
declaring that the first agreement did not give
rise to a valid arbitration agreement between the Applicant and the
First Respondent;
1.5.
setting aside the first agreement;
1.6.
declaring that the agreement purportedly
concluded between the Applicant and the First Respondent in March
2007 ("the second
agreement") is constitutionally invalid
and is unenforceable against the Applicant;
1.7.
declaring that the process which was followed by
the Applicant to procure goods and services from the First Respondent
purportedly
in terms of the second agreement was constitutionally
invalid and unlawful;
1.8.
declaring that the second agreement did not give
rise to a valid arbitration agreement between the Applicant and the
First Respondent;
and
1.9.
setting aside the second agreement.
This aforegoing
application constitutes the main application of the three
applications that served simultaneously before court at
the hearing.
The second application is a counter-application by the First
Respondent in terms of the provisions of
s 31(
1
) of the
Arbitration Act 42 of 1965
, in which the First Respondent seeks this
Court's order of confirmation of the arbitration award made on 31
March 204 by the Second
Respondent in favour of the Second Respondent
in terms of which award the Applicant was ordered to pay certain
amounts and interest
to the First Respondent. The third application
is an application by the First Respondent to strike out certain
paragraphs of the
founding and replying affidavit of Vincent Tendani
Mphaphuli, the deponent to the Applicant's founding affidavit on the
basis that
they such paragraphs contain unsupported hearsay evidence.
[2] Before setting out
the facts of the main application it is only apposite to first set
out the procedure that has to be followed
in the procurement of goods
and services by such entities as the Applicant and the government
departments.
[3] The Applicant
procures information, technology, goods and services on behalf of
itself and government departments. In doing
so it is required to
procure goods and services in the manner contemplated in s 217 of the
Constitution of the Republic of South
Africa Act 108 of 1996 ("the
Constitution"). The said section states as follows:
“
217(1)
When an organ of state
in the national, provincial or local sphere of government, or any
other institution identified in national
legislation, contracts for
goods or services, it must do so in accordance with a system which is
fair, equitable, transparent,
competitive and cost effective.
(1)
Subsection (1) does not prevent the organs of state
or institutions referred
to
in that subsection from implementing a procurement policy providing
for
–
(a)
categories
ofpreference the allocation of contracts; and
(b)
the protection or
advisement of persons, or categories of persons, disadvantaged by
unfair discrimination.
(2) The national
legislation must prescribe a framework within which the policy
referred to in (2) must be implemented.”
The Applicant, it is so
contended, is in law obliged to resist the enforcement of procurement
contracts concluded in violation of
the procurement system
contemplated in s 217 of the Constitution.
[4] What is required by s
217 is that, amongst others, interested parties should be publicly
invited to submit tenders for the provision
of goods or services to
the state organ concerned and that all the relevant information
should be accessible to interested tenderers.
In addition the said
section requires that adjudication of tenders submitted should be
done in a transparent manner and that the
contract is awarded to a
bidder which has scored the highest points in the adjudication
process. It is contended by the Applicant
that this process was not
followed before the two agreements which are the subject matter of
this application were concluded.
[5] The Applicant is
bound by the provisions of the Preferential Procurement Policy
Framework Act 5 of 2000 ("the PPPFA")
and its regulations
when it procures goods and services. It is also bound by the Supply
Chain Management Policy ("the SCMP").
The introduction in
the Supply Chain Management Policy states as follows:
"(a) The purpose
of this document is to outline the policy of SITA on procurement
activities and related contracts entered
into by SITA (for work,
products and services);
(b) The object of this
policy is to establish a competitive advantage a competitive
advantage to SITA through procurement of all
products and services,
which meet the needs of SITA;
(c)
The
policy is governed by the supply chain management guidelines issued
by the National Treasury, with the primary focus on the
acquisition
methods; and
(d) The Head·
Procurement Services, as the custodian of the procurement policy, has
the full accountability and responsibility
for the procurement
policy, including all annexes in this document. Updates on this
policy and process will be done through procurement
circulars issued
by the Head· Procurement Services and they will have the same
weight and effect as this policy document."
[6] S 2 of the
Constitution provides as follows:
"This
Constitution is the supreme law of the Republic, law or conduct
inconsistent with it is invalid, and obligations imposed
by it must
be fulfilled
"
According to this section
the obligations imposed by the Constitution must be complied with and
failure to do so renders the conduct
in issue invalid. The
implication of s 2 is simply that the conduct of those to whom the
Constitution applies must at all material
times comply with it; that
the conduct which is in contravention of the Constitution is invalid
and cannot in law be enforced;
and, thirdly, that in so far as this
matter is concerned, the procurement of goods and services in
contravention of s 217 of the
Constitution is invalid and the
relevant organ of state is in law not bound by an agreement
concluded in contravention of
s 217 of the Constitution.
[7] It is furthermore
contended by the Applicant that s 2 of the Constitution does not
contain any requirement which must be complied
with before an
application for the relief such as sought herein is instituted. It is
submitted by the Applicant that such an application
may be instituted
at any time and in particular in circumstances such as the present
where the First Respondent seeks to enforce
what are clearly
constitutionally invalid agreements.
[8] The Applicant is in
law required to conduct itself in a manner which is consistent with
the Constitution and any of its conduct
which is inconsistent with
the Constitution is invalid. The Courts are also bound by the
Constitution to declare as constitutionally
invalid any conduct which
is inconsistent with the Constitution invalid.
[9]
The facts of
the matter relating to the first agreement
I proceed hereunder to
set out the facts that relate to the conclusion of the first
agreement. On 16 March 2006, the Applicant and
the First Respondent
concluded a written agreement for the provision of goods and
services. A copy of the said agreement was attached
to the founding
affidavit as Annexure 'FA2'. Clause 3 of the first agreement provides
for the appointment of the First Respondent
by the Applicant
"to
perform the services detailed in schedule 1 upon the terms and
conditions set out herein."
In terms of the first agreement,
the First Respondent was required to develop and implement an
information management system for
the South African Social Security
Agency. Accordingly the first agreements provided for the procurement
of goods and services by
the Applicant and ought to have been
concluded pursuant to the procurement processes contemplated in s 217
of the Constitution.
The said section requires, amongst others, that
a service provider from whom goods and services are produced should
be selected
through a competitive tender process.
[10] For the following
reasons it is contended by the Applicant that the first agreement was
not concluded in accordance with the
prescripts of s 217 of the
Constitution in as much as:
1.
there was no public invitation to
interested parties to submit tenders for the provisions of the
goods and services
provided for in the first paragraph;
2.
the First Respondent did not submit a tender for
the provision of the goods and services provided for in the
agreement;
3.
it
was not concluded in the transparent manner;
4.
the respondents' goods and services were not
assessed to determine if the agreed price was competitive and cost
effective;
5.
the process which led to the conclusion of the
agreement was not fair in that other service providers were not
publicly invited
to submit tenders for the provisions of the goods
and services in issue.
[11] On those bases it is
submitted by the Applicant that the appointment of the First
Respondent in terms of the first agreement
was constitutionally
invalid in terms of s 2 of the Constitution; that the conclusion of
the first agreement was not authorised
by the defendant (Applicant)
in the manner contemplated in s 217 of the Constitution and it is
therefore invalid; that the appointment
of the First Respondent was
not enforceable against the Applicant as its enforcement would
constitute an illegality and would perpetuate
the very mischief which
s 217 of the Constitution was designed to combat; and lastly, that
the first agreement was invalid, unenforceable
and did not give rise
to a valid and enforceable arbitration agreement between the
Applicant and the First Respondent.
[12] Clause 25 of the
impugned agreement provides for a dispute resolution. It provides as
follows:
''25 1 In the event of
a dispute arising between SITA and the Service Provider, in
respect of any cause whatsoever, including a dispute
with regard to the remuneration in terms of paragraph 11, it shall be
referred
to mediation within 7 (seven) calendar days of written
notification by either party to the other.
25.2 If the dispute
remains unresolved at the expiry of 14 (fourteen) calendar days after
the referral of the dispute to mediation,
then the dispute may be
referred to arbitration. In this regard:
25.2.1 the arbitration
would be conducted in accordance with the rules of the Arbitration
Foundation of South Africa (''AFSA")
as amended from time to
time;
25.2.2
AFSA
shall appoint an arbitrator to preside over the arbitration provided
that more than one arbitrator may be appointed where the
parties
agree thereto; and
... "
It is contended by the
Applicant that, in view of the fact that the first agreement is
constitutionally invalid for the reasons
set out above, so is the
arbitration agreement. Accordingly, for these reasons, the
arbitration proceedings conducted by the Second
Respondent under the
auspices of AFSA under this aforementioned number are invalid and the
arbitration award issued in terms thereof
ought to be set aside.
[13]
The second
agreement
The deponent has set out
the facts relating to the second agreement as follows. In a letter
dated 11 January 2007, the superintendent
general of the Eastern Cape
Department of Health ("ECDH") requested the Applicant to
appoint the First Respondent to
develop a record management system
for that department. The said letter, which was addressed to the
General Manager State Information
Technology Agency Bisho 5609 for
the attention of Mr. Padayachy stated as follows:
"RE: REQUEST FOR
SYSTEMS ON RECORDS MANAGEMENT PROJECT BY ELCB AND PRICE WATERHOUSE
COOPERS THROUGH SITA
The Department of
Health is requesting your organisation to come and assist us in
providing a solution in addressing the problem
we have in keeping,
managing and correcting our manual records.
During the 200512006
Financial Year, our Department was given a disclaimer by the Auditor
General due amongst other things the non-availability
of essential
documents or records that could have enable Auditor General to
conduct an audit and give opinion in the performance
of the
Department. After the thorough investigation that the Department had
done, the MEG had recommended that we request your
organisation to
come and assist us in addressing this problem. The MEG had also made
it very clear that SITA should utilise or
appoint the very same
companies that you utilise when you were addressing Department of
Education's problem. We had discovered
that the companies that were
subcontracted by SITA in that project were ELCB and Price Waterhouse
Coopers through ELCB. The reasons
why the Department request the
very same companies are because of the quality of work that they had
done for the Department
of Education. The Department felt that we
need the very same type of expertise and services to ensure that we
get a good quality
output. The skills and the experience that these
two companies had portrayed when they were doing this project for the
Department
of Education, let our Department to decide and recommend
that the two companies be the one provided this service to us.
The Department
therefore request SITA to work specifically with ELCB and Price
Waterhouse Coopers in this project.
Your assistance in
this matter will be highly appreciated.
LM Boya
Superintendent
11/1/2007 "
Following the said letter
the Applicant appointed the First Respondent to develop a records
management system for the Eastern Cape
Department of Health and
according to the First Respondent an agreement was concluded in
relation thereto. No trace of a copy of
the said agreement could be
found.
[14] In the arbitration
proceedings the First Respondent relied on an unsigned agreement
which it alleged had been concluded between
the Applicant and the
First Respondent. The Applicant contends that in the absence of a
duly signed agreement no proof exists that
such an agreement was ever
concluded. It is contended furthermore by the Applicant that in the
absence of any such signed agreement
there is no basis for the
existence of an arbitration agreement.
[15] It was submitted by
the Applicant that even if the second agreement were signed, the
Applicant was still entitled to the relief
which it seeks due to the
fact that the Applicant's case was based on the following grounds as
far as the second agreement was
concerned:
15.1 if the said
agreement was indeed concluded and signed by the Applicant it was
still invalid due to the fact that it was concluded
in contravention
of the provisions of s 217 of the Constitution;
15.2 secondly, if the
said agreement was not signed and therefore not concluded by the
parties then in that event there was no valid
arbitration agreement
to arbitrate for the First Respondent's second claim.
For that reason the
Second Respondent had no jurisdiction to arbitrate the First
Respondent's second agreement and accordingly the
Second Respondent's
arbitration award should be set aside.
[16] Although clause 2 of
the second agreement recorded that the Applicant advertised a request
for quotation for interested parties
to submit quotations for the
provisions of the records management system contemplated in the
second agreement, this was done only
to create an impression that
there was compliance with the Applicant's obligations in terms of s
217 of the Constitution when in
fact there was no such compliance.
The following circumstances show quite clearly that there was no
compliance with the provisions
of s 217 of the Constitution. The
process contemplated in s 217 of the Constitution is designed to
identify a successful bidder
who does not know when the invitation to
a tender or submit quotations is issued. If the request for
quotations was indeed issued
it was issued in circumstances where the
Applicant had already been told by the Eastern Cape Department of
Health to appoint the
First Respondent as the aforesaid and it had
agreed to do so. Thirdly, the conclusion that the Applicant appointed
the First Respondent
to give effect to the Eastern Cape Department of
Health request to appoint the First Respondent cannot be avoided.
Finally when
regard is had to value of the services for which the
First Respondent was appointed, in other words for the amount of R23
million,
a full tender process ought to have been followed as opposed
to a request for quotations which at the time was prescribed for
procurement
of services and goods whose value did not exceed
R200,000.00. Finally, there is no record to confirm the contents of
clause 2 of
the second agreement, in other words, that a proper and
lawful request for quotation processes had been followed.
[17] Even if that had
been followed, it is still unlawful because procurement of the
services in question were far in excess of
the threshold of
R200,000.00 for which a request for quotation is allowed.
[18] Clause 23 of the
second agreement provides for the dispute resolution through
arbitration. According to clause 23.6 of the
second agreement the
arbitrator
"shall be obliged to give his award in writing
fully supported by reasons."
It is the Applicant's case that
the arbitrator, the Second Respondent, failed to comply with the
provisions of clauses 23.6 and
23.8 of the second agreement in as
much as he exceeded his powers.
[19] Through the
affidavit of one Shaun Bernard Gouws ("Gouws"), an adult
business man employed by the First Respondent
at its Divisional Head:
Business Solutions, the First Respondent, which opposes this
application, has raised certain crucial issues
against the
application. Before I attend to enumerating such issues it is
apposite at this stage to point out that the Second Respondent
has
not filed any papers. The First Respondent has, however, and through
the affidavit of Gouws, taken up cudgels on behalf of
the Second
Respondent.
[20] The various issues
that the First Respondent has raised against the application are as
follows:
20.1
that there had been an
inordinate and unexplained delay in
bringing
this application;
20.2
that there is no merit in the application;
20.3
that the First Respondent has, throughout and
over the years, performed all of its obligations in respect of the
two aforementioned
agreements;
20.4
that the Applicant has, in respect of both
agreements, substantially complied with its obligations;
20.5
that on no single occasion during the performance
of its obligations arising from the two contracts did the Applicant
complain about
the invalidity of the agreements;
20.6
that when the Applicant defaulted with its
payments for the outstanding amount, despite numerous protracted
negotiations between
the parties, the Applicant did not raise the
issue of the constitutional invalidity of the agreement; and,
20.7
that the Applicant participated in the
arbitration process.
[21] I now proceed to
deal with the First Respondent's consents singly:
THE DELAY IN BRINGING
THIS APPLICATION
21.1
It is contended by the First Respondent that
procurement of goods and services constitutes administrative law and
that any irregularities
in the manner in which goods and services by
an organ of state were procured must be addressed by our Courts in
terms of the provisions
of the Promotion of Justice Act 3 of 2000
("PAJA"). PAJA sets out in section 7 a time period in which
an application
of this nature must be launched. Section 7(1) thereof
provides as follows:
''Any proceedings for
judicial review in terms of s. 6(1) must be instituted without
unreasonable delay and not later than 180 days
after the date
-
(a)
subject
to subsection (2)(c), on which any proceeding instituted in
terms of internal remedies as contemplated in subsection
(2)(a) have
been concluded,· or,
(b)
where
no such remedies exist, on which the person concerned was informed of
the administrative action, became aware of the action
and
the reasons for it or might reasonably have been
expected to have become aware of the action and the reasons.
"
It is contended by the
First Respondent that where there has been a failure by a party, such
as the Applicant in this matter, to
bring the review in terms of PAJA
within the time period prescribed by s. 7(1) of PAJA, it requires
that condonation for such non-compliance
must be sought before relief
can be granted. The First Respondent is mainly concerned about what
it calls in 7 to 8 years of an
unexplained delay in bringing this
current application.
[22] During the
aforementioned delay the following events took place. The First
Respondent throughout and over a number of years
performed its
obligations in respect of the two agreements. Simultaneously the
Applicant also performed a substantial part of its
obligations, for
instance in respect of the first agreement, a total amount payable by
it to the First Respondent for the services
of the First Respondent
was R220 million. Of the said amount only the balance of R891,155.85
remains unpaid. In respect of the
second agreement whose contract
value was R20.1 million, the Applicant has paid a substantial portion
of it and only R2,911.674.64
remains unpaid.
[23] The Applicant
contends that the fact that the relief which the Applicant seeks in
the application may be brought in terms of
PAJA does not mean that it
cannot be brought under s. 2 of the Constitution or the general
principles of legality. It was argued
by counsel for the Applicant
that s. 2 of the Constitution does not contain any requirements which
must be complied with before
an application for the relief sought
herein is instituted. He developed his argument and stated that there
is nothing contained
in the Constitution that suggests that the
relief sought by the Applicant in the notice of motion can only be
brought by way of
a review application in terms of the provisions of
PAJA. He has not referred this Court to any authority in support of
his contention.
[24] The Applicant
contends that because s. 2 of the Constitution is not time bound, it
was entitled to launch this application
notwithstanding the
unexplained delay of 7 to 8 years. The Applicant expressly disavows
any reliance on the provisions of PAJA.
It opines that it is not
bound by PAJA's prescription in terms of s. 7(1) thereof that an
application for the review of an administrative
action must be
brought within 180 days after the Applicant had become aware of the
action and the reasons for it or such Applicant
might reasonably have
been expected to have become aware of the actions and the reasons.
[25] The Applicant's view
is, in my view, somewhat flawed. The fit of clay in its argument is
the contention that s. 2 of the Constitution
is not time-bound and
secondly, that it is not bound by PAJA's stipulations that an
application for review of an administrative
action must be brought
within 180 days. It has now become settled law in this country that
the procurement of goods and services
or tender process constitutes
an administrative action.
[26] Section 1 of PAJA
defines
''administrative action'
as any decision, taken or any
failure to take a decision, by -
''(a) an organ of
State, when
-
(i)
exercising a power in terms of
the Constitution over
a
Provincial Constitution;
(ii)
exercising a public power or performing a public function in terms of
any legislation;
(b) a natural or
juristic person, other than an organ of state, when exercising a
public power or performing a public function in
terms of an
empowering provision, which adversely affects the rights of any
person which has a direct, external legal effect, but
does not
include
..."
According to
Chairman,
State Tender Board and Another v Supersonic Tours (Pty) Ltd 2008(6)
SA 220 SCA
, the Applicant is an
''organ of state'
as
defined in s 239 of the Constitution read with s 1 of PAJA. The
Applicant made a
"decision'
as contemplated in s 1 of
PAJA, to award the tender to, or to procure services from, the First
Respondent. That decision that the
Applicant took in awarding the
tenders to, or procuring services and goods from, the First
Respondent was an exercise of public
power as envisaged in s 1 of
PAJA. Accordingly the requirements of
''administrative action"
were
fulfilled. The decision of the Applicant to award tenders
to, or to procure goods and services from, the First Respondent was
clearly
an administrative action as contemplated by PAJA.
Consequently such an administrative action is susceptible to be
reviewed in terms
of s 6(1) of PAJA provided that the grounds set
forth in s. 6(2) of PAJA are established.
[27]
Law Authorities
In this regard
Logbro
Properties CC v Beddenson NO and Others 2003(2) SA 460 SCA
at
page 465 F-G this is what the Court stated:
"(5) The starting
point must be that the tender process constituted ''administrative
action" under the Constitution.
This entitled the
appellant (and it does not matter in this case whether the interim or
the 1996 condition applied) to a lawful
and procedurally fair process
and outcome where its rights were affected or threatened justifiable
in relation to the reasons given
for it
"
See
also Umfolozi Transport (Edms) Beperk v Minister van Vervoer en
Andere
[1997] ZASCA 8
;
(1997) 2 ALL SA 548
(SCA) at 552J - 553A; Transnet Ltd v
Goodman Brothers (Pty) Ltd 2001(1) SA 853 (SCA) at 870 paragraph 7
where Schutz JA, as he
then was, remarked that:
'Turning to the
first question, whether administrative action was involved, If has
already been held in this Court that the State
Tender Board's
handling of tenders
...
constituted administrative action,
-
Umfolozi Transport (Edms) Beperk vs Minister van Vervoer en Andere
(1997)28 ALL SA 548 (SCA) at page 552 J to 553 A. Howie
JA
pointed out that the steps that had preceded the conclusion of the
contractual of the contract were purely administrative actions
and
decisions by officials whilst in addition public money was being
spent by a public body in the public interest. Naturally,
said Howie
JA, in such a case, the subject is entitled to a just and reasonable
procedure.
"
At page 871 B the Court
continued and stated that:
"For the reasons
given I am of the view that the actions of Transnet in calling for an
adjudicating tender constituted administrative
actions wherever
contractual arrangements may have been attendant upon it
"
[28] Finally s 33 of the
Constitution deals with just administrative action. It provides as
follows:
"33(1)
Everyone has the right to administrative action that
is lawful, reasonable and procedurally fair.
(2)
Everyone
whose rights have been adversely affected by
administrative
action has the right
to be given written reasons.
(3)
National
legislation must be an update to give effect to these rights, and
must -
(a)
provide for the review of administrative action
by a Court or, where appropriate, an independent and impartial
tribunal,·
(b)
impose a duty on the state to give effect to the
rights in (1) and (2); and
(c)
promote an efficient administration."
It is now trite law that
the actions of the Applicant in calling and adjudicating for a tender
for the supply of goods and services
or that resulted in the
conclusion of the impugned agreements constituted, as the authorities
cited above have demonstrated, or
in concluding the impugned
agreements, administrative actions irrespective of the consequent
contractual arrangements. That being
the case then s 6 of the PAJA,
and not s. 2 of the Constitution, provides for the mechanism of
challenging, by way of judicial
review, of the constitutional
validity or legality of any administrative action. S 6 provides that:
"(1) Any person
may institute proceedings in a Court or a tribunal for the judicial
review of an administrative action.
(2) A Court or
tribunal has the power to judicially review an administrative action
if
(a) an administrator
who took 11-
(i)
was not authorised to do so by the empowering provision;
(ii)
acted under a delegation of power which was not authorised by the
empowering provision; or
(iii)
was biased or reasonably suspected of bias;
(b) a mandatory
and material procedure or condition
prescribed by an
empowering provision was not
complied with;
(c) the action was
procedurally unfair;
(d) the action was
materially innuenced by an error of law;
(e) ….
(f) the action itself
-
(j)
contravenes a law or is not authorised by the empowering provision;
or
(ii)
is not originally** connected to
(aa) the purpose for
which it was taken;
(bb) the purpose of
the empowering provision;
(cc) the information
before the administrator; or
(dd) the reasons given
for it by the administrator;
(g) …
(h)
the
exercise of the power or the performance of the function authorised
by the empowering provision, in pursuance of which the administrative
action was purportedly taken, is so unreasonable that no reasonable
person could have so exercised the power or performed the function;
or
(i)
the
action is otherwise unconstitutional or unlawful.
"
[29] The Applicant's
contention that s 2 of the Constitution does not contain any
requirement which must be complied with before
an application for the
relief sought herein instituted, is incorrect. The feet of clay in
the Applicant's contention is to look
in s 2 of the Constitution in
isolation for the procedure that one has to follow or in order to
give effect to the provisions of
s 2. How does one approach the Court
in law for a declaration of invalidity of law or conduct? The answer
lies in s 33(3)(a) of
the Constitution read with s 6 of PAJA.
Accordingly the Applicant's contention that s 2 does not contain any
requirement that must
be complied with before an application for
relief is instituted may be correct only if the said section is
considered in isolation.
Other provisions of the Constitution and
PAJA do provide for a mechanism of giving effect to s 2 of the
Constitution. It was accordingly
obligatory for the Applicant to
bring this application in accordance with the provisions of s. 33 of
the Constitution read with
s. 6 of PAJA.
[30] Finally, in
Bato
Star Fishing (Pty} Ltd vs The Minister of Environmental Affairs
2004(4} SA 490 CC at p. 564 paragraph
22 the Court, O'Regan J,
had the following to say:
'The Court's power to
review administrative action no longer flows directly from common law
but from PAJA and the Constitution itself."
In
paragraph 25
the
Court continued and stated that:
'The provisions of s 6
divulge a clear purpose to qualify the grounds of judicial review of
administrative action as defined in
PAJA. The cause of action for the
judicial review of administrative action now ordinarily arises from
PAJA, not from common law
as in the past
...
As PAJA gives effect to section 33 of the
Constitution, matters relating to the interpretation and application
of PAJA will of course
be constitutional matters.
"
[31] With regards to the
time limitation set out in s 7(1} of PAJA, one merely has to refer to
Khumalo and Another vs MEC for Education, Kwazulu Natal SA 579 SCA
"the Khumalo matter" .
It is the law in this
country that legality review should be brought without delay. Courts
do have a discretion to refuse or grant
a review application when
there has been a delay in bringing it. According to the Khumalo
matter at page 594:
"But that does
not mean that the Constitution has dispensed with the basic procedure
requirement that review proceedings are
to be brought without undue
delay or with a Court's discretion to overlook the delay.
"
It is clear that there
was an inordinate delay of between 7 to 8 years before this
application could be launched. This delay has
not been explained.
There was before the Court no application for condonation for the
late filing of this application. Even if
the Applicant had not
planned to launch this review application in terms of PAJA, there is
no explanation as to why the application
was launched after so long a
period.
[32] In deciding whether
to exercise its discretion, which it must do judicially, in favour of
the applicant, this Court must have
regard to other circumstances
such as the length of the delay; the reasons for the delay; the
extent to which the parties have
performed their obligations; and the
prejudice to the parties if the delay is overlooked or not. Where
there is no application
for condonation and therefore no reasons for
the delay furnished the Court will, without much ado, readily infer
that the Applicant
has no genuine reasons for the delay. Where the
parties have rendered substantial performance of the obligations,
like in the present
application, and it will prejudice the First
Respondent unfairly if the delay is overlooked, the Court should
exercise its discretion
in favour of the First Respondent and refuse
to overlook the delay.
[33] There is another
fundamental problem with the application. The following lines in the
Khumalo matter
supra
might well demonstrate that fundamental
problem:
'
Court has greater
powers under the Constitution to regulate any possible unjust
consequences by granting an appropriate order. While
a Court must
declare conduct that it finds to be unconstitutional invalid, it need
not set the conduct aside."
In conclusion, as no
circumstances on the basis of which this Court could exercise its
discretion in favour of the Applicant have
been placed before it, the
inference is inevitable that this application must fail on this point
alone. There is no basis upon
which another procedure, which
envisages a different set of circumstances, could be regarded as
applying in this application. Accordingly
the Applicant has failed to
show that this application does not qualify to be dealt with in terms
of s 93 of the Constitution read
with s 6 and 8 of PAJA.
[34] In the light of the
conclusion I have come to, I do not I do not deem it necessary to
consider the other applications raised
by the First respondent. It
goes without saying that if this Court dismisses the application the
fundamental point that there was
an unexplained inordinate delay in
bringing this application, which application would have upset the
arbitration award if successful,
the application by the first
Respondent to an order confirming the said award should be
successful.
In the result I make the
following order:
1.
The application is
dismissed.
2.
The First Respondent's
counter-application that the award of the arbitrator made on 31 March
2014 be made an Order of Court
in terms of
section
31(
1
) of the
Arbitration Act 42 of 1965
is hereby granted.
3.
The arbitration award
made by the Second Respondent in favour of the
First Respondent on 31 March 2014 is hereby
confirmed.
4.
The Applicant is
hereby ordered to pay the costs of the application, including the
costs of the First Respondent's counter-application.
_______________________
P.M. MABUSE
JUDGE OF THE HIGH COURT
Appearances:
Counsel for the
Applicant:
Adv. K Tsatsawane
Instructed
by:
Kunene Ramapala Botha Attorneys
Counsel for the First
Respondent:
Adv. S Rorke (SC)
Instructed
by
Smith Tabata Inc.
c/o Barnard Inc.
Date
Heard:
25 August 2015
Date of
Judgment:
15 April 2016