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[2013] ZAGPPHC 94
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MDS NDT Consultants (Pty) Ltd v National Minister of Home Affairs and Another (47389/12) [2013] ZAGPPHC 94 (10 April 2013)
IN
THE NORTH GAUTENG HIGH COURT, PRETORIA
(REPUBLIC
OF SOUTH AFRICA)
CASE
NUMBER: 47389/12
DATE:10/04/2013
In
the matter between:
MDS
NDT CONSULTANTS (PTY) LTD
….....................................
APPLICANT
And
NATIONAL
MINISTER OF HOME AFFAIRS
................................
FIRST RESPONDENT
DIRECTOR
GENERAL OF THE DEPARTMENT
.......................
SECOND RESPONDENT
OF
HOME AFFAIRS
JUDGMENT
TLHAPI
J:
[1]
This application was for interim relief pending the finalization of a
review application to be instituted in terms of the Promotion
of
Administration of Justice Act 3 of 2000 (‘PAJA’) against
the first and second respondents, for rejecting the appeal
(‘the
impugned decision’), lodged in terms of sections 8(3) to 8(7)
of the Immigration Act, 13 of 2002 (‘the
Act’). Although
this matter was to be heard as one of urgency in the urgent court on
the 27 August 2012, due to the volume
of papers it was given a
special date and was heard on 10 November 2012.
The
following orders were sought:
2.1
that applicant shall be allowed and be authorised to retain in
applicant’s employ all applicant’s current employees,
and
that applicant may utilizes such employees for purpose of all
applicant’s business operations;
2.2
that applicant be entitled and authorised to take ail actions, and to
act as if applicant has been awarded a new corporate permit
as
applied for in annexure “A5” annexed to the founding
affidavit;
2.3
that respondents be prohibited from instituting any further
investigations into the business operations of the applicant, without
reasonable cause or grounds therefore;
2.4
that the respondents shall honour all corporate worker authorisation
certificates, all visa applications, and all other authorisations
that may be applied for by the applicant, workers in the applicant’s
employ and workers to be employed by the applicant in
the ordinary
course of applicant’s business, as if the corporate permit was
lawfully issued by the respondents;
2.5
the respondents shall grant to the applicant new corporate workers
authorisation certificates and new visas for foreign workers
to be
applied for, as if the corporate permit application dated 19 August
2011 was granted, and as is such corporate permit was
issued by the
respondents, in the ordinary course if business;
2.6
applicant shall be entitled in all respects to continue with
applicant’s business in the normal course of business;”
The application was opposed.
[2]
The founding affidavit was deposed to by Mr Alan Joshua Armitage, a
director of the applicant. He averred that the applicant
operated as
a ‘service provider in the engineering and construction
industry’. The applicant contracted with its clients
on
specific projects and for a specific period of time, by providing
employment to foreign skilled workers, in accordance with
the
specific needs of the client and, in particular where no such skilled
services could ‘be provided by a South African
company or
entity’. In certain instances and depending on the facts of
each contract, applicant may fall under
section 198
of the
Labour
Relations Act, 66 of 1995
. Furthermore, it was contended that the
applicant had the ‘capability, the know-how and it managed and
supervised the services
and outcome of such projects. The refusal of
a corporate permit would severely jeopardise the engineering and
construction contracts
concluded by the applicant with its clients
and that this would lead to ‘grave prejudice and damages
suffered by both.
[3]
The applicant had been issued with corporate permits since 2004 to
2008 for a specified period, in respect of a certain number
of
individuals. The 2008 corporate permit for 5000 employees was valid
for a period of 36 months and expired on 18 November 2011.
On 19
August 2011 applicant applied for a corporate permit to be valid for
a period of 5 years and which permit would allow applicant
to employ
5000 foreign skilled workers.
[4]
The applicants had from time to time addressed queries raised by the
respondents about the nature of their business and whether
it was a
labour broker or not.
They
contended that they were not into the labour broking business because
the foreign skilled workers were employed in terms of
a fixed term
contract, with a guaranteed minimum remuneration of 180 hours being
paid by the applicant; they supervised work performance
and outcome
and engaged in disciplinary issues related to the skilled workers;
they provided food transport accommodation, medical
treatment and
insurance cover as obliged by the corporate permit.
[5]
On 8 September 2011 applicants were informed of an impending
preliminary investigation into possible violations of the Act,
in
respect of corporate permits issued to the applicant. With regard to
its application certain documentation was requested and
these were
annexed to the application of 19 August 2011 (listed in paragraph
42.1 to 42.4.14) of the founding affidavit. The applicant
contended
that the additional documentation requested went far beyond what was
required for consideration of the application for
a corporate permit
and although the documentation was provided, the respondents were
informed that there was no basis for the investigation.
According to
the applicant it had a legitimate expectation and an entitlement to
the issue of a corporate permit on the same basis
upon which previous
corporate permits had been granted by the respondents and, for the
same business of the applicant which had
not changed. This had been
the case despite the first respondent’s policy relating to
labour brokers.
[6]
The applicant averred that the investigations into its business and,
the refusal to grant a new corporate permit was undertaken
for
extraneous and mala fide reasons. This came to light when the
respondents’ inspectors paid a visit to Sasol to investigate
the issuing of alleged fraudulent visa stamps in the passports of the
applicant’s employees and, instructions were given
to Sasol to
remove all foreigner’s from the site. The applicant was
informed that shortly thereafter a company known as Global
Migration
had called Sasol to assist with its permit problems. There was a
possibility that a previous disgruntled employee of
the applicant was
responsible for the vexatious conduct by the respondents on the
applicant. The official responsible for the issue
of visa stamps at
OR Tambo Airport confirmed to Sasol and the first respondents the
validity of the visa stamps.
[7]
The decision to refuse the application was mala fide in that it was
based on the contents of a policy document which in the
opinion of
the applicant had to be set aside because it was ultra vires. The
applicant contended that the second respondent was
not allowed in the
exercise of his discretion to issue the permit, to be influenced by a
predetermined policy and procedure, and
that in as far as it
contended that such conduct was unlawful and unconstitutional, the
applicant was entitled to approach the
court for relief in terms of
PAJA.
[8]
The applicant averred that it was a corporate applicant as defined in
section 1 of the Act and that it had observed and complied
with the
requirements set out in section 21 of the Act with regard to the
factors to be considered by the second respondent in
its
consideration of applicant’s application. According to the
applicant, the second respondent was confined to the considerations
in sections 21(2) and 21(3) of the Act and, in this regard the
corporate permit should have been granted and not refused.
[9]
Furthermore, the applicants averred that it was necessary to bring
this application because the court order of 18 November 2011
had the
effect of only pending the internal appeal process.
[10]
The applicant averred that the appeal decision was based on incorrect
conclusions relating the entities MDS NDT Consultants
(Pty) Ltd and
MDS International Skills (Pty) Ltd and their business purposes. The
fact that they worked in association with each
other, did not mean
that the latter was the alter ego of the former. The applicant dealt
with the employment contracts and the
MDS International Skills (Pty)
Ltd managed payroll issues, furthermore it later offered its local
clients labour broking services
which were discontinued in August
2011 . The other factor to consider was that the purpose of business
of the applicant changed
with time to deal specifically with the
employment of foreign skilled workers. The two companies operated
independently of each
other.
[11]
The respondents put up several grounds upon which it maintained the
application should fail.
Mr
Ronney Marhule, for the second respondent averred that the applicant
had not annexed a copy of the respondents full reasons (‘RM3’)
for the impugned decision to the founding affidavit. It was contended
that the applicant had out of context paraphrased such reasons,
and
had failed to demonstrate in what respects the decision was ‘not
justifiable, irrational, unreasonable or unlawful. It
had therefore
failed to make out a prima facie case for the relief sought.
[12]
It was averred for the respondents that the purpose for which the
relief in the first application of 18 November 2011 was given
had
been fulfilled, that is, for the business of the applicants to
continue operating ‘pending exhaustion of the internal
appeal
procedures’. Furthermore that any reliance on the expired
permit for the continued employment of foreign skilled workers
constituted unlawful conduct.
The
relief now sought in sub-paragraphs 2.1- 2.7 of the notice of motion,
had the same effect sought in the urgent application of
18 November
2011. In this matter the applicant sought an ‘extension of its
expired corporate permit, alternatively the grant
of a corporate
permit that would enable it to conduct its business operations as if
a corporate permit had been granted under section
21 of the Act’.
[13]
The respondents contended that they were entitled to raise the res
judicata
exception
because on a proper consideration of the relief sought, it was the
‘same relief, between the same parties and based
on same
grounds’ therefore the matter falls to be dismissed.
[14]
According to the respondents, holders of corporate permits are issued
with authorisation certificates which enable them to
manage
distribution and immigration compliance processes in respect of their
large foreign based work force, this being subjected
to ‘intermittent
inspections by the second respondent’s officials. A
Departmental Directive 22 of 5 June 2007 (‘the
2007 Directive’)
to immigration officers qualified the circumstances under which an
application for a corporate permit was
to be considered. This was
followed by another Directive issued on 29 October 2008 (‘the
2008 Directive’). The latter
was motivated by a High Court
ruling which was aimed at creating a ‘uniform policy’ in
the consideration of applications
for corporate permits between the
respondents, the Departments of Labour, and Trade and Industry.
According to the respondents
the issue of the validity and
application of the directives were sufficiently justified in ‘RM3’.
[15]
The respondents averred that there were no reasonable prospects of
success in the intended review application and that the
previous
grants of a corporate permit could not give rise to any legitimate or
reasonable expectation to be granted a corporate
permit if the
present application was not compliant with the criteria in section 21
of the Act. It was contended that it was clear
from the business
undertaking of the applicant, acting in association with MDS
International Skills (Pty) Ltd, as described in
documents in support
of the application and letters from its clients annexed thereto, that
the employment relationship was that
of a labour broker and not one
contemplated within the meaning of section 21 of the Act.
[16]
While the respondents have raised several grounds upon which it
opposed the application and maintained that this matter be
dismissed,
I shall deal with only two of those issues being, whether the
applicants have made out a case for the relief sought
and the issue
of separation of powers.
[17]
I understand the application to be that by means of an interim
interdict, the applicant seeks to preserve the status quo of
its
business as existed prior to the expiry of its corporate permit, by
the granting of a temporary permit or an extension of the
expired
permit, pending the finalization of the intended review of the
impugned decision of 15 June 2012, rejecting applicant’s
internal appeal.
It
was trite that in order for the applicant to succeed it had to
satisfy the requirements of an interim interdict and it had to
make
out a prima facie case that there were prospects of the impugned
decision being set aside on review.
[18]
The impugned decision was incorporated into the respondents’
answering affidavit. In the founding affidavit the issues
that were
to be reviewed are set out in paragraphs 69 to 86 under the heading
“The Appeal Decision”. It was submitted
for the
respondents that failure by the applicant’s to deal with the
impugned decision would make it difficult for this court
to find that
it had a prima facie prospect of success on review. I am in agreement
with this submission.
[19]
The issues raised by the applicant under the heading relate to the
following conclusions arrived at by the first respondent:
1.
That the applicant was a labour broker;
2.
That the applicant, namely MDS NDT CONSULTANTS (PTY) LTD and MDS
INTERNATIONAL SKILLS (PTY) LTD are one entity;
3.
That the directives and policies were ultra vires;
4.
That the refusal to grant the corporate permit was arbitrary and/or
capricious and or based on an error of law and of fact;
[20]
It was clear to me that in dealing with aspects 1 and 2 of paragraph
19 above, and from paragraphs 18 to 30 of ‘RM3’,
that the
respondents reasons and conclusions were based on the interpretation
and understanding of the documents annexed to the
application for a
corporate permit and the applicant’s grounds of appeal.
[21]
My understanding of the decision and the answering affidavit was
that, the respondents denied that the applicant was a corporate
applicant within the meaning of the Act. According to them, and in
order to qualify the applicant had to be:
1.
the entity which was the employer of the employees in its own
business
undertaking; and
2.
be the same entity which was in control of the particular undertaking
for which the foreign skilled workers were required and
not that
the
workers be made available for employment in a client’s
undertaking; and
3.
that the applicant should be the same entity/undertaking which
engaged with the Departments of Trade and Industry and Labour
on
issues of compliance.
In
the answering affidavit and with regard to point 3 above it was
contended that the applicant would not have had to rely on
confirmation
by its clients that they had complied with the
requirements of the Departments of Trade and Industry, before
applying for a corporate
permit, that is, if it qualified in terms of
section 21 of the Act.
[22]
In the heads of argument for the applicant submissions were made that
applicant
had not been given an opportunity to explain the difference in the
two companies; that certain parts of the impugned decision
(pages
602-604) had not been part of the original decision; that the first
respondent had incorrectly applied certain labour law
decisions in
its decision. These issues should have raised serious concerns for
the applicant about how the appeal was dealt with.
The applicant was
in possession of the said decision and yet it chose not to fully
address the issues raised in the impugned decision
in the founding
affidavit. If incorrect facts were taken into account in
consideration of the application as submitted, then the
applicant had
a duty to point out such
occurrence
to the court and this in my view would assist towards establishing .
an prima facie right.
[23]
In my view the applicant should have properly dealt with the issues
raised by the first respondent around its relationship
with MDS
International, as viewed from the documents annexed to the
application for a corporate permit and the relevance of Annexure
7 to
this application as raised by the respondents in the answering
affidavit. The respondents averred that there were letters
from
clients which formed part of the application which suggested that the
employment of foreign skilled workers was not such as
contemplated in
section 21(1). In reply this suggestion was simply denied and no
explanation was given regarding the content of
such letters and how
the content should have been interpreted.
[24]
Again, the applicant disavowed being a labour broker and yet it
stated in its papers that in certain instances some of the
contracts
with clients could fall under
section 198
of the
Labour Relations
Act. It
was submitted that
the
first respondents decision went against government policy on the
issue of labour brokers. I presume that by saying so was meant,
it
did not matter if applicant was indeed a labour broker, because
nothing in the Act prevented it from qualification as a corporate
client. In this regard, no case was made out on the papers.
Furthermore the applicant raised mala tides in the conduct of the
second respondent. In the founding affidavit mention was made of a
disgruntled employee but the applicant failed to point out in
the
impugned decision how these allegations against this employee and
conduct of some of the officials of the respondents were
used to
influence the impugned decision to the prejudice the applicant. The
issues raised in the impugned decision and the applicants
response
thereto was the case which the respondents had to answer to in this
application.
In
my view, and in order to enable me to determine whether the applicant
had established a prima facie right, it was important that
the
impugned decision in particular to be addressed, even if it meant
having to repeat its case and submissions in the intended
review
application. After all I am not to determine the merits in the main
application, mine is to establish whether a prima facie
right exists
even if same was open to doubt. It was not for me to determine why
the issue of labour broking should play or not
play a role in the
consideration of a corporate permit application. It was for the
applicant to show the court that there were
prospects in the review
by dealing with the grounds upon which it based its case. In
addressing the prima facie right in the founding
affidavit, the
applicant referred to annexures (A21, A22, A23, A24.etc.) and did not
in the founding affidavit deal with how these
would be relevant, for
purposes of dealing with the relief sought.
[25]
In dealing with points 3 and 4 of paragraph 19 above, I have to
examine what the impugned decision stated .
In
“RM3” the first respondent stated that in considering the
application for a corporate permit the respondents were
mindful of
the objective of the Act as set out in its preamble, the provisions
of section 21 read with Regulation 18 of the Act.
The recommendations
from the Departments of Trade and Industry and Labour, had to be
considered in order to determine whether the
applicant qualified to
receive a corporate permit.
[26]
Section 21 provided:
(1)
A corporate permit may be issued by the Director-General to a
corporate applicant to employ foreigners who may conduct work
for
such corporate applicant.
(2)
After consultation with the Departments of Labour and Trade and
Industry, the Director-General shall determine the maximum number
of
foreigners to be employed in terms of a corporate permit by a
corporate applicant, after having considered:-
The
directives provided:
“
if
the core business is labour hire or equivalent, the applicant will
not qualify for a corporate permit
“
.........................................
a corporate permit may only be considered if the corporate
applicant
intends to employ foreigners to conduct work for such applicant and
provided that such foreigner complies with the aims
of the Act,
namely to increased skilled human resources”
and
The
impugned decision:
“
Paragraph
39: ....MDS Consultants persist that they are entitled to be granted
a corporate permit, quite apart from the directives....the
corporate
permits which were issued to it on previous occasions ought not to
have been granted in the light of the nature of its
business
undertaking....On this basis aione, the facts as objectively set out
above, demonstrate that MDS Consultants could not
be granted a
corporate permit after due consideration of the Department’s
obligation under the Act.
Paragraph
41: At the time of applying for a new corporate permit, MDS
Consultants knew that the 2007 and 2008 directives were in
place”
Paragraph
43 : The contention that the 2008 directive is not compatible with
the Act is incorrect.... the directive is entirely
consistent with,
and was designed to give expression to the objective of the
Act.............................................................
aimed precisely to make sure that that the legislative intent is
enhanced....to give practical intent to the intention behind the
Act
as stipulated in paragraphs (d), (h), (i) and (j) of the Pre-amble
which indicated the parameters in terms of which officials
must act
when deciding applications of corporate permits. ”
[27]
In the founding affidavit the applicant stated:
“
Paragraph
45: The only reason for the refusal of the corporate permit was that
the applicant is allegedly a labour broker. That
decision rested upon
the validity of the policy document referred to above, which the
applicant contends is ultra vires and which
should be set aside.
There is no legal basis or ground in the Act in any event, for flatly
refusing
applications
for corporate permits by labour
brokers......................................................... the
applicant is
not a labour broker in the normal sense of the word,
that there is a
difference
of opinion regarding the meaning of a labour broker, and that the
respondents are acting mala fide. ”
Paragraph
83: ....the applicant persists with its claim that the 2008 directive
alternatively policy is ultra vires and accordingly
unlawfuf’
Having
regard to the above paragraphs in the founding affidavit, and in the
impugned decision, it is my view that the applicant
has failed to
justify the basis upon which it believed that the conclusions of fact
and law, based on the documents before it were
ultra vires. The
applicant has also failed to show how the respondents failed to
exercise their discretion properly.
[28]
Whether the applicant may suffer irreparable harm and prejudice
depended on whether it had on the papers first established
a prima
facie right. In the founding affidavit the applicant contended that
it stood to loose R19 273 846 over a period of two
years should the
worker authorisations remain valid and, that should the applicant
cease to exist and close its doors this would
result in a loss per
annum of R17 280.00. It stated further that the irreparable harm
would filter down to the employees and clients
and that the employees
would loose their livelihood and their employment. It further
contended that if the temporary interdict
was not granted the
consequences would be irreversible and applicant’s business
relationships would break down. The respondents
have stated that the
applicant has continued to operate its business without a corporate
permit and this was denied. The respondents
contended that “RM3”
demonstrated that the contracts of employment annexed to the
application for a corporate permit
and to this application would have
expired by the time this application was heard. This was not
disputed.
[29]
I have already indicated the difficulty presented by applicant’s
failure to deal with the impugned decision. This also
affects those
factors addressed by applicant in dealing with the balance of
convenience and absence of or an alternative remedy.
It was submitted
for the respondents that the grant of the interim order would entail
lengthy litigation which would have the effect
of ‘ subverting
the regulatory framework in the Act to the prejudice of the
respondents.
In
the urgent application before Bertelsman J a case was been made out
for the extension of the permit because some of the contracts
were
still valid. In this matter the applicant has failed to demonstrate
which worker authorisations and employment contracts remained
valid
or which projects were not completed or were still ongoing after the
expiration of the permit and notification of the impugned
decision.
If the corporate permit and all the contracts of employment which
were annexed to the application for the permit and
the founding
papers had expired, then the purpose for which the permit was
procured had fallen away and any extension of the permit
to
accommodate the situation as prayed for in prayer 2.1 of the notice
of motion would constitute a nullity. In the urgent application
before Bertelsman J , the corporate permit was extended to allow the
process of appeal before the first respondent to be finalized.
In
these circumstances the application was not about preserving the
status quo, it is about the court being requested to step into
the
shoes of the second respondent and grant a corporate permit.
[30]
It was submitted for the applicant that a case had been made out
warranting the limitation of the separation of powers and
of enabling
the court to develop
the
law. It was submitted for the respondents that section 21 (1) of the
Act enjoined the second respondent to consider the application
for a
corporate permit and did not provide ‘either expressly or by
necessary implication for a court of law to grant an extension
of a
permit that has expired or, the grant of a temporary permit ‘in
circumstances where an application therefore has been
rejected or at
all’. The relief sought was in essence unlawful in that it
constituted a contravention of the principle of
separation of powers.
I am in agreement with this submission. In National Treasury and
Others v Opposition to Urban Tolling Alliance
and Others
2012 (6) SA
223
(CC) at paragraph [44] the following is said:
“
The
common-law annotation to the Setlogelo test is that courts grant
temporary restraining orders against the exercise of statutory
power
only in exceptional cases and when a strong case for the relief has
been made out. Beyond the common law, separation of powers
is an even
more vital tenet of our constitutional democracy. This means that the
Constitution requires courts to ensure that all
branches of
government act within the law. However, courts must refrain form
entering the exclusive terrain of the executive and
the legislative
branches of government unless the intrusion is mandated by the
Constitution itself”
Paragraph
46
“
.....
when a court weighs up where the balance of convenience rests, it may
not fail to 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. Paragraph 47
“
.............................
A court must keep in mind that a temporary restraint against the
exercise
of statutory power well ahead of the final adjudication of a
claimants case may be granted only in the clearest of cases
and after
a careful consideration of separations of powers harm...... “
(my
underlining)
[31]
In my view the manner in which the orders sought have been couched
demonstrate that the court is required to usurp the regulatory
functions
of
the respondents to such a degree that it would amount to
unlawfulness.
The
applicants have not demonstrated that it had current employees,
neither did it demonstrate that it had current projects (except
for
mentioning names without providing details) or clients whose
interests had to be balanced against those of the applicant and
the
respondents. Of importance is that the impugned decision stated that
the decision was taken within the confines of what was
presented to
it by the applicants and, applicants, as I have already found have
not made out a case for the relief sought on an
interim basis. The
application should fail for the reasons above.
[32]
I am also not satisfied that the applicant made out a case for
urgency, the facts speak for themselves. The corporate permit
expired
in November 2011, the impugned decision was made on 15 June 2012 and
the applicant still deemed it necessary to engage
the first
respondent after such decision was made and only issued the urgent
application in August 2011 to be heard on 27 August
2012. The matter
was then moved to November 2012.
[33]
In the result the following order is given.
The
application is dismissed with costs to include the costs of two
counsel.
TLHAPI
V. V
(JUDGE
OF THE HIGH COURT)
MATTER
HEARD ON: 20 NOVEMBER 2012
JUDGMENT
RESERVED ON: 20 NOVEMBER 2012
ATTORNEYS
FOR THE APPLICANT : McMENAMIN, VAN HUYSSTEEN & BOTES INC
ATTORNEYS
FOR THE RESPONDENT: THE STATE ATTORNEYS