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[2006] ZASCA 176
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Private Security Industry Regulatory Authority v Anglo Platinum Management Services Ltd (588/05) [2006] ZASCA 176; [2007] 1 All SA 154 (SCA) (29 September 2006)
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THE SUPREME COURT OF APPEAL
OF SOUTH AFRICA
REPORTABLE
CASE NO. 588/05
In
the matter between:
PRIVATE
SECURITY INDUSTRY
REGULATORY
AUTHORITY Appellant
and
ANGLO
PLATINUM MANAGEMENT
SERVICES
LTD First
Respondent
RUSTENBURG
PLATINUM MINES LTD Second Respondent
LEBOWA
PLATINUM MINES LTD Third Respondent
POTGIETERSRUS PLATINUMS LTD Fourth
Respondent
CORAM: CAMERON,
NUGENT, PONNAN, MAYA JJA et
THERON AJA
HEARD: 22
AUGUST 2006
DELIVERED: 29
SEPTEMBER 2006
Summary: Private Security Industry Regulation Act 56 of 2001 –
the Minister may grant indefinite exemptions under the Act –
the Act does not empower the Minister subsequently to make
regulations which impose supervening limitations on such exemptions.
Neutral Citation: Private Security Industry
Regulatory Authority v Anglo Platinum Management Services Ltd [2006]
SCA 129 (RSA)
JUDGMENT
___________________________________________________________
MAYA JA
[1] This appeal, with leave of this court, concerns the
validity of regulation 10(3) of the Regulations Relating to Appeals
and Applications
for Exemptions, 2003,
1
promulgated in terms of the Private Security Industry Regulation Act
56 of 2001 (the Act). Van Oosten J, sitting in the High Court
in
Pretoria, granted an order declaring (a) the regulation invalid and
(b) two exemptions granted under the Act in favour of the
respondents
and some of their employees (which the regulation purported to amend
and/or terminate) valid in the terms in which they
were granted.
Background to the application
[2] The respondents are wholly owned subsidiaries of
Anglo American Platinum Corporation Group Limited, a company listed
on the Johannesburg
Securities and London Stock Exchanges. Together,
the subsidiaries and the holding company comprise the Anglo Platinum
Group (the
group), which is the world’s leading primary
producer of platinum group metals.
[3] The group’s business operations include
mining, smelting and refining precious metals in the Limpopo and
North West provinces.
It provides its own in-house security services
which are rendered by the first and second respondents solely within
the group. These
two respondents employ security officers who render
the security service,
2
including access and perimeter control, maintenance of security
equipment, protection and safeguarding of persons and property. The
first respondent, which acts as the administrative, financial and
technical adviser to the group, also provides training and
instruction
to the security officers, conducts its own intelligence
function and manages the rendering of the security services.
[4] The Act, which came into operation in February 2002
and has a much wider ambit than its predecessor, the repealed
Security Officers
Act 92 of 1987, brought about changes which had the
potential to impact on the manner in which the first and second
respondents conducted
their security activities. The main change was
the prohibition on provision of security services by unregistered
persons contained
in s 20(1)(a) of the Act, which provided that ‘no
person...may in any manner render a security service for
remuneration, reward,
a fee or benefit, unless such a person is
registered as a security service provider in terms of this Act’.
In its quest ‘to
regulate the private security industry and to
exercise effective control over the practice of the occupation of
security service
provider in the public and national interest and the
interest of the private security industry itself,
3
the Act thus imposed a new obligation on persons who provided
commercial security services – to register as security service
providers.
4
[5] Section 44(6)(a) of the Act excluded ‘any
category or class of security service providers which was not obliged
to be registered
as security officers in terms of the repealed
legislation immediately before the commencement of [the] Act, [from
the operation of]
the provisions of [the] Act or the Levies Act,
until such date as the Minister [for Safety and Security] may
determine by notice
in the Gazette’. The date contemplated in
this subsection (and by which the respondents would, therefore, have
had to register
as service providers) was subsequently determined as
1 March 2003.
5
[6] For a security business
6
to be registered as a security service provider, ‘all the
persons performing executive or managing functions in respect of
[the] security business [must be] registered as security service
providers’
7
and, in the case of a security business which is a company, every
director of the company must be so registered.
8
In view of the fact that the first and second respondents did not
provide security services as their core business, their managerial,
executive and directorial staff, who exceeded 35 in number, had not
complied with any of the elaborate registration requirements,
including a rigorous security training course.
9
Further, all contracts relating to the provision of security services
by the respondents would be invalidated by the provisions of
s 20(3)
of the Act.
10
[7] The provisions of the Act presented the second
respondent with a further problem. In terms of s 20(1)(a) each
security officer
employed by the respondents was required to register
in his individual capacity. Further, s 23(1)(a) of the Act requires
an applicant
for registration,
inter alia
,
to be a South African citizen or have permanent resident status in
South Africa. Twenty-two of the second respondent’s security
officers were foreign nationals, who had been in its employ for
extended periods and were allowed to work in the country by virtue
of
bilateral agreements concluded between South Africa and its
neighbours, Lesotho and Botswana. Sections 20(1)(1)(a) and 23(1)(a)
effectively barred these employees from rendering security services
in this country unless they were able to fulfil the new citizenship
or permanent residence requirement.
[8] The respondents accordingly applied to the appellant
(the Authority), which is vested with statutory authority to
administer and
enforce the Act, for an extension of time within which
to register to enable them to consider their options in the light of
the new
legal dispensation. Later they applied for exemptions and,
acting in terms of sections 1(2) and 20(5) of the Act,
11
the Minister issued two notices in which he granted two exemptions.
In one,
12
he exempted the second respondent’s twenty-two foreign
employees from the provisions of s 23(1)(a) on condition that ‘they
only render a security service within [the second respondent] …and…
not for other security businesses’ (the first
exemption). In
the other,
13
the Minister exempted the respondents from registering as security
service providers in terms of s 20(1)(a) on condition that they
‘do
not deploy security officers outside the holding company, Anglo
American Platinum Corporation Limited’ (the second
exemption).
No other conditions attached to the exemptions and no time limits
were imposed.
[9] After to the grant of the exemptions, the Minister,
purportedly acting in terms of s 35 of the Act, which vests him with
the power
to make regulations relating to a wide array of issues,
promulgated the Regulations. Part I, in regulations 5-7, deals with
the procedures
relating to the reproduction of records, lodging and
prosecution of appeals. Part II sets out,
inter
alia
, the procedure relating to the lodging
of applications for exemptions and other relevant requirements.
Regulation 8, which forms
part thereof, provides for the lapsing,
renewal and review of exemptions.
14
[10] Of direct relevance to this appeal, however, is
Part III. It embodies regulation 10, which provides:
‘(1) With effect from the date of commencement of these
Regulations, any appeal pending in terms of the repealed regulations
must continue and be disposed of as though these Regulations have not
been made, unless the interests of justice require otherwise.
(2) The provisions of sub-regulation (1) apply, with the necessary
changes, to any application for exemption.
(3) An exemption granted before the date of commencement of these
Regulations, lapses one year after such commencement, unless it
has
been renewed in terms of these Regulations’.
The respondents’ challenge to the
regulations
[11] In the court below, the respondents sought an order
declaring that (a) regulations 5-8, 10(2) and 10(3) were
unconstitutional,
unlawful, invalid and of no force or effect, (b)
the two exemptions were valid, of indefinite duration and not subject
to the provisions
of regulations 8(1) and (3), and (c) the
respondents were not obliged to apply for the renewal of the
exemptions in terms of regulation
8(2).
[12] The Authority raised several points
in limine
relating to joinder and legal standing, which were dismissed by
the court below. The objections were persisted with on appeal. At
the
hearing of the appeal, counsel for the Authority was, however,
constrained to concede, properly in my view, that they had no
merit.
In his judgment, the judge
a quo
dealt with them fully. I
wholly agree with his reasoning and nothing more need, therefore, be
said on this aspect.
[13] Regarding the merits, the respondents contended
both in the court below and in this court that the grant of the
exemptions, which
conferred rights on the respondents, amounted to
administrative action. Once the Minister granted the exemptions he
became
functus officio
and could not revisit his decision in
the absence of authority in the empowering statute for the revocation
or amendment thereof,
so the argument continued. They contended
further that the regulations (a) offended against the rule of law as
they purported to
operate retrospectively, to deprive the respondents
of their rights acquired under the exemptions when the Act empowered
neither
the Minister nor the Authority to amend or withdraw rights
retrospectively, and (b) the Minister having promulgated them without
granting the respondents or the public any form of hearing, violated
the respondents’ right to procedurally fair administrative
action.
[14] The Authority’s answer both in the court
below and here was the following. The objects of the Act - to
regulate the security
industry - precluded the grant of indefinite
exemptions. The exemptions in issue, which were mere indulgences, and
thus created neither
rights which could be breached nor a legitimate
expectation that they would endure indefinitely, were thus not
indefinite in nature
and could be revoked by reasonable notice as the
regulations did. It followed, in the Authority’s argument, that
regulation
10(3) did not operate retrospectively.
Decision of the court below
[15] The court below held that the matter fell to be
decided solely on the question of ‘retrospectivity of the
regulations…created
in regulation 10(3)’ and that it was
unnecessary to go beyond the question of the validity of this
regulation except to consider
the validity of the other impugned
regulations as an alternative. It found that regardless of the nature
of the exemptions, the respondents
had acquired the right ‘to
provide security services free from the formal requirements relating
to registration and the sanctions
for non-compliance’. In its
view, the Act did not empower the Minister, who became
functus
officio
after granting the exemptions, ‘to amend the
exemptions by the introduction in the regulations of a time limit
relating to
their duration’ and his failure to conduct the
public consideration process contemplated in sections 3 and 4(1) of
the Promotion
of Administrative Act 3 of 2000 further served to
render the regulation invalid. It found that the respondents were
brought within
the purview of regulation 8 (which was prospective in
its operation and thus valid), by the provisions of regulation 10(3)
which
created retrospectivity and were invalid. It then concluded
that the exemptions remained valid, indefinitely but would terminate
if the security services were provided outside the group.
Determination of the issues
[16] It needs to be borne in mind that the Minister
exercised quite different powers when he granted the exemptions, and
when he made
the regulations, respectively. He granted the exemptions
in the exercise of the administrative power to grant exemptions in
particular
cases that was conferred upon him by sections 1(2) and
20(5). When making the regulations, however, he exercised the
regulatory powers
conferred on him to make subordinate legislation
generally by section 35. The Minister has at no stage purported, in
the exercise
of his powers to administer the Act, to withdraw the
exemptions that he granted in the exercise of those administrative
powers. What
he has purported to do instead is to make regulations,
in the exercise of his regulatory powers, that have the effect of
terminating
all exemptions generally, including those that are now in
issue.
[17] Thus, in my view, it assists to approach the matter
in two stages: (i) Did the Act confer power on the Minister to issue
exemptions
that were of indefinite duration (which is what he
purported to do)? This concerns the extent of the Minister’s
administrative
power under the Act in implementing its provisions.
(ii) If so, did the Act authorise the Minister to make regulations
that terminated
all exemptions generally (including those that are
now in issue). This concerns the ambit of the Minister’s
regulatory powers
– that is, his power to issue subordinate
legislation – under the Act.
[18] The Authority’s counsel conceded that the
Minister had not erred in granting the original exemptions and that
he did so
properly in procedural and substantive respects. That was a
necessary and unavoidable concession, for the Minister has not
claimed
that any irregularity tainted the grant of the original
exemptions. Counsel for the Authority nevertheless argued first that
the
exemptions cannot be of indefinite duration as the Act does not
empower the Minister to grant such an exemption.
[19] Secondly, he contended, indefinite exemptions
militate against the main object of the Act, which is to regulate the
security
industry, since the Authority would lose its power to
control a security service provider ‘indefinitely and forever’
once the exemption was granted. For example, so the argument
developed, the respondents could appoint, as security service
providers,
persons who do not meet the requirements prescribed in s
23(1) of the Act; they could flout the requirements relating to
infrastructure
and capacity necessary to render a security service in
terms of s 23(2)(b); or the foreign employees could continue working
for the
respondents even where the bilateral agreements entitling
them to work in the country were cancelled. In all these instances
the
Authority would be unable to exercise any of its regulatory
powers set out in the Act, to the prejudice of the objectives set out
therein.
[20] It was contended, thirdly, that the Minister has
power, which he derives from the provisions of s 35 of the Act, to
make regulations
reviewing, amending or revoking the exemptions.
Regulation 10(3), which gives reasonable notice of the contemplated
termination of
an exemption, operates prospectively and is therefore
valid.
[21] I am unable to agree with the contentions on behalf
of the Authority. The Act clearly does not prohibit the grant of
indefinite
exemptions. As previously indicated, s 20(5) empowers the
Minister to grant an exemption from the provisions of the Act,
‘either
generally or subject to such conditions as [he may
specify]’. Clearly, the Minister has the power to grant an
exemption with
or without condition. Contrary to submissions made on
the Authority’s behalf in this regard, ‘condition’
must include
the duration of an exemption, where one is fixed.
15
If that be the case, one must then ask why the Minister should not
have the power to impose an exemption without term. The answer
must
be that he does have that power. This is precisely what he did in the
instant matter. The exemptions are indefinite.
[22] I do not believe that the exemptions conflict with
the objects of the Act because they are indefinite. It must first be
borne
in mind that here, despite the grant of the exemptions, all the
respondents’ employees (except the twenty-two foreigners),
including its executives, directors and managers actively engaged in
the provision of security services, were still required to
register
in their individual capacities and did in fact register.
[23] Further, the Authority’s argument seems to
ignore the existence of the Code of Conduct for Security Service
Providers,
2003
16
contemplated in s 28 of the Act. The Code provides comprehensive and
stringent procedures and rules that all security service providers
and employers of in-house security officers must obey
17
in the conduct of their security duties, irrespective of whether or
not they are registered with the Authority.
18
There is, therefore, absolutely no impediment to the appellant’s
ability ‘to regulate the private security industry and
to
exercise effective control over the practice of security service
providers in the public and national interest and in the interest
of
the private security industry itself’.
19
It is clear also in the case of the foreign employees that were the
bilateral agreements to cease for any reason, their work permits
would likewise lapse and they would be repatriated to the countries
of their origin. As the respondent’s counsel correctly
submitted, no legal vacuum could be created by the grant of
indefinite exemptions. The security service providers concerned
clearly
remained within the Act’s reach and firmly under the
Authority’s regulatory control.
[24] It is so that there is a legitimate and compelling
public interest in the control of the large and enormously powerful
private
security industry. This is to ensure, for example, that
security officers have no links to criminal activities, are properly
trained
and are subject to proper disciplinary and regulatory
standards and avoid any abuses which might be perpetrated by security
officers
against the vulnerable public.
20
There is therefore a compelling need for vigilance on the Authority’s
part to ensure that the objects of the Act are not undermined.
[25] The concerns raised by the Authority, even if
unwarranted in this case, do therefore highlight the need for the
Minister to exercise
caution in granting exemptions; to apply his
mind properly to the merits of the application and to use his power
to exempt sparingly.
However, one assumes that he will grant an
exemption only in appropriate cases. That being so, it then becomes
difficult to conceive
any basis for a subsequent revocation of the
exemption, particularly where none of the relevant circumstances have
changed, as is
the case here.
[26] Since, as I have found, the Minister exercised his
administrative authority under the Act regularly and properly in
granting
indefinite exemptions, the question then is: Does the Act
confer on him the power to issue regulations which terminate those
exemptions?
The Act contains no express provision conferring such a
power. The Authority contended that since the Act gives the Minister
the
power to grant an exemption, it must, by necessary implication,
clothe him with a comparable power to revoke it. As indicated above,
the Authority relies for this contention on the wide, general
provisions of s 35 (1)(a), (b) and (u) which read:
‘(1) The Minister may make regulations relating to-
(a) any matter which in terms of this Act is required or permitted to
be prescribed;
(b) the registration by the Authority of security service providers;
. . .
(u) generally, any matter which it is necessary or expedient to
prescribe for the attainment or better attainment of the objects
of
[the] Act or the performance of the functions of the Authority’.
[27] The question whether or not legislation impliedly
provides authority (for revocation in this case) ultimately depends
upon an
interpretation of the statute concerned. As mentioned
earlier, the Act confers no express power of this kind. Does it do so
impliedly?
A provision can only be read into a statute when it is a
necessary implication. The test for implying the provision,
therefore, is
whether it is necessary for the efficacious operation
of the statute.
21
In my view, there is no reason why the Act cannot operate
efficaciously without implying the power to revoke the exemptions in
issue,
bearing in mind that they were tailor-made for a specific,
circumscribed group of in-house security service providers and the
safeguards
provided by the Act mentioned in paragraphs [21] and [22]
above.
[28] I agree with the respondents
that the power contended for by the Authority should have been
expressly conferred and cannot be
implied. As stated in
Principal
Immigration Officer v Medh
:
22
‘The powers of the Minister must be found within the section
creating them, and according to that section the Minister only
has
power either to exempt or not: there is no third course. In the
absence of specific provisions to that effect, such power cannot
be
construed as embracing the wider power of attaching conditions. If it
had been the intention of the Legislature to confer upon
the Minister
the additional power of attaching conditions to the exemption, it
should have said so, as it has done in the case of
temporary permits
…’
[29] There is moreover strong
indication in the Act that the legislature was well aware of the need
to confer powers to withdraw,
revoke or amend exemptions granted
thereunder. Indeed, the Act contains, for example, s 26 which
provides comprehensively for the
lapsing, withdrawal and suspension
of registration. Of significance also in this regard is s 22 which
expressly empowers the Minister
to regulate the periodic renewal of
registration. The rest of the provisions contained in s 35 itself are
very specific about the
matters in respect of which the Minister may
make regulations. Yet the only mention of exemptions anywhere in the
Act is in sections
1(2) and 20(5), which as already explained provide
the Minister with express power to afford exemptions either with or
without condition,
or for a definite or indefinite period.
[30] The provisions of s 35, in my view, do not assist
the Authority. The Minister did not have the power to make regulation
10(3)
and, as the court below found, it is invalid. In view of this
conclusion, it is unnecessary to deal with the other issues.
[31] There is an outstanding issue relating to a costs
award made by the court below in an interlocutory application during
the proceedings.
In response to the
in limine
objection
relating to non-joinder, the foreign employees had filed confirmatory
affidavits in which they supported the respondents’
case,
disavowed any need or desire on their part to be joined as
respondents in the application and waived any corresponding right
they may have had to demand to be joined. They, however, launched an
application in terms of Uniform rule 12 for intervention in
the
proceedings, conditional on a finding by the court below that their
waiver was inadequate to relieve the second respondent of
an
obligation to join them in the proceedings. The Authority delivered a
notice to oppose the application but filed no opposing affidavit.
The
judge
a quo
consequently found it unnecessary to decide the
application. He merely made a costs award against the Authority on
the basis that
the objection was misconceived and the foreign
employees’ action warranted in the circumstances. This award
remained an issue
on appeal although it was not pursued with any
particular vigour. More importantly, it was not contended that the
court below exercised
its discretion unjudicially in making the costs
award. This court thus has no basis to interfere in this regard.
[32] For these reasons, the appeal is dismissed with
costs, such costs to include the costs of two counsel.
__________________
MML MAYA
JUDGE OF APPEAL
CONCUR:
CAMERON
JA
NUGENT
JA
PONNAN
JA
THERON
AJA
1
Promulgated by
GN 1253 published in GG 25394
dated 5 September 2003.
2
‘
Security service’ and ‘security
officer’ are defined extensively in the Act. The respondents
and their employees
fall within the purview of the definitions.
3
Section 3 of the Act.
4
Defined in s 1(1) of the Act as ‘a person who renders a
security service to another for a remuneration, reward, fee or
benefit
and includes such a person who is not registered as required
in terms of this Act’.
5
GN 1027 published in GG 23679 of 26 July 2002.
6
Defined in s 1(1) of the Act as ‘subject to
ss (2), any person who renders a security service to another for
remuneration,
reward, fee or benefit, except a person acting only as
a security officer’.
7
Section 20(2)(a) of the Act.
8
Section 20(2)(b).
9
Regulation 3(3)
of the
Private Security Industry
Regulations, 2002
requires ‘every person contemplated in s
21(1)(a)(ii), (iii), (iv), (v), (vi) or (vii) of the Act, or a
person who intends
to render a security service contemplated in
paragraph (l) of the definition of security service in s 1(1) of the
Act, who applies
for registration as a security service provider,
must have successfully completed, at a training establishment
accredited in terms
of the law, at least the training course
described and recognised as ‘Grade B’ in terms of the
law and policy applied
by the Board…’.
10
Section 20(3) provides: ‘Any contract,
whether concluded before or after the commencement of this Act,
which is inconsistent
with a provision contained in subsections (1),
(2) or section 44(6), is invalid to the extent to which it is so
inconsistent’.
11
Both sections contain exemption provisions which are very similar in
wording. Section 1(2) empowers the Minister, after consultation
with
the Private Security Industry Regulatory Authority and as long as it
does not prejudice the achievement of the objects of
the Act, by
notice in the Gazette, to exempt any service, activity or practice
or any equipment or any person or entity from any
or all the
provisions of the Act. Section 20(5), on the other hand, empowers
the Minister, after consultation with the Authority,
by notice in
the Gazette to exempt any security service provider or security
service provider belonging to a category or class
specified in the
notice, either generally or subject to such conditions as may be
specified in the notice, from the operation of
any provision of this
Act.
12
GN R1119 published in GG 25278 dated 8 August 2003.
13
GN R1500 published in GN 24119 dated 6 December 2003.
14
Regulation 8:
(1) An exemption
granted by the Minister in terms of section 1(2) or 20(5) of the Act
lapses, subject to these Regulations, one
year after the date on
which the applicable notice was published in the
Gazette
,
unless the Minister determined otherwise when the exemption was
granted or the exemption has been renewed in terms of these
Regulations.
(2)(a) Any person who wishes an exemption to be
renewed, must apply for a renewal not earlier than 90 days and not
later than 45
days before the date on which the exemption will lapse
as contemplated in subregulation (1).
(b) An application for the renewal of an exemption is
subject to the provisions, with the necessary changes, applicable to
the submission
and consideration of an application for exemption in
terms of these Regulations.
(c) If an application for the renewal of an exemption
has been submitted to the Authority in terms of these Regulations,
the exemption
remains valid, subject to these Regulations, until the
application is decided by the Minister.
(3) The Minister may at any time review an exemption
that has been granted or renewed in terms of the Act and, if there
is a sound
reason therefor -
(a) withdraw
the exemption;
(b) amend or remove any condition to which the
exemption is subject, or add the conditions that may be necessary;
(c) amend the scope of the exemption; or
(d) take any other step permitted by law in regard to
the exemption’.
15
Principal Immigration Officer v Medh
1928 AD 451
at 458.
There, the court equated the power to impose conditions with the
capacity to impose limitations on duration.
16
GN 305 published in GG 24971 of 28 February 2003.
17
Section 1.
18
Section 2(a).
19
Preamble of the Code of Conduct.
20
PSIRA v Association of Independent Contractors
2005 (5) SA 416
(SCA) para 1.
21
South African Medical Council v Maytham
1931
TPD 45
at 47; See also
The Firs
Investments (Pty) Ltd v Johannesburg City Council
1967
(3) SA 549
(W) at 557B-C.
22
1928 AD 451
at 458.