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[2012] ZAGPPHC 210
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Gaza Security Services CC v Minister of Department of Health and Another (71074/10) [2012] ZAGPPHC 210 (12 September 2012)
NOT
REPORTABLE
NORTH
GAUTENG HIGH COURT, PRETORIA
CASE
NO: 71074/10
DATE:12/09/2012
In
the matter between:
GAZA
SECURITY SERVICES
CC
…............................................................
Applicant
and
MINISTER
OF DEPARTMENT OF
HEALTH
..............................................
First
Respondent
DIRECTOR
GENERAL:
DEPARTMENT
.....................................................
Second
Respondent
DEPARTMENT
OF HEALTH
JUDGMENT
MSIMEKI,
J
[1]
The Applicant, a service provider, brought this application seeking
an order:
"1.
That the failure to act/omission of the Respondents to grant the
Applicant a written formal contract since 2005, which
pays for the
Applicant security services at a rate as promulgated in the
Government Gazette, at the Hillbrow branch of the Respondent
be
reviewed.
2.
That the Respondents are ordered to reimburse the Applicant in the
amount being the difference between the remuneration paid
to the
Applicant since 2005 and the remuneration as set out in the
Government Gazette since 2005, for such security services by
the
Applicant.
3.
The First and/or Second Respondent is/are ordered to take all steps
to conclude a formal written agreement with the Applicant
for
security services rendered by the Applicant at the Hillbrow branch.
4.
In alternatively (sic) to paragraph 1 above:
4.1.
The matter is referred back to the First and/or Second Respondent for
reconsideration, who is ordered within thirty calendar
days from the
date of this order to:
4.1.1.
Conduct the investigations into the matter and take into account the
guidelines that may be imposed by this Honourable Court;
4.1.2.
Inform the instructing Attorneys of thee Applicant of the decision
taken after the investigation mentioned in paragraph 4.1
1 above, in
writing and within forty eight hours of the time such decision is
taken;
4.1.3.
In the event of an adverse finding by the First and Second
Respondents, to provide written reasons for such finding to the
instructing attorneys of the Applicant within fifteen calendar days
of the date of such finding.
5.
Any of the Respondents, who oppose (sic) the relief sought herein,
are (sic) ordered to pay the costs of this Application on
attorney
and client scale.
6.
Further or alternative relief."
[2]
BRIEF FACTS
The
Applicant, in 2005, concluded a written agreement annexure "TN2"
appearing on paginated page 18 of the papers with
the Respondents.
The conclusion of the agreement came about when the service provider
Gijima, at the time, gave short notice of
the termination of security
services at Hillbrow clinic. The Applicant would then perform
security services at the clinic from
1 July 2005 on a month to month
basis for a period not exceeding six (6) months. This was an
emergency agreement- The Applicant
contended that it wanted the work
and "its foot in the door." The further contention is that
the Applicant agreed to
work for much less than the Government
Gazette normally promulgate for salaries of employees in the security
sector and for much
lesser amount than they are paid for security
services at the other sights of the Respondent. The Applicant
contended that the
Respondents advised it that the tender process
would be implemented and that the contract would be advertised for
the security
services on a permanent basis at the Hillbrow clinic and
that interested parties would tender for the work. This, according to
the Applicant, meant that it would have an added advantage as "its
foot would already be in the door." It then agreed
to render the
services at a reduced rate of R90.288.00 and for 6 months. The
Applicant contended that it normally would be working
for R131.971.16
per month if the scale was not reduced. The difference between the
two scales therefore amounts to R 41.000.00
per month. The
Applicant's further contention is that the Respondents were entirely
happy with the Applicant's work which it also
did at Tladi clinic and
TM1 Metro clinic where the Applicant, according to it, was properly
paid for the work. The Applicant compared
the Government Gazette
price scale to the Government prices used for domestic workers, mine
workers and other employees in other
sectors in South Africa.
According to the Applicant, the Government price scale for security
services regulates the salaries of
employees of the security firms in
the industry. The Respondents contended that the price scales do not
apply to them as the employer-employee
relationship is missing. This
contention seems to have merit. The Applicant contended that it had
to explain to its employees that
they would be paid at a reduced rate
for 6 months only. The Applicant specifically confirms that the
Respondents had difficulties
with the tender process, advisement
thereof and the funding for the tendering. More guards in terms of
another agreement were employed
at the Hillbrow clinic and these
guards, according to the Applicant, were properly paid. This,
according to the Applicant, created
two categories of employees those
that were not properly paid (i.e. at the reduced rate) and those that
were properly paid. The
Applicant found the arrangement unacceptable.
What the Applicant seems to be loosing sight of is that one here has
to do with two
different agreements. This resulted in the Applicant
bringing this application alleging that the Respondents had since
2005 omitted
and neglected to bring the two agreements on par with
the other agreements which the Applicant concluded with the
Respondents.
Again sight is lost of the fact that the agreements are
independent of each other. The Respondents contend that the Applicant
seeks
orders for specific performance which the court, in this case,
cannot do as that would interfere with the agreement that the parties
concluded.
[3]
THE ISSUES
These
are:
3.1.
whether the review procedure is warranted and justified
3.2.
whether there is an administrative action that requires to be
reviewed or whether only a purely contractual relationship which
has
nothing to do with an administrative action has come into being.
[4]
PRINCIPLES
4.1.
An agreement once concluded has to be respected hence the maxim
"pacta sunt servanda"
4.2.
courts often interfere with agreements which are illegal or against
public policy.
4.3.
if an agreement is not contrary to public policy or its enforcement
such agreement is binding and enforceable.
4.4.
courts are allowed to decline to enforce terms in agreements that are
in conflict with the constitutional values even though
the parties
may have consented to them (See Bredenkamp and Others V Standard Bank
of SA Ltd 2010(4) SA 468 (SCA) at 479 A)
4.5.
A party is bound by a term of a contract even if the term is unfair
(See Bredenkamp case (supra) at para [34])
[5]
In Sasfin (Pty) Ltd v Beukes
1989 (1) SA 1
(A) at 9B-C Smalberger JA
said:
"The
power to declare contracts contrary to public policy should, however,
be exercised sparingly and only in the clearest
of cases, lest
uncertainty as to the validity of contracts result from an arbitrary
and indiscriminate use of power. One must be
careful not to conclude
that a contract is contrary to public policy merely because its terms
(or some of them) offend one's individual
sense of propriety and
fairness"
In
Bedenkamp v Standard Bank of South Africa Ltd 2010 (4)SA468 at para
[50] the court said:
"with
all due respect, I do not believe that the judgment held or purported
to hold that the enforcement of a valid contractual
term must be fair
and reasonable, even if no public policy consideration found in the
Constitution or elsewhere is implicated".
In
Barkhuizen v Napier (supra) 2007 (5) 323 (CC) at 341 para [57] Ncgobo
J said:
"Self-
autonomy, or the ability to regulate one's own affairs, even to one's
own detriment, is the very essence of freedom
and a vital part of
dignity. The extent to which the contract was freely and voluntarily
concluded is clearly a vital factor as
it will determine the weight
that should be afforded to the values of freedom and dignity. The
other consideration is that alt
persons have a right to seek judicial
redress."
[6]
Ms Nobanda for the Respondents submitted that the principles of just
administrative action found application only in instances
where
"administrative action" was involved. The submission is,
indeed, correct. Just administrative action has been defined
as:
"
that part of public law which regulates the exercise of public power
and the performance of public functions by organs of
State, which
fall within the constitutional rights to just administrative action
laid down in Section 33 of the Constitution."
(See LAWSA (2ed)
(vol 1) at para 70)
Section
1 of the Promotion of Administrative Justice Act no.3 of 2000 (PAJA)
defines administrative action as "any decision
taken, or any
failure to take a decision by
(a)
organ of State, when-
d)
exercising a power in terms of the Constitution or a
provincial
constitution; or (ii) exercising a public power or performing a
public
function
in terms of any legislation; or
(b)
a natural or justice 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 and which has a direct, external legal effect."
Grounds
for judicial review of administrative actions are set out in Section
6 of PAJA.
[7]
Ms Nobanda submitted that before an act can be regarded as an
administrative action and accordingly reviewable certain
jurisdictional
facts must first exist. The submission is correct.
These are that:
7.1.
the exercise of public powers or
7.2.
the performance of public functions
7.3.
by organs of state; or
7.4..
a natural or juristic person must be:
(a)
in terms of an empowering provision; or
(b)
in terms of the Constitution or a provincial constitution; or
(c)
in terms of any legislation.
[8]
Ms Nobanda submitted, correctly in my view, that:
8.1.
none of the jurisdictional facts have been alleged or appear from the
papers
8.2.
instead, the parties concluded a private agreement in terms of which
the Applicant was to render services for the Respondents
in return
for payment.
8.3.
the Respondents exercised private and not public powers or
performance of public functions as envisaged in the definition of
an
administrative action.
8.4.
the Applicant did not show that the agreement was not concluded
voluntarily or that it was not aware of the terms of the agreement
which were agreed upon by them giving rise to the agreement.
8.5.
the Respondents took no decision which could have resulted in the
administrative action. Just and lawful administrative action,
according to her, finds no application in this matter.
8.6.
Neither the agreement nor any of its terms is contrary to public
policy
8.7.
nothing vitiates the validity of the agreement.
8.8.
the agreement does not offend the provisions of the Constitution
8.9.
the facts of the current matter do not accommodate any legitimate
expectation on the side of the Applicant. In the light of
the
principles I have referred to above, I am bound to agree with Ms
Nobanda's submissions.
[9]
Ms Strauss, for the Applicant, submitted that the Respondents created
legitimate expectation on the part of the Applicant which
understood
the agreement to mean that:
9.1.
it would exist for 6 months only
9.2.
they had their "proverbial foot in the door" which meant
that they would be at an advantage when the tender would
be
advertised and considered.
9.3.
This agreement would be considered by the Respondents who would bring
the contract price in line with the other agreements
that the parties
were involved in.
9.4.
the Respondents had since 2005 omitted and neglected to bring the
agreement in line with the other agreements between the parties.
Once
brought in line with the other agreements, the agreement would then
be reasonable and acceptable.
9.5.
the Respondents would then act reasonably, justly and fairly in their
dealings with the Applicant which always had such legitimate
expectation.
[10]
Ms Strauss submitted that the Applicant has a legitimate expectation
to protect its interest. Legitimates expectation according
to the
decided cases that she referred the court to, according to her,
included expectations which go beyond enforceable legal
rights. She
submitted that the Applicant has more than the legitimate expectation
based on the contractual relationship that exists
between the
parties. She further submitted that the Applicant's whole case "is
based on contractual relationship that was
not handled in a fair and
reasonable manner." It was Ms Strauss's contention that the
court could compel a substantive result
"by granting an order to
compel the Respondents to reimburse the Applicant for the difference
in the amounts paid to the Applicant
and the amounts that the
Applicant ought to have received from 2005 to the date of the order.
The amount, according to Ms Strauss,
can be determined after delivery
of statements to the Respondents and after calculation is made by the
parties. Ms Strauss submitted
that the Respondents could be ordered
to give reasons for the decision not to pay the Applicant in
accordance with the price scale
and allow the Applicant an
opportunity to state its case in order for the amicable solution to
be reached. Ms Strauss's submission
does not have merit. The court,
for instance, is not competent to make an order forcing the parties
to amend their valid agreement-
The court neither has the basis to
interfere nor to force the parties to conclude a contract. The court
cannot order that the terms
of the existing agreement be amended. The
agreement is valid and in place and continues to exist on a month to
month basis until
validly cancelled. The Applicant, as Ms Nobanda
correctly submitted, took a business decision which is regulated by
the law of
contract. This, according to her, has never included an
administrative action . The government Gazette price scales according
to
her, have nothing to do with the contractual relationship between
the parties as they concern the employer-employee relationship.
The
submissions, in my view, have substance. Ms Strauss herself gave
examples of the relationships regulated by the price scales
in the
various industries. The Respondents cannot be forced to conclude
another agreement to substitute the valid agreement. Of
course, it is
up to the parties,. by agreement, to vary the agreement. Absent the
variation, the agreement remains in place. Ms
Strauss argued that the
agreement was preceded by a decision which was taken by the
Respondents and that that was the decision
that was reviewable. Of
course, an agreement is preceded by a decision to conclude it but
that does not simply make the decision
to conclude the agreement an
administrative action. No administrative decision was taken to
warrant the re-consideration of the
matter by way of a review. There
is nothing to review.
[11]
The Applicant seeks, inter alia, orders for specific performance. As
Ms Nobanda correctly submitted, the different meanings
of specific
performance have a common thread of "in pursuance of a
contractual obligation or other obligation.”
There
is an order to perform a specified act (ad factum praestendum) in
pursuance of a contractual or any other obligation. There
is an order
to perform a specified act or to pay money (a pecuniam solvendam) in
pursuance of a contractual obligation. There is
also an order to
perform a specified act in pursuance of a contractual obligation (See
Christie,
The Law of contract in South Africa (5ed) at p522.)
The
Applicant did not prove or allege that there was an agreement between
the parties that the Respondents would pay the Applicant
an amount
more than the contract price at the end of the agreement or any time
thereafter. Annexure TN2 does not disclose that.
The agreement
regulates whatever is being done by the parties. The Applicant
conceded that it was advised that the Respondents
would advertise a
tender for the provision of permanent security services and that the
Applicant, like any interested party, would
also tender. Indeed, Ms
Strauss conceded that there was no guarantee that the Applicant would
get the tender. An indefinite contractual
relationship can be
terminated by either party on reasonable notice. (See Breedenkamp
matter (supra) at para [23]. The Applicant,
voluntarily, decided and
elected to continue with the agreement once it came to an end. That
was to enable it to obtain "the
foot in the door" which was
as Ms Nobanda correctly submitted, "for self-serving reasons and
motives."
The
Applicant, she further submitted, "made a business decision"
and should not "seek the aid of the court to change
the terms of
the agreement it had agreed to"
[12]
Finally, Ms Nobanda submitted that the Applicant can still lawfully
cancel the agreement which is enforceable until duly cancelled.
The
Applicant, according to her, has failed to make out a proper case for
the relief that she seeks and the application should,
accordingly, be
dismissed with costs. I agree.
[13]
In the result I make the following order:
The
application is dismissed with costs.
MSIMEKI
J
JUDGE
OF THE HIGH COURT NORTH GAUTENG, PRETORIA
Counsel
for applicants: Advocate Strauss
Counsel
for respondent: Advocate Nobanda
Attorneys
for applicant:Surita Marats Attorneys
Attorneys
for respondent:State Attorney
Date
heard:10 September 2012
Date of judgment: