Steer Property Services (PTY) Limited t/a Steer & Co v Estate Agency Affairs Board (A421/01) [2002] ZAWCHC 8; [2002] 3 All SA 103 (C) (22 February 2002)

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[2002] ZAWCHC 8
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Steer Property Services (PTY) Limited t/a Steer & Co v Estate Agency Affairs Board (A421/01) [2002] ZAWCHC 8; [2002] 3 All SA 103 (C) (22 February 2002)

REPORTABLE
IN THE HIGH COURT OF SOUTH AFRICA
(CAPE OF GOOD HOPE PROVINCIAL DIVISION)
CASE
NO. A421/01
In the matter between:
STEER PROPERTY SERVICES (PTY)
LIMITED
T/A STEER & CO
Appellant
and
THE ESTATE AGENCY AFFAIRS BOARD
Respondent
­­­­­­­­
JUDGMENT : 22 FEBRUARY 2002
________________________________________________________________
VAN HEERDEN J:
The appellant is a company carrying on business as an ‘
estate
agent
’ as defined in section 1 of the Estate Agency Affairs Act
112 of 1976, as amended (hereinafter referred to as ‘
the Act
’).
The respondent, the Estate Agency Affairs Board (hereinafter
referred to as ‘
the Board
’), is a juristic person
established in terms of section 2 of the Act. Section 8B of the Act
empowers the Board to appoint committees
of inquiry, while section
30(2) provides that the Board or a committee of inquiry ‘
may in
the prescribed manner bring and investigate any charge of conduct
deserving of sanction against any estate agent
’. Section 30(1)
deals extensively with what acts and/or omissions by an estate agent
constitute ‘
conduct deserving of sanction
’.
On 19 October 2000, the
appellant was found by a committee of inquiry appointed by the Board
to have contravened section 30(1)(c)
of the Act, in that
the appellant had
failed to pay moneys due by it ‘
to the Board or in respect of
the fund within one month after such moneys became due
’. The
‘
fund
’ referred to in section 30(1)(c) is the Estate
Agents Fidelity Fund established under section 12(1) of the Act
(hereinafter referred
as ‘
the Fund
’). In terms of section
12(2) of the Act, the Fund is controlled and managed by the Board,
which is obliged to ‘
utilise the moneys in the fund in
accordance with the provisions of’
Chapter II of the Act.
Acting in terms of
section 30(3) of the Act, the abovementioned committee of inquiry
withdrew the Fidelity Fund Certificate of the
appellant, but
suspended such withdrawal for a period of 30 days on
condition that ‘
the balance of R234 498.00 plus interest be paid
to the Board within 30 days
’.
On 8 January 2001, the
appellant, acting in terms of section 8C(1) of the Act, lodged an
appeal to the Board against the decision
of the committee of inquiry,
such appeal relating both to its ‘
conviction
’ by the
committee of a contravention of section 30(1)(c) of the Act, as also
the ‘
sentence
’ imposed upon it by the committee in terms
of section 30(3). On 14 May 2001, the Board advised the appellant in
writing that its
appeal against the ‘
conviction and sentence of
the relevant committee of inquiry of the Board was duly considered by
the Board at its recent meeting held
on 8 May, 2001
’ and that,
‘
after having had due consideration of the papers which served
before the committee of inquiry
a quo
, the
transcript of the hearing, the written reasons for the decision of
the committee of inquiry concerned and the notice of appeal
filed …
it was resolved by the Board, pursuant to the provisions of section
8C(2)(a) that the finding and sentence of the committee
of inquiry of
the Board be confirmed.
’ According to this written
notification, the Board was of the view that the reasons for the
finding of the committee of inquiry
concerned correctly reflected the
position and it accordingly aligned itself fully with these reasons.
The appellant now
appeals to this court against both its ‘
conviction
’ and
the penalty imposed upon it. Its right of appeal to this court
arises from section 31 of the Act, which section provides
as follows:
‘
(1) Any person who feels aggrieved by any decision taken by the
Board in the exercise of its powers under section 8C, 16, 27, 28 or
30 may at any time after he or she became aware of such decision but
not later than one month after the Board –
has informed him or her in writing of such decision and upon
payment of the prescribed fees, request the Board in writing to
furnish
him or her in writing with its reasons for such decision;
has in accordance with paragraph (a) furnished him or her with
its reasons for such decision and after notice to the Board, appeal
to the court against such decision, and the court may thereupon –
dismiss the said appeal;
if it is of the opinion that the Board has not acted in
accordance with the relevant provision of the Act, give an order
opposite
to the decision of the Board or amending the decision of
the Board;
refer the matter back to the Board for further consideration; or
give such other order, including any order as to costs, as it may
deem fit.
’
As submitted by Mr
Binns-Ward SC
, who represented the Board in
the present proceedings, it appears from the South African case law
that these appeal proceedings in
terms of section 31 of the Act are
sui generis
, combining certain elements of judicial review of
administrative action and certain elements of civil appeal
proceedings. See, in
this regard,
Lek v Estate Agents Board
1978 (3) SA 160
(C),
Hanley v Estate Agents Board
1978 (3) SA
281
(T) at 285G-286G and
Estate Agents Board v Lek
1979 (3) SA
1048
(A) at 1065C-E.
It is common cause that
the appellant was not given any notice of the date of the hearing of
its ‘
appeal
’ by the Board, nor was it given the
opportunity to make representations at the hearing of such appeal.
In its Notice of Appeal
in terms of section 31 of the Act, one of the
grounds of appeal relied upon by the appellant was that the Board
‘
erred in not hearing the appeal in the prescribed manner by not
conducting a hearing and by not affording the appellant an
opportunity
to attend the hearing and address the Board at such
hearing
’.
Section 8C(2) of the
Act provides that an appeal against the decision of a committee of
inquiry ‘
shall
’ be heard by the Board ‘
in the
prescribed manner
’. The word ‘
prescribed
’ is
defined in section 1 as meaning ‘
prescribed by regulation
’,
and section 33(1)(jB) provides that the Minister of Trade and
Industry may, after consultation with the Board, make regulations
‘
prescribing the procedure to be followed in respect of an
appeal to the Board and the manner in which the appeal must be
heard
’. It is, however, common cause that, at the time of the
hearing of the appeal by the Board, (and, it would appear, at the
time
of the present proceedings) no such regulations had been
promulgated. Neither in its Notice of Appeal in terms of section 31
of
the Act, nor in the original heads of argument filed on its behalf
in the present proceedings, was it contended by the appellant
that
the absence of the procedural regulations contemplated by section
8C(2) affected the competence of the Board to consider an
appeal
under the substantive provisions of section 8C.
However, in the
supplementary heads of argument filed on behalf of the appellant, Ms
Fichardt
, counsel for appellant before this court, argued
that, in view of the peremptory language of section 8C(2), read
together with section
33(1)(jB), the Board is itself not empowered to
determine the procedure to be followed in hearing an appeal against
the decision
of a committee of inquiry, and that, in the absence of
regulations made by the Minister prescribing the procedure to be
followed,
any
procedure adopted by the Board, as well as
any
decision taken by the Board pursuant thereto, would be
ultra
vires
the provisions of the Act and accordingly null and void.
Mr
Binns-Ward
,
on the other hand, submitted that, in the absence of regulations made
by the Minister in terms of section 33(1)(jB), the adoption
by the
Board of
ad hoc
procedures compliant with the rules of natural
justice would be in order and that, although the appellant had
admittedly not been
given any oral hearing by the Board, the rules of
natural justice (in particular, it would appear, the
audi alteram
partem
principle) had been complied with, in that the appellant’s
written notice of appeal in terms of section 8C(1) of the Act
constituted
a combination of grounds of appeal and arguments in
support thereof. Mr
Binns-Ward
argued further that, even
if
this court were to find that the decision of the Board, in
respect of both the ‘
conviction
’ and the ‘
sentence
’
was indeed vitiated by procedural irregularities, this court could,
and indeed should, substitute its own finding for that of
the Board
in respect of the appeal from the decision of the committee of
inquiry. I will return to this matter at a later stage.
The salient facts on
which the committee of inquiry based its decision are common cause.
In terms of section
32(1) of the Act, the appellant, trading as an estate agent, is
obliged to open and keep one or more separate
trust accounts with a
bank and deposit therein all trust moneys held or received by it or
on its behalf. Pursuant to this section,
the appellant paid all
trust moneys received by it for the financial year ending 28 February
1999 into various trust accounts opened
by it at various financial
institutions. Interest in the total amount of R670 420.33 (R693
396.33, less R22 976.00 paid out in terms
of express written
mandates) accrued in respect of the said trust monies for the
financial year ending 28 February 1999.
Section 32(2)(c) of the
Act provides that interest on moneys deposited in trust accounts
referred to in section 32(1) ‘
shall, subject to the express
terms of the mandate in question, which shall be in writing, be paid
to the fund
by the estate agent concerned
’
(my emphasis), while section 32(2)(d) provides that the Board ‘
may
in the prescribed circumstances refund to an estate agent a
prescribed portion of the interest paid by such estate agent
to
the fund
in terms of paragraph (c)
’ (again my
emphasis). In terms of Regulations made by the Minister in terms of
the Act, headed ‘
Trust Account of an Estate Agent and Investment
of Trust Moneys
’, under Government Notice R1415 (Regulation
Gazette 3226, Government Gazette 7648) dated 3 July 1981
(substituting Regulation 4
of the Regulations published under
Government Notice R1472 (Regulation Gazette 2506, Government Gazette
5694) dated 29 July 1977
-
‘
Any interest received by or credited to an estate agent in
respect of any period ending on the last day of February in each year
and
payable
to the fund
in terms of section
32(2)(c), shall be paid regularly and promptly but in any event not
later than the last day of May in that year,
to the fund or
its nominee
’ (emphasis added).
Regulation 4.2 of the
same Regulations published on 3 July 1981 provides that the Board
‘
may, in terms of section 32(2)(d), refund 50% of all interest
paid
to the fund
in terms of regulation 4.1, to
such estate agent
' (again my emphasis).
It would appear that,
in practice, estate agents are permitted by the Board to retain 50%
of the interest payable by them to the Fund
in terms of Regulation
4.1, read together with section 32(2)(c) of the Act, as an amount
‘
refunded
’ to them in terms of Regulation 4.2, read
together with section 32(2)(d) of the Act. In terms of this
practice, estate agents
in reality
pay
over to the Board only
50% of the interest due by them to the Fund in terms of Regulation
4.1 and section 32(2)(c), while retaining
the balance (the other 50%)
as an amount ‘
refunded
’ to them in terms of Regulation 4.2
and section 32(2)(d). Thus, for the financial year ending 28
February 1999, the appellant
should have paid over to the Board, in
respect of the Fund, the sum of R335 210.17 by no later than 31 May
1999. Indeed, on 17 August
1999, the Board advised the appellant
that an amount constituting 50% of the abovementioned total interest
accrued for the financial
year ending 28 February 1999 (namely the
amount of R335 210.17) was payable by the appellant ‘
to the
Board
’ – presumably in the Board’s representative capacity
as the juristic person controlling and managing the Fund.
Instead of paying the
abovementioned amount of R335 210.17, the appellant paid over only
the amount of R100 712.17, leaving an unpaid
balance of R234 498.00.
The appellant’s failure to pay this latter amount to the Fund (or
to the Board in its representative capacity)
gave rise to the
disciplinary proceedings instituted against the appellant, which
proceedings culminated in the abovementioned decision
of the
committee of inquiry on 19 October 2000.
The appellant’s
explanation for its failure to pay the outstanding balance of
R234 498.00 was the
assertion by it of a claim that it was entitled to deduct from the
amount admittedly due by it to the Fund in
terms of Regulation 4.1
(read together with section 32(2)(c)), the amount of R234 498.00
(R205 700.00 plus VAT in the amount of R28
798.00) in respect of fees
levied by it for administering the trust moneys held in 2 057 trust
accounts (ie a fee of R100.00 per
annum per account, plus VAT).
Indeed, the appellant rendered a so-called ‘
tax invoice
’
dated 21 June 1999 to the Board for this amount, headed ‘
Management
of deposits for Estate Agency Board
’, which invoice was
received by the Board on 7 September 1999. According to the
appellant, it was entitled to set-off

the sum of its ‘
fair and reasonable
’ costs and expenses
(as quantified by itself) of administering the trust accounts held by
and administered by it in terms of section
32 of the Act against the
amount of accrued interest due to the Fund in terms of section
32(2)(c) and (d) of the Act, read together
with Regulations 4.1 and
4.2.
During the hearing
before the committee of inquiry, the representative appearing on
behalf of the Board led no evidence, but simply
produced the
correspondence and other documents upon which the Board relied. The
appellant, on the other hand, presented the evidence
of a certain Mr
John van der Spuy, a director of the appellant, who also deposed to
the main affidavit filed in support of the current
proceedings.
As pointed out by Mr
Binns-Ward
, there was no suggestion whatsoever in the
documentation or in the evidence given by Mr Van der Spuy before the
committee of inquiry
that the Board had contractually agreed to pay
the ‘
administration charge
’ levied by the appellant in
respect of the financial year ending 28 February 1999. On the
contrary, it appears from the record
of the proceedings before the
committee of inquiry and from the correspondence between the parties
annexed to Mr van der Spuy’s
affidavit, that the appellant
unilaterally ‘
decided
’, for the first time in 1999, to
levy these administration fees. From the correspondence attached to
the appellant’s papers
before this court, it would appear that the
Board was informed of the appellant’s decision in this regard only
in September 1999
(see Annexure JVS 5 to the Founding Affidavit
deposed to by Mr Van der Spuy).
During the hearing
before the committee of inquiry, the basis upon which these
administrative charges were claimed to be recoverable
by the
appellant from the Board was stated by the appellant’s attorney to
be a ‘
common law right
’. The precise nature and origin of
this so-called ‘
common law right
’ were not identified by
the appellant’s attorney, such attorney merely stating that ‘
the
normal
[rule]
in
practice is if you
do work for the benefit of a third party, you’re entitled to charge
for that work a reasonable remuneration,
a reasonable compensation,
and that is what Steer & Co have done, and we believe that they
are entitled to do it according to
law
’.
In the notice of appeal
lodged by the appellant in terms of section 8C(1) of the Act, the
basis of the appellant’s alleged claim
against the Board was
described as ‘
a legitimate expectation
’. However, as
convincingly submitted by Mr
Binns-Ward
in the
initial
heads of argument filed on behalf of the appellant, the statements in
support of this basis in the notice of appeal were highly
unconvincing and, unsurprisingly, Ms
Fichardt
placed no
reliance upon this basis in the proceedings before this court.
I am in full agreement
with Mr
Binns-Ward
that the appellant failed to establish any
legal basis for the existence of an obligation on the Board to pay to
the appellant the
amount claimed in respect of administrative
charges. As indicated above, there is no question of the conclusion
of an express contract
between the appellant and the Board in this
regard. Insofar as the appellant may seek to rely upon a tacit
contract (see the appellant’s
reliance on a ‘
tacit and/or
implied mandate
’ in its plea and counterclaim in the action
instituted by the Board against the appellant, for payment of the
outstanding moneys,
after the completion of the disciplinary
inquiry), it is my view that the appellant has certainly not
satisfied either one of the
two apparently conflicting tests for
inferring the existence of a tacit contract. These two tests were
described by Comrie J (with
whom Ngwenya J concurred) in
Muller v
Pam Snyman Eiendomskonsultante (Pty) Ltd
2001 (1) SA 313
(C) as
follows (at 320A-H):
‘…
The
first is the “no other reasonable interpretation” test, which was
enunciated by Corbett JA in the Ocean Commodities case
[
Standard
Bank of South Africa Ltd v Ocean Commodities Inc
1983
(1) SA 276
(A)]
at 292B-C:
“
In
order to establish a tacit contract it is necessary to show, by a
preponderance of probabilities, unequivocal conduct which is
capable
of no other reasonable interpretation than that the parties intended
to, and did in fact, contract on the terms alleged.
It must be
proved that there was in fact
consensus
ad idem
.”
The second test is the “most plausible probable conclusion”
test which was stated by the same Learned Judge of Appeal in the
Joel
Melamed
case
supra
[
Joel
Melamed & Hurwitz v Cleveland Estates (Pty) Ltd
[1984] ZASCA 4
;
1984 (3)
SA 155
(A)]
at 165:
“
In this connection it is stated that a court may hold that a
tacit contract has been established where, by a process of inference,
it concludes that the most plausible probable conclusion from all the
relevant proved facts and circumstances is that a contract
came into
existence …”
The preferred test was left open in that case and in the
subsequent decisions of that court. However, Corbett JA added the
following
comments at 165C-F of
Joel Melamed
:
“
It
may be that in the light of this the principle as quoted above from
Standard Bank of SA Ltd v
Ocean Commodities Inc (supra)
requires reformulation. In
this regard, however, there is this point to be borne in mind. While
it is perfectly true that in finding
facts or making inferences of a
fact in a civil case the court may, by balancing probabilities,
select a conclusion which seems to
be the more natural or plausible
one from several conceivable ones, even though that conclusion is not
the only reasonable one, nevertheless
it may be argued that the
inference as to the conclusion of a tacit contract is partly, at any
rate, a matter of law, involving questions
of legal policy. It
appears to be generally accepted that a term may not be tacitly
imported into a contract unless the implication
is a necessary one in
the business sense to give efficacy to the contract … By analogy
it could be said that a tacit contract
should not be inferred unless
there was proved unequivocal conduct capable of no other reasonable
interpretation than that the parties
intended to, and did in fact,
contract on the terms alleged. Be that as it may, this is not the
occasion to resolve those problems.”
It seems to me, with respect, that proof of the primary facts on a
balance of probabilities is required by either test, and that the
main difference between them lies in the strength of the inferences
to be drawn from the facts so proven. As Corbett JA observed,
that
would at least in part be influenced by considerations of legal
policy. My own preference, writing as a single judge of first
instance, is for the so-called traditional test, the only reasonable
interpretation test, provided that the test is applied in a
common
sense and businesslike way …
’
(Cf. the decision of the Supreme Court of Appeal in
Gordon Lloyd
Page & Associates v Rivera & Another
2001 (1) SA 88
(SCA)
at 95H-96B where Harms JA, purporting to ‘
restate the ordinary
test for proof of a tacit contract
’, stated that ‘
since
this case is concerned with the test for absolution at the end of a
plaintiff’s case … it was, at that stage, at least
necessary for
the appellant to have produced evidence of conduct of the parties
which justified a reasonable inference that the parties
intended to,
and did, contract on the terms alleged, in other words, that there
was in fact
consensus ad idem
.’ See further
Bourbon-Leftley & Andere v WPK (Landbou) Bpk
1999 (1) SA
902(C)
at 925B-D,
Samcor Manufacturers v Berger
2000 (3) SA
454
(T) at 461D-G and
Alzu Ondernemings (Edms) Bpk v Agricultural
and Rural Development Corporation & Another
[2001] 2 All SA
368
(T) at paras 14-16.)
There would also appear
to be no
statutory
basis for the appellant’s alleged claim
against the Board for administrative charges and no reliance was
placed by the appellant
upon any such statutory basis. Furthermore,
the appellant had no scope to bring a claim based on unjustified
enrichment and did
not attempt to do so. The ‘
services
’
which appellant claims to have rendered did not occur
sine causa
– the appellant was statutorily obliged to establish and administer
the relevant trust accounts and to account to the Fund for
the
interest accrued upon such accounts (see section 32 of the Act).
Moreover, as argued by Mr
Binns-Ward
, the ‘
service
’
of administering the trust accounts would, in any event, appear to be
more sensibly characterised as a service rendered to the
estate
agent’s clients and trust account creditors than to either the
Board or the Fund.
In view of the above,
as the appellant in my view failed to establish any legal basis for
the existence of any obligation on the Board
to pay the amount
claimed by it in respect of administrative costs, the alleged
fairness and reasonableness of such administrative
charges as
contended for by Ms
Fichardt
is totally irrelevant and was
correctly regarded as such by the committee of inquiry.
The failure on the part
of the appellant to establish any legal basis for its claim against
the Board in respect of administrative
services allegedly rendered by
it to the Board is fatal to the appellant’s reliance upon set-off.
Moreover, even if the appellant
were
to be able to establish a
legal basis for any such claim against the Board, the appellant would
not, in my view, be able to set-off
such a claim against
the Board
against its (ie the appellant’s) statutory obligation (in terms of
sections 32(2)(c) and (d) of the Act, read with Regulations
4.1 and
4.2) to pay to
the Fund
interest accrued on moneys deposited
in trust accounts by it. As indicated above,
the Fund is established
in terms of section 12(1) of the Act,
paragraph (e) of which provides that ‘
interest paid to
the
fund
in terms of section 32(2)(c)
’ (my emphasis)
shall be paid into the Fund. In terms of section 12(2), ‘
the
fund shall be controlled and managed by the Board
,
which shall
utilise the moneys in the fund in accordance with the provisions of
this Chapter
’ (ie Chapter II of the Act).
The nature of the
payments which the Board, acting in its representative capacity as
the administrator of the Fund, is empowered to
make from the Fund is
closely regulated by Chapter II of the Act (see, in particular,
sections 12B, 12C, 13, 18 and 19 of the Act).
As pointed out by Mr
Binns-Ward
, it is clear from the provisions of sections 9 and
10 of the Act that the Board is required to keep its ‘
business
accounts
’ separate from the Estate Agents Fidelity Fund account
provided for under section 12(3) of the Act.
For set-off to occur,
there must be reciprocity of debts – in other words, A cannot
set-off against B a debt due by C. Accordingly,
a debtor is not
allowed to rely by way of set-off on a liability of his creditor to a
third party. For the purposes of set-off,
a debt owed by or to a
person in his or her individual capacity cannot be set-off against a
debt owed to or by the same person in
a representative capacity.
(See, in this regard, Van der Merwe et al
Contract: General
Principles
(1993) 389 and Christie
The Law of Contract in
South Africa
4 ed (2001) 557-558, and the authorities cited by
these writers.) Thus, any claim which the appellant may have against
the Board
for services allegedly rendered by it to the Board
could not be set-off against the amount owed by the appellant to the
Board in
its representative capacity as administrator of the Fund in
respect of interest accrued on moneys deposited in trust accounts
held
and managed by the appellant in terms of section 32 of the Act.
In view of the above,
it would appear that the committee of inquiry correctly found that
the appellant had ‘
failed to pay any moneys due by
[it]
to the Board or in respect of the fund within one month after such
moneys became due
’ and was, accordingly, ‘
guilty
’ of
conduct deserving of sanction in terms of section 30(1)(c) of the
Act.
As regards the appeal
against the ‘
sentence
’ imposed upon the appellant by the
committee of inquiry, Ms
Fichardt
argued that the condition of
suspension of the withdrawal of the appellant’s fidelity fund
certificate, in particular, that the
balance of R234 498.00 plus
interest be paid within 30 days,
in effect
amounts to a fine
imposed by the committee of inquiry upon the appellant. According to
Ms
Fichardt
, this ‘
fine
’ is in excess of the
prescribed statutory limit of
R25 000.00 in respect
of a fine which may be imposed by the Board or a committee of inquiry
(as the case may be) in terms of section
30(3)(b) of the Act.
I agree with Mr
Binns-Ward
that this argument is lacking in merit. The
‘
sentence
’ imposed by the committee of inquiry was a
suspended withdrawal of the appellant’s fidelity fund certificate.
Section 30(3)
of the Act provides as follows:
‘
When any estate agent is found guilty of conduct deserving of
sanction by the Board or a committee of inquiry, the Board or a
committee
of inquiry (as the case may be) may –
withdraw the fidelity fund certificate of such estate agent…
impose on such estate agent a fine not exceeding R25 000,00 or
such higher amount as may be prescribed by the Minister by notice
in
the Gazette in order to counter the effect of inflation, and which
is payable to the Board;
reprimand such estate agent:
Provided that a fine or any portion thereof or the withdrawal of
any fidelity fund certificate may be suspended for a period not
exceeding
three years and on such further conditions as the Board or
committee of inquiry (as the case may be) may determine.
’
.
’
To my mind, it is quite clear from the papers before this court that
the nature of the condition of suspension of the appellant’s
fidelity fund certificate imposed by the committee of inquiry in the
present case was the purging by the appellant of its contravention
of
section 30(1)(c) of the Act within 30 days. The appellant had to
purge its misconduct by payment of the outstanding balance of
R234
498.00, plus interest thereon (presumably calculated from 1 June 1999
in terms of Regulation 4.1), still owing by it to the
Fund in respect
of the financial year ending 28 February 1999, in terms of section
32(2)(c) of the Act. The argument that this condition
amounted
in
effect
to a fine is completely unacceptable. It is perfectly
clear from the record of the hearing before the committee of inquiry,
as also
from the reasons given by the committee of inquiry for its
decision, that payment by the appellant of the outstanding balance,
plus
interest, would discharge the appellant’s outstanding
statutory obligation
vis à vis
the Fund in terms of section
32(2)(c) of the Act, read together with Regulation 4.1. The
analogy drawn by my
learned brother presiding of the suspension of a period of
imprisonment imposed on a person convicted of failing
to comply with
a maintenance order against him or her on condition that the amount
of maintenance in arrears is paid to the maintenance
creditor is an
apt one in this regard.
Viewed in this light,
the ‘
sanction
’ imposed upon the appellant by the committee
of inquiry was eminently fair and reasonable. Subject to it
discharging its outstanding
statutory obligation to the Fund within
the 30 day period provided for by the condition of suspension, the
withdrawal of the appellant’s
fidelity fund certificate would not
take effect and the appellant would suffer no effective penalty
whatsoever.
To return to the
procedural considerations relating to the appeal to the Board against
the decision of the committee of inquiry, in
terms of section 8C of
the Act, I am prepared to accept in favour of the appellant that, in
view of the peremptory language of section
8C(2), read together with
section 33(1)(jB), the Board is itself not empowered to determine the
procedure to be followed in hearing
an appeal against the decision of
a committee of inquiry, and that, in the absence of regulations made
by the Minister prescribing
the procedure to be followed,
any
procedure adopted by the Board, as well as
any
decision taken
by the Board pursuant thereto, would be
ultra vires
the
provisions of the Act and accordingly null and void. Moreover, even
if one were to accept that, in the absence of regulations
made by the
Minister in terms of section 33(1)(jB), the adoption by the Board of
ad hoc
procedures in accordance with the rules of natural
justice would be in order, I am of the view that, by failing to even
notify the
appellant of the date of the hearing by the Board of its
appeal against the decision of the committee of inquiry and to give
the
appellant the opportunity to make full written or oral
representations at the hearing of such appeal, the Board failed to
comply
with the
audi alteram partem
principle. This failure
to my mind constitutes a material irregularity, vitiating the
decision of the Board.
I agree with Ms
Fichardt
that the argument by Mr
Binns-Ward
that the
a
udi alteram partem
principle was complied with in that the
Notice of Appeal lodged by the appellant in terms of section 8C(1) of
the Act ‘
constituted a combination of grounds of appeal and
arguments in support thereof
’ cannot be accepted. As submitted
by Ms
Fichardt
, the Notice of Appeal does not deal, in any
way, with the record of the proceedings before the committee of
inquiry or make any submissions
in respect thereof. It can therefore
not be regarded as constituting ‘
argument
’ by the
appellant. Furthermore, the appellant was not afforded any
opportunity of supplementing its Notice of Appeal, nor was
it advised
by the Board that the notice of appeal would, in itself, be regarded
as ‘
argument
’.
It follows from the
above that the Board’s decision in respect of both the finding and
the sentence imposed by the committee of
inquiry must be regarded as
vitiated by procedural irregularities and, accordingly, null and
void.
This is not, however,
the end of the matter. As indicated above, the proceedings before
this court must be regarded as
sui generis
, combining elements
of judicial review of administrative action and of civil appeal
proceedings. The wide powers of this court in
such proceedings are
evident from the provisions of section 31(1) of the Act. With
reference to, in particular, section 31(1)(b)(ii)
of the Act and the
powers of the court in judicial review of administrative action, Mr
Binns-Ward
submitted that this would be a proper case for the
court to substitute its decision for that of the Board.
As a general principle,
a review court, when setting aside a decision of an administrative
authority, will not substitute its own
decision for that of the
administrative authority, but will refer the matter back to the
authority for a fresh decision. In determining
whether there are
exceptional circumstances justifying the review court in substituting
its own decision for that of the relevant
administrative organ, the
overriding principle is that of fairness to both sides (see, in this
regard,
Masamba v Chairperson, Western Cape Regional Committee,
Immigrants
Selection Board & Others
2001 (12) BCLR
1239
(C) at 1259D-1260E, and the authorities there cited). Although
it would appear that there is no
numerus clausus
of situations
in which a court may substitute its own decision for that of the
administrative organ concerned, a number of guidelines
have
crystalised from the South African case law in this regard, which
guidelines were usefully summarised by Hlophe J (as he then
was) in
University of Western Cape & Others v Member of the Executive
Committee for Health and Social Services & Others
1998 (3) SA
124
(C) at 131D-J:
‘
Where the end result is in any event a foregone conclusion and
it would merely be a waste of time to order the tribunal or
functionary
to reconsider the matter, the Courts have not hesitated
to substitute their own decision for that of the functionary …
The Courts
have also not hesitated to substitute their own decision
for that of a functionary where further delay would cause
unjustifiable
prejudice to the applicant … Our Courts have further
recognised that they will substitute a decision of a functionary
where the
functionary or tribunal has exhibited bias or incompetence
to such a degree that it would be unfair to require the applicant to
submit
to the same jurisdiction again… It would also seem that our
Courts are willing to interfere, thereby substituting their own
decision
for that of a functionary, where the Court is in as good a
position to make the decision itself. Of course the mere fact that a
Court considers itself as qualified to take the decision as the
administrator does not
per se
justify usurping
the administrator’s powers or functions. In some cases, however,
fairness to the applicant may demand that the
Court should take such
a view … the categories where the Court would be prepared to
substitute its own decision for that of an
administrative body are
not closed. Depending on the circumstances of each particular case,
it may be fair for the Court to take
the decision itself rather than
refer it back to the appropriate functionary.
’
In this case, the facts
in question are not subject to dispute and the decision of the
committee of inquiry turned entirely on questions
of law. Sending
the matter back to the Board in such circumstances will result in
purposeless delay and administrative inconvenience
and expense,
particularly in view of the fact that there are still no procedural
regulations governing the hearing of an appeal by
the Board in terms
of section 8C. This is a situation where the court is as well or
better qualified to make the decision as the
Board.
As regards the costs of
the current proceedings, Ms
Fichardt
argued that, in view of
the procedural irregularities vitiating the decision of the Board,
as also the failure by the Board to furnish
the appellant with proper
reasons for its decision (as required by section 8C(1)(b) of the
Act), the respondent should be ordered
to pay the costs of the appeal
proceedings, even if this court were to set
aside the decision of
the Board and substitute such decision by, in effect, confirming the
decision of the committee of inquiry and
the sanction imposed by it
on the appellant.
Mr
Binns-Ward
,
on the other hand, argued that should the court follow this route,
then the Board would have achieved substantial success in these
proceedings and that, in accordance with the general rule that costs
should follow the event, the appellant should be ordered to
pay the
Board’s costs in these proceedings. Mr
Binns-Ward
further
submitted that, in the light of the stance adopted by the Board from
the very outset in respect of the appellant’s alleged
claim against
it for administrative charges, the subsequent conduct of the
appellant, both in the hearing before the committee of
inquiry and in
the subsequent proceedings, was indicative of a lack of
bona fides
on its part. This being so, submitted Mr
Binns-Ward
, the
equities favoured the award of costs against the appellant.
It is trite law that an
award of costs is in the discretion of the court and that even the
general rule, namely that costs should
follow the event, is subject
to the overriding principle. This discretion must be exercised
judicially upon a consideration of the
facts of the case. In essence,
it is a matter of fairness to both sides. (See, in this regard, A
Cilliers ‘Costs’ in Joubert
(ed)
LAWSA
Volume 3 Part 2
(First reissue, 1997) para 292 and the authorities there cited.)
Although the Board may
be said to have succeeded on the merits in the present proceedings,
the appellant has been successful in its
attack upon the procedural
aspects of the decision taken by the Board. This being so, the fair
outcome is, in my view, that no order
as to costs should be made.
In the circumstances, I
would recommend that the following order be made:
The decision of the Estate Agency Affairs Board taken on
8 May 2001 confirming the finding of, and the penalty imposed by,
the committee of inquiry constituted by the Board dated
19 October 2000 is
hereby set aside.
The decision of the committee of inquiry dated
19 October 2000 to the effect that the appellant contravened
section 30(1)(c) of the Estate Agency Affairs Act 112 of 1976 by
failing
to pay moneys due by it ‘
to the Board or in
respect of the Fund within one month after such moneys became due
’
is hereby confirmed.
The sanction imposed by the committee of inquiry upon the
appellant, namely that the Fidelity Fund certificate of the
appellant
be withdrawn, but that such withdrawal be suspended for a
period of 30 days on condition that the outstanding balance of R234
498.00,
plus interest thereon, be paid to the Board within 30 days,
is hereby confirmed.
Each party is to pay its own costs of these proceedings.
…………………………………….
B J
VAN HEERDEN
VAN
ZYL J
: I agree and it is so ordered.
…………………………………….
D
H VAN ZYL
REPORTABLE
IN THE HIGH COURT OF SOUTH AFRICA
(CAPE OF
GOOD HOPE PROVINCIAL DIVISION)
CASE
NO. A421/01
In the matter between:
STEER PROPERTY SERVICES (PTY)
LIMITED
Plaintiff
and
THE ESTATE AGENCY AFFAIRS BOARD
Defendant
______________________________________________________
Adv for Plaintiff
Adv
L F Fichardt
Attorneys
Ince
Wood & Raubenheimer
Adv for Defendant
Adv
A G Binns-Ward SC
Attorneys
Pohl
& Stuhlinger
Date(s) of Hearing
22
February 2002
Judgment
22
February 2002
CORAM : VAN ZYL et VAN
HEERDEN JJ
JUDGMENT
: VAN HEERDEN J (VAN ZYL J concurs)