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[2015] ZALAC 57
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Karoo Hoogland Municipality v Nothnagel and Another (CA07-14) [2015] ZALAC 57; (2015) 36 ILJ 2021 (LAC) (15 April 2015)

REPUBLIC OF SOUTH
AFRICA
THE LABOUR APPEAL
COURT OF SOUTH AFRICA, CAPE TOWN
JUDGMENT
Reportable
Case no: CA 07-14
In
the matter between
KAROO
HOOGLAND
MUNICIPALITY

Appellant
and
NOTHNAGEL,
LOUIS

First Respondent
and
BOTHA
MARIUS KIRSTEN

Second Respondent
Heard:
05 March 2015
Delivered:
15 April 2015
Summary:
Mootness - court having discretion to deal with a matter which has
become moot or academic if there
exist circumstances of public policy
related to the impact or likely impact of the judgment
a quo
that render it prudent that a judgment be given.
Court
a
quo
misconstruing facts that led to the decision to institute a
disciplinary enquiry into conduct of  employees – evidence

proving that municipal council took decision to institute an enquiry
and that municipal manager mandated to carry out municipal’s

council’s decision – municipal manager’s role or
influence not  affecting the status of the decision nor
its
source –– Authority vested in the municipal manager not
invoked in the decision – the finding of the High
Court that
the municipal manager was invalidly appointed not affecting the
decision of the council - interpretation of the
Oudekraal
doctrine restated - invalid action remaining enforceable unless and
until set aside - Labour Court erred in finding that decisions
made
by a municipal manager whose appointment is declared void are
automatically to be set aside – appropriate to clarify
the
principle of law despite mootness- danger of dicta in  labour
judgment being cited selectively and causing confusion in
future
disputes before arbitators employees opposing the correction of a
legal point on appeal unwarranted and justifying costs
against them-
Appeal upheld with costs.
Coram: Davis, Ndlovu
and Sutherland JJJA
JUDGMENT
SUTHERLAND
JA
Introduction
[1]
The
origins of the controversy which is the subject of this appeal lie in
an urgent interdict obtained from the Labour Court (Steenkamp
J) by
the two respondents, Nothnagel and Botha on 15 August 2013. (Reported
as
Nothnagel
and Another v Karoo Hoogland Municipality
(2014)
35 ILJ 758 (LC)) The respondents were senior employees of the
appellant, Karoo Hoogland Municipality. The Labour Court declared

that steps taken to institute and prosecute a disciplinary enquiry
into their alleged misconduct were unlawful and interdicted
the
municipality from taking any further steps pursuant to that decision
to subject them to discipline. On 16 April 2014, the appeal
against
that order was lodged, ie about eight months later.
[2]
The
appeal was argued before this Court on 5 March 2015. At that moment,
the court was informed that the two respondents were no
longer
employees of the appellant. Consequently, the dispute between the
parties is moot, save for the question of costs. This
much is
accepted by both parties. The appellant’s stance is that
notwithstanding the mootness, the appeal should be heard,
not only
for the costs question to be resolved, but because it is appropriate
that certain statements by the judge
a
quo
about the law, which are argued to be plainly incorrect, be overruled
because if they are left to stand, they are likely to cause

unnecessary subsequent litigation, especially if CCMA commissioners
are misled by the questionable
dicta
.
Counsel for the respondents, despite other arguments, ultimately,
conceded that on the crucial point, he could not defend the
reasoning
in the judgment, although he contended the result was justifiable; ie
the prevention of the continuation of the disciplinary
enquiry.
Nevertheless, it was argued on behalf of the respondents that the
appeal should not be further entertained, on grounds
of its academic
nature and because, for reasons of established policy, any
controversy about costs alone does not warrant a hearing.
Approach
to Mootness
[3]
It
is the issue of mootness that now takes centre stage in the matter.
However, because of the premise upon which it is advanced
that there
are proper grounds to deal with at least one issue despite the
mootness of the order, it is unavoidable that the merits
of the
judgment
a
quo
must be addressed. The paradox of having to take a view on the
controversy in order to decide whether it is necessary to take a
view
is not lost on me.
[4]
It
is beyond doubt that a court may, at its discretion, deal with a
matter even if it is moot or academic as between the principal

parties, if there exists circumstances of public policy, related to
the impact or likely impact of the judgment
a
quo
,
that render it prudent that a judgment be given. In
Qoboshiyane
NO v Avusa Publishing Eastern Cape (Pty) Ltd,
[1]
a matter dealing with compelling the disclosure of a report as
contemplated by the Promotion of Access Information Act, Wallis
JA at
[5] put it thus:
‘
The
disclosure of the report means that any judgment or order by this
court will have no practical effect or result as between the
parties.
In the circumstances this court may dismiss the appeal on that ground
alone. The court has a discretion in that regard
and there are a
number of cases where, notwithstanding the mootness of the issue as
between the parties to the litigation, it has
dealt with the merits
of an appeal. With those cases must be contrasted a number where the
court has refused to deal with the merits.
The broad distinction
between the two classes is that in the former a discrete legal issue
of public importance arose that would
affect matters in the future
and on which the adjudication of this court was required, whilst in
the latter no such issue arose.
In exercising its discretion the
court is always mindful of the wise words of Innes CJ in
Geldenhuys
and Neethling v Beuthin
,
that:
“
After all,
Courts of Law exist for the settlement of concrete controversies and
actual infringements of rights, not to pronounce
upon abstract
questions, or to advise upon differing contentions, however
important.”’
[2]
[5]
In
my view, as shall become evident, this is a case which requires a
judgment on one particular legal issue to be given, despite
mootness
of the matter.
[6]
A
brief narrative of the history of the dispute is appropriate. The two
respondents, long standing employees, and a newly appointed
municipal
manager, Saayman, ostensibly, did not hit it off. At once Saayman
took the reins, he set in train investigations into
the propriety of
past financial decisions. Among others, the two respondents came
under suspicion of committing improprieties.
In turn, Saayman himself
was accused of improprieties by the respondents. The two respondents
were suspended in terms of a decision
by Saayman, but an application
to the Labour Court to set that aside succeeded. The appellant abided
that court order.
[7]
After
that, the appellant nevertheless persisted in prosecuting an enquiry
into alleged misconduct. Investigations were conducted
by outsiders
including the National Treasury. The Treasury recommended discipline
against several employees including the two respondents.
[8]
The
two respondents launched an application seeking several forms of
relief, much of it interlocutory.
[9]
The
Labour Court interdicted the enquiry on the basis that the decision
to discipline the two respondents was unauthorised. The
premise of
that finding was the common cause fact that, on 22 February 2013, the
Northern Cape Division of the High Court had delivered
a judgment
which declared that the appointment of Saayman as municipal manager
was unlawful and set it aside.
[10]
The
application for the interdict had been launched before that date, on
12 February 2013. At that stage, the grounds relied upon,

self-evidently, could not include the alleged unlawfulness of the
decision to discipline based on Saayman’s unlawful appointment,

declared so only on 22 February. But on 27 February, the two
respondents supplemented their founding affidavit by the introduction

of that information, and invoked it as a basis to set aside the
enquiry.
The
Judgment of the court a quo
[11]
The
critical passages in the Labour Court Judgment explaining the
reasoning supporting the order are at [19] – [28]. It is

necessary to reproduce them in full:
‘ …
Legality
[19] The applicants base their claim
to have the disciplinary hearings set aside on the principle of
legality. They claim that a
failure to intervene would lead to a
grave injustice, summarized under three headings:
19.1   the lack of
authority for the holding of the disciplinary hearings;
19.2   an alleged
breach of the regulations; and
19.3   a claim that the
disciplinary hearings would amount to a gross injustice in the
circumstances.
Authority
[20] In the Northern Cape judgment,
the High Court has declared the decision of the municipality to
appoint Saayman as its
municipal manager null and void and his
employment contract has been set aside.
[21] Saayman — who was accused
of financial impropriety by the applicants —
played a
central role in convening the disciplinary hearings against the
applicants that have not yet been held.
The council mandated
him to appoint a chairperson and an officer to lead evidence in those
disciplinary hearings
.
[22] The Local Government: Municipal
Systems Act regulates the appointment of municipal managers.
Saayman's appointment was set
aside, inter alia, because it did
not comply with s 54A(2) of the Systems Act:
'(2) A person appointed as municipal
manager in terms of subsection (1) must at least have the skills,
expertise, competencies and
qualifications as prescribed.'
[23]
The result is that all actions
undertaken by Saayman in his capacity as municipal manager are null
and void ab initio
.
One of those was to institute disciplinary
action against the applicants, albeit by resolution of the council.
The municipal manager is the head of administration of the
municipality. In terms of s 55 of the Systems Act:
'As head of administration the
municipal manager of a municipality is, subject to the policy
directions of the municipal council,
responsible and accountable for
— …
(g)
the
maintenance of discipline of staff;
(h)
the
promotion of sound labour relations and compliance by the
municipality with applicable labour legislation.'
[24] Mr
Stelzner
argued that,
flowing from the Northern Cape judgment, read with the provisions of
the Systems Act, the disciplinary action against
the applicants must
be set aside as a result of the role of Saayman in initiating and
prosecuting the hearings.
[25] Mr
Oosthuizen
countered
that this did not follow, relying on the following passage from
Oudekraal Estates
'[26] ... But the question that arises
is what consequences follow from the conclusion that the
Administrator acted unlawfully.
Is the permission that was granted by
the Administrator simply to be disregarded as if it had never
existed? In other words, was
the Cape Metropolitan Council entitled
to disregard the Administrator's approval and all its
consequences merely because it
believed that they were invalid
provided that its belief was correct? In our view, it was not. Until
the Administrator's approval
(and thus also the consequences of the
approval) is set aside by a court in proceedings for judicial review
it exists in fact and
it has legal consequences that cannot simply be
overlooked. The proper functioning of a modern State would be
considerably compromised
if all administrative acts could be given
effect to or ignored depending upon the view the subject takes of the
validity of the
act in question. No doubt it is for this reason
that our law has always recognised that even an unlawful
administrative act
is capable of producing legally valid consequences
for so long as the unlawful act is not set aside…
[31] Thus the proper enquiry in each
case — at least at first — is not whether the initial act
was valid but rather
whether its substantive validity was a necessary
precondition for the validity of consequent acts. If the validity of
consequent
acts is dependent on no more than the factual existence of
the initial act then the consequent act will have legal effect for so

long as the initial act is not set aside by a competent court.'
[26] But the respondents' reliance on
those passages overlooks the phrase — repeated no less than
three times in various forms
in the passages cited by the
respondents — 'for so long as the initial act is not set aside
by a competent court'
. In this case, the initial appointment of
Saayman as municipal manager has been set aside by the High Court.
His consequent acts,
including the prosecution of the disciplinary
hearings against the applicant, cannot be legally valid.
[27
] In these circumstances, the
pending disciplinary hearings against the applicants must be set
aside.
Interdict: A clear right?
[28]
It is clear from the foregoing
that the applicants have established a clear right for the
relief they seek, based on the fact
that the appointment of the
municipal manager was null and void
. In the circumstances, I need
not consider the second and third grounds, ie that the municipality
did not comply with the regulations;
or that the proceedings are an
abuse of process.’
(Footnotes omitted; highlighted
critical passages supplied)
[12]
The
locus of the controversy is in the highlighted passages. Two issues
warrant attention. (1) First, on the facts, Saayman did
not make the
relevant decision to institute and prosecute an enquiry into alleged
misconduct by the two respondents; the Council
did so. (2) Second,
the remarks about the application of what I shall call the
Oudekraal
doctrine do not accurately state the law.
The
Facts
[13]
The
Council of the appellant, on 9 October 2012, resolved thus
(immaterial remarks omitted):
‘
2. That the
municipal council… resolves …. that the charges against
the following senior managers …. are serious:
>Dr M K Botha
>Mr L Nothnagel
…
.
3. The municipal council further notes
that based on the national treasury….report it is recommended
that council take appropriate
action including disciplinary
proceedings:
> Council thus resolve to proceed
with disciplinary proceedings against senior managers (Dr MK Botha
and Mr L Nothnagel) in terms
of the Local Government: Disciplinary
Regulations for Senior Managers…
> ….
4. Council further authorise the
municipal manager, Mr E Saayman to proceed to (a) appoint and (b)
sign the letters of appointment
for:
> an independent presiding officer
– Mr Silas Selemela;
>An officer to
lead the evidence – Adv Martin Phera; and
> any other persons(s)/ experts
that may be required to assist in conducting and concluding the
disciplinary proceedings.’
[14]
It
is plain from the reading of this resolution, that Saayman’s
mandate was purely administrative. No part of what he was
directed to
do was dependent upon his status as municipal manager. No other act
in furtherance of the disciplinary enquiry required
a decision nor an
act premised on the powers vested in the office of municipal manager,
per se. Even the charge sheet was, apparently,
signed by the pro
forma prosecutor, Adv M Phera, who was selected by the Council rather
than by Saayman. Later, a substitution
of the selected presiding
officer was effected and again this was a decision taken by the
Council on 30 October 2012, not by Saayman.
[15]
The
Labour Court’s finding that Saayman was mandated to
appoint
a chair for the enquiry and a prosecutor is semantically correct, but
the text of the resolution, read in context, was a mandate
to
administer
the Council’s decision, a task anyone could have been assigned
to do. The further finding by the Labour Court that Saayman
played “a
central role” is an exaggeration of the relevant facts; what he
did was to perform the acts of a functionary
at the bidding of the
Council and his “central” role as such ought not to be
exaggerated. Although understandable that
the most senior person in
the bureaucracy was mandated to undertake these tasks, it makes no
difference to the source or status
of the decision itself. The allied
perspective that the Council was heavily influenced by Saayman, and
the implication that such
influence was malign does not disturb the
status of the Council as decision-maker nor the validity of its
decision.
[16]
Thus,
on the facts adduced, however influential Saayman might have been,
(an assessment which must be cautiously weighed in the
light of the
fact of outside forensic agents playing a role in the investigations
and it being the Treasury’s recommendation,
not that of
Saayman, to discipline the two respondents) Saayman did not make the
critical decisions. A proper appreciation of the
facts would have
showed that no decision was necessary by the Labour Court about the
validity of the authority of the municipal
manager to make decisions.
[17]
Notwithstanding
this important aspect, the Labour Court decided the matter on the
premise that Saayman was relevantly implicated
in the decision to
discipline the two respondents. That premise was not substantiated
and once that edifice is absent there is
no factual basis for the
order that was granted.
The
application of the
Oudekraal
doctrine
[3]
[18]
However,
the more serious aspect is the notion that once a municipal manager’s
appointment is set aside, (paragraphs [23]
and [26] of the judgment
a
quo
,
cited above) whatever decisions taken during the incumbent’s
reign purporting to exercise the authority now declared to
have been
invalidly exercised, are
ipso
facto
,
invalid too, and in consequence fall to be set aside automatically,
without regard to the implications of so doing.
[19]
On
behalf of the appellant, it is argued that these
dicta
are incorrect. As alluded to earlier, the
dicta
were not defended in argument on behalf of the respondents. If these
dicta
are inaccurate, it is argued on behalf of the appellant, that the
publication thereof holds out the real and likely risk of the

judgment being cited in future disputes about the impugned decisions
of municipal managers and inviting undesirable results, especially
in
SALGBC arbitrations, where as a reading of the law reports reveal,
the corps of municipal managers has, over several years,
contributed
at least its fair share to the volume of litigation. It is argued
that there is a threat to the interests of justice;
more concretely,
the real risk of public funds being consumed in litigation over the
uncertainties. Moreover, such a controversy
could apply to any public
official whose appointment is voided, not only to municipal
officials.
[20]
This
view is countered by the submission that the
dicta
in the judgment
a
quo
have no precedent value, because any realistic confusion about the
ambit of the
Oudekraal
doctrine has been eliminated by the remarks made in the decision of
the Constitutional Court in
MEC
for Health, EC v Kirland Investments (Pty) Ltd t/a Eye Laser
Institute
2014
(3) SA 481
(CC). In that case, the court was divided about the
process that was mandatory to set aside invalid decisions. The
Majority, per
Cameron J, rejected what they called a shortcut by an
organ of state to be released from the invalid decision taken by
itself by
regarding it as non-existent, and held that a review
application to declare the decision invalid had to be prosecuted, and
upon
that being decided, a further decision would have to be taken
about what to do about the consequences. (esp at [87] – [106])
[21]
It
must be fairly stated that comprehension of the
Oudekraal
doctrine is no easy task. It is the classic example of common sense
triumphing over mechanical legal reasoning in order to prevent

self-help, which cannot be sanctioned, and to ensure that an invalid
decision must be set aside pursuant to a legal process, rather
than
be ignored by the decision maker.
[22]
The
critical passages in
Oudekraal
are cited above. The sting is in the idea that an act, albeit invalid
for want of regularity, remains a fact. Later acts perpetrated
on the
assumption of the validity (incorrectly) of the initial act remain
enforceable unless and until they are set aside. The
important
dimension of this doctrine is that once a court has declared the
initial decision invalid, thereafter, another court,
recognising the
invalidity of decisions made later upon that premise, must have such
later decisions placed before it whereupon
it shall consider the
problem and make two decisions; first, to declare the later decision
invalid, and second, decide what appropriate
relief, consequent upon
such a declaration, ought to follow.
[23]
There
is no room on the
Oudekraal
doctrine
for an “automatic” washing away of the multitude of
decisions made by a municipal manager, if his appointment,
after
usually several months if not longer, is declared to be invalid. It
is for this reason that the
dicta
in the judgment [26] and [27] require qualification. It cannot follow
as a matter of course that in every instance it is appropriate
to
unwind what has been set in train based on an invalid decision. A
court must assess the consequences and on some occasions a
pragmatic
decision will be warranted, and when appropriate, an invalid decision
will not be set aside.
[24]
In
the decision by Froneman J in
Benwenyama
Minerals (Pty) Ltd and Others v Genorah Resources (Pty) Ltd and
Others
2011(4) SA 113 (CC) at [81] – [87] the approach of a court to
dealing with invalidly made decisions was addressed. The issue
was
the identification of what consequences would a court permit to flow
from an invalid decision, in the exercise of its discretionary

powers. At [83]  - [86] it was held thus:
‘ …
This
'generous jurisdiction' in terms of s 8 of PAJA provides for a wide
range of just and equitable remedies, including declaratory
orders,
orders setting aside the administrative action, orders directing the
administrator to act in an appropriate manner, and
orders prohibiting
him or her from acting in a particular manner.
[84] It would be conducive to clarity,
when making the choice of a just and equitable remedy in terms of
PAJA, to emphasise the
fundamental constitutional importance of the
principle of legality, which requires invalid administrative action
to be declared
unlawful.
This would make it clear that the
discretionary choice of a further just and equitable remedy follows
upon that fundamental finding.
The discretionary choice may not
precede the finding of invalidity. The discipline of this approach
will enable courts to consider
whether relief which does not give
full effect to the finding of invalidity, is justified in the
particular circumstances of the
case before it.
Normally this
would arise in the context of third parties having altered their
position on the basis that the administrative action
was valid and
would suffer prejudice if the administrative action is set aside, but
even then the 'desirability of certainty' needs
to be justified
against the fundamental importance of the principle of legality.
[85] The apparent anomaly that an
unlawful act can produce legally effective consequences is not one
that admits easy and consistently
logical solutions. But then the law
often is a pragmatic blend of logic and experience. The apparent
rigour of declaring conduct
in conflict with the Constitution and
PAJA unlawful is ameliorated in both the Constitution and PAJA by
providing for a just and
equitable remedy in its wake. I do not think
that it is wise to attempt to lay down inflexible rules in
determining a just and
equitable remedy following upon a declaration
of unlawful administrative action. The rule of law must never be
relinquished, but
the circumstances of each case must be examined in
order to determine whether factual certainty requires some
amelioration of legality
and, if so, to what extent. The approach
taken will depend on the kind of challenge presented — direct
or collateral; the
interests involved, and the extent or materiality
of the breach of the constitutional right to just administrative
action in each
particular case.
[86]
The High Court, after finding
that the review was brought out of time and that there were no
reviewable irregularities, nevertheless
went ahead and stated that
this was a case where a court in its discretion ought to decline to
set aside the invalid administrative
act
. The majority judgment
in the Supreme Court of Appeal adopted this reasoning. The reasons
offered were fourfold, namely that: (a)
it would make little
difference to the members of the community whether Genorah or
Bengwenyama Minerals exploited the prospecting
rights; (b) reliance
on s 104 of the Act was misplaced; (c) if the grant in respect of the
two community farms were set aside,
it would probably affect the
viability of the remainder of the project; and (d) the public
interest required finality.’
[25]
As
a result, such an enquiry follows as a matter of course, not an
automatic setting aside of the decision, without more.
[26]
The
approach of the Labour Court to the decisions of the municipal
manager, taken prior to his appointment being declared invalid,
are
inconsistent with higher authority cited above. Despite it being
possible for the decision
a
quo
to be understood to be trumped by higher authority, it remains
equally realistic to suppose that in a dispute ventilated in the

SALGBC, especially among non-lawyers, that the
dicta
in the court
a
quo
might not be interrogated as carefully as the best practice might
require, especially among those disputants who confine their
reading
to the Labour Law reports. The risk of avoidable appeals is real. A
correction by way of the qualification set out above
is therefore
wholly appropriate.
The
costs
[27]
Counsel
for the respondents pressed on us that the two respondents, as
individuals, ought not to be ordered to pay costs. However,
their
conduct of the litigation is not such that they can be accused of
seeking to resolve the dispute cheaply. The appeal was
prosecuted
after they had refused to consent to a re-institution of the
disciplinary proceedings. Moreover, after a protracted
period, they
left the employ of the appellant when the appeal process was far
advanced with only the hearing outstanding. They
delivered heads of
argument the day before the hearing raising mootness for the first
time. The appellant’s burden of costs
was not given any weight
in seeking their own strategic advantages. Lastly, the premise of the
case they pressed on the Labour
Court, in urgent proceedings, was
fundamentally flawed. On the other hand, it could fairly be said that
part of their case was
unexplored in the court
a
quo
,
and it is inappropriate to explore it on appeal simply to assess it
merits, if any, to determine the effect it may have on the
costs.
(See:
Mashoane
v Mashoane
1962
(2) SA 684
(D) at 687G). However, the costs applicable to the initial
proceedings differ in character from the appeal proceedings. The
insistence
on the appeal process rumbling on, and active opposition
at the eleventh hour to resist an appeal made moot by their departure
from the employ of the appellant, to resist a correction of the
judgment on a legal point of public importance, in my view, justifies

the two respondents paying the costs of the appeal. Such an order
would, in my view, satisfy the species of considerations articulated

by Centlivres CJ in
Tropical
(Commercial and Industrial) Ltd v Plywood Products Ltd
1956 (1) SA 339
(A) at 345H- 346A:
‘
Up to a late
stage in the present case it appears that both parties mistook the
position and it was not until October 21st that
the plaintiff's
attorneys notified the defendant's attorneys that the plaintiff would
object
in
limine
to the hearing of the appeal. By that time the major costs of appeal
must have been incurred by both sides, the record having been
lodged
with the Registrar on August 15th and notice of set down having been
given on August 31st. It is reasonable to assume from
the letter of
October 21st that by that time counsel had already been briefed for
the appeal. None of the cases purport to lay
down a hard and fast
rule in a matter such as this nor can they be said to deprive the
Court of its inherent discretion to make
such an order as to costs as
may be just in the circumstances of any particular case. Cf. Estate
Maree v Redelinghuis,
1943 AD 547
at pp. 557 and 558. The defendant
persisted in maintaining that the matter was appealable and as the
Court did not feel able to
give a decision on the preliminary point
at once it heard argument on the merits and the argument in the whole
case lasted two
and a half days. This is a factor which must be taken
into account.’
The
Order
[28]
The
appeal is upheld.
[29]
The
order of the court
a
quo
is set aside.
[30]
The
respondents shall pay the costs of the appeal jointly and severally,
the one paying the other to be absolved.
_______________
Sutherland JA
Davis
JA and Ndlovu JA concur in the judgment of Sutherland JA
FOR
THE APPELLANT:
Adv A C Oosthuizen
SC
Instructed by Wessels &
Smith Attorneys
FOR
THE RESPONDENTS:
Adv R Stelzner SC
Wessels & Associates
[1]
2013 (3) SA 315
(SCA),
[2]
At para 5.
[3]
Oudekraal
Estates (Pty) Ltd v City of Cape Town and Others 2
004
(6) SA 222
(SCA).