About SAFLII
Databases
Search
Terms of Use
RSS Feeds
South Africa: Labour Appeal Court
SAFLII
>>
Databases
>>
South Africa: Labour Appeal Court
>>
2017
>>
[2017] ZALAC 27
|
|
Minister of Higher Education and Training and Another v South African Commercial, Catering and Allied Workers Union and Others (JA13/17) [2017] ZALAC 27; (2017) 38 ILJ 1967 (LAC) (16 May 2017)
IN
THE LABOUR APPEAL COURT OF SOUTH AFRICA, JOHANNESBURG
Reportable
Case
no: JA13/17
In
the matter between:
MINISTER
OF HIGHER EDUCATION AND
TRAINING
First Appellant
DIRECTOR-GENERAL
HIGHER
EDUCATION
AND TRAINING
Second Appellant
and
SOUTH
AFRICAN COMMERCIAL, CATERING
AND
ALLIED WORKERS
UNION
First Respondent
ENTERTAINMENT
CATERING COMMERCIAL AND ALLIED
WORKERS
UNION OF SOUTH AFRICA
Second Respondent
FEDERAL
COUNCIL OF RETAIL AND
ALLIED
WORKERS
Third Respondent
NOZIOHO
PEARL MAPHOSHE
AND
23 OTHERS
Fourth to Twenty-Four Respondents
Held:
06 April 2017
Delivered:
16 May 2017
Summary:
Appointment of an administrator in terms of s15 of the Skills
Development Act – appellant alleging financial mismanagement
of
sixteenth respondent in invoking s15 - whether decision by the
appellant to place the sixteenth respondent under administration
falling within the scope of s15 of the SDA – held that such
decision could only be taken strictly in terms of the powers
under
s15 of SDA on the basis of the principle of legality – The
Auditor General’s reports forming the basis
to invoke s15
evince that sixteenth respondent received qualified audits and these
reports cannot therefore fairly be used to justify
the invocation
s15(1) of SDA. Evidence further reveals that the appellants paid no
attention to the final management report of
sixteenth respondent of
31 March 2016 which indicates that 60% of the recommendations
accepted by management of sixteenth respondent
regarding issues which
were contained in the Auditor General’s report were implemented
while 40% were still in the process
of implementation. No reason was
given by appellants as to why this explanation did not prove to be
adequate - appellant acting
outside of the powers in terms of s15 of
SDA and contrary to the principle of legality and that decision
stands to be set aside.
Appeal dismissed with costs.
Coram:
Waglay JP, Davis and Landman JJA
JUDGMENT
DAVIS
JA
Introduction
[1]
On 28 September 2016, first
appellant took a decision to instruct second appellant to appoint an
administrator to take over and
administer the affairs of the
sixteenth respondent. The second appellant informed the Chairperson
of the Accounting Authority of
the Wholesale and Retail Sector
Education and Training Authority, sixteenth respondent, of his
decision in a letter of 28 September
2016. The decision was taken in
terms of s15 of the Skills Development Act 97 of 1998 (“SDA”).
[2]
The first to fourteenth
respondents then brought an application to have first appellant’s
decision reviewed and set aside.
This application was successful and
thus on 23 December 2016, the court
a
quo
reviewed and set aside
the decision of first appellant.
[3]
The court
a
quo
held that the decision
taken by first appellant on 28 September 2016 constituted an
administrative action as contemplated in the
Promotion of
Administrative Justice Act 3 of 2000 (“PAJA”). The court
went on to consider whether, in terms of s6(2)(f)
of PAJA, the action
taken by first appellant had been authorised by the empowering
provision, namely s15 of SDA and was rationally
connected to the
purpose for which it was given. The court answered this question in
favour of the respondents, finding that “the
preconditions for
the exercise of the Minister’s powers in terms of s 15 of SDA
had not been met at the time the decision
to place W&RSETA in
administration was taken”. Following upon this finding, the
court ordered the reinstatement of the
members of the board of
sixteenth respondent and directed that the administration and control
of the affairs of sixteenth respondent
vest lawfully with its board.
[4]
On 07 February 2017, the court
granted an order in terms of s18 of the Superior Courts Act 10 of
2013 (Supreme Court Act), read
with Rule 11(3) of the Labour Court
Rules, directing that the operation and execution of the order
granted on 23 December 2016
(‘the main order’) would come
into operation immediately and be executable, pending the appeal
launched by first appellant.
[5]
Appellants also appealed this
decision, contending that respondents had not met the test imposed by
s18
of the
Superior Courts Act for
the granting of the order.
[6]
This Court then directed that
the automatic appeal against the
s18
order and the main appeal be
heard together at a consolidated hearing.
The
factual background
[7]
The core facts do not appear to
be contested. Sixteenth respondent was established in 2000 and its
period of establishment was extended
on numerous occasions, the
latest being on 06 October 2015 when it was re-established until 31
March 2018. The primary purpose
of sixteenth respondent is to meet
the skills and development needs of the wholesale and retail sector,
having regard to the functions
of the Sectorial Education and
Training Authority (‘SETA’) as set out in
s10
of the SDA.
During 2016, first appellant addressed written instructions to
sixteenth respondent, acting in terms of
s14
A of the SDA, which
provides as follows:
‘
(1)
The Minister may issue a written instruction to a SETA if -
(a)
the
SETA is not performing any of its functions or not complying with its
service level agreement;
(b)
the
SETA is not managing its finances in accordance with this Act;
(c)
the
SETA’s membership is not representative of the constituencies
contemplated in s 11; or
(d)
the
SETA has not prepared or implemented an employment equity plan as
contemplated in s 20 of the Employment Equity Act, 1998 (Act
Number
55 of 1998).
(2)
An instruction issued under subsection (1) must set out –
(a)
the
reason for issuing the instruction;
(b)
provision
of the Act that the SETA has not complied with; and
(c)
the
steps that the SETA is required to take and the period within such
steps must be taken.’
[8]
In his letter, first appellant
noted that he had received “anonymous communiques making
serious allegations about the poor
state of governance” at
sixteenth respondent, in particular that the Acting Chief Executive
Officer and the Chief Operations
Officer had been guilty of:
(1)
‘
deliberately
delaying payments and approval of transactions, such as stipends and
other training activities;
(2)
not
paying stipends for some learnerships and graduate internships;
(3)
not
paying staff salaries on the normal day leading to unnecessary bank
charges due to returned debit orders;
(4)
using
defamatory statements such as calling staff a “bunch of useless
managers and useless staff”;
(5)
threatening
to fire employees “because of their stupidity”;
(6)
treating
staff members with rudeness and disrespect thereby demoralising and
emotionally draining them; and
(7)
not
following Human Rights policies when the appointments of the Acting
Chief Executive Officer, Acting Chief Financial Officer
and Board
Secretary was made.’
[9]
As a result of these
allegations, first appellant instructed the accounting authority of
sixteenth respondent to submit:
(1)
‘
a
clarification on the appointment of Ms Maggie Mofokeng, the Chief
Financial Officer (CFO), appointed on contract who also acts
as Chief
Executive Officer (CEO) and Chief Officer: Qualifications;
(2)
a
comprehensive report addressing the veracity of the allegations
raised and an action plan / turnaround strategy with timeframes
that
addresses all the issues identified in order to ensure that the
governance challenges are resolved;
(3)
a
comprehensive corrective plan that will address the Auditor-General’s
qualification, indicating what action has been taken
to address the
Auditor-General’s concerns and if no action has been taken, to
state the reasons why and explain when such
action will be taken; and
(4)
the
reason why the Accounting Authority decided to withdraw from the
Rural and Township Revitalisation Programme despite signing
the
Memorandum of Agreement with the Department committing to support the
programme with R 107 million.’
[10]
The sixteenth respondent
replied on 1 July 2016 and provided a detailed explanation in respect
of each of the items requested and
advised first appellant that it
would make every effort to investigate and resolve any performance or
governance related issues
faced by it. On 16 August 2016, first
appellant generated a letter recording that, in his view, sixteenth
respondent had failed
satisfactorily to respond to the instruction
and gave notice of his intention to apply s15(1) of the SDA, thereby
giving the accounting
authority of sixteenth respondent five days
within which to advise him of why the powers contained in s15 should
not be applied
by him.
[11]
Sixteenth respondent replied on
26 August 2016. In a letter which extended to over 50 pages, it
assured first appellant that it
was in a position to correct the
problems and to resolve the challenges identified by first appellant,
as a result of which it
urged first appellant not to apply powers in
terms of s15(1) of the SDA.
[12]
On 15 September 2016, second
appellant wrote a letter to sixteenth respondent in which he stated,
inter alia
,
that first appellant supported the proposal “to meet in good
faith in an attempt to salvage the Rural and Township Revitalisation
Programme (‘RTRP’) in a manner that the W&RSETA has
committed to”.
[13]
On 20 September 2016, sixteenth
respondent’s attorneys replied to this letter of 15 September
2016 stating that “our
client is pleased to have received the
invitation to meet with representatives of the Department on behalf
of the Minister and
is hopeful that the meeting can be conducted in
the spirit of reaching a mutually satisfactory resolution of the
parties concerns.”
[14]
Further correspondence was then
exchanged between second appellant and sixteenth respondent’s
attorneys in order to settle
upon a mutually acceptable date for a
meeting. However, sixteenth respondent’s request to meet at a
mutually convenient date
was ignored by first appellant and on 28
September 2016 he informed sixteenth respondent that he had decided
to exercise his powers
in terms of s15(1) of the SDA and place
sixteenth respondent under administration and, further, that he had
directed second appellant
to take the necessary steps.
The
basis for the review application
[15]
First to fourteenth respondents
raised three main grounds in support of their application to review
the decision of first appellant
of 28 September 2016, namely that the
decision was contrary to ss3 and 6 of PAJA in that the preconditions
established in terms
of s15 (a) to (e) of SDA had not been fulfilled
when first appellant took his decision; the decision was irrational
and unreasonable
in that the drastic intervention contemplated by
s15(1) of SDA constituted irrational and unreasonable action in a
context where
the sixteenth respondent had committed itself to fully
cooperate with the appellants and finally, they raised the issue of
procedural
unfairness in the decision making process.
The
appeal
[16]
As indicated in the
introduction to this judgment, the court
a
quo
found that the decision
of the first appellant to direct second appellant to appoint an
administrator constituted administrative
action and thus fell within
the scope of PAJA. The learned judge found further that, in terms of
s6(2) (f) of the PAJA, the administrative
action by first appellant
had not been properly authorised by the empowering legislation and
was not rationally connected to the
purpose for which the power was
given.
[17]
Much of the debate, certainly
as contained in the heads of argument of the parties respectively,
turned on whether the impugned
decision constituted administrative
action.
[18]
Given the approach that I
proposed to adopt to this case, there is no need to come to a clear
decision as to whether the action
taken by appellants was
administrative or executive action. Suffice to say that there is
considerable merit in the analysis conducted
by the court
a
quo
. As Nugent JA said in
Greys Marine Hout Bay (Pty)
Ltd v Minister of Public Works (Greys Marine Hout Bay),
[1]
the scope of the term administrative action eludes a comprehensive
definition. It appears, however, from a number of cases that
the
courts have adopted the view that whether particular conduct
constitutes administrative action depends primarily on the nature
of
the power exercised rather than upon the identity of the person who
exercises the power. See
President
of the Republic of South Africa v South African Rugby Football Union
2000 (1) SA 1
(CC) at para 141.
[19]
From this premise, it has been
held that administrative action does not extend to the exercise of
legislative powers by democratically
elected legislative bodies, nor
to the ordinary exercise of judicial power, to the formulation of
policy or the initiation of legislation
by the executive nor to the
exercise of original powers conferred upon the President. See
Greys
Marine Hout Bay, supr
a at
para 24 and the cases captured therein.
[20]
On this basis, a sound
foundation exists for the finding by the court
a
quo
that the decision taken by first appellant in terms of s15 of the SDA
did not represent action whereby first appellant developed
policy or
initiated legislation. He purported to act in terms of power derived
exclusively from s15 of SDA, the content of which
does not appear to
fall into any definition of the implementation or conception of
policy.
[21]
Be that as it may, it is clear
that, on the basis of the principle of legality, first appellant
could only act strictly in terms
of the powers entrusted to him under
s15 of SDA. As has been held in numerous cases, the doctrine of
legality is an incident of
the rule of law which is one of the
fundamental constitutional controls through which the exercise of
public power is regulated
by the Constitution of the Republic of
South Africa 108 of 1996. It has been held consistently that no power
or function can be
exercised by the legislature or a member of the
executive beyond that which had been conferred upon them by law. See
Affordable Medicines Trust v
Minister of Health
[2005] ZACC 3
;
2006 (3)
SA 247
(CC) at para 49 and the further authorities set out in
footnote 40 and 41 thereof.
First
appellant’s purported application of s 15(1) of SDA
[22]
For this reason, the critical
question is whether first appellant acted outside of the scope of s15
of SDA. This section provides
as follows:
‘
The
Minister may, after consultation with the National Skills Authority
and the SETA in question, direct the Director-General to
appoint an
administrator to take over the administration of a SETA or to perform
the functions of a SETA if –
(a)
the
SETA fails to perform its functions;
(b)
there
is mismanagement of its finances;
(c)
its
membership no longer substantially represents the composition
contemplated in s 11;
(d)
the
SETA has failed to comply with its service level agreement; or
(e)
the
SETA failed to comply with an instruction issued by the Minister in
terms of s 14 A.’
[23]
The importance of the letter of
28 September 2016 by first appellant to the chairperson of sixteenth
respondent to the determination
of whether the decision fell within
s15(1) of SDA requires that it be reproduced in full:
‘
Due
to the governance challenges and failure by the Accounting Authority
to satisfactory address me on the following:
1.
The
Accounting Authority failed to submit a comprehensive plan to address
the Auditor-General’s qualification for the 2014/15
financial
year, which should have indicated what actions were taken to address
the Auditor-General’s concerns and if no action
has been taken,
to state the reasons why and explain when such action would be
undertaken. The SETA’s failure to mitigate
the identified
risks has resulted in W&RSETA receiving another qualified audit
from the Auditor-General for the 2015/16 financial
year.
2.
Regarding
the Accounting Authority’s explanation on the matter of the
Chief Financial Officer, who is appointed on contract
by W&RSETA
and subsequently also appointed as the acting Chief Executive Officer
(CEO) and Chief Officer: Qualifications were
not satisfactorily
addressed. The implications of this appointment compromises the
effectiveness of internal control processes
and exposes W&RSETA
to a risk of self-review as the acting CEO would have been reporting
to herself on operational tasks she
performs, as supported by a
letter received from the Auditor-General.
3.
When
the National Skills Authority conducted the investigation on the
matters, some of the Accounting Authority members were not
aware of
my s 14A instruction letter. These members were also not
involved in compiling a response to this instruction letter.
This demonstrates a serious lack of unity, cohesion and cooperation
among the Accounting Authority, which is necessary for optimal
execution of its fiduciary responsibilities. This view is
further supported by the fact that some Accounting Authority members
wrote to me indicating that the resolution was for the “
correction
of the contents of the MoA and not withdrawal from the RATERP
”.
4.
W&RSETA
failed to provide satisfactory reasons responding to its withdrawal
of all financial support towards the Rural and Township
Economies
Revitalisation Programme. The reasons advanced by the
Accounting Authority are not satisfactory noting the impact
of this
project, which was initiated by the Department as its contribution to
Governments 9 Point Plan to unlock the potential
of Small, Medium and
Micro-sized Enterprises (SMMEs), cooperatives, townships and rural
enterprises W&RSETA has failed to comply
with its Service Level
Agreement.
5.
The
Accounting Authority never communicated or consulted with the
Department before taking such a drastic decision, i.e. to withdraw
all financial support for the Rural and Township Economies
Revitalisation Programme. Neither had the Department been
informed of the actions that had been taken regarding other
stakeholders whom also committed to fund the project substantially,
such as the Unemployment Insurance Fund and Department of Small
Business Development. The drastic decision by W&RSETA
and
its failure to communicate with affected stakeholders has a potential
to bring the Department and the SETA system into disrepute.
I
have consulted with the National Skills Authority of my intention to
act as required by s 15 of the Skills Development Act.
Based on
the advice I have received from the National Skills Authority and the
reasons stated above, amongst others, I have decided
to impose s 15
of the Act to place W&RSETA under administration.’
[24]
In substantiation of his
decision to invoke powers in terms of s15, first appellant, in his
answering affidavit, sought to justify
his decision on sixteenth
respondent’s failure to provide a satisfactory reason as to its
withdrawal of financial support
towards the RATERP, a lack of
cohesion within the accounting authority, and the failure to submit a
comprehensive plan to address
the Auditor General’s
qualifications for the financial year ending 31 March 2015. He also
noted that sixteenth respondent
had
received
another qualified audit opinion from the Auditor-General. First
appellant then states in his answering affidavit that the
listed
circumstances in s15 are “only some of the basis upon which the
Minister may act in terms of ss 14 and 15 of the SDA”.
[25]
This affidavit has to be read
with the critical letter of 28 September 2016, for it is in that
letter that first appellant provided
his reasons for invoking powers
in terms of s15(1) of SDA.
[26]
Appellants’ justification
for invoking s15(1) of SDA was narrowed further. When the notice of
application for leave to appeal
was filed on 26 January 2017, the
appellants reduced their primary arguments to the contention that
there was irregular expenditure
and poor governance and further that
there had been mismanagement of finances as was evident from the
Auditor General’s reports
of 2014/15 and 2015/16.
[27]
It is to these specific grounds
raised by appellants to which I must turn. The first argument
regarding, poor governance, hardly
appears in any specific detail in
the letter of 28 September 2016, save for copious references to the
report of the Auditor General.
[28]
Presumably, the reference to
the failure to deal with the Auditor-General’s qualifications
were invoked in order to contend
that s15(1)(b) was of application,
namely that there was a mismanagement of sixteenth respondent’s
finances.
[29]
The material paragraphs in the
Auditor General’s report for the financial year 2014/15 read
thus:
‘
The
financial statements of the public entity were materially misstated,
as the public entity did not accurately determine all amounts
meeting
the definition of a contractual commitment, in accordance with s 1 of
the Sector Education and Training Authorities (SETAs)
Grant
Regulations regarding monies received by a STA and related matters,
issued in terms of the SDA. Consequently, contractual
discretionary grant commitments as disclosed in note 18.1 to the
financial statement stated at R 759,920 million were overstated
by R
35,492 million. Additionally, there was a resultant impact on the
provision for uncommitted funds due to the National Skills
Fund,
surplus for the period and the accumulated discretionary grant
reserves, due to the amount of discretionary grant commitments
forming part of the calculation of the provision for uncommitted
funds.
Qualified
Opinion
In
my opinion, except for the effects of the matter described in the
basis for qualified opinion paragraph, the financial statements
present fairly, in all material respects, the financial position of
the W&RSETA as at 31 March 2015 and its financial performance
and
cash flows for the year then ended, in accordance with the SA
Standards of GRAP and the requirements of the PFMA and SDA
.’
[30]
Similarly, in respect of a
2015/16 financial year, the Auditor General reported as follows:
‘
I
was unable to obtain sufficient appropriate audit evidence for
discretionary grant commitments. As described in note 38
to the
financial statements, the restatement was made to rectify a prior
year material misstatement, but could not be substantiated
by
supporting audit evidence. I was unable to confirm the
restatement by alternative means. Consequently, I was unable
to
determine whether any adjustment to the discretionary grant
commitments corresponding figure stated?? at R 471 262 000
in the financial statements was necessary. Additionally, there
was a resultant impact on the provision for uncommitted funds
due to
the National Skills Fund, surpluses for the period and the
accumulated discretionary grant reserves, due to the amount of
discretionary grant commitments forming part of the calculation of
the provision for uncommitted funds.
Furthermore,
I was unable to obtain sufficient appropriate audit evidence for
current year discretionary grant commitments balance
as the public
entity did not maintain accurate and complete records of the
contractual information used to determine commitments.
I could
not confirm the amounts by alternative means. Consequently, I
was unable to determine whether any adjustment to discretionary
grant
commitments stated at R 585 267 000 in the financial statements was
necessary.
Qualified
Opinion
In
my opinion, except for the possible effects of the matter described
in the basis for qualified opinion paragraph, the financial
statements present fairly, in all material respects, the financial
position of the Wholesale and Retail Sector Education and Training
Authority as at 31 March 2016 and its financial performance and cash
flows for the year then ended, in accordance with the South
African
Standards of GRAP, and the requirements of the PFMA an SDA.’
[31]
What is clear from these
reports is that sixteenth respondent received qualified audits in
both financial years. However, the qualifications
were very limited
in their scope relating as they did to discretionary grant
commitments. They cannot fairly be employed to justify
the conclusion
that there was the kind of widespread financial mismanagement which
would explain satisfactorily the drastic assumption
of powers in
terms of s15 (1) of SDA.
[32]
In addition, in the letter of
26 August 2016, sixteenth respondent’s attorneys made clear
that “comprehensive remedial
steps had been taken to address
the Qualified Opinion in the 2015 DG reports. Considerable
success has been achieved through
these remedial steps. The
Qualified Opinion in the 2016 draft AG Report results from matters
that could not be completely
resolved by the period ending 31 March
2016. The aforesaid is not an indicator of,
inter
alia
, bad management or
governance on the part of the Board”.
[33]
A significant part of the first
appellant’s letter of 28 September 2016 dealt with the question
of withdrawal from the RATERP.
Sixteenth respondent’s attorneys
provided a detailed explanation as to the approach adopted by its
client to RATERP. In the
letter of 26 August 2016, the following
appears:
‘
On
27 May 2016, the Board resolved to rescind the decision to approve
the amount of R 107 500 000.00 for allocation to
the RATERP
on the basis of its having serious concerns with the framework of
governance within which the project was proposed to
operate, and
whether the proposed framework would comply with legislation
regulation and best practice governing the public sector.
The
Board made a simple request for evidence of strong governance of
funds allocated to the project and when this evidence was not
forthcoming, the funds were withdrawn. In the light of the
Qualified Opinions of the AG, and the remedial steps required
to be
taken by the W&RSETA, it is submitted that the Board has acted
responsibly and proactively in this regard. The
Board’s
decision not to fund the RATERP at this stage and in these
circumstances does not constitute evidence of financial
mismanagement
or a failure to perform its functions.’
[34]
This letter is evidence that a
comprehensive answer was provided to first appellant by the sixteenth
respondent as to its approach
to this project, which answer appears
to have been completely ignored by first appellant when he generated
his decision on 28 September
2016. But that is not the main
difficulty with the appellants’ arguments relating to RATERP.
There is no basis provided by
appellants as to how the many
paragraphs from the critical letter of 28 September 2016 devoted to
RATERP and which is included
as a key reason for first appellant
invoking powers under s15(1) falls within the scope of this section.
If the argument
is that the sixteenth respondent’s conduct with
regard to RATERP fell in terms of s15(1)(a), there was no attempt
made to
explain how this could be justified. Indeed, there was not
even an attempt to so argue in appellants’ heads of argument
[35]
Turning to the findings of the
Auditor General, even if the reports could be stretched to support a
greater measure of financial
mismanagement from what appears in the
reports, nowhere does it appear that the appellants paid any
attention to the final management
report of sixteenth respondent of
31 March 2016 where a clear assessment of “the progress in
implementing the commitments
made by the entity to address the prior
and current years audit findings” is set out comprehensively.
The table attached
(item 72 of this report) indicates that 60% of the
recommendations accepted by management of sixteenth respondent
regarding issues
which were contained in the Auditor General’s
report were implemented while 40% were still in the process of
implementation.
No reason was given by appellants as to why this
explanation did not prove to be adequate nor as to why,
notwithstanding this response,
there was a sufficient basis by which
to find that s15 (1) (b) had been shown to exist on the available
evidence.
[36]
In summary, neither in the
letter generated by first appellant of 28 September 2016 nor in his
answering affidavit is there any
indication as to why sixteenth
respondent’s explanation as to its conduct regarding the
funding of the RATERP was not only
disregarded but why there was a
sufficient evidential basis in respect of RATERP for the powers under
s15(1) to be justified in
the circumstances.
[37]
On the evidence presented,
first appellant acted outside of the powers conferred upon him in
terms of s15 of SDA. He failed
to show that the necessary
preconditions set out in s15(1) existed in order to place sixteenth
respondent under administration.
Accordingly, having acted outside
the powers conferred upon him in terms of s15 of the SDA, he acted
contrary to the principle
of legality and his decision stands to be
set aside.
[38]
For all of these reasons I
agree entirely with the conclusion reached by the court
a
quo
that “the
preconditions for the exercise of the Ministers powers in terms of s
15 of the SDA had not been met at the time
the decision to place
W&RSETA under administration was taken. The W&RSETA
head at the relevant time demonstrated
its capacity to address any
administrative shortcomings and none of them either singularly or
collectively constituted grounds
that met the threshold requirements
impose by s 15 for the exercises of his powers under that section”.
The conclusion illustrates
that by acting outside of the powers set
out clearly in s15 of SDA, appellants had acted outside of the
principle of legality.
As Chaskalson P (as he then was) said in
Pharmaceutical
Manufacturers Association of South Africa: In Re Ex parte President
of the Republic of South Africa
:
[2]
‘
It
is a requirement of the rule of law that the exercise of public power
by the Executive and other functionaries should not be
arbitrary.
Decisions must be rationally related to the purpose for which the
power was given, otherwise they are in effect arbitrary
and
inconsistent with this requirement. It follows that in order to pass
constitutional scrutiny the exercise of public power by
the Executive
and other functionaries must, at least, comply with this requirement.
If it does not, it falls short of the standards
demanded by our
Constitution for such action.
’
[3]
[Footnote
omitted]
The decision of first appellant of 28
September 2016 fails this test and thus must be set aside.
Cross-appeal
in terms of s 18
[39]
Having come to the conclusion
that the appeal against the order of the court
a
quo
of 23 December 2016
stands to be dismissed, there is no basis by which to deal any with
the question as to whether the order granted
in terms of
s18
of the
Superior Courts Act should
be set aside.
[40]
In the circumstances, the
appeal is dismissed with costs, including the costs of two counsel.
The cross-appeal is dismissed.
_______________
Davis
JA
I
agree
_______________
Waglay
JP
I
agree
_______________
Landman
JA
APPEARANCES:
FOR THE
APPELLANTS:
M C Erasmus SC, Adv M A Dewrance and
Adv M P Moropa
Instructed by Cheadle Thompson and
Haysom Attorneys
FOR
THE FIRST TO FOURTEENTH
RESPONDENTS:
Adv A Franklin SC and Adv F Hobden
Instructed by Bowman Gilfillan INC
[1]
[2005] ZASCA 43
;
2005 (6) SA 313
(SCA) at para 21.
[2]
2000 (2) SA 674 (CC).
[3]
At para 85.