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[2011] ZALCJHB 30
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Taung Local Municipality v Mofokeng (J 536/2011) [2011] ZALCJHB 30; [2011] 12 BLLR 1243 (LC); (2011) 32 ILJ 2259 (LC) (28 April 2011)
IN THE LABOUR COURT OF
SOUTH AFRICA
HELD AT JOHANNESBURG
Reportable
Case N0:
J536/2011
In the matter between:
TAUNG LOCAL
MUNICIPALITY
…...................................................................
Applicant
And
MPHO MOFOKENG
…...................................................................................
Respondent
JUDGMENT
Molahlehi J
Introduction
This matter came before
this court on the return day, with the applicant seeking
confirmation of the
rule nisi
which had been made by Gush J
on 8 April 2011. In terms of the interim order the learned judge
found that the matter was urgent
and called upon the respondent to
show cause why he should not be ordered to leave the applicant’s
premises, pending the
finalisation of the investigation or until his
suspension was revoked or declared invalid by a competent forum.
On 20 April 2011 when
the matter came before this court, the applicant raised a new
preliminary point concerning the respondent’s
supplementary
answering affidavit. There is no need in this judgement to go into
the details of the reasons for the objection
the respondent having
withdrawn the affidavit. The only issue that remains concerns the
cost order occasion by the withdrawal
of the affidavit.
In my view, while the
respondent can be criticised for the manner in which he handled the
issue of the answering affidavit, I
do not, however, believe that it
would be fair for him to be required to pay the costs for that
reason. The respondent withdrew
his affidavit in light of a possible
postponement that would have occasioned had he persisted with
seeking to have the affidavits
accepted by the court. In my view,
the approach adopted by the respondent was the most reasonable one
considering the implications
of insisting on having the affidavit
admitted as that would have resulted not only in wasted costs but
also delay in the finalisation
of this matter.
Background facts
The respondent, Mr
Mofokeng is an employee of the respondent, employed as the municipal
manager. On 20 March 2011, the applicant
took a decision to suspend
the respondent pending the outcome of the investigation and a
disciplinary enquiry. The applicant
suspended the respondent because
of the alleged serious financial irregularities, management of his
fiduciary duties which had
been submitted by the South African
Municipal Workers Union (SAMWU) to the applicant. The allegations
concern the following:
The respondent used the
amount of R56 000,00 of municipality to repair his damaged car
He awarded a tender to a
person of SA name similar to he's in the amount of hundred and R88
000,00 and ignore a tender which was
less.
He hired a car whilst
receiving a travelling allowance
The applicant relied on
clause 14 of the contract of employment in suspending the
respondent. The suspension is more particularly
based on the
resolution taken by the applicant at its meeting which was held 24
March 2011. The resolution reads as follows:
“
Item
6.5
RESOLUTION ON
ALLEGATIONS LEVELLED AGAINST THE ACTING MUNICIPAL MANAGER (MPHO
MOFOKENG) BY SAMWU (SOUTH AFRICAN NMUNICIPAL WORKERS
UNION)
The Council takes
note of the matter
The council regards
the allegations as serious and as disturbing
That Council resolved
to suspend the Acting Municipal Manager
That Council resolved
to mandate the Mayor to handle this matter, exhaust all legal
process and report to Council.
That Council resolved
to appoint Mr G Human Director Community Services) to act on the
position with all benefits and powers including
signing Powers.
That Council resolved
to add a case of insubordination on the allegations levelled against
the Acting Municipal Manager (Mr Mpho
Mofokeng).
In the event of him
resisting vacating the office, court interdict be sorted to have him
out.”
In his answering
affidavit the respondent contends that applicant did not have either
the power or authority to suspend his contract
of employment. He
further contends that the applicant did not have the power to
suspend him because he was not appointed by the
municipality but by
the Member of the Executive Council (the MEC) of the Province in
terms of s 139 of the Constitution read
with
s 106
of the
Local
Government Municipal Systems Act 32 of 2000
. The respondent has
subsequently conceded that the applicant did indeed have the power
to suspend him and accordingly abandoned
this point.
The issue of the
validity of the resolution which led to the suspension of the
respondent is based on what happened at the meeting
of the applicant
when the decision was taken to suspend him. The meeting was attended
by 33 (thirty three) out of 44 (forty four)
of the councillors of
the applicant. The meeting seem to have proceeded without any
difficulty until when it was about to discuss
item 6.5 which was on
the agenda of the meeting and which concerned the allegations, which
SAMWU had levelled against the respondent.
According to the
applicant the respondent left the meeting to answer a cell phone
call towards the end of item 6.4 of the agenda
of the meeting. On
his return he handed the cell phone to the ANC Chief Whip who was
apparently requested by the person on the
phone to request the
speaker to postpone the meeting. It would appear that the Chief Whip
refused to communicate the request
to the Speaker whereupon the
respondent approached the Speaker and informed her/him of the
request to postpone the meeting. The
Speaker’s attempt to have
the meeting postponed was resisted by the majority of those present
in the meeting. And thereupon
13 councillors walked out of the
meeting. The remainder of the councillors continued with the meeting
and appointed the ANC’s
Chief whip to be the Acting Speaker.
The contention of the
parties
It seems common cause
that the decision to suspend the respondent was unlawful due to the
fact that the decision was taken without
the necessary quorum. Ms
Hassim for the applicant did not dispute that the decision to
suspend the respondent was unlawful as
a result of the procedure
that was followed in arriving at that decision. She however, relying
on the decision of
Oudekraal Estates (Pty) Ltd v City of Cape
Town and others
[2004] 3 All SA 1
(SCA)
, contended that the
decision remained valid and should be enforced because it was never
set aside on review by the court. She
further contended that the
respondent could not rely on the “collateral” defence in
resisting the confirmation of
the interim order that had been made
by the court.
As indicated earlier the
respondent on the other hand initially contended that the applicant
did not have the power and authority
to suspend him. In opposing the
confirmation of the interim order Mr Lengane, for the respondent
contended that the court should
not confirm the interim order
because the resolution upon which the applicant sought to rely on
was unlawful and also that the
applicant did not have the
locus
standi
to institute this procee
dings.
The law
It
is generally accepted that an unlawful administrative decision
r
emains valid until it is set aside by a
competent court. The authorities say that an unlawful act is invalid
in law but is however
valid as a matter of fact. As a general rule
an unlawful administrative decision is in fact valid and has legal
consequences
until such time that it is set aside by a court.
It
has been pointed out in
Oudekraal
supra
that whilst an
unlawful act is void in law it is however in fact valid and derives
its validity and the force of law from its
factual basis. Thus the
enquiry in generally is not whether the decision has its basis in
law but rather whether such a decision
exist in fact. The next
enquiry once it has been established that the decision is unlawful
but exists in fact would be to determine
whether it has been set
aside on review. In general this question arises in the
determination of whether or not the decision
is enforceable or
whenever there is an attempt at coercing such unlawful
administrative act.
It
follows that the parties opposing the existence of the decision
should not seat and do nothing about it because in the interest
of
certainty and with the passage of time,
de
facto
the decision would be entrenched. This
is likely to arise in particular when an attempt is made at
reviewing the decision.
In
as far as challenging an unlawful administrative decision on review
is concerned, the authorities seem to be in agreement that
the court
has discretion whether or not, to refuse to grant the relief. The
discussion whether or not to grant or refuse the
review is used as a
mechanism to strike a balance between the consequences of legality
and certainty. The delay in taking steps
could result in the
uncertainty as to the status of that decision. See
Oudekraal
supra
at pargarph 36 and
Bruyns
v Makatana Bay Lodge CC
(2010 JOL 26057
(KZN)
at
paragraph [23],
Bullock NO v Provincial
Government, North West Province
and
Seale v Van Rooyen NO and others;
Provincial Government, North West Province v Van Rooyen NO and
others
[2008] ZASCA 28
;
[2008] 3 All SA 245
(SCA).
In
Oudekraal supra (at
paragraph
36) the court drew a distinction between the remedy sought under the
review and collateral defence in case involving
the challenge to an
unlawful administrative act. In this respect the court had the
following to say
:
“
On
the other hand, a court that is asked to set aside an invalid
administrative act in proceedings for judicial review has a
discretion
whether to grant or to withhold the remedy. It is that
discretion that accords to judicial review its essential and pivotal
role
in administrative law, for it constitutes the indispensable
moderating tool for avoiding or minimising injustice when legality
and certainty collide. Each remedy thus has its separate application
to its appropriate circumstances and they ought not to be seen
as
interchangeable manifestations of a single remedy that arises
whenever an administrative act is invalid.”
In the present case it
is common cause that the respondent has not to date sought to have
the unlawful resolution of the applicant
to suspend him set aside on
review. The respondent has now in these proceedings raised
“collateral defence,” that
the court should not permit
the applicant to coerce him into complying with the decision or in a
sense enforcing the decision.
The issue that has
arisen in the present matter is whether a party affected by an
unlawful administrative decision can ignore
such a decision and when
coerced through the court resists such attempts through “collateral”
defence and seeks to
have it set aside on the basis of such a
defence.
The issue of the
consequences of an unlawful administrative decision received
attention in a number of the courts decisions. The
issue received
much attention since the
Oudekraal supra.
The issue of the
legality of the administrative decision in that case arose in the
context where the Surveyor-General granted
an extension of the time
for the lodging of the town plans. The plans related to the
establishment of a settlement development
in an area which had
significant religious and cultural sites for one of the communities.
The SCA in analysing the
consequences of an unlawful administrative decision had the
following to say:
“
[26]
. . . 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.”
In arriving at the above
the court accepted the analysis by Laurence Baxter in Administrative
Law at page 355-356 where the principle
is stated as follows:
“
[27]
'There exists an evidential presumption of validity expressed by the
maxim omnia praesumuntur rite esse acta; and until the
act in
question is found to be unlawful by a court, there is no certainty
that it is. Hence it is sometimes argued that unlawful
administrative
acts are ''voidable'' because they have to be annulled.'
The
key issue in this matter is whether the respondent having not taken
any step to have the decision set aside can rely on the
“collateral
defence” to stop the confirmation of the
rule
nisi
.
Ms Hassim for the applicant suggested in her submission and
specifically relying on paragraph [26] and [27] of
Oudekraal
supra
that
unless the decision to suspend the respondent was set aside on
review it is extant and consequently the respondent has no
right to
be on the applicant’s premises. The essence of the learned
counsel’s argument was that collateral defence
could not avail
to the respondent. She also emphasised having accepted that the
decision to suspend the respondent although unlawful
its
unlawfulness was based on latent and not patent defect. In other
words the defect in the decision arose from failure to follow
the
correct procedure in arriving at the decision rather than a
substantive defect.
In
National
Industrial Council for the Iron, Steel, Engineering &
Metallurgical Industry v Photocircuit SA
(
Pty
)
Ltd
and others
1993 (2) SA 245
(C), the court was ceased with having to answer two questions
concerning whether or not the respondents
were precluded from
challenging the registration of the Industrial Council by the
Minister of Labour including whether the respondents
were by reason
of the lapse of time precluded from challenging that decision. After
discussing the application of the “delay
rule,” the
court (at page
252J),
in
accepting that the “collateral
defence”
does apply in case of challenging the validity of an administrative
decision had the following to say:
“
.
. .the validity of administrative acts and subordinate legislation
can be challenged not only directly in review proceedings,
but also
indirectly or, as is sometimes said, collaterally, ie ‘proceedings
which are not themselves designed to impeach
the validity of some
administrative act or order’. . . Obvious examples
are enforcement proceedings and criminal
prosecutions, the latter
according to Baxter . . ., being ‘one of the hardiest
methods of securing review’.
In such proceedings, therefore,
the need for judicial scrutiny of an administrative act or
subordinate legislation arises not for
the purpose of affording a
discretionary remedy, viz review or a declaratory order, but for the
purpose of determining the entitlement
of the party seeking
enforcement, or the guilt or innocence of an accused person. The
defendant or accused in such proceedings
cannot, it seems to me, be
precluded from raising invalidity as a defence merely on the grounds
of delay . . .”
The
court went further
(at
page 253G), to
suggest
that the court has a discretion to either uphold or reject
collateral defences that may be raised when attempts are made
to
coerce an invalid administrative decision. It seems to me that this
view is correct if regard is had to those instances where
a party
seeking to rely on collateral defences has previously acceded to the
implementation of the invalid decision and after
substantial lapse
of time seeks to dispute the factual existence of the decision. This
analysis derives from the comment the
court made when saying the
following:
“
A
Court, however will not in every case permit an administrative act to
be challenged in collateral proceedings. Where, however,
enforcement
of such an act or order is resisted, whether in criminal or civil
proceedings, on the ground that in making it the
official acted
beyond his powers, our Courts, to my knowledge, have never refused to
allow the question of validity to be canvassed.”
A similar view was
expressed by the SCA in
Oudekraal
supra
where at
paragraph [35 ] of that judgement the court had the following to
say:
“
[35]
It will generally avail a person to mount a collateral challenge to
the validity of an administrative act where he is threatened
by a
public authority with coercive action precisely because the legal
force of the coercive action will most often depend upon
the legal
validity of the administrative act in question. A collateral
challenge to the validity of the administrative act will
be
available, in other words, only “if the right remedy is sought
by the right person in the right proceedings”.
Whether
or not it is the right remedy in any particular proceedings will be
determined by the proper construction of the relevant
statutory
instrument in the context of principles of the rule of law.”
The SCA disagreed with
the court a quo that where an unlawful decision is challenged
collaterally the court has no discretion
to allow or disallow the
raising of the defence. In this respect the court held that:
“
[36]
It is important to bear in mind (and in this regard we respectfully
differ from the court a quo) that in those cases in which
the
validity of an administrative act may be challenged collaterally a
court has no discretion to allow or disallow the raising
of that
defence: the right to challenge the validity of an administrative act
collaterally arises because the validity of the administrative
act
constitutes the essential prerequisite for the legal force of the
action that follows and ex hypothesi the subject may not
then be
precluded from challenging its validity.”
On the facts of the case
in
Oudekraal supra
the SCA found that the City Council’s
reliance upon a collateral challenge to the validity of the
Administrator’s
decision in that case was, misplaced. It is
important to note that the SCA did not decide the matter on the
basis of the collateral
defence but rather on a different basis.
In
Mthethwa v
Municipal Manager, Uthungulu District Municipality & others
[2007] JOL20640 (N)
the court held that:
“
It
should be borne in mind that the analysis of these issues took place
in the context of the council claiming that it was simply
entitled to
ignore the unlawful administrative act. The court recognised that,
where a public authority seeks to coerce a subject
into compliance
with an unlawful administrative act, the subject may be entitled to
ignore the unlawful act and raise what is known
as a "defensive"
or "collateral challenge" to the validity of the
administrative act without taking positive
steps to set it aside and
that, in such a case, a court has no discretion to allow or disallow
the defence in question because
"the validity of the
administrative act constitutes the essential pre-requisite for the
legal force of the action that follows
and ex hypothesi the subject
may not then be precluded from challenging its validity".
Recently, the court in
Gardner & others v Central University of Technology, Free
State
[2010] JOL 25682
(LC),
in agreeing with what is said by
Daniel Pretorius, in her article in the
South African Law
Journal
, "The Status and Force of Defective Administrative
Decisions Pending Judicial Pronouncement”, held that the view
expressed
in
Oudekraal
supra
should be viewed within
the particular factual context of that case. I align myself with
this view.
The Constitutional Court
in
Helicopter & Marine Services (Pty) Ltd and Anotherv &
A Waterfront Properties (Pty) Ltd and Others
[2005] ZACC 21
;
2006 (3) BCLR 351
(CC),
accepted that collateral attacks could be mounted against an attempt
at coercing an unlawful administrative decision. However
the court
declined to determine whether a collateral attack as identified by
the SCA in
Oudekraal supra
is too narrowly drawn or not.
It seems to me that the
starting point in applying the above principles is to accept that
although the resolution to suspend the
respondent was unlawful and
therefore
ultra vires
the powers of the applicant, it does
not as matter of fact lead to the conclusion that the resolution and
the subsequent actions
arising from it should be regarded as if they
had no basis upon which they occurred. In law the suspension may be
invalid because
it is based on an unlawful resolution but it is
however valid to the extent that it exists as a matter of fact. In
other words
although the resolution is unlawful it may survive and
remain effective if not challenged on review or, as is the case
presently,
a collateral defence is raised to challenge its coercion.
The analyses of the
submission made by Ms Hassim, suggest that if the collateral defence
is accepted then account should be taken
of the fact that the defect
in the resolution was latent and not patent. In other words
consideration should be given to the
substance of the resolution and
not the mere procedure in adopting it.
In general and depending
on the nature and circumstances of the case that may be put before
the court, I would agree with the
sentiment expressed in the
submission made by the learned counsel. In the present case the fact
that the defect is limited to
procedure is immaterial in the
assessment of its validity and force in law because it offends one
of the basic principles of
our law namely the rule of law. The rule
of law is foundational to any relationship between the parties in a
constitutional democracy.
The parties to any relationship are
required to act lawfully in their interaction with each other. The
rule of law in labour
matters requires an employer, as is the case
in the present instance, to take decisions that are authorised by
the law in order
to comply with the provisions of s 23 of the
Constitution. Section 23 of the Constitution provides everyone with
the right to
fair labour practices.
The manner in which the
resolution in this matter was taken does not only undermine the rule
of law but also fundamentally undermines
the constitutional right to
fair labour practice of the respondent. Thus the fact that the
defect is limited to a procedural
defect does not detract from the
fundamental requirement of compliance with the rule of law.
It is thus my view based
on the above that the resolution to suspend the respondent whilst it
existed in fact it is a legal nullity
in all respects including its
purported authorisation for the institution of these proceedings. In
this respect the point raised
by the respondent regarding the
locus
standi
of the applicant in instituting these proceedings
including the collateral defence stands to succeed.
In conclusion I make the
following findings:
The resolution taken by
the applicant was until the findings of this court valid in fact
and not in law.
The respondent has
successfully mounted collateral defence to the validity of the
resolution passed by the applicant.
The resolution together
with all the acts that followed thereafter are invalid and of no
force and effect in all respects
The application to have
the
rule nisi
confirmed stands to fail.
Costs
I have already dealt
with the issue of costs as concerning the withdrawal of the
respondent's supplement answering affidavit.
As concerning the costs
of the matter having to stand down on the 7th April to 8th April
2011 there is no reason in law and fairness
why the respondent
should not pay the costs occasioned by that postponement. And as
concerning the cost of this application,
I see no reason why they
should not in law and fairness follow the results.
In the premises, the
following order is made:
The rule nisi made on
the 8
th
April 2011 is discharged.
The respondent is to
pay the costs occasioned by the postponement of the matter on the
7
th
April 2011.
There is no order as
to cost concerning the filing and the withdrawal of the
supplementary answering affidavit of the respondent.
The applicant is to
pay the costs of this application.
Molahlehi J
Judge of the Labour Court of South Africa
Date of Hearing: 20 April 2011
Date of reasons: 28 April 2011
Representation
For the applicant: Adv SK Hassim instructed by Mkhonto &
Associates
For the respondent: Adv Lenagane instructed by DMS
Attorneys
11