IN THE HIGH COURT OF SOUTH AFRICA
(EASTERN CAPE DIVISION, MAKHANDA)

OF INTEREST
CASE NO. CA 199/2023

In the matter between:

MINISTER OF HUMAN SETTLEMENTS, Appellant
SANITATION AND WATER

and

BUHLE TONISE First Respondent

ZAMA XALISA Second Respondent

MZOLISI JOE SIKHOSANA Third Respondent

TABISA WANA Fourth Respondent

NKOSAZANA NOMXHOSA JONGILANGA Fifth Respondent


FULL BENCH APPEAL JUDGMENT

HARTLE J

Introduction:

[1] The appellant was the incumbent Minister of Water and Sanitation when, on
25 March 2022 , he exercised the power bestowed upon him in terms of section 35
(5) of the Water Services Act , No. 108 of 1997 (“ WSA ”) to “dissolve the Amatola
Water Board ,” effectively terminat ing the term s of office of nine board members at
the same time with one fell swoop .1

[2] The respondents , cited as the first to the fifth applicants, comprised almost
one half of the erstwhile members of the Board affected by th e fiat who approached
the court below to review that course of action taken by him as well as his decision ,
evidently taken on the same day, to appoint an interim board of seven members in
their place (“ the Interim Board ”).

[3] The court below set aside both decisions by the appellant to dissolve the
Board and to terminate their member appointments but in the opposite order of
primacy .2 It ordered the appellant “ to reinstate ” them “ as members of the Amatola
Water Board with immediate (as oppose d to retrospective) effect ” but made no
pronouncement against the appointment of the Interim Board.

[4] The present appeal against the respective orders is with the leave of the
court below .

[5] There is no counter appeal .


1 The tenth member, making up the full complement of the Board, resigned on 14 March 2002.
2 The judgment of the first court has been reported by SAFLII as Tonise and Others v Minister of
Water and Sanitation and Others (1274/2022) [2023] ZAECMKHC 68 (24 May 2023). The order
reads as follows:
“(a) The decision taken by the first respondent on or about 25 March 2022 to terminate the
applicants’ appoint ment to the Amatola Water Board in terms of Section 35 (5) of the Water Services
Act 108 of 1997 is reviewed and set aside.
(b) So is the decision taken on or about the same date as mentioned in (a) above to dissolve the
Amatola Water Board.
(c) The applicants are to be re -instated as members of the Amatola Water Board with immediate
effect.
(d) The first respondent is ordered to pay the costs of the application.”
The prequel to the application:

[6] The broad essential facts hardly brook any contention .

[7] The respondents together with five other erstwhile members were
simultaneously appointed as members of the governing board (“ the Board ”) of the
Amatola Water Board (“ Amatola Water ”) by the previous Minister of Water and
Sanitation, Ms. L N Sisulu , during March 2021 following the dissolution of a previous
interim Board . The ir appointments were for a four -year period .

[8] Their term of office was upended on 28 March 2022 as a result of the
appellant’s decisions aforesaid .

[9] On 15 March 2022 , prior to making his decision(s), the Appellant issued a
standard notice to each of the members advising them of his primary intention to
“dissolve the Amatola Water Board ” (sic),3 thus terminat ing their appointment s as
members of the Board. The notices were predicated on the fact that the Department
of Water and Sanitation had received “ numerous correspondences indicating
governance challenges at Amatola Water ”. To this the Minister added the
observation that since its inauguration the Board “ has experienced several

3 Section 28 of the WSA provides for the establishment and disestablishment of a water board as an
entity/institution in itself, evidently on the basis of need, to provide water services to other water
service institutions within its service area. (See section 29). According to the definition of “ water
board ” in section 1 of the WSA, it is an organ of state established or regarded as having been
established in terms of the WSA to perform, as its primary activity, a public function. Section 31 of the
WSA provides in turn that a water board is a body corporate that exists to perform its primary activity
and other activities contemplated in section 30 of the WSA. A water board, in terms of section 31,
once established, is governed by a board which consists of a chairperson and such other members as
the Minister may appoint from time to time, this according to section 35 (1) of the WSA. In the context
of the Public Finance Management Act, No. 1 of 1999 (“ PFMA ”) Amatola Water is classified as a
public entity listed in Schedule 3 (under the mantle of “ Other Public Entities ”) which concerns National
Government Business Enterprises as defined in the PFMA. As such, it is the vehicle through which
its core activity and others are carried out. The board consists of a chairperson and such other
members as the Minister may appoint who are colloquially also referred to as the board of control. As
a collective they are the responsible governing body and stand as the accounting authority under the
provisions of the PFMA. For present purposes it is useful to simply distinguish between “Amatola
Water” as the entity /institution , and its “ Board ” through which it governs its business activities, as the
nomenclature can be confusing. Moreover, the disestablishment of a water board itself is a far more
rigorous process per section 28 (2) and (3) of the WSA and self -evident ly concerns itself with policy
related considerations regarding their need to exist, if at all, subject to a ministerial review for the
provision of water services as defined in delineated service areas falling within each entity’s area of
jurisdiction.
governance challenges, including alleged misconduct by some Board members ,
which has led to instability within the entity ”. He emphasized that this conduct
(supposedly the misconduct by some Board members ) was “ the opposite of the
fundamental ethical standard and ha( d) the potential of subjecting the Amatola Water
Board to disrepute ”.

[10] He invited each member to furnish him with written reasons within seven days
of receipt of his notice as to why he should not “dissolve the Amatola Water B oard”
(obviously a reference to the governing Board comprising of all of its members as
opposed to the entity itself )4 and thus terminate their appointments.

[11] The respondents took up this opportunity to make comprehensive
submissions defending both their personal interests as individual members as well
as the operational integrity of the Board.

[12] On 26 March 2022 it was announced in the media that the appellant had
dissolved the Board and terminated the respondents’ appointments . In a press
statement dated 25 March 2022 the appellant attributed the reason to the fact that he
was “deeply concerned about the instability and governance challenges at Amatola
Water as an entity, which had in turn, also affected the provision of water to
communities in the Buffalo City Metropolitan area.” He further stated that water
supply by Amatola W ater had been far below the growing demand in various parts of
the province, which situation was untenable for him .

[13] In further expanding on the appointment of an Interim Board , he expressed
the hope that the new appointees would “bring about stability to the water entity in
terms of its finances and governance and would also extend the mandate of dealing
with issues of water in the entire province. ”


4 See footnote 3.
[14] It was further revealed in the press statement put out by him that he had
appointed the seven -member Interim Board for a period of five months .5 The letters
of appointment issued to the new members forming part of the record of decision
indicate to the contrary however that such appointments were “ until such time as a
new Board is appointed ”.6 (The relevance of this fact has some bearing on the issue
of the remedy which will be elaborate d upon below.)

[15] The appellant’s official letters of termination uniformly assert that he had
considered the content of the members’ input in response to his pre-termination
notices that had heralded his intention to dissolve the Board but bore some nuance s
here and there .7 However, they say nothing of the reasons for the wholesale
dissolution of the Board (such as for example that which he had disclosed to the
media) or indeed even suggest that the members’ memberships had been
terminated coincidentally as a result of his primary decision to relieve the entire
Board . Instead, the appellant purported to persuade them, with reference to his pre-
termination notices wherein he had requested them to provide reasons as to why
their appointments should co-incidentally not be terminated, that he had considered
each person’s response and had decided nonetheless to terminate their individual
appointments in terms of section 35 (5) of the WSA.8


5 The Minister apologised in his answering affidavit for the unfortunate happenstance that the
respondents had learned of their fate through the media before being served with the official notices
of termination of their membership of the B oard.
6 When the review application was launched on an urgent basis the parties moved a consensual order
that, pending the final resolution of the review application, under Part B, that the Minister be
interdicted against appoin ting any permanent board mem bers to Amatola Water. The option was
however left open to him in the meantime to take such steps to identify suitable candidates to be
appointed in due course if the respondents’ legal challenge was unsuccessful.
7 The 6th respondent ( as cited in the review application) resigned on 14 March 2022 (see footnote 1) .
The appellant’s termination notice exceptionally confirmed his acceptance of the latter member’s
resignation instead. The 5th respondent was thanked for h er “elaborate response ”. In response to the
erstwhile chairperson the appellant noted her “ non-objection to any decision that (he) would take .” To
the 9th respondent as cited in the review application the appellant noted her response and “ support
for the dissolution of the Board in its enti rety.” To the 4th and 12th respondent s, he expressed the view
that neither had “ not demonstrated reasonable grounds for (their) term of office to not be (or not to be)
terminated .”
8 The termination (as opposed to the pre -termination) notices oddly gave no indication that the
appellant had decided to relieve the entire board, except in the header which reflects that each notice
concerned the “ Termination of the term of office of the Board ,” this apart from their individual
membership appointments.
[16] The termination letters were generated on 28 March 2022 and received by the
second, third and fourth respondents on the same day. In the case of the first and
fifth respondents, they were received two days after the appellant had been placed
on terms by the respondents ’ attorneys to confirm their membership status and to
provide reasons for the appellant’s rumoured decisions under threat of the issue of
the application for review.

[17] No additional reasons were forthcoming prior to the launch of the review
application . Reading between the lines, it was this lack of transparency that provided
the raison d’etre for the respondents’ resort to the litigation and in my view legitimate
concern that the appellant had not acted lawfully within the prescripts of
administrative law. Indeed , the respondents contended that the lack of any clear
reasons for the impugned decisions was in itself sufficient to establish that they were
taken without good reason .9

The respondents’ founding affidavit :

[18] The respondents asserted in their founding papers filed in the review
application, that they were “taken aback ” even by the appellant’s pre-termination
notices that to some extent hinted at why he was inclined to dissolve the Board
pursuant to the provisions of section 35 (5) of the WSA . They, however, saw no
reason for such action . Moreover, the appellant had not sought to engage with them
or initiate any investigation into the alleged governance challenges or misconduct
referenced in his pre-termination notices .

[19] Without the benefit of any reasons for his decision s provided even after the
fact, they surmised that the appellant had taken reports from the erstwhile
chairperson , Dr. Makgae, against them (going to the issue of the claimed
“governance challenges ”) at face value without applying his mind as to what the
problem was (if any) or what could be done to address the supposed concern s. In

9 See National Lotteries Board v SA Education and Environment Project 2012 (4) SA 504 (SCA) at
[27] in which the court held that the duty to give reasons is a central element of the constitutional duty
to act fairly, and that the failure to give reasons, which includes proper or adequate reasons, should
ordinarily render the disputed decision reviewable.
this respect they revealed that the latter had mad e certain representations to the
appellant in an open meeting on 8 Ma rch 2022 regarding broad, generalized
complaints against them which they had not been given any time to respond to , but
even before this , the second respondent had addressed a comprehensive letter to
the appellant dated 8 February 2022 seeking his intervention because , according to
him, Dr. Makgae had acted unilaterally in respect of the implementation of a SIU
report implicating Amatola Wa ter staff and had ignored a request to convene a
special meeting. The appellant had not respond ed to this communication.10

[20] A separate issue , which the first respondent surmised might have some
correlation, concerned the process for the recruitment of a chief executive officer.
After a special meeting called by her to discuss this and the SIU report which Dr.
Makgae failed to attend , she had sent a letter to the appellant confirming that she
and the respond ents had been opposed to the appointment of the prop osed CEO ,
which had somehow come to be sanctioned by him despite their disapprova l. This
communication too had gone unanswered.

[21] The respondents asserted that without having been given “ clear ” reasons for
the impugned decision s (to the contrary they were given none at all) , they were left in
a quandary to understand why the appellant had decided as he did, given the vague
reference to the claimed “ several governance challenges ” and the unspecified
alleged misconduct in the appellant’s notice anticipating the wholesale disso lution of
the Board. She complained in any event that it had not been possible for them to
respond in detail to the pre -termination notice s as they lacked particularity .

[22] The first respondent offered the assurance that whilst it was true that Dr.
Makgae had obstructed the discharge of the Board’s duties through her unilateral
decision making and refusal to participate in a special board meeting, which
difficulties they appeared to accept constituted “ governance cha llenges ” at their

10 The first respondent averred that Dr . Makgae’s presentation was not shared with the Board after
the open meeting . She apologised that there was no copy to attach to the affidavit, neither minutes of
the meeting. The formal memoranda addressed to the appellant dated 2 1 February 2022 ostensibly
informing the basis for Dr. Makgae’s complaints at the open meeting appears not to have ben made
available to the respondents until after the review record was filed . The complaints raised against the
respondents in it are certainly not generalised, but quite specific.
worst , they were not aligned with the thought that these were of a nature that justified
the drastic action of dissolving the entire Board. She further emphasized the fact that
any governance issues within the Board arose as a result of the chairperson’s
obstruc tive conduct.

[23] They criticized the blanket approach adopted by the appellant ultimately,
despite the lack of adherence to principles of good governance by only a few
individuals (indeed their discontent lay essentially with Dr. Makgae and the twelfth
respondent) , as “erroneous if not outrightly irrational ”.

[24] In justifying the basis for the review of the appellant’s decisions (absent any
official reasons having been advised to the individual members by the date of the
launch of the review application), the respondents contended that the course of
action adopte d by him had been particularly “drastic ” (demonstrative on its own of an
unlawful and irrational decision) whereas it had been open to him also to have
invoke d his powers in terms of the WSA to investigate whatever allegations there
were against any individual Board member or to have issue d directives to the
Board.11

[25] Certainly, as far as they were concerned , none of their group had made
themselves guilty of any misconduct or otherwise unethical behaviour (with reference
to the Boa rd’s Charter) , but e ven if there had been a basis to complain against any
of their number, so they averred, they had not been properly informed of any
accusations or been given an opportunity to respond. Further and in any event, so
they opined, the essential provisions in the Board Charter relating to the termination

11 The respondents referenced section 41 of the WSA in this respect, but these directives seem to
relate to the undertaking of a specific activity or the Ministers power to direct that a water board
desist from a specific activity, as opposed to a Board’s pr imary activity referenced in section 29.
“Other activities ” are suggested in section 30. An “activity “in terms of the WSA appears therefore to
relate to the essential or other work or projects carried on by a water board. The Minister does
however have the power in terms of section 73 (1) (h) to issue guidelines to “ water service
institutions ” (which by definition includes a “ water board ”) on performing their functions in terms of the
WSA. The Minister is also authorised to investigate the affairs and fi nancial position of a water board
pursuant to the provisions of section 45 of the WSA. It appeared to be common cause that other than
an earlier investigation by a firm of attorneys commissioned by the appellant’s predecessor, no other
contemporaneous investigation had been undertaken beyond the appellant’s ad hoc intervention
taken closer to the date of his impugned decisions to hold a meeting with the Board members .
of office of a Board member's appointment had t o inform the interpretation of the
appellant’s powers in section 35 (5) of the WS A.

[26] In particular, and with reference to clause 9 (a)(iii) thereof , a member of the
Board may cease to hold office through, inter alia , a request for termination that has
been approved by the Minister in line with section 35 ( 5) of the WS A. The clause
goes on to provide that this may be passed by a 2/3 v ote of the Board on the
grounds of unethical or obstructive behaviour, an accusation concerning them which
they absolutely abjured. (As an aside it appears to me that this provision of the
Board Charter applies in the unique context of the Board initiating a request to the
appellant to terminate the membership of one of them on the stated grounds , which
scenario is entirely distinguishable from a situation where the Minister
independently exercises his power in terms of section 35 (5) of the WSA without
reference to any such a request .)12

[27] They also lamented the fact that the appellant had further in any event ignored
their written representations before making his decisions especially sinc e these were
notably absent from the record of decision disclosed by the appellant in response to
their notice filed in the review application in terms of Rule 53 (1) .13 Had each of these
been properly considered, they contended, the appellant would surely not have
proceeded with the termination of their membership and the wholesale dissolution of
the Board.

[28] With regard to the Code of Ethics for Board Members they highlighted the fact
that in the event of a chairperson being implicated in a breach, such a matter was to
be reported to the Minister for purposes of section 45 of the WSA, read together with
sections 84 and 85 o f the Public Finance Management Act, No. 1 of 1999 (the

12 Reading between the lines it was the rumblings of the respondents against the complaints of Dr .
Makgae concerning them that seems to have motivated the appellant to have adopted the course of
action which he did, but neither “ faction ” formally requested the termination of membership of the
other in terms of the Board Charter.
13 The appellant insisted in his replying affidavit that he had had regard to these. The court below
appeared to accept the appellant’s say so to this effect which would have been the correct approach
to have followed on the basis of the Plascon -Evans Rule. The fact that they were absent from the
record of decision hardly provides a basis on its own to conclude the opposite because there were
other documents also referenced here and there that were not in the “ record .” The respondents
themselves remarked upon the fact that the record was incomplete and or its compilation selective.
“PFMA ”), thus they contended that the appropriate course of action to be followed
was to have initiated an investigation to determine what remedial measures were
required , this in respect of the complaint of the governance challenges especially.
(As an aside it wa s not evident that the respondents formally complained to the
appellant of any breach of the Code by Dr. Makgae . She , conversely , raised their
conduct in undermining her authority as chairperson to call a special meeting of the
board and in seeking to frustrate her chairmanship as a prima facie breach of clause
9 of the Board Charter that forbids unethical and obstructive behaviour. Dr Ma kgae
also contended that they were in breach of section 38 ( 2 ) of the WSA that legally
obliges board members to perform their duties with honesty, care and diligence.)

[29] Thus the respondents approached the court below to review and set aside the
decisions against the background of the prevailing legal framework principally on the
basis that these decision s to terminate their membership of the Board and to
dissolve it, fell to be challenged on the several bases made provision for in sections
6 (2)(c), 6 (2)(e)(iii), 6 (2)(e)(vi), 6 (2)(f) and 6 (2)(h) of the Promotion of
Administrative Justice Act, No. 3 of 2000 (“ PAJA ”), alternatively on the common law
grounds of illegality and irrationality.14

The Record of decision and reasons advanced by the Minister for his impugned
decisions:

[30] The record of decision filed in response to the respondents’ notice of
application to review the appellant’s decisions revealed a raft of various document s.
Some by their very nature hint to a reader of a possible basis for the appellant to
have relieved the entire Board ,15 but nay a firm reason was expressed by him

14 The subsections of PAJA relate, in the order of their being listed, to decisions that are procedurally
unfair ; taken because irrelevant considerations were taken into account and /or relevant
considerations were not taken into account ; were taken arbitrarily or capriciously ; are irrational ; and/or
are unreasonable.
15 Such as for example, a Request prepared by the Director Genera l for the appellant’s benefit
suggesting a course of action ultimately taken by him in the form of placing the members on terms to
provide reasons as to why their appointments should not be terminated . This “ request ” was premised
upon the Department havin g received numerous communications between January 202 1 to March
2022 indicating governance challenges at Amatola Water. Because the appellant failed to engage
with this document in his affidavit or give it any context at all, or identify what communications it
concerned, it merely hovered as something in the ether.
personally in the plethora of documentation for having come to this drastic outcome ,
except in a letter addressed to the Provincial Secretary of SAMWU dated 18 March
2022 written in response to a petition filed by the union regarding certain matters . In
it he revealed that what had stood out for him in his recent engagements with the
Board and m anagement on key projects , was the “ instability ” of A matola Water ,
evidenced by the lack of a duly appointed Chief Executive and a Chief Financial
Officer and “ other internal strains amongst the Board members ”. He remarked that
despite interventions made by the Ministry in 2021 to address these issues “the
situation ha (d) continued unabated ,” which grievous concerns he was “attending to” .
He qualified that the Minister’s intervention had been on behalf of the Ministry and
the Department as a shareholder in Amatola Water and not as an “ Employer ”, that it
had been informed by the context aforementioned , was aimed at stabilizing the
entity , and would last until stability was reinstated. With regard to an issue about a
13th cheque that had inter posed itself, the appellant ventured that the Ministry was
concerned that the stability within the Board had generally impaired its ability to
make “ sound decisions ”, including those of a financial nature.16

[31] As an aside, the appellant simply annexed the “ whole of the record ” to his
answering affidavit without relating what in it bore pertinently on his decision -making
except to the extent indicated below .

[32] Leaving aside what the media reported based on the Department’s press
release, h is own voice in the whole scenario leading up to his dissolution of the
Board was muted until he gave context , in his answering affidavit , to some of the
documentation in the record as justification for why he res ponded to the perceived
crisis as he did .

[33] Surprisingly, the appellant set store , firstly, by dated reports filed pursuant to
an earlier investigation by an attorney commissioned by his predecessor into
complaints of misconduct against the first respondent (founded on anonymous
letters by two whistle -blowers and a letter authored by the Secretary of SAMWU

16 The appellant did not flag this letter to SAMWU in his answering affidavit either as a relevant
document bearing upon his impugned decisions. It just so happened to be amongst the documents
comprising the record of decision.
Amathol e Region ) that he claimed had caused him concern even having had regard
to the first respondent’s affidavit provided in response to the serious allegations
against her which she had provided at the time of the investigation .17

[34] The complaints that had formed the subject matter of the attorney ’s
investigation implicated the first and second respondent s in allegations of acts of
corruption and unethical conduct . The y also implicated the fourth respondent in her
capacity as chair person of the Human Re source Committee but by reason of her
“lack of proper qualifications within the area of human resources .”

[35] Also relied upon was a letter dated 29 April 2021, addressed by SAMWU to
the Ministry raising objections to the appointment of executive managers.

[36] These letters, according to him, were seeking the Ministry to address issues
of unethical conduct on the part of the named members . One such complaint
concerned the first respondent encouraging board members to shift from the
fundamental objectives of Amatola Water to advance her own interests and
implicated bullying tactics on her part by undermining oth er board members during
virtual meetings. The appellant repeated verbatim the attorney’s words lifted from
the latter’s 2021 investigative report as if they were his own that, “whether true or
not”, these allegations were very serious in nature.

[37] He related a further allegation that the first respondent had irregularly
appointed the Executive Manager : Planning and Development Director, one Mr.
Koyo, without consulting other board members, despite accepted policy that the
appoint ment of the Chief Executive Officer was to have preceded Mr. Koyo’s
appointment. This according to him was a cause for concern because “ it allegedly
validates the allegation that (the first respondent) was or is pushing her own agenda
and not that of Amatola Water ”.18


17 In this respect a “Final Report ” suggesting the termination of the 1st and 4th respondents’
membership, on prior notice to them, was dated 26 July 2021.
18 These sentiments are those of the attorney once again who conducted the earlier investigation and
are evidently not the appellant’s or iginal thoughts.
[38] He added that the first respondent had in fact responded to these allegations
in an affidavit but his takeaway from her input given at the time is that its contents ,
apart from implicat ing the then chairperson and the second respondent in allegations
of misconduct , was tantamount to making herself guilty of a contravention of section
3 (a) of the Prevention and Combatting of Corrupt Act ivities Act, No. 12 of 2024
(“PRECCA ”) by having received “ gratification ” (as defined in the PRECCA), and of
overlooking unlawful and corrupt acts by both the then chairperson and the second
respondent, criminal knowledge of these actions having been imputed to her on the
basis contemplated by section 2 of the PRECCA .19

[39] Without explaining what had happened going befo re, he related that he had
“re-appointed ” the first respondent with the belief that she was “ fit and proper for the
position ” but added the rider that “ her behaviour is, without a doubt, a cause for great
concern ” and that he had “ lost confidence in her ability to execute her duties, as
expected of a board member. This too is an observation from the 2021 investigative
report that the appellant owned as his independent view of the issues concerning the
first respondent . In the report the attorney had noted as follows:

“The Minister appointed Ms. Tonise with the belief that she, as someone who
is legally qualified and trained, is a fit and proper person for the position, but
her behaviour is, without a doubt, a cause for a great concern. In light of the
foregoing, the Minister would be entitled to lose confidence and trust in her
ability to execute her duties, as expected of her.”

[40] He concluded that the first respondent had “failed to conduct herself in a
manner that reflects Good Corporate Governance and to uphold the law ”.

[41] As an aside, it is common knowledge that the outcome of the attorney’s
investigation conduced to the first respondent’s membership being terminated at the
time, but subsequent thereto the appellant himself reinstated her as a member of the
Board. It appears further th at despite her having sought to accuse the second
respondent of certain misc onduct in the affidavit filed in response to the investigative

19 Again these were thoughts expressed by the attorney in the investigative report.
report, she asserted in an affidavit filed in the review application that in a meeting
held with the appellant on 22 October 2021 “ any concerns in relation to the second
respondent, including the allegations set out in the Minister’s answering affidavit,
were resolved to the satisfaction of all attendees.”

[42] One would have expected some explanation from the appellant as to why the
first respondent especially had been absolved and reinstated in spite of the very
serious allegations against her, but true to her claims, i n separate letters dated 14
October 2021 the appellant had written to both her and the fourth respondent as
follows: “ I have considered the termination of your board membership to the Amatola
Water Board by the former Minister. As a result, I have decided to reinstate your
membership to enable you to serve as a member of the Amatola Water Board in
terms of section 35 of the Water Services Act, 1977….” .20

[43] In the light of the appellant self -evidently having absolved and reappointed the
first respondent , it appeared curious that he had elevated these complaints against
her to established facts, as it were, of charges of serious misconduct against her at
the time of his impugned decision making . Further of relevance is the fact that the
attorney himself, in making his report, had qualified that i t was by no means a final
report .

[44] Be that as it may, t he appellant further added to the raft of supposed
misdemeanors against the first respondent the significant allegation that she had had
a personal relationship with Mr. Koyo who she had interviewed for the position of
Executive Manager : Planning and Development and had failed to disclose this
relationship in contravention of clause 4.4.2 (b) of the Board Charter.21


20 The first respondent clarified in her affidavit that she and the fourth respondent had been reinstated
“upon (their) termination being challenged .” One would certainly have liked to know more about that to
understand why the appellant had capitulated by reappointing them , but it remained a mystery on t he
papers .
21 To this allegation, seemingly not raised as an issue in the investigative report, the first respondent
pleaded a denial. No further detail was however forthcoming from either the appellant or her regarding
the complaint .
[45] Concerning t he second respondent , the appellant noted that he had also
attracted complaints of misconduct in the earlier investigation alluded to raising
concerns “ around acts of corruption ” when he was the acting chairperson of the
Board ; irregular interv iews undertak en a year before in the pursuit of appointing
executive officers ; and, more recently , relating to the unauthorized use of a rental
motor vehicle for Board business that had subsequently been involved in a motor
vehicle accident.22 Whilst the latter fact was acknowledged by the second
respondent and he had offered to pay for the damages ,23 it bears mentioning that
the outcome of the attorney’s formal investigation against him in July 2021 had been
concluded on the basis that:

“There is no evidence to support the allegations against Mr Xalisa, Mr M …and
Mr T ….. The allegations are baseless and … were probably raised with
malicious intent to tarnish the character and image of those ‘implicated’
thereby.”

[46] Despite the significant sequel to the investigation, the appellant yet asserted
that “(f)rom the foregoing ” (that would entail the complaints of misconduct against the
first and second respondents arising from the investigative repo rt)24 it was “ clear ”
that the erstwhile Board was dysfunctional.25


22 In effect the appellant reopened the allegations against the second respondent which had as a fact
being found to be baseless by the investigator appointed by his predecessor. Not surprisingly, the first
respondent opined that it was wholly inappropriate an d impermissible for the appellant to have relied
on these allegations after they had been investigated and were established to be untrue.
23 It appeared to be common cause that he had not been asked for an explanation neither was the
matter referred for investigation in terms of clause 6.10 of the Code of Conduct and Ethics for Board
Members .
24 This would no doubt have included the allegations against the fourth respondent mentioned in the
investigative report that evidently trailed into nothingness.
25 Lest one might be mistaken that this is what the appellant meant, namely that what had been the
subject of the attorney’s investigation conduced to the claimed present day dysfunctionality warranting
the wholesale dissolution of the Board, it was repeated i n counsel’s submissions upon appeal that it
was clear “ from the investigative report ” that the erstwhile Board was dysfunctional , this as opposed
to the allegations of misconduct raised against the respondents by Dr . Makgae in her memorandum to
the appellant dated 21 February 2022. One would have expected the appellant to have distinguished
between the two bases for termination and to have focused on the governance challenges as the
predominating issue because this wa s essentially the foremost reason why the appellant seemed
intent , in his pre -termination notices, on dissolving the entire Board.
[47] Forward tracking in time to the date of his impugned decisions , the appellant
also complained (in essence as a secondary concern to that of the alleged
misconduct of the three members aforesaid) that Board members were said to be
“making allegations at each other ”.

[48] He cited the example of the fourth respondent having “used defamatory
statements ” against Dr . Makgae, in an email communication dated 1 February 2022,
in which she had equated her to “ Verwoed .” 26

[49] He also cited as a “ glaring ” indication of the Board’s dysfunctionality (speaking
closer in time to the date of his impugned decisions) the fact that the first respondent
had called an urgent special meeting on 20 February 2022 to discuss the same
aspects that were on the agenda for a regular meeting scheduled for 25 February
2022 arising from the significant release of the SIU report and the process of
recruitment of the chief executive officer whereas in his view the chairperson had
had this very much under her control at the time and would have dealt with it in the
ordinary course . In this regard the appellant was especially informed by the
memorandum of Dr. Makgae dated 21 February 2022 in which she had
particularized various complaints of “ misconduct ” against Board members relat ing to
governance issues which the appellant drew attention to amongst the documentation
making up the record of decision .27

[50] He further remarked upon the tenor of correspondence exchanged between
board members (samples of which had been attached to Dr . Makgae’s memorandum
dated 21 February 2022 ) that gave the impression that they were divided into two
factions, one group comprising the respondents , and the second group the
remaining five members. He expressed the view that given the stark positions taken
by the members on the issue of the timing and supposed need for the special

26 Dr. Hendrik Frederik Verwoed was a notoriously known apartheid era Prime Minister . The Supreme
Court of Appeal has found that to label a person with such a moniker is tantamount to an offensi ve
and actionable racial slur . See Pringle v Mailula (773/23) [2024] ZASCA 146 (25 October 2024) at
[28].
27 As an aside the first respondent denied its contents.
meeting to discuss the SIU report that they would not be able “to co ntinue working
together ”.

[51] Elsewhere he alluded to their “ infighting ,” and a “ pulling in different directions”
by the two groups of members .

[52] He thus concluded that the Board was “ unstable ,” which , so he purported to
explain at last, had prompted him to call for reasons why he should not dissolve it.

[53] Following his consideration of the attorney’s 2021 investigat ive report, which
he sought to emphasize the members were also fully aware of ; the nature of the
“complaints ” against them ; memoranda from the chairperson (which included the
report against the second respondent concerning the motor vehicle accident by Dr .
Makgae dated 21 January 2021 and the “ Verwoed ” complaint ); as well as the
representations he had received from each member, he claims to have been moved
to dissolve the Board.28

[54] In justifying his decision to disband the entire complement of members as
rational under the circumstances he purported to reason that the Board could not
have continued to be dysfunctional at the expense of the residents of the Eastern
Cape Province to whom Amatola Water is constitutionally mandated to provide
access to water . He adverted in this respect to his constitutional duty to ensure that
the Board is functional and can fulfil its statutory mandate which it was precluded
from doing effectively at that point in his view given the governance challenges at
play.

[55] He denied that there was a less drastic measure that he could have taken to
“rescue the dysfunctional Board ” repeating his concern that there were two groups
making accusations at each other and refusing to work together. As for the
suggestion that he should have initiated investigations before jumping to the

28 It is certainly curious that the primary motivating factor for the wholesale dismissal of the Board
flowed from the dated investigative report that had in effect been given a pass by the appellant in
October 2021 when he reinstated the 1st and 4th respond ents who had been on precautionary
suspension pending the investigation.
wholesale dissolution , he adverted to the fact that this had in fact already been done
in the form of the two earlier investigative initiatives undertaken at the behest of his
predecessor which had yielded up the damning reports referred to above implicating
the first and second respondents respectively in, inter alia , criminal acts .29

[56] As for both his decisions to terminate the term of office of all the Board
members and the appointment of the Interim Board members he pointed to his
“unfettered ” powers in terms of section 35 (5) of the WSA which he categorized as
an executive function (concerned with the setting of policy as opposed to the
implementation of legislation ) especially insulated from scrutiny under the mantle of
PAJA.30

[57] However, inasmuch as the decision s were in his view executive one s, he yet
defended them as legal having regard to the authority bestowed upon him in terms of
section 35 (1) and (5) of the WSA both to have appointed the Interim Board and to
have terminate d all the member ’s appointments . He also contended , in respect of his
primary decision under scrutiny , that his decision to have relieve d the whole board
was rational having regard to the relevant information at his disposal that formed the
basis for his response .

The members’ case in response to the allegations of “dysfunctionality ” leading to
instability :

[58] The respondents entertained a different perspective of the members’ poor
interrelations and the impact of this on the Board to properly carry out its mandated
governing function .


29 This prop osition is simply illogical because the substance of the governance challenges only came
to the fore long after the attorney’s investigation.
30 This was couched in the form of a legal submission. His answering affidavit heralded that it would
be argued at the hearing of the review application that the exercise of “ this kind of power by the
Minister ” constitutes executive action and not administrative action . It was promised that reference
would be made to the “ relevant judgment of the Constitutional Court ” which, so it was later revealed ,
is that of Minister of Defence and Military Veterans v Motau and Others 2014 (5) SA 69 (CC)
(“Motau”) .
[59] Despite the acknowledged “serious difficulties ” with Dr. Makgae , as noted in
their founding affidavits, they asserted that her refusal to work with the rest of the
members of the Board had not affected its ability to continue with its business .
Indeed the first respondent emphasized that they had been largely successful in
discharging its mandate and had made substantial progress in resolving “ historical
difficulties ” that have plagued Amatola Water. (As an aside, the appellant did not
gainsay this affirmation of their collective endeavo urs as members of the Board or
that they had achieved the successes claimed by them.)

[60] In a supplementary affidavit filed after delivery of the review record the
respondents opined that that there was in any event no conclusive evidence
amongst the documents disclosed to support the appellant’s anticipated reason for
the impugned decisions foreshadowed in the pre -termination notices .

[61] Whilst I do not agree with the first respondent’s observation that there was no
evidence in the record of decision to support the appellant’s concern about the issue
of gover nance challenges at least , an aspect I will discuss further below, there was
self-evidently nothing in the record of decision documenting the claimed causal
instability that was the reason offered to the media and SAMWU for the appellant’s
supposed concerns for the failure of the Board and its abrupt dissolution.

The member’s case in response to the allegations of their claimed misconduct:

[62] Whilst acknowledging that the record contained allegations of misconduct
against their number, the respondents pointed out that these were untested and
unsubstantiated . They challenged the fact that the attorney’s investigative report
was on its own qualified and provisional in the sense that it emphasized that those
carrying on the invest igation were not in receipt of all the information necessary to
make final findings and conclusions and that their report was not intended to equal
the weight of a proper forensic investigation of the Board’s affairs and management.
In any event the sting of these allegation s had also been removed and had
culminated (after the first and fourth respondent s’ suspension ) in their memberships
being reinstated. In the case of the second respondent the invest igation had
concluded in his favour.

[63] The respondents in any event pertinently denied all the negative allegations in
the record of decision pertaining to themselves and lamented the fact t hat they had
not been given a proper opportunity to challenge these under the circumstances in
which the allegations had resurfaced and had come to be top of mind for the
appellant as a reason why he considered it deserving of collapsing the Board in
March 2022 .

The approach of the court below:

[64] In respect of the argument that the appellant had exercised an executive
function in making the decisions which thus precluded any scrutiny under the
provisions of PAJA , the court below found against the appellant . It also concluded
that there was no merit in his submission in any event that the discretion which he
had exercised was “unfettered ” or “unbridled. ”

[65] Although accepting in the respondent s’ favour that the impugned decisions
amounted to administrative ac tion, the court below concluded that the respondents ’
complaints as to how the appellant had fallen short, at least in respect of the
requirements contemplated by section 3 of the PAJA, did not equate to procedural
unfairness.

[66] The court then proceeded to consider whether the appellant’s decisions met
the standard of rationality, although it is unclear whether it did so under the mantle of
PAJA or under the legality principle.31

[67] Concerning the factual premise upon which it based its determination, the
court considered that the height of what had been established in the evidential
material before it concerning the dysfunctionality contended for by the Minister is that

31 In paragraph 4 of the judgment in respect of the application for leave to appeal , the court below
states that: “(t)he Minister’s decision was reviewed in terms of the Common Law, in particular the
principle of legality which requires that every exercise of public power must be rational .” In par 23 of
the judgment in the review application it is implied that the court had entertained the alternative
argument before it that the decisions were reviewable on the basis of the principle of legality despite
its ostensible finding that a PAJA review was implicated .
there was at most “ disharmony ” or “ disagreement ” amongs t the members of the
Board, but it concluded that these shortcomings , which it labelled only as
“governance issues within the Board ,” had in any event not been at the expense of
residents of the Eastern Cape Province. The court appeared to have accepted as
“farfetched ” the appellant’s conclusion to the contrary that the trouble within
(conversely labelled by him as “dysfunctionality ”) had indeed come at such expense .

[68] It found instead , on an acceptance of the respondents’ averments in this
respect, that whatever the sticking points had been, the members had risen above
the conflict concerned and had achieved progress in the Board’s primary activity.
This finding was consistent in its view with the absence in the record of decision of
any suggestion of a negative impact on the delivery of water services in the Eastern
Cape and the lack of any denial by the appellant to the respondents’ averment in
their p apers that they had (notwithstanding the accepted troubles) contributed
substantially to the reliable provision of water services to the people of th e province .

[69] The court contemplated that a further blow to the Minster’s submission that
the dysfunctionality and its supposed impact rendered his impugned decisions
rational is that in his pre-termination notice s there had been no mention that
“instability within the entity ” had been at the actual expense of residents of the
Eastern Cape.

[70] On the issue of the separate ground of misconduct against the first and
second respondents the court appears to have remarked generally that there was no
evidence that they had breached any of the legal instruments determining their
duties .32 Furthe r, whilst keeping these complaints that dated back to the time of the
appellant’s predecessor in the forefront, the court observed that the application was
less about whether there was merit in them against the implicated respondents
arising from the earlier investigation , but that it was more about the manner in which
the impugned decisions had been taken in March 2022 and the reasons given by the
appellant therefor.

32 These would relate to the provisions of section 29 of the WSA concerning the primary activity of a
water board, the duties set out in section 38 of the WSA, the Board Charter , and the Code of Conduct
and Ethics for Board Members by which members are bound.

[71] These factual conclusions parlayed to the court’s conclusion ultimately that it
was not persuaded that the decision to dissolve the Board, which gave rise to the
ancillary decisions, was rationally connected to the purpose sought to be achieved
thereby .

[72] On the issue of the remed y which the court thought appropriate it reasoned
that it would not be just and equitable not to order the “reinstatement of the Board ” at
least from the date of its judgment because the acceptance by a person of an
appointment to the board of a state entity “presents a risk to one’s personal brand
and professional image .” With reference to the relief sought by the respondents that
they be reinstated retrospectively, the court observed that no facts had been brought
to its attention regarding the efficacy of an order in such terms.

The appellant’s grounds of appeal:

[73] The grounds of appeal relied upon by the appellant are in essence that the
court below should have followed the principle adopted by the C onstitutional Court in
Minister of Def ence and Mili tary Veterans v Motau and Others (“Motau ”)33 to the
effect that the decision to remove board members of a state owned entity constitutes
an executive decision whereas the court below had determined that the decision
under scrutiny by it amounted to administrative action within the meaning
contemplated under the provisions of the PAJA .

[74] Allied to this contention is that the court below breached the stare decisis
principle (“to stand by previous decisions ”) by not bringing to bear the proper
standard of scrutiny against the appellant’s decision to dissolve the Board and by
failing to recognize that his power in this respect was not inhibited or restrained by
any provisions contained in the WSA .

[75] Further co ntended on behalf of the appellant is that having determined that
the appellant’s decisions under scrutiny by the court below constituted administrative

33 2014 (5) SA 69 (CC).
action , its conclusion that the respondents failed to persuade it that the re were
“sufficient reasons to review the decision taken by the Minister in terms of PAJA ”
should have resulted in a dismissal of the application.

[76] Further asserted is that t he court erred in failing to find in any event that the
appellant’s decision for the reasons given by him was not justified on a legality
rationality basis. This was especially so based on the complaints of serious
misconduct against the relevant Board members investigated at the Department’s
behest and reported instances of the Board’s dysfunctionality and /or instability.

[77] Also under challenge on appeal is that the court below failed to properly apply
the Plascon Evans Rule34 to the facts before it . There were two strands to this
supposed misstep. The first is that the court should have accepted the appellant’s
evidence that the Board had been facing several governance challenges which led to
instability within the entity especially since the respondents had supposedly not
denied t he existence of challenges facing the Board . The second part of this ground,
which was not well articulated in the notice of appeal, is that the court minimized the
serious nature of the allegations made against the Board members in the attorney’s
investigation report, accepting the respondents’ version instead as to the purported
absence of any serious cause for concern by the appellant warranting the drastic
step taken by him of dissolving the Board.

[78] Allied to the second part, it was contended on behalf of the appellant that the
court should have found that his “decision ” (evidently to remove the respondent s as
Board members) was rational, having regard to the serious allegations made against
“the Board members ” in the investigati ve report , which factual premise the court
ought to have accepted if proper regard was had to the principles set out in Plascon -
Evans .35

34 Plascon -Evans Paints (TVL) Ltd. v Van Riebeeck Paints (Pty) Ltd. (53/84) [1984] ZASCA 51; [1984]
2 All S A 366 (A); 1984 (3) SA 623; 1984 (3) SA 620 (21 May 1984).
35 With hindsight this is confusing because the primary decision entailed dissolving the Board as a
collective for the misconduct of two of the respondents. Concerning t he application of Plascon -Evans ,
these principles dictate that material disputes of fact in applications for final relief are, as a general
rule, resolved on the basis of the facts as stated by the respondent , together with the admitted facts in
the applicant’s affidavit.

[79] Finally, it was contended on behalf of the appellant that even accepting the
pretext that his decision s fell to be reviewed and set aside and that the erstwhile
Board had to be reinstated retrospectively, such a remedy was irreconcilable with the
fact tha t the appointment of the Interim Board in the meantime stood, had legal effect
according to the Oudekraal principle ,36 and produced valid legal consequences that
could not be ignored.37

Preliminary Observations:

[80] By and large some of the grounds raised above fall to be discounted for
obvious reasons. For one , the court below self -evidently did not conclude that the
respondents had not persuade d it that the re were “ sufficient reasons to review the
decision taken by the Minister …” which should therefore, according to Mr. Erasmus
who appeared for the appellant , have resulted in a dismissal of the application . To
the contrary the court below found definitively that t he course of action adopted by
the appellant was unlawful (by whichever standard of scrutiny) and that it was not
persuaded that the primary decision to dissolve the Board, which in turn gave rise to
the ancillary decisions, was rationally connected to the purpose sought to be
achieved (by the empowering provision) .

[81] In this regard the following passage in the jud gment under appeal came to be
criticised:


36 Oudekraal Estates (Pty) Ltd v City of Cape Town and Others (2004 (6) SA 222 (SCA )
37 In the court’s judgment in the appellant’s application for leave to appeal it was noted as follows:
“[7] To the extent that I may have erred by not setting aside the Minister’s decision to appoint an
Interim Board thereby offending the principle enunciated in the matter of Oudekraal Estates (Pty) Ltd
v City of Cape Town and Others (2004 (6) SA 222 (SCA ) , there once again I am unable to say there
are no reasonable prospects of the Minister succeeding on this point. Even though I was of the view
that such an order would have been superfluous in the light of the order I made that applicants in the
matter (n ow respondents) be re -instated as members of the Amatola Board. This also in view of the
fact that the term of the Interim Board was for five months, which period had already expired. ”
[8] In the Oudekraal matter it was held that until such time that an in valid administrative action is set
aside by a court in proceedings for judicial review, it exists in fact and has legal consequences. ”
The application for leave judgment is reported as Minister of Water and Sanitation v Tonise and
Others (1274/2022) [2023] ZAECGHC 84 (12 September 2023) .
“I am not persuaded that the appointment and termination of a Board is an
executive decision. The respondent does not say why the taking of the
impugned decisions amounts to executive decisions/ action. It certainly
cannot be said to amount to a policy or f ormulation policy decision/s.
Therefore, (it) must be an administrative action. Be that as it may, there are
prescribed requirements for administrative action to be procedurally fair as
laid out in PAJA in particular Section 3 . Applicants do not say in wha t way
these requirements were not met. Their qualm, as I understand their case is
that the Minister took the allegations against them at face value and acted in
the manner he did based on incomplete and untested allegations.
Furthermore that he did not engage the applicants especially those against
whom allegations were made, treated the allegations as established facts,
and did not apply his mind to the said allegat ions. I'm not persuaded that
these are sufficient reasons to review the decisions taken by the Minister in
terms of PAJA .”38

[82] Ms. Stein who appeared for the respondents contended in this respect that on
a correct reading of the paragraph in the context of the judgment as a whole , the
court below did not find that none of the PAJA grounds of review relied upon by the
respondents in their papers had been established , as was suggested by the Mr
Erasmus to the contrary . Whilst the paragraph was prone to attract some confusion , I
agree that the court’s comments therein were confined to the question of procedural
fairness as contemplated in section 3 of PAJA and the respondent’s failure in it s
opinion to have establishe d in what way these requirements had not been met . It is
clear in my view that t he court below merely declined to set aside the appellant’s
decisions on the basis that they were procedurally unfair.39

[83] Concerning the factual premise upon which the court below made its
determination of irrationality, t here was ostensibly some misconception between the
parties as to what had been before the appellant at the time of his decision -making

38 At paragraph [22].
39 Although I do not agree with this finding , at least from the perspective of process rationality , there
was no cross appeal before us on the subject of procedural fairness.
to have motivated him to act as he did and what the court should have concluded in
this respect .

[84] The appellant seemed to have been under the mistaken impression when the
matter was argued in the court below that the respondents had always conceded or
acknowledged the “ dysfunctionality ” referenced by him, but far from it.40 What they
had contrarywise placed before him for his intervention was their concern with Dr .
Makgae’s claimed unilateral and highhanded board leadership which they
themselves complained posed a risk to the entity’s stability. Despite their concerns
for her alleged questionable leadership , however, the impact thereby on the
erstwhile Board’s ability to operate normally or effectively was otherwise vociferously
placed in contention by them .

[85] But even assessed from the appellant ’s perspective and leaving aside the
notion of “dysfunctionality ” employed by him in his answering affidavit , he too merely
adverted to a “risk” of instability within the entity arising from the claimed governance
challenges which he failed to elaborate on in any detail.

[86] The court below was correct in my view to accept that there was no evidence
adduced by the appellant neither was it apparent from the record of decision that
there was any negative impact to the delivery of the Board’s operational mandate by
the conflict between the respondents on the one hand and Dr Ma kgae on the other
concerning the issues or differen ces in approach to handling the affairs of the Board
that arose between them. Neither indeed did the appellant’s pre-termination notices
hint at the claimed instability being at the expense of residents of the Eastern Cape
Province even though the appellant was quoted by the media as stating that
instability and governance challenges at Amatola Water had affected the prov ision of

40 The appellant hardly articulated how the concept of dysfunctionality ought to have been
understood , but one gets the impression that he was focused on a causal effect . What he appeared to
suggest is that what ever instability was apparent it was , or had , as a fact , rendered the Board as a
mandated governing body serving a designated purpose in terms of the WSA unable to attain that
purpose effectively , in essence the rational causa for his primary decision . Such a drastic factual
finding is however not ju stified on the evidence and the court below was correct in our view to find as
much.
water to communities in the Buffalo City Municipality area . This allegation was
however completely unsubstantiated.

[87] The issue of the so -called “ governance challenges ” in the forefront of
appellant’s mind was however certainly informed by correspondence in the record of
decision made available to the respondents after the fact , in particular in memoranda
by Dr. Makgae which the appellant specifically and pertinently adverted to in his
answering affidavit .

[88] The respondent s however maintained the view that they were facing
generalized complaints about them raised with the appellant by Dr. Makgae. Their
claimed nescience of the real issue at the heart of the crisis as perceived by the
appellant could however not have been sustained after service of the Rule 53 record
once they were apprised of what had be en before him in the form of Dr. Makgae’s
memoranda . In this respect they merely denied the contents of Dr Makgae’s
memoranda rather than engaging in the detail or extent of her formal complaints
against them that appear to have been strongly and forcibly made to the appellant at
the time .

[89] As an aside it does appear to me to be anomalous that t he respondents’
documented impression of what in their view had instead caused the difficult ies or
conflict41 are notably absent from the record of decision (and were not responded to
by the appellant) but again the objective fact of the existence of Dr. Makgae’s

41 There were two letters highlighting the challenges as perceived by them. In the first, the second
respondent on 8 February 2022 wrote to the appellant of the refusal by the Chairperson to have called
a special Board meeting to discuss the SIU report on pr ocurement during or in respect of the National
State of Disaster which begged his intervention to prevail upon her to call an urgent special meeting
because of the sensitivity of the matter and the fact that Dr. Makgae was said to have been acting
divisive ly and had begun to implement some of the SIU’s recommendations unilaterally without
involving the Board. The second letter is dated 22 February 2022 in which the first respondent wrote
to the appellant regarding the purported appointment of the chief exec utive officer after the special
general meeting which they had held in the absence of Dr. Makgae, and its import in this respect. The
first respondent conveyed the essential cause of the complaint which is that the chairperson had
clandestinely written to the appellant to say that the Board supported the recommendation for the
appointment of an executive officer whereas that was not the case. They especially wanted to
distance themselves from whatever Dr. Makgae might have said to him in her personal capac ity in
this regard. These communications on their own would have made plain to the appellant that
whatever Dr . Makgae had con vinced him to the contrary they certainly had a different take on the
matter that warranted closer inspection before jumping in to disband the Board.
complaint against them lodged with him cannot be overlooked . The memoranda
prepared by her are what the appellant pertinently identified in the record as having
informed his decisions at the time.

[90] Ultimately however the appellant did not dispute the respondents’ criticism of
him that he took what Dr. Makgae had said against them at face value without
engaging with the allegations or any supporting evidence or applying his mind
thereto . This in itself flies in the face of the requirement of procedural f airness as the
respondents were not made aware even by the pre -termination notices of what Dr .
Makgae had said against their interests that he considered to be d amning in the
circumstances.

[91] As for the issue of the claimed “miscon duct” one gets the impression from the
record that it was Dr . Makgae’s concerns mentioned in the memoranda of 22
February 2022 which she labelled as misconduct that had singularly precipitated the
perceived crisis within the appellant’s contemplation at the time and which had
galvanized him into action .42 But instead, he adverted (in his answering affidavit and
in purporting to explain his decisions after the fact ) to the dated complaints of
misconduct forming the subject matter of the earlier investigation by the attorney as
having led to the instability .43 This was the predom inant reason for his primary
decision which he gave in his answering affidavit yet he certainly failed to give any
warning in his pre -termination notices that it was the claimed misconduct arising from
the attorney’s investigation in 2021 that had formed the basis for his concerns which
in March 202 2 had propelled him in the direction of collapsing the Board. Indeed,
why would cold and dated misconduct investigations again st two Board members (of
which they had effectively been absolved ) be a reason to relieve the entire Board in
March 2022 ? Such a proposition needs only to be stated to realise its absurdity.


42 The further fact that he was concerned by the absence of the appointment of the Chief Executive
officer (and ostensibly hamstrung by the respondent’s opposition to the appointment of his approved
candidate ) also suggests itself as a motive .
43 It makes no sense that the misconduct charges related in the attorney’s investigative re port could
have been what the pre -termination notices suggested “has led to instability within the entity .”
[92] Given how those complaints were dealt with and the peculiar sequel thereto,
the court below was correct in my view to have treated them as having no traction in
the decision making process. Whilst not being dismissive of the serious nature of
those charges of misconduct , it fairly declined to determine whether there was merit
in them . The court was further astute to read in that it was in fact the governance
challenges as opposed to the unspecified misconduct allegations which the appellant
clarified in his template pre -termination notices had “led to instability within the entity ”
that had ostensibly primarily motivat ed him at the time to want to dissolve the Board.

[93] A word should perhaps finally be said about the review record and its impact
on the court’s determination of what was before the appellant when he made his
impugned dec isions to dissolve the Board and prematurely end the members’ terms
of office .

[94] The appellant accused the respondents of not having extracted from the
record provided what it needed for purposes of the review application nor had it
certified these as true copies. In Venmop 275 (Pty) Ltd & Another v Cleverla nd
Projects (Pty) Ltd & Another44 the court set out the expectation of parties concerning
the production of a record in a review application launched pursuant to the provisions
of Rule 53 as follows:

“Rule 53 of the unifo rm rules of court provides a mechanism for an applicant,
in review proceedings, to obtain a record of the proceedings and to facilitate
the presentation of the applicant’s case in the review. Rule 53(1) provides for
the notice of motion to call for the di spatch of the record of such proceedings
to the registrar. Rule 53(4) provides the applicant with an opportunity, after
having inspected the record, to vary the terms of the notice of motion and
supplement the supporting affidavit. The provisions of rule 53(3) are quite
clear. They require the applicant to “ cause copies of such portions of the
record as may be necessary for the purpose of the review ” to be made. The
purpose of the rule is equally clear. It is to provide an aggrieved applicant,
who migh t not necessarily have all the evidence at his or her disposal, the

44 (2014/14286) [2015] ZAGPJHC 176; 2016 (1) SA 78 (GJ) (3 August 2015) at [17].
opportunity to supplement the case made in the application by providing
potential evidence in the full record of the review proceedings. Having been
given such opportunity, it is the duty of the applicant to select what is relevant
from the record to serve as evidence for the purpose of the review
application. It is only what is selected by the applicant in terms of rule 53(3)
that serves as evidence. Should there be documents forming pa rt of the
record omitted, which in the view of the respondent are relevant, these can be
introduced into evidence as annexures to the answering affidavit. Any other
part of the record omitted which is necessary to rebut what is said in answer
might simila rly be introduced as an annexure to the replying affidavit .”
(Emphasis added)

[95] In this instance the respondents clearly referenced what was relevant for their
purposes and further lamented what was not in the review record .

[96] The appellant on the other hand, although attaching the entire record to his
answering affidavit, in the end only referenced a few of the documents in it which he
claims bore on his decision making.

[97] The first was the attorney’s 2021 investigative report in support of the
allegation that the first and second respondents had made themselves guilty of
serious misconduct. Secondly, there were three letters written by Dr Makgae to him.
One concerned the second respondent’s accident with the rented motor vehicle.
Another concerned the complaint by her against the fourth respondent that she had
defamed her by equating her to “ Verwoed ”, thus allegedly making herself guilty of
unethical behavi our. In this letter there was a tagged on complaint against the
second responde nt that he was “ sending emails on matters that are unfounded,
copying management and really putting the Board in disrepute ” which, so Dr Makgae
claimed , amounted to “an attemp t to undermine (her) from executing her duties .” The
last one was the seminal memoranda of 22 February 2022 in which she accused the
respondents of misconduct in calling the separate special meeting to discuss the SIU
report and of undermining her authority and blocking attempts to take decisions, hold
management accountable and to investigate matters of concern.

[98] Beyond what the appellant owned as relevant to explain what m otivated him
at the time he made his decisions , there was indeed no obligation on the court below
(neither on this court) to have rummage d through the record to determine on its own
from unreferenced document ation what was essential to the enquiry whether he had
responded rationally in the circumstances by relieving the entire Board.45

[99] In my opinion the court below was therefor e correct to have concluded on a
factual basis , with the admissible evidence at its disposal , that the appellant had not
established the dysfunctionality contended for by him and in accepting that whatever
the divide was between the respondents and Dr . Makgae, this had not in fact caused
any negative impact to the Board delivering on its mandate. Indeed this would
provide the only compelling reason why , as a collective, the Board ’s ability to
function in accordance with the law and its statutory mandate could be called into
questi on.

[100] On another point of contention, t he respondents seemed to misunderstand
that the appellant in emphasizing his “unfettered ” discretion to terminate members’
appointment s to the Board and attempting to place it in the category of executive
rather than administrative action did not mean thereby that his decisions were not
subject to any oversight by the courts at all . While the taunt ostensibly offended the
respondents, it was ultimatel y clarified that he merely implied thereby that there was
no threshold placed on his authority to appoint and remove Board members by the

45 One such unreferenced do cument was a departmental recommendation which the appellant did not
own as bearing on his impugned decision s. Mr . Erasmus during argument , in countering Ms. Stein’s
submission that the appellant had concocted reasons after the fact, laid down the gauntlet : “The
record speaks for itself (and) here it is, this is what the Minister had !” and yet in advancing reasons for
his dissolution of the Board the appellant clearly went beyond the essence of the recommendation to
focus on the dated complaints of misconduct against the first and second respondent as the primary
reason for his decision. A litigant who can ’t be bothered to give proper context to documents serving
in the record of decision as being of particular significance to the subject matter of the review should
not complain when it is ignored by the court in its determination. As was lamented by the court in
Venmop at [18] , practitioners universally ignore the provisions of Rule 53 (1) in review applications but
do so at their own peril . The court remar ked further in [19] as follows in respect of the perfunctory
approach adopted by practitioners: “ The idea that more is better and that it is wiser “to put everything
before the judge” belongs to the lazy and the insecure. It ignores the sentiment expressed
in Phambili, Van Z yl, Zuma, Dunkel and McKesson. Litigants who deluge a court with a welter of
irrelevant and unnecessary material, which hides and confuses what is relevant, ought not to be
heard to complain about the quality of the judicial determination they receive. When representing
applicants utilising the provisions of rule 53, practitioners ought to take heed of the provisions of rule
53(3) and apply their minds to what is relevant ”.
empowering provision . This was but a factor conducing to the contention put forward
on his behalf that this put his impugned decisions in to the category of executive
action that in the end attracts a different level of scrutiny by the courts .46 He
acknowledged however that whilst the empowering provision provided legal author ity
for his dissolution of the Board , it did not give him a free pass , as it were, to do as he
wishe d or to hire and fire members of the Board on a whim.

[101] Indeed, as correctly observed by the court below with reference to Hoexter
and Penfold in their publication “Administrative Law in South Africa ”, 47 the
suggestion of an unfettered discretion is a misnome r:

“(I)t is important to realise that the holder of discretionary power never has a
completely free hand. First, to act with discretion means to act wisely and after
due reflection ; And so while discretion can be very wide, it is never completely
“free”, “ unfettered ”, “absolute” or “arbitrary”, notwithstanding the frequency
with which these and similar adjectives have been used by the courts. Baxter
rightly describes an “unfettered discretion” as a contradiction in terms.
Secondly, the idea of uncontrolled or unguarded discretion is hopelessly at
odds with contemporary constitutionalism. In the South African context, our
Constitu tion requires that there be some constraints on broad discretionary
powers. As the constitutional court has explained, that is not only to minimise
the danger of a violation of rights but also “so that those who are affected by
the exercise of the broad di scretionary powers will know what is relevant to
the exercise of those powers or in what circumstances they are entitled to
seek relief from an adverse decision ’.”

The Constitutional Court ’s decision in Motau and other judgments of relevance :


46 That di stinction between administrative and executive action is of considerable significance as was
highlighted and discussed in Motau at [27], [33] – [35] and [44], read with footnote 28 in particular .
Answering this question is impo rtant says the Constitutional Court . If it amounts to administrative
action, it is subject to a higher level of scrutiny in terms of PAJA. If it is an executive action, it is
subject to the less exacting constraints imposed by the principle of legality.
47 3rd Edition at page 65.
[102] The Minister of Defence and Military Veterans argued in Motau , as was
contended on behalf of the appellant in casu , that the power to appoint and dismiss
members of the board of a state owned entity for the effective pursuit of government
business through the e ntity constitutes executive action as contemplated in the
Constitution which falls outside of the administrative law purview of PAJA and does
not invite the court’s scrutiny under its provisions .48

[103] Indeed, PAJA expressly excludes from its remit “executive powers or
functions of the National Executive ”.49 In addition to this general exclusion , section 1
(aa) lists particular executive powers that are excluded . This list includes those
powers bestowed upon the National Executive in terms of section 85 (2) (e) of the
Constitution.50

[104] Section 85 of the Constitution , which is concerned with the “ Executive
Authority of the Republi c,” provides that:

“(1) The executive authority of the Republic is vested in the President.


48 It is one of the appellant's chief ground s of appeal that the court below erred in law and on the facts
in finding his decision under review to be an administrative one. Even though the classification of the
decision one way or the other does not impact the issue of the rationality of the appellant ’s decision
(the requirement for a decision to be rational is the same whether assessed under the provisions of
PAJA or the common law) , and despite the well-established principle that an appeal lies against an
order and not its reasons (SeeTavak oli and Another v Bantry Hills (Pty) Ltd (1251/2017) [2018]
ZASCA 159; 2019 (3) SA 163 (SCA) (28 November 2018) , the judge formed the opinion that the
appeal would have reasonable prospects of success on this particular point . It appears from Motau
and other judgments cited therein that the distinction is a very important one and therefore falls to be
properly made on appeal . Firstly it determines the level of scrutiny that will be brought to bear in the
review process which for obvious reasons will also impact the relief that ought to be held to be
appropriate in the peculiar setting if the review succeeds . Further, since the starting premise is that a
litigant seeking to assert a constitutional right (in this instance to fair and just administrative action)
should seek his/her recourse in or based on any legislation enacted to regulate the right in question
(in this instance PAJA) , as opposed to the Constitution itself, Motau confirms the necessity to “make a
positive decision in each case whether a particular exercise of public power …is of an administrative
character ” to bring it within the remit of PAJA . The further requirement in the definition of
administrative action in PAJA itself that it must not fall under any of the listed exclusions propels a
reviewing court , so the Court observed in Motau , to undertake a close analysis of the nature of the
power under consideration . [33 -34] It is therefore not a moot consideration what distinction applie d in
casu , the issue of accountability in a similar fact setting also, by parity of reasoning, being “ a matter of
great public importance ” [24] and entailing “important questions for any democracy that takes
seriously the values of accountability and good governance .” [1]
49 Section 1 (aa) of PAJA.
50 Motau at [30] .
(2) The President exercises the executive authority, together with the other
members of the Cabinet, by ―

(a) implementing national legislation except where the Constitution or an Act
of Parliament provides otherwise;

(b) developing and implementing national policy ;

(c) co -ordinating the functions of state departments and administrations;

(d) preparing and initiating legislation; and

(e) performing any other executive function provided for in the Constitution or
in national legislation.”

(Emphasis added)

[105] In Motau the High C ourt51 reviewed a decision by the Minister of Defence and
Military Veterans to remove two leaders from the board of directors of the
Armaments Corporation of South Africa (S OC) limited (“Armscor ”). It granted
judgment in their favour setting aside the decision of the Minister on several grounds
premised upon the provisions of the PAJA , holding that her decision was
administrative rather than executive .52 On appeal from the High Court , the
Constitutional Court considered the question to what standard of performance a
minister in his or her capacity as the responsible member of the executive may hold
the leadership of a state owned entity that falls under his/ her supervisory control to
account , and further to what standard a court should hold that minister when he/she

51 Motau and Another v Minister of Defence and Military Veterans and Another , North Gauteng High
Court , Case No: 51258/13, 18 September 2013 .
52 The High Court concluded that the Minister’s decision was administrative rather than executive
action because the decision met the positive requirements of the administrative action definition in
PAJA and because it was not expressly excluded from the amb it of the PAJA as are some other
forms of conduct by members of the National Executive. See in this respect the definition of
“administrative action ” in section 1 (i) with its seven definitional elements that constitute the threshold
for engaging in admini strative law review.
exercises her powers of oversight in relation to that state owned entity in the
particular context of service dismissals .

[106] It did so in recognition of the fact that Armscor is a wholly state owned entity
regulated by the Armaments Act53 and cognisant of the fact that the state exercises
ownership control of Armscor through the Minister as its sole shareholder .54 It
concluded for reasons that I will shortly elucidate that the power in question
constituted executive action .

[107] In that legislative setting Armscor’s affairs are managed and controlled by its
Board comprising nine non -executive members and two executive member55 in the
same way that Amatola Water and other water boards established under the WSA
are governed by board s of control .56 Amatola Water , including other water boards
established in terms of the WSA , are listed as National Government Business
Enterprises under Schedule 3 (Part B ) of the PFMA. Although Armscor is listed
unde r Schedule 2 of the PFMA as a “ Major Public Entity ” and is registered under the

53 This is a reference to the Armaments Corporation of South Africa Limited Act, No. 51 of 2003.
54 This is expressly provided for in section 2 (2) of the Armaments Act.
55 Section 6 (1) of the Armaments Act.
56 Section 35 of the WSA , although it is implied rather than pertinently stated . (The powers and duties
of water board s and their members are fles hed out in sections 31 and 38 which give context to the
expectation of how the entity’s affairs are to be carried on.) . These provisions are conveniently stated
here:
“35. Governance of water boards . - (1) A water board consists of a chairperson and such other
members as the Minister may appoint from time to time.
(2) Schedule 1 regulates the terms of office of board members, the procedure for the recommendation
of persons for appointment as chairperson or board members and the termination of office of board
members.
(3) When appointing a member, the Minister must have regard to -
(a) the objects of the water board;
(b) the need for the board to be representative of -
(i) the water services authorities to which it provides water services;
(ii) the other interests served by the water board; and
(iii) the broad population;
(c) the expertise required for the board to function effectively; and
(d) the desirability or otherwise of executive employees being members of the board.
(4) The extent to which relevant water services authorities should be represented on a water board
must be determined by the Minister after consultation with every relevant organisation representing
municipalities having jurisdiction in the service area.
(5) The Minister may terminate the appointment of any or all the members of a water board .
(6) …..”
Section 4 of Schedule 1 , relevant to dismissals, merely states the obvious circumstances under which
a member of a board ceases to hold office as a Board member including when his or her appointment
has been terminated in terms of the provisions of section 35 (5).
Companies A ct as a state owned company,57 the appellant stands in a similar
position to the Minister of Defence and Military Veterans. He (or she with reference
to the current incumbent ) is similarly the representative shareholder of the se entities
over which the state exercises ownership control and supervision over the members
making up the boar ds of control .

[108] Does that mean therefore that the power exercised by the Minister of Water
and Sanitation in the same capacity as representative shareholder and overseer of
the corpo ratised entities under his /her charge to terminate a board of control or the
services of any of its members also equate s to the discharge of a political or more
closely policy related function by virtue of these basic similarit ies?

[109] The spontaneous answer to this question is , not necessarily so, for as Ms.
Stein correctly pointed out , Motau does not support the conclusion that all decisions
regarding all removals of all board members of a state owned entity constitute
executive action per se . On the contrary , Motau confirm ed a case -by-case approach
in classifying the nature of the power under review consistent with our jurisprudence .
In this respect it reaffirmed the principle that “ (t)he determination (that assists a
court in making the difficult distinction between executive and administrative action)
needs to be made on a case -by-case basis; there is no ready -made panacea or
solve -all formula” .58

[110] While the determination is one that must be made on the specific facts of each
case and against the background of the relevant legal framework underpinning the
power in contention , the following guiding principles as set out in Motau (and more
recently endorsed by the Constitutional Court in Mncwabe v President of the

57 The court observed in Motau , firstly, that Armscor falls within the definition of a “ state owned
company ” in terms of the Companies Act. Secondly it pointed to the fact that it is listed in schedule 2
of the PFMA as a “ major public entity ” and that it is registered under the Companies Act. Thirdly,
section 9 of the Companies Act deals specifically with the statute's application to the affairs of state
owned companies. The effect of that provision is that state owned companies are, for all intents and
purposes, to be treated as public companies, unless a Cabinet member has procured an exemption
(in whole or in part) from the obligation to comply with the Companies Act.
58 Motau, Supra at [36]. President of the Republic of South Africa and o thers v South African Rugby
and Football Union and others 2000 (1) SA 1 (CC) at 143 (“SARFU ”). See too Molefe and others v
Minister of Transport and others (17748/17) [2017 ZAGPPHC 120 (10 April 2017) (“Molefe ”) in which
the court classified a decision by the Minister of Transport to dissolve the Board of Control of PRASA
as administrative, and not executive. (at para graphs 32 and 37).
Republic of South Africa and Others; Mathen jwa v President of the Republic of South
Africa and Others )59 are instructive and led the court in Motau to determine that the
Minister’s decision in that case to terminate the services of the two members in the
leadership of the Armscor Board amount ed to the performance of an executive
function in terms of section 85 (2) (e) of the Constitution, rather than the
implementation of national legislation in terms of section 85 (2) (a) which would have
fallen within PAJA’s remit .

[111] Firstly, one has to have regard to the nature of the function or power
exercised , as opposed to the position of the functionary. In this respect the
Constitutional Court highlighted the executive power’s different utility and application :

“[37] Executive powers are, in essence, high -policy or broad direction -giving
powers. The formulation of policy is a paradigm case of a function that is
executive in nature. The initiation of legislation is another. By contrast,
“[a]dministrative action is . .. the conduct of the bu reaucracy (whoever the
bureaucratic functionary might be) in carrying out the daily functions of the
state, which necessarily involves the application of policy, usually after its
translation into law, with direct and immediate consequences for individuals or
groups of individuals.” Administrative powers are in this sense generally
lower -level powers, occurring after the formulation of policy. The
implementation of legislation is a central example. The verb “implement”,
which also appears in section 85(2 )(a) of the Constitution and distinguishes it
from section 85(2)(e), may serve as a useful guide: administrative powers
usually entail the application of formulated policy to particular factual
circumstances. Put differently, the exercise of administrativ e powers is policy
brought into effect, rather than its creation. ”

[112] Secondly, one has to consider the source of the power be ing exercised and
how closely it relates to the formulation of policy , on the one hand , or its application,
on the other . Regarding the latter, the Constitutional Court observed that:


59 2023 (11) BCLR 1342 (CC) at 120.
“[38] In determining the nature of a power, it is helpful to have regard to how
closely the decision is related to the formulation of policy, on the one hand, or
its application, on the other. A power that is more closely related to the
formulation of policy is likely to be executive in nature and, conversely, one
closely related to its application is likely to be administrative .”

[113] Regarding the source of the power, it noted the tricky nature of this feature of
the categorization :

“[39] As further assistance, a number of pointers can be extracted from
previous decisions which are helpful in assessing the nature of a particular
power. First, it may be useful to consider the source of the power. Where a
power flows directly from the Constitution, this could indicate that it is
executive rather than administrative in nature, as administrative powers are
ordinarily sourced i n legislation. In Masetlha 60 Moseneke DCJ held that the
President’s power to dismiss the Director -General of the National Intelligence
Agency was sourced in and flowed from section 209(2) of the
Constitution. This was partly the basis for the conclusion that the power
under consideration was an executive power as contemplated in section
85(2)(e) of the Constitution, despite the fact that section 209(2) had an
analogue in national legislation.

[40] Special care must, however, be exercised when reliance is placed on this
factor. While administrative powers more commonly flow from legislation,
PAJA’s definition of adm inistrative action expressly contemplates that the
administrative power of organs of state may derive from a number of sources,
including the Constitution. Conversely, and as borne out by section 85(2)(e) of
the Constitution read with section 1(i)(aa) of P AJA, an executive power may
be sourced in legislation. This feature of a power is thus only useful in this
context, if at all, as a tentative signpost: constitutional powers are often wide -

60 Masetlha v President of the Republic of South Afri ca and Another (CCT 01/07) [2007] ZACC 20;
2008 (1) SA 566 (CC); 2008 (1) BCLR 1 (3 October 2007) (“Masetlha”)
ranging and direction -giving, while statutory powers are generally more
narrow and the concretisation of formulated policy. ”

[114] Thirdly, the degree of discretion afforded to the functionary in the exercise of
the power is significan t. Again the Constitutional Court expressed caution in relying
on such factor as follows:

“[41] Second, the constraints imposed on the power should be considered.
The fact that the scope of a functionary’s power is closely circumscribed by
legislation might be indicative of the fact that a power is administrative in
nature. In Ed-U-College61 this Court considered the nature of a Member of
the Executive Council’s power to determine a formula for the payment of
subsidies to independent schools. It was persuaded that the power was
administrative by, among other things, “the constraints upon [the] exercise [of
the power]”, as well as its relatively restricted scope.

[42] Again, caution is required when reliance is placed on the absence of
constraints or the level of discretion afforded to a functionary. This factor’s
utility is that, when a discretion is particularly broad, it suggests that the
exercise of the power is akin to the formulation of policy. However, while the
presence of a wide -ranging discretion is often indicative of a broad policy -
making power, it may equally be an incident of the subject matter on which it
is brought to bear. A functionary may, for example, be afforded a
considerable discretion in the exercise of a certain power simply because its
exercise is heavily dependent on the factual circumstances th at obtain in a
particular case. Context is thus crucial in assessing the relevance of this
factor.”

[115] Lastly, it should be considered whether it is appropriate to subject the exercise
of the power to the higher level of scrutiny under the provisions of PAJA. So for

61 Permanent Secretary of the Department of Education of the Government of the Eastern Cape
Province and Another v Ed-U-College(PE)(Section21) (CCT26/00) [2000] ZACC 23; 2001 (2) SA 1
(CC); 2001 (2) BCLR 118 (CC) (29 November 2000) . The Constitutional Court referenced par 21 in
this respect.
example in Motau the court observed that it ma y be that this level of scrutiny is not
appropriate given that the power bears on particularly sensitive subject matter or
policy matters for which the courts should show the Executive a greater level of
deference.62

[116] In applying those principles in the unique setting of the Minister having
exercis ed her powers of oversight in relation to Armscor over which she exercise d
ownership control on the state’s behalf (under the legal framework imposed by the
Armscor Act inter alia ),63 the court in Motau determined that she was “ charged with
the high -level supervision of the corporation to ensure that it discharges its statutory
mandate and operates in the national interest .” It noted in particular that this was a
“different ” power (operating at a different level ),64 more closely related to the
formulation of policy , that formed a constitutive part of the Minister’s power to
supervise high-level public office -bearers in the performance of their official duties ,
as opposed to a low -level bureaucratic power which merely involves the application
of policy in the discharge of the daily functions of the state , which is in the ordinary
remit of administrative law.

[117] The Constit utional Court’s seminal reasoning in answering the question what
level of scrutiny had to apply is fully set out below :

“Was the Minister’s decision administrative or executive action?


62 Motau at [42]. See also Masetlha at paragraph 77.
63 Although under a separate discussion concerning the procedural constraints on the exercise of the
Minister’s section 8 (c ) power , the Court recognized that both the Armaments Act and the Companies
Act apply to Armscor’s governance and corporate affairs [74] and must have been intended to apply
concurrently otherwise it would be operating without an y statutory guidance over a wide range of
areas. [77] It also recognized the application of the provisions of the PFMA , but only co-incidentally
related the fact of Armscor being listed “as is required ” in terms of Schedule 2 as a “ major public
entity .” [74] It may have been useful to have mentione d the peculiar context in which the Minister’s
ownership control and supervisory powers derive from the provisions of the PFMA . Unfortunately the
Court did not go into the source of the political responsibly resting upon the Minister to supervise the
Board leadership of the Board of control in greater detail to understand the different level power that
in its view set apart the Minister’s power to dismiss as constituting the performance of an executive
function in terms of section 85 (2) (e) of the Constitu tion rather than the implementation of national
legislation in terms of section 85 (2) (a) .
64 At paragraph [49].
[45] In order to determine the nature of the Minister’s section 8(c) power, we
must have regard to the legal framework imposed by the A rmscor Act. The
Minister’s powers under the Act are fairly broad. For example, she “ exercises
ownership control . .. on behalf of the State ”; imposes such conditions on
Armscor’s interactions with foreign states “as may be necessary in the
national inte rest”; appoints the non -executive members of the Board and
designates the Chairperson and the Deputy Chairperson from their number; is
consulted by the Board in its selection of the CEO; determines Armscor’s
share capital; and approves the formation and di sposal of subsidiaries. She is
also empowered to make regulations stipulating “conditions or restrictions
subject to which the Board must manage and control the affairs of the
Corporation”.

[46] The business of military procurement, on the other hand, is left to the
Board. Thus, while it is Armscor’s responsibility to see to the practical
aspects of procuring defence matériel in order to meet the needs of the
SANDF, the Minister is charged w ith the high -level supervision of the
Corporation to ensure that it discharges its statutory mandate and operates in
the national interest. This, in turn, must be understood in the context of the
Minister’s political responsibility and constitutional duty to see to the defence
of the Republic, its territorial integrity and its people.

[47] In the light of the foregoing and for the reasons that follow, I am of the
view that the Minister’s decision is executive rather than administrative in
nature. First, the Minister’s section 8(c) power is an adjunct of her power to
formulate defence p olicy. In terms of this power, the Minister formulates
policy on, among other things, the acquisition and maintenance of “air
navigation systems” and “arms, ammunition, vehicles, aircraft, vessels,
uniforms, stores and other equipment”. Of course, this i s policy in the broad
sense: overarching and direction -giving, with the minutiae of individual
procurement decisions left to Armscor.

[48] As is apparent from the scheme of the Armscor Act, the Minister does not
provide direction through interventions in i ndividual projects or by prescribing
particular procurement policies. Rather, she discharges her political
responsibility to ensure that the Department’s procurement agency meets its
statutory obligations by appointing and dismissing leaders who have the
“knowledge and experience which . .. should enable them to attain the
objectives of the Corporation”. The Minister must have in mind the
Department’s policy aims when selecting Board members, including the
Chairperson and Deputy Chairperson. She must se lect people who are
capable of carrying out those aims and who share the Department’s policy
vision. Similarly, the Minister arrests the failure to follow proper policy by
terminating the directorships of people who have not assisted Armscor to
discharge its statutory functions. The formulation of defence procurement
policy and the appointment and dismissal of people who will supervise the
implementation of that policy are thus closely linked. While the appointment
and dismissal of Board members is not th e formulation of policy as such, it is
the means by which the Minister gives direction in the vital area of military
procurement and is therefore an adjunct to her executive policy formulation
function.

[49] Second, and relatedly, the exercise by the Minis ter of her section 8(c)
power is not a low -level bureaucratic power which merely involves the
application of policy in the discharge of the daily functions of the state, which
is the ordinary remit of administrative law . Rather, it operates at a different
level, for the section is a constitutive part of the Minister’s power to supervise
high-level public office -bearers in the performance of their official duties. She
does so by means of the corporate relationship that she has with the Board
members. They are the directors she has selected, in accordance with her
policy dictates, to manage the Corporation – and thereby determine defence
procurement policy.

[50] Third, under the Armscor Act the Minister need only demonstrate good
cause in order to justify t he termination of the services of a Board member.
She does not have to satisfy a list of jurisdictional requirements before she
can take the decision or need to demonstrate that a particular ground such as
incapacity or misconduct exists. The Minister th us has a level of discretion in
determining when directors should be removed, which points to the fact that
her power under section 8(c) is executive in nature. The fact that the power is
sourced in legislation is, as noted above, not in itself determinat ive, and thus
does not dilute the force of the other considerations canvassed.

[51] For these reasons, I am persuaded that the impugned decisions are not
subject to review under PAJA. Because section 8(c) of the Armscor Act is an
adjunct of the Minister’s power to make defence policy, and thus more closely
related to the formulation of policy than its application, the decision to
terminate the services of Board members amounts to the performance of an
executive function in terms of section 85(2)(e) of the Constitution, rather than
the implementation of national legislation in terms of section 85(2)(a).”

[118] It is evident that i n getting to this conclusion and resolve of the nature of the
Minister’s power to have relieved the leadership of the Armscor Board of Control , the
Court had regard to the legal framework imposed by the Armaments Act, and cited
her various powers, mostly quite broad but at least specific in relation to the role
played by her specified in section 2 (2) (b), namely that she exercises ownership
control over the corporation on behalf of the state. It consciously noted what was in
the domain of t he corporation on the one hand , which is “ the business of military
procurement...left to the Board, ” and what fell to her charge on the other . In this
respect it recognized her political responsibility and constitutional duty to see to the
country’s defen ce (as provided for in section 201 (1) read with section 200 (2) of the
Constitution) through the exercise of all her powers including ownership and
supervisory control over the corporation (which in turn embraces the power both to
appoint and discharge members of the Board of Control) with a view to ensuring that
it discharges its statutory interest and operates in the national interest.

[119] It recognized that this ownership control begins with the Minister having in
mind the Depar tment’s policy aims in selecting the board’s members and leaders
and effecting such a choice based on her satisfaction that the persons selected are
capable of carrying out those aims and share the Department’s policy vision. Her
power to dismiss, a recognized corollary of the power to appoint ,65 entails her
“arresting ” the failure to follow proper policy by terminating the directorships of
people who have not assisted Armscor to discharge its statutory function . The
formulation of defence procurement policy and the appointment and dismissal of
people who will supervise the implementation of that policy are thus closely linked.
While the appointment and dismissal of board members is not the formulation of
policy as suc h, so the court explain ed, it is the means by which the minister gives
direction in the vital area of military procurement and is therefore an adjunct to her
executive policy formulation function.

[120] It dubbed the latter power as “ high level ” given its significance in my view of
the model of the state owned entity , the peculiar niche that it occupies in the domain
of the developmental state , the cabinet minister’s role as representative shareholder
faithful to the relevant department’s ownership policy and aims , and her bespoke
corporate relationship with the entity’s board members .

[121] I digress briefly to discuss this feature. That state owned entity is generally
defined as a legal entit y created by it in order to partake in commercial activities on
its behalf.66 They are public enterprises and although owned by the state as the
majority or sole shareholder , as the case may be , the ownership is on behalf of the
public. Government is thus expected to be accountable to the public in respect of
their function. The public interest in the functioning of state owned entities is
safeguarded by two essential layers of accountability . The first is through the entity’s
board of control that is notionally expected to be independent and whose members
are obligated to aspire to good corporate governance in accordance with their
fiduciary responsibilities . The second layer comprises the monitoring and supervision
by the executive authority accountable to Parliament , which as described in Motau ,

65 Masetlha , Supra , at par 77.
66 The summary set forth in th is passage and those following on the subject is derived from several
helpful research papers in the domain of the Dullar Om ar Institute for Constitutional Law, Govern ance
and Human Rights (University of the Western Cape) that has conduct ed extensive research into and
advocacy on the issue of the appointment and dismissal of board members of state owned entities , as
well as problems arising therefrom . See, for example , Muntingh, L (2019) Appointing directors to the
boards of state -owned enterprises: A proposed framework to assess suitability ; Wandrag R (2018)
The legal framework for the appointment and dismissal of SOE board members’ ; Wandrag R (2019)
Appointment and Dismissal of Board Members and Executives of Eskom, Prasa and the SABC , all
accessible at www.dullahomarinstitute.or g.za.
also entails the consideration of policy dictates according to which members are
appointed and dismissed. It involves in my view a special category of appointment
especially conferred on the shareholding minister for the effective pursuit of
government business. It is also significant in my view that the model of the state
owned enterprise largely mimic s that applicable to profit companies in which realm
directors serve at the behest of the compan y’s shareholders who elect them and in
which setting it would be entirely permissible to terminate directorships antithetical to
companies’ commercial objectives or vi sion statements by an ordinary shareholder
resolution adopted at a shareholder ’s meeting.67

[122] With regard to state owned entities there are three legal frameworks that must
be considere d. The first is the PFMA that is always applicable. The entity’s creation
is recognised by its being listed in the schedules to the P FMA. It is however
established by the relevant constitutive/ founding legislation that applies to its being .
The second is the Companies Act which is not always applicable . (Indeed it will
apply only to those state owned entities registered as companies in terms of its
provisions . It was held to be applicable in Motau but does not apply in casu .) The
third framework is the specific legislation establishing the relevant state owned entity .

[123] The PF MA does not provide any detail s, standards or procedures on the
appointment of board members but it locates the power to appoint both the member
of board and its executive head within its definition of ownership control exercised by
the National Executive through the relevant cabinet minister. Where the Companies
Act is applicable, the minister (usually being the sole shareholder ) will appoint the
directors unless the state owned entit y’s Memorandum of Incorporation or Articles of
Association provide for a different procedure. Invariably the applicable founding
legislation regulates such appointme nts.

[124] When it comes to dismissals, as far as the PFM A is concerned the power to
remove an executive (board member and Chief Executive officer) would again fall
under the definition of ownership control.68 The Companies Act , if applicable ,

67 Section 71 of the Companies Act , if applicable to the state owned entity under consideration.
68 Section 1 under the relevant definition.
provides that it is the majority shareholder that may dismiss any director including
the entity’s chief executive officer .69 In practise this means that the government ,
through the releva nt minister , will do so. The Companies Act at least insists on prior
notice and an opportunity for an embattled executive to state his or her case before
this happens and a sui generis type of review avails such a person to challenge
his/her dismissal .70

[125] In the case of entities not registered as companies , the founding legislation
may regulate who dismisses executives and on what grounds. In the context of
dismissals from service generally, which invariably involves prejudicial allegations
being levelled against the dismissed person, this has been recognized by our courts
as a decision that attracts the requirement of procedural fairness.71 Our courts have
insisted on procedural fairness for dismissals challenged under the institutional
construct of a government enterprise through process rationality at least where the
dismissal decision is found to constitute executive action . In instances where such
decisions have been found upon review to constitute administrative action subject to
the higher l evel of scrutiny in terms of PAJA, it follows that procedural fairness is a
minimum subset of the right to just administrative action.

[126] In Molefe and others v Minister of Transport and others72 the high court , in
classifying a decision by the Minister of Transport to dissolve the Board of Control of
the Passenger Rail Agency of Sout h Africa , similarly a state owned entity , came to
the contrary conclusion that such a decision was administrative rather than
executi ve. It distinguished the case before it from Motau as follows:

“The fundamental difference between the Modau case and the current case is
that in the Modau case the Constitutional Court found that the Minister's
powers were predicated on the provisions of the Constitution whereas in the
current case the Minister's powers are anchored in statutory enactment. Her

69 Section 71 of the Companies Act.
70 Section 71 (5) of the Companies Act. See also Pityana v ABSA Group Limited and Others [2023]
ZAGPPHC 342; 2024 (1) SA 491 (GP) (10 May 2023)
71 Motau , at [83].
72(17748/17) [2017] ZAGPPHC 120 (10 April 2017) .
power to appoint and dismiss the Board of PRAS A is sourced from the
legislation and not from the Constitution. In removing the directors of the
Board the Minister was wielding her statutory power which was conferred on
her by the provisions of s 24 of the Legal Succession Act. She was not
involved in the development of a new policy. I have accordingly reached a
conclusion that the Minister's decisions are liable to be reviewed under the
broad grounds provided for in PAJA. It will be recalled that in his argument Mr
Labuschagne submitted that in decidin g whether a decision was executive
rather than administrative, the court should have regard to, inter alia, the
source of the power, in other words, was it the Constitution or, if not so, was it
statute? ”73

[127] In Reddy & others v Minister of Human Settlements, Water and Sanitation and
Others74 (“Reddy ”) the court adopted a similar approach. In that instance it was
asked to review and set aside a decision taken in terms of section 35 (5) of the WSA
to disband the Umgeni Water Board. Rejecting the Minister's assertion that the court
was bound by Motau to classify the decision as executive, the court held instead as
follows :

“In my view considering that the power to appoint originates not in terms
of the Constitution but in terms of the Water Services Act that it is a
function that the Minister performs which is granted to the Minister by
the said legis lation. In my view it is therefore administrative action that is
reviewable in terms of PAJA. It is not as pointed out above a review by
the Minister of the decisions of the previous Minister in which event in
terms of Gijima it would indeed have been a le gality review.”75

[128] Mr. Erasmus in substantiating the chief ground of the appeal that the court
below erred in finding that the appellant’s decisions under scrutiny constituted
administrative action (and that it was wrong not to follow the lead of the

73 At paragraph [37].
74 Reddy and Others v Minister of Human Settlements, Water and Sanitation and Others (5167/2020)
[2021] ZAKZPHC 100 (21 October 2021)
75 At paragraph [29].
Constitutional Court in Mota u on the basis of the stare decisis principle) , argued that
the legal framework applicable in casu entailed the exercise of virtually the same
kind of power as concerned the Minister in Motau (as representative shareholder)
involving the supervision of high level office -bearers chosen by his predecessor with
a view to ensuring (in this instance) that Amatola Water meets its statutory
obligations t hrough the identity of the selected members serving on the board who,
according to the prescripts of section 35 (3) (c) of the WSA , are expected to have the
expertise required for the board to function effectively for the duration of their term of
office . He clarified that this does not entail the formulation of policy per se , but that it
is the means by which the appellant gives direction to the vital areas of water and
sanitation , and therefore is an adjunct to his executive policy formulation function.

[129] He noted further that the test resting on the executive in Motau was higher
than that on the appellant. In terms of the provisions of Section 8 ( c) of the
Armaments Act the section dealing with the vacation of office by members of its
board states that such a member “ must ” vacate office if “ his or her services are
terminated by the minister on good cause shown .” The fact that no such threshold or
jurisdictional requirement for the exercise of the power to dismiss is mentioned in
section 35 (5) of the WSA , in contradistinction to Motau , was in his estimation an
important consideration in determining on which side of the line the appellant’s
actions fell.

[130] He also urged upon this court to note the difference in treatment under the
WSA concerning the dismissal of a chief executive officer as opposed to a board
member. Section 36 (3) of the WSA requires that the termination of services of such
an incumbent by a water board , as opposed to the Minister , must be “ for good
reason ” (and subject to fair labour practices) , whereas section 35 (5) states without
any elaboration that the Minister may terminate the appointment of a ny or all the
members of a water board . This too provide s a significant signpost in his view that
the dismissal of a board member under the provisions of the WSA constitutes an
executive decision.76

76 It bears highlighting that a different approach is also indicated in the WSA for the dismissal by the
Minister of the services of a member of a water services co mmittee established under Chapter VII of


[131] He referenced other general broad policy given directions vesting in the
appellant to be gleaned from the provisions of the WSA, those apart from his powers
to appoint, supe rvise control over and dismiss board members that flow from the
import of his ownership control under the provisions of the PFMA, that in his
submission, taken globular ly, provide an indication of a high level power accorded to
the Minister similar to that identified by the court in Motau which should have been
given recognition by the court below.

[132] In this respect section 30 (3) empowers the Minister in consultation with the
Ministers of Finance, Trade and Industry, and Public Enterprises by notice in the
Gazette to determine the nature of activities a water board can perform outside the
borders of South Africa and the countries in which such activities may be performed.
It also provides that the Minister may dictate the maximum amount of capital that a
water board can take out of the Republic when an activity contemplated in
subsection (4) is perfor med.

[133] He also adverted to the provisions of section 39 (relating to a water board’s
obligation to prepare and adopt a policy statement) which ostensibly entitle the
appellant to give policy direction although such policy i s in the first instance
formulated by the Board itself.

[134] Further, in terms of section 4 1, power resides in the Minister to issue
directives to water boards , to the extent that it is reasonable , to undertake a specific
activity at its own cost if it is financially viable, against full or partial payment, or to
desist from a specific activity, if it is not in the best interests of the general
population , in accordance with the parameters set out section 34 (1).

[135] Section 46 deals with the assets and liabilities of a board upon its
disestablishment , again giving very wide and broad powers to the Minister.


its provisions. Section 55 (4) provides that the Minister may terminate the membership of such an
appointee after consultation with the members of the community served by that committee.
[136] Section 47 provides that one cannot litigate against a water board unless the
Minister is served with the relevant court papers.

[137] Lastly, in terms of section 50, it is provided that the inclusion of Chapter VI
(dealing with water boards as a subset) must not be construed as giving any
executive or legislative power to any province in respect of water boards .

[138] Ms. Stein contended contrariwise that what supported the court a quo ’s
finding that it was concerned with administrative action is that the appellant ’s powers
are firstly sourced in legislation and not in the Constitution ; that the primary activity of
the Board is to provide water service s to other water service institutions within its
service area77 in accordance with the main objects of the WSA ;78 that the appellant's
powers are circumscribed both substantively and procedurally by section 35 of the
WSA79 and, finally, that the Board expr essly has no role to play in the formulation or
prescription of policy, which is a function that must be exercised by the Minister and
cannot be delegated.80

[139] She urged upon the court to follow the a pproach adopted by the courts in
Reddy and Molefe in advancing the respondent s’ contention that the court below did
not err in finding that it was concerned with administrative action.

Discussion:


77 Section 29 .
78 Section 2 .
79 Mr. Erasmus argued con versely that the appellant’s powers were not circumscribed . On the issue
of the Minister’s power to appoint especially in terms of the provisions of section 35 read with section
3 of Schedule 1 to the WSA, he noted that there was no ostensible imperative on the incumbent to
seek the a ssistance of a selection panel to recommend persons for appointment of members of a
water board. He could do so if he wished, so the argument went , but was not obliged to foll ow such a
process . This is ostensibly how the Interim Board members came to be appointed . He added that this
free reign , as it were, that he enjoyed to appoint and dismiss board members subject only to the
requi rement of rationality was also an indicator that the appellant’s power was executive in nature.
80 In the latter respect she submitted that the national water policy is to be distinguished from the
policy statement adopted by each water board in terms of section 39 of the WSA w hich the minister in
casu is authorised to direct it to amend if the policy statement submitted by it to the minister is not in
the best interests of the general population within the institution’s service area or if it is not in
accordance with the functi ons of water boards set out in section 34(1) of the WSA. I understood the
submission to mean that the role played by the Board in this respect, even with the Minister’s
intervention, is not to be construed as closely related to the formulation of policy .
[140] In my view it appears that in both Reddy and Molefe the courts resorted to a
simplistic appraisal of the power exercised by the Ministers in each case without
considering the paradigm of the state owned entit y and the wholistic legal
framew orks of application, more especially the provi sions of the PFMA that define
and dictate the unique model of the state owned entity and its key features .

[141] In the case of Reddy , it is so that the Minister’s powers to appoint and dismiss
members of a water board are located in the provisions of section 35 of the WSA
(as opposed to the Constitution) but the court undertook no examination of the state
ownership control concept or its implications referenced in the PFMA . Indeed, it
appears to me to be counterintuitive not to have explicated those powers in the
exceptional context that the minister is the representative shareholder and has an
oversight function in relation to the entity and supervisory control over its leadership
charged with its corporate governance .

[142] I digress to highlight a few of those feature s apparent from the extended legal
framework imposed by the PFMA , which apply in casu as well.

[143] The provisions of the PFMA , which in terms of section 3 (3) thereof provides
that i n the event of any inconsistency between this Act and any other legislation th e
Act prevails , firstly give an indication of the nature of Amatola Water as well as other
water b oards as government enterprises in terms of its provisions.

[144] Amatola Water Board amongst others is especially listed by name under Part
B of Schedule 3 of the PFMA as a public national entity in the form of a National
Government Business Enterprise under the mantle of “ other public entities ”,
distinguishing it from “ major public entities ”.

[145] Such category of entity is defined in section 1 of the PFMA as follows:

““national government business enterprise” means an entity which —

(a) is a juristic person under the ownership control of the national executive;

(b) has been assigned financial and operational authority to carry on a busines
s activity;

(c) as its principal business, provides goods or services in accordance with
ordinary business principles; and

(d) is financed fully or substantially from sources other than—

(i) the National Revenue Fund; or

(ii) by way of a tax, levy or other statutory money;”

[146] The further definition of “ ownership control ” is also necessary to mention .
Such control is defined section 1 of PFMA as follows:

““ownership control” , in relation to an entity, means the ability to exercise
any of the following powers to govern the financial and operating policies of
the entity in order to obtain benefits from its activities:

(a) To appoint or remove all, or the majority of, the members of that entity’s
board of directors or equivalent governing body;

(b) to appoint or remove that entity’s chief executive officer;

(c) to cast all, or the majority of, the votes at meetings of that board of
directors or equivalent governing body; or

(d) to control all, or the majority of, the voting rights at a general meeting of
that entity; ”

[147] It is also necess ary to advert to the provisions of section 63 of the PFMA that
align with the object of the PFMA in section 2 which is to secure transparency,
accountability and sound management of the revenue , expenditure, assets and
liabilities of the institutions to which the Act applies, inclusive of Schedule 3 entities:

“63. Financial responsibilities of executive authorities. —(1) (a)
Executive authorities of departments must perform their statutory
functions within the limits of the funds authorised for the relevant vote.

(b) In performing their statutory functions executive authorities must
consider the monthly reports submitted to them in terms of section 39
(2) (b) and 40 (4) (c).

(2) The executive authority responsible for a public entity under the
ownership control of the national or a provincial executive must exercise
that executive’s ownership control powers to ensure that that public
entity complies with this Act and the financial policies of that executive. ”
(Emphasis added)

[148] In the context of the appellant’s supervisory and oversight function , the Board
that manages the financial affairs of the public entity is designated in section 4 9 (1)
and (2) of the PFMA as the responsible accounting authority for that entity.
Section 50 be read in tandem since it lists the fiduciary duties of accounting
authorities which align generally with a director’s obligations arising under the
common law.

[149] Although the provisions of the PFMA pertain especially to the f iscal aspects of
public entities , the theme of the Act is consistent, namely that the various role
players in giving effect to its object are accountable in the chain of command to t he
Executive that is accountable in turn to Parliament for the relevant public entity in
whose portfolio it fall s. The purpose for the necessary control and supervision over
the board by the shareholder minister appears from the definitions above to be to
“govern the financial and operating policies of the entity in order to obtain benefits
from its activities as government enterprises .”

[150] In terms of section 76 (2) of the PFMA the National Treasury may make
regulations or issue instructions to departments concerning the establishment and
control over trading entities ,81 reinforcing the state’s overarching ownership and
supervisory aims over such entities for maximum benefit flowing from the state’s
pursuit of business through them .

[151] This aligns with the preamble to the PFMA which introduces the reasons and
intent ion of the Act as being “(t)o regulate financial management in the national
government and provincial governments; to ensure that all revenue, expenditure,
assets and liabilities of those governments are managed efficiently and effectively; to
provide for the responsibilities of perso ns entrusted with financial management in
those governments; and to provide for matters connected therewith .”

[152] In Molefe , other than refere ncing the fact that PRASA is a state owned entity
listed as a National Government Business Enterprise under Schedule 3 of the PFMA
and mentioning its obligations under its provisions relative to the irregular
expenditure identified as one of the supposed bases for the wholesale dismissal of
the board of control in that instance, the High Court similarly did not consider the
Minister of Transport’s power to dismiss members of the board of control in the
unique context of its being as a sta te owned entity and having ownership control
powers as defined in the PFMA.82 It is again myopic to consider the power that
vested in her in the narrow context of section 24 of the Legal Succession Act without
regard to these provisions and to have compartmentalised the exercise of the power
as administrative in nature on the simplistic basis that her powers to appoint and
dismiss the board of PRASA are sourced in legislation a nd are not from the
Constitution .

[153] To have state d further that the Minister was not involved in the development
of a new policy by the exercise o f her section 24 powers further misses the

81 Subsection (c) .
82 No emphasis seems to have been placed on the significant fact that the Minister of Transport’s
notices of removal to the directors were premised not only on the direct empowering provision
(section24 ( 1)of the Legal Succession to the South African Transport Services Act, No. 9 of 1989) but
also on the fact that she was giving notice “as the Minister designated as the shareholding Minister ”.
See paragraphs [6] and [7] of the judgment.
substance of the Constitutional Court’s careful analysis in Motau of the issue of the
accountability of a Minister in the setting where he/she is the responsible member of
the E xecutive of a state owned entity (and shareholder representative ) exercising the
power to appoint and dismiss members of the Board of that entity as special feature s
of his/her overall oversight responsibility and ownership control in relation to that
state owned entity.

[154] To my mind this is a universal feature of a cabinet minister’s role in relation to
a state owned entity courtesy of the provisions of the PFMA that trump in the case of
any conflict (whether the entity is constituted as an ent erprise or a company) and
which cannot be ignored in assessing the nature of a power to dismiss members of
its board of control . So too what cannot be ignored is that state owned entities are
constrained by the constitutional imperatives in section 195 of the Constitution to
ensure the promotion of constitutional values and principles as set out in section
195(1), which includes the efficient and economic use of the state’s resources.83

[155] In applying the relevant guiding principles as outlined above , the following
features of the present matter commend themselves to me in support of a conclusion
that the appellant’s decisions under scrutiny were executive in nature .84

[156] Firstly, the nature of the appellant’s power exercised and under consideration
must be understood in the context of the universal feature s indicated above. When it
comes to an analysis of the function or power exercised it is plain that although on
the face of it the appellant derives his authority from the provisions of section 35 (5)
of the WSA (read with section 4 of Schedule 1) , this power must be seen in the
context of his representative shareholding capacity and pec uliar relationship to the
members appointed by him as well as the rationale for the entity’s existence and
institutional structure given expression to in the provisions of the PFMA. We are
concerned here with a special category of appointment especially conferred on the

83 See section 195 (2) of the Constitution that render s the basic values and principles governing public
administration applicable to public enterprises.
84 In essence the only power under discussion is the appellant’s power to dismiss board members
since there is no counter appeal against the court a quo’s failure to have made any order in relation to
the appointment of the Interim Board’s members.
Minister of Water and Sanitation for the express and effective pursuit of government
business which also fits in with appellant’s authority, unshackled by any jurisdictional
requirements stated in section 35 (5) of the WSA, to “arrest the failure to follow
proper policy ” (to borrow the phrase employed in Motau ) by terminating membership
appointments of people on boards of control who do not assist the entity to discharge
its statutory function . Whatever service delivery is the subject of the entity’s
commercial objectives or mandate hardly matters , as the model for state owned
enterprises remains essentially the same.

[157] Although sta ted in the context of an analysis of the President’s powers, t he
judgment in Masetl ha provides an important reason why it would not be appropriate
to constrain executive power to requirements of procedural fairness, which is a
cardinal feature in reviewing administrative action :

“These powers to appoint and to dismiss are conferred specially upon the
President for the effective business of government and, in this particular case,
for the effective pursuit of national security. In Premier, Mpumalanga ,85 this
Court has had occasi on to express itself on whether to impose a requirement
of procedural fairness in the following terms :

“In determining what constitutes procedural fairness in a given case, a
court should be slow to impose obligations upon government which will
inhibit it s ability to make and implement policy effectively (a principle
well recognised in our common law and that of other countries). As a
young democracy facing immense challenges of transformation, we
cannot deny the importance of the need to ensure the abilit y of the
Executive to act efficiently and promptly.”86

[158] In Masetlha it was held that t he authority in section 85(2)(e) of the Constitution
is conferred in order to provide room for the President to fulfil executive functions

85 Premier, Province of Mpumalanga and Another v Executive Committee of the Association of
Governing Bodies of State Aided Schools: Eastern Transvaal (CCT10/98) [1998] ZACC 20; 1999 (2)
SA 91; 1999 (2) BCLR 151 (2 December 1998) (“Premier, Mpumalanga”)
86 At paragraph [77] of Masetlha .
and should not be constrained any more than through the principle of legality and
rationality .87 The same applies in my view in the context of the state owned entity
paradigm of which ownership control is a central feature . The court in SARFU88 also
recognized the different range of functions that the Executive is concerned with that
do not necessarily directly involve administration:

“It can be seen from these provisions that members of the executive in the
national and provincial spheres have a range of responsibilities: for preparing
and initiating legislation; for developing policy; for co -ordination of government
departments; for implementing legislation and for implementing policy. A
similar range of responsibilities is conferr ed upon the executive councils of
municipalities. One of the tasks of the national and provincial executives (and
municipal executives) is therefore to ensure that legislation and policy are
implemented. The process of implementation is generally carried o ut by the
public service. Members of the executive, of course, have other functions as
well, such as the development of policy and the initiation and preparation of
legislation, which are not directly concerned with administration.”89

[159] The Constitutional C ourt in Motau has found that the similar power to dismiss
a chair and deputy chairperson respectively of a board of control of a state owned
entity resorts within that unique niche of power referenced in section 85 (2) of the
Constitution that puts it outside of the threshold for engaging in administrative law
review . There is in my view no difference in the subject matter with which this court
is concerned and one does not have to strain to pigeon -hole it in any other manner .

[160] In conclusion, on this ground of appeal I am satisfied that the approach
adopted in Motau finds application here and that the appellant’s power to have
dismissed all the members of the Board in casu amount ed to executive action.

[161] This does not really shift the success in favour of the appellant for present
purpose s as the real question (regardless of the categorization of the power either

87 At paragraph 78 of the judgment.
88 Supra
89 At paragraph [1 39].
way) turns on whether the court below was correct in determining that the impugned
decisions were rationally connected to the purpose sought to be achieved by the
empowering provision. By the empowering provision we are for present purposes
only concerned with the appel lant’s power in terms of section 35 (5) of the WSA to
dismiss all or any single member of the Board within the unique context described
above .90

Was the appellant’s decision to dismiss the board members rationally connected to
the purpose sought to be achieved thereby?

[162] The principle of legality requires that every exercise of public power , including
every executive act , must be rational.91 For an exercise of public power to meet this
standard , it must be rationally related to the purpose for which the power was
given .92 It is also well established that the test for rationality is objective93 and distinct
from that of reasonableness .94

[163] The analysis in Motau gives a clear indication that the purpose behind the
power to dismiss directors o r members of a boar d of control of a state owned entity
is to remove such appointees who do n ot assist the entity to effectively discharge its
statutory functions . 95

[164] A brief overview of the expectations that the appellant would have had of the
board members and the Board itself are indicated in various provisions of the WSA
referenced below , as well those provisions of the PFMA that have been highlighted
above.

90 The power to appoint is not in contention although the power to dismiss is an essential corollary of
the former. The issue of the appointment of the Interim Board is also not the direct subject of the
appeal since the respondents did not file a counter a ppeal against the court’s failure to have
pronounced upon the validity of its members’ appointments.
91 Motau at [69]; Democratic Alliance at para 27; and Pharmaceutical Manufacturers Association of
South Africa and Another: In re Ex Parte President of the Republic of South Africa and Others [2000]
ZACC 1 ; 2000 (2) SA 674 (CC); 2000 (3) BCLR 241 (CC) ( Pharmaceutical Manufacturers ) at para 85.
92 Motau at [69] and Pharmaceutical Manufacturers at para 85 .
93 Motau at [69] and Democratic Alliance at paras 14 -26.
94 Motau at [69] – [71] (where the Court found that the exercise by the Minister of her section 8 (c)
power was properly used, in the exercise of her oversight function , to abate the problems that had set
in at Armscor ) with reference also to the observations made by the Court in footnote 101.
95 At paragraph [48].

[165] Amatola Water amongst other water boards is an entity established in terms
of section 28 of the WSA . It has as its primary activity the obligation to provide water
services to other water service institutions , including municipalities in its service
area.

[166] Its powers set forth in section 31 entail its basic obligation and wherewithal to
carry out its pri mary activity and “ other activities ” mentioned in section 30, to set and
enforce general conditions, including tariffs, for the provision of water services, to
delegate some of its functions, and to limit or discontinue water services or other
services pro vided to water services institutions, consumers or users.

[167] From a governance perspective, it is authorised to set up advisory forums,
establish committees consisting of board members and other persons and to
determine how they function, alongside determining how the Board of control
operates from a procedural poin t of view. A water board may, for example,
determine the procedure for convening and conducting meetings of its board and the
section concludes with the requirement that the quorum for any meeting of a water
board is one half of its members.

[168] A water boa rd’s principal duty is to give priority to its primary activity.96

[169] The parameters for its functions are set out in section 34 of the WSA which
appear standard for any public government entity which is expected to strive for
financial viability, the attain ment of its stated objects and delivery of its constitutional
mandate.

[170] Section 38 provides for the duties of water boards and their members in
repeating the expectation of it to ensure that its functions are performed within the
parameters set out in se ction 34 (1) and to promote its policy statement and
business plan and to ensure that these are implemented.


96 Section 32.
[171] In the latter respect, a water board is required to adopt a policy statement that
may be amended from time to time but must be revised at least every five years. It
must, not later than one month before the commencement of each financial year,
also prepare and adopt a business plan relating to the following five years. It bears
an obligation to have the accounts of the entity audited and mu st, within four months
after the end of each financial year, issue audited financial statements. It must adopt
an accounting policy consistent with generally accepted accounting practices. It must
annually issue a report open to the public on the activitie s of the entity with sufficient
details to permit stakeholders to assess the performance of the water board. Section
45 also compels a water board to give the minister or any person authorised by him
such information as is reasonably required on the affair s and financial position of the
water board, and reasonable access to such books, accounts, documents and other
assets of the waterboard as are reasonably required.

[172] Apart from these fundamentals, section 38(2) notes the peremptory obligation
on members to perform their duties with honesty, care and diligence and to disclose
any conflicts of interest and abstain from voting on any resolutions proposed in
connection with contracts or dealings in respect of which they would be conflicted.

[173] Section 35 provides that a water board consists of a chairperson and such
other member s as the minister may approve from time to time , who must each fit the
professional criteria required for the Board “to function effectively ” and meet the
other objects of their appointment so as to ensure that the particular water board is
able to discharge its obligations in terms of the WSA.

[174] The Board collectively must also meet the mandate imposed upon it by the
relevant provisions of the PFMA to be efficient and effective financial managers of
the entity’s affairs entrusted to it.

[175] Given that no threshold is stated in section 3 5 (5) the WSA one needs to
consider a yardstick against which to measure whether the appellant’s decision to
have dissolved the Board and terminated the appointments of the members thereby
was rational. Considering the legal frameworks of peculiar application the proper
question might be whether circumstances existed that posit ed the opposite of what is
expected from such appointees to have warrant ed their dismissal by the Minister
before the expiry of their terms of office , either in the ir qualifications or conduct , or
their “failure ”, as it were , singularly or collectively to have assisted Amatola Water to
discharge its statutory functions in the various respects outlined above . The main
requirement it seems is that a Board must “ function effectively ”97 and meet its
statutory mandate .

[176] There is also the related aspect of process rationality that applies .98 It is a trite
principle in this respect that both the process by which an executive decision is
made, and the decision itself, must be rational.

[177] In National Energy Regulator of South Africa and Another v PG Group (Pty)
Ltd & Others99 the court noted as follows regarding the approach to be adopted by a
court in this respect :

“[48] I do not believe that we can separate process rationality and
substantive rationality in the way the second judgment purports to. The
relevant question for rationality is whether the means (including the
process of making a decision) are linked to the purpose or ends. To my
mind, rationality necessa rily, whether found in PAJA or anywhere else,
must include some evaluation of process. If not, then we are simply
asking whether a decision is right or wrong based on post
hoc reasoning. ”

[178] It is a natural and inescapable denouement that the process leadin g to a
decision “ must also be rational in that it must be rationally related to the achievement
of the purpose for which the power is conferred ”. As stated in Democratic Alliance :


97 Section 35 (3) (c) of the WSA.
98 Albutt v Centre for the Study of Violence and Reconciliation and Others (CCT 54/09) [2010] ZACC
4; 2010 (3) SA 293 (CC) ; 2010 (2) SACR 101 (CC) ; 2010 (5) BCLR 391 (CC) (23 February 2010)
(“Albutt”) at paragraphs [49] – [50]; Democr atic Alliance at paragraph [34] ; 2018 (1) SA 200 (SCA) at
[82].
99 (CCT131/18) [2019] ZACC 28; 2019 (10) BCLR 1185 (CC); 2020 (1) SA 450 (CC) (15 July 2019) .
“The means for achieving the purpose for which the power was
conferred must include everything that is done to achieve the purpose.
Not only the decision employed to achieve the purpose, but also
everything done in the process of taking that decision, constitutes
means towards the attainment of the purpose for whic h the power was
conferred.”100

[179] In Zuma v Democratic Alliance & Others; Acting National Director of Public
Prosecutions & Another v Democratic Alliance & Others101 the Court noted that a
rationality review also covers the process by which the decision is made which
includes an assessment of whether the means (including everything done in the
process of taking the decision) links to the end. Problems found in the process used
to reach a decision can be very useful evidence or illustration of a faulty rational link.
How far that evaluation of process goes depends on the facts of a particular case .

[180] I have dealt above with the issue of the factual premise of the court below
which can not in my view be faulted.

[181] Applying those facts against the legal expectations imposed upon the board
members by the relevant legal frameworks there was in our view no imperative on
the appellant to have addressed any supposed failure on the part of the erstwhile
Board to have follow ed proper policy by the grand scale termination of all of its
members .

[182] As for the belated reasons offered for his decisions, firstly, the complaints of
misconduct against the first and second respondents were dated and ostensibly
resolved as between them selves , however serious their nature as vaunted by the
appellant . Inasmuch as the appellant might have purported to revive them in March
2022 , it appeared to be commonly accepted that the attorney’s investigati ve report
dated in July 2021 could by no means be recognized as final or of any value from a
forensic point of view.

100 At paragraph [36].
101 2018 (1) SA 200 (SCA) at [82] .

[183] In any event the appellant’s reliance on these allegations was not
foreshadowed in the pre -termination notices by any stretch of the imagination. So too
the appellant’s reliance on the so-called misconduct of the fourth respondent in
offending the chairperson by likening her to “Verw oed,” and the second respondent
in damaging a hired motor vehicle , was not heralded with any clarity in the notices
for them to respond meaningfu lly to . Indeed, even the claimed governance
challenges, based on “numerous correspondence s”, were not outlined with any
particularity for the members to derive an understanding of why the appellant felt
motivated to dissolve the entire Board.

[184] The exercise of the appellant’s power to have dissolve d the entire Board,
which was the primary decision under review , as a purported response to the
claimed misconduct of two members certainly makes no sense.102

[185] Even upon a consideration of the appellant’s decisions individually assessed
in the case of the members especially implicated it does not appear to me to be a
rational response to have terminated their membership. I have said before that the
court below wa s justified in not treating the complaints that formed the subject matter
of the attorney’s investigation against the first and second respondents as being a
legitimate issue in March 2022.

[186] Concerning the claims of misconduct that quite ostensibly arose latterly , the
second respondent was not charged with “misconduct ” relating to the unauthorized
use of the rented motor vehicle that was subsequently damaged in an accident or
even called upon to respond to the taint of unethical beh aviour against him , neither
was the fourth respondent made aware that he r Verwoerdian slur against the
chairperson might cost her her board membership. It therefore appeared strained for

102 The nature of the power to dismiss board members on a wholesale basis, as suggested by Motau ,
at [66] warrant s a cautious approach focused on the need to maintain the institutional integrity of the
board which has crucial obligations to fulfil, so as to keep it functioning rather than dissolving it in its
entirety, leaving it “ disabled and completely rudderless ” thereby. In Molefe the court also remarked
upon the wholly disproportionate decision of the Minister t o effect the wholesale removal of the Board
in circumstances where she appeared to have given no consideration to the “serious and prejudicial
impact ” of her decision on PRASA’s interest. [At 56] It follows that the decision to relieve a board of
control in its entirety is of momentous impact and harmful to the entity’s very core.
the appellant to have attributed his primary decision to these allegations of
misconduct after the fact when the members implicated had not been called to
account for th eir so -called misconduct before at all. Procedural fairness required that
they be provided with the appropriate information relevant to his proposed decision
before their dismissal and a chance to respond to it.103

[187] That leaves the appellant’s claim of the dysfunctional ity of the Board, which by
obvious import suggests a Board unable to operate effectively and meet its statutory
mandate . It is not inconceivable that a board labouring under such a severe deficit
might rationally warrant an outcome of its wholesale dismissal but in this instance,
there was no such evidence established . In fact, the appellant failed to take the
court into his confidence at all concerning his intervention meeting with the Board on
8 March 20 22 and seemed resigned to accept that he had taken the chairperson’s
complaints at face value. In this respect he ought to have warned the respondents
that he intended to act on her complaints (which appear to have come to the
attention of the respondents only after the review application was launched) and to
have given them an opportunity to respond to their substance . Clearly, he did not.

[188] The court below in our view correctly found that whatever the issues were
between the respondents and the chairperso n in particular, the “ instability within the
entity ” had not compromised the operational efficiency of the Board or affected
Amatola Water’s service delivery mandate, neither did the pre -termination notices
suggest as much. Indeed, the Board remained able to effectually discharge its
statutory mandate desp ite the admitted challenges that had arisen.

[189] In the result there was no valid reason for the termination of the respondents’
services ,104 no real adherence to the Audi alterum principle by the pre -termination
notices, and the absence of any rational connection between the bespoke purpose

103 See Du Preez and Another v Truth and Reconciliation Commission (426/96) [1997] ZASCA 2 (18
February 1997) , in which the SCA held that procedural fairness demands not only that a person
implicated be given reasonable and timeous notice of the hearing, but also that he or she is at the
same tim e informed of the substance of the allegations against him or her, with sufficient detail to
know what the case is all about. What is sufficient information would depend upon the facts of each
individual case.
104 Self-evidently no reasons were offered at the time of the dism issals and the reasons which came
forth later were properly found not to be justified on the evidence .
for which the appellant is permitted to remove any or all its members and the
wholesale dissolution of the erstwhile Board. It appears to the contrary that the
exercise of the discretion afforded the appellant in section 35 (5) of the WSA for its
unique purpose and design was impetuously taken by the appellant without fair and
proper reflection .

[190] We are satisfied that the court a quo’s finding of irrationality was well made ,
leaving only the question whether the remedy of reinstatement resorted to by the
court below was (and indeed is because the consideration remains a live one )
appropriate in all the circumstances.

The “issue” of the standing of the Interim Board and appropriate relief :

[191] Although the court below ostensibly kept in mind that the respondents’
membership was co -incidentally terminated as a result of the appellant’s wholesale
dismissal of the Board , it set aside their individual terminations (as primary relief ) and
ordered that they (the five of them) be reinstated from the date of the court’s order .
105

[192] Mr. Erasmus contended on behalf of the appellant that since the court below
failed to pronounce on the appellant’s related decision to appoint t he Interim Board ,
the well -established Oudekraal principle applies , which means that the appointment
of these members stands , has legal effect and can be taken to have produced valid
legal consequences . He argue d that absent the relief having been granted to the
respondents as prayed for in this respect to set aside the “decision to appoint an
interim Amatola Water Board ”, this would result in there being two parallel boards if
the reinstatement order is confirmed upon appeal. 106

105 This is an awkward aspect of the order. By setting aside the erstwhile Board all the members
comprising its number would effectively be back in the saddle as a natural consequence of such an
order although some of them had indicated to the Minister that they would accept his termination of
their services. The reinstatement of five only would also in itself be a cause for concern because the
erstwhile Board comprised the essential complement of the bespoke ten members chosen by his
predecessor.
106 The challenge under appeal was oddly framed. There was however no suggestion that this court
was required to address the glitch in the absence of an order by the court below on the issue of the


[193] Mr. Erasmus’ submission regarding the application of the Oudekraal principle
might well be correct , but is this court required to address the perceived anomaly by
the present day threat of the Interim Board existing alongsi de that of the erstwhile
Board comprising of the five reinstated members ?

[194] Ms. Stein argued that it was unnecessary for the court below to have made
any finding on the issue of the appointment of the Interim Board members and that it
deliberate ly omitted to grant the order prono uncing on the lawfulness of the
appellant’s decision in this respect because the tenure of the Interim Board had
expired by natural effluxion of time after five months.107 It is evident from the
appointment letters themselves however that t he terms of the members of the
Interim Board are expected to endure until such time as a new board is appointed .
That has obviously not yet happened neither could it have because , in terms of the
consensual interim relief granted by the high court, the appellant accepted that he
was interdicted from appointing any permanent board members pending the final
resolution of the review application that was in effect delayed by the present appeal .

[195] Mr. Erasmus assured us from the Bar that the Interim Board still existed . Even
though there is no evidence before this court as to whether it has in fact continued in
place during the interregnum, it would be absurd to imagine that Amatola Water
operate s today without a governing board . Therefore, f or better or worse , the fact of
its existence , until a permanent board is appointed, remains a feature that this court
must have regard to in considering the question whether the court a quo ’s remedy of
reinstatement consequent upon the setting aside orders can be given practical effect
to.

[196] The appellant’s ground of appeal and contention on this final aspect is that in
the event of this court finding that the court below was correct in issuing its orders
reviewing and set ting aside the dissolution of the erstwhile Board and the members’

appointment of the Interim Board members by making a pronouncement on its validity. Rather the
concern was about the effect of t he reinstatement order in practical terms.
107 The respondents appear to have accepted as evidence in this regard what was stated in the media
forum , rather than what the official appointment letters actually say.
appointments respectively , that this court should not uphold the order reinstat ing the
respondents upon a true assessment of what relief would be just and equitable in all
the circumstances . It was argued on his behalf that a mere declarator that his
conduct was unlawful would have , and ought to (especially having regard to the
present day circumstances entailing the practical difficulties ), suffice.

[197] Mr. Erasmus adverted to the example in Motau in which the Court declined to
reinstate the leadership of the Armscor Board despite finding in their favour that the
Minister had failed to comply with sections 71 (1) and (2) of the Companies Act in
dismissing them , contenting itself instead with a declara tion sufficient to address the
flaws in the Minister’s conduct . The Court emphasized the usual approach in
granting appropriate relief (which is the expectation once a declarator has been
made in a legality review that conduct is inconsistent with the Constitution and falls
to be reviewed as such ) that would follow from a finding that the dismissal was
procedurally defective and did not comply with the relevant legislati on, but also
explained why a declarat or constituted a just and equitable remedy in the peculiar
circumstances of th at matter :

“[85] To grant appropriate relief, we must determine what is fair and just in the
circumstances of a particular case. The various interests that might be
affected by the remedy should be weighed up. This should at least be guided
by the objective to address the wrong occasioned by the infringement; deter
future violations; make an order which can be complied with; and which is fair
to all those who might b e affected by the relief. It also goes without saying
that the nature of the infringement will provide guidance as to the appropriate
relief. And the right to be heard has value both instrumental and intrinsic. One
cannot excuse an unfair process because it led to the right result.

[86] So the setting aside of the Minister’s decision and the reinstatement of
the aggrieved parties or an award of compensation would usually follow from
a finding that a dismissal was procedurally defective and did not comply with
the relevant legislative prescripts. But the very exceptional circumstances of
this case mean that it would not be just and equitable for this Court to award
such remedies here. A declaration is sufficient to address the flaws in the
Minister’s con duct, and to draw her attention to the importance of complying
with the Companies Act and adopting a fair process in making such
decisions. Limiting the relief to a declaration would, at the same time,
vindicate the Minister’s efforts to address the dereliction of duty by
General Motau and Ms Mokoena.

[87] First, the Minister, on a number of occasions, had expressed her
dissatisfaction with their conduct. The Minister convened three mee tings with
the Board to address various governance issues. None of these was
attended by General Motau whilst Ms Mokoena failed to attend the last of the
meetings. And General Motau’s response to the Minister’s letter in which she
registered her disappro val of his nonattendance was insouciant, reminding her
that Board members had other jobs and obligations. So General Motau and
Ms Mokoena were certainly on notice of the Minister’s dissatisfaction and her
wish to reconstitute the Board. ”

[198] Mr. Erasmus ’ submi ssion that a mere declarat or was apt in the present
instance was however based on his misunderstanding that the evidence had
established that the erstwhile Board was in fact dysfunctional and that this aspect
had been acknowledged by the respondents . He argued in tandem that the court a
quo’s reinstatement of the respondents rather than allowing the appointment of a
new board was counterintuitive since the erstwhile members “can clearly not work
together ” and should not have been made .108 Whilst an irreparable breakdown in
relationships might usually invoke concern in considering a reinstatement order in
such a scenario,109 it does not apply in casu given the court a quo’s factual decision
on the issue, which we accept.


108 See footnote 105. Implied in his submission is the expectation that if the court a quo’s setting aside
of the erstwhile Board was confirmed on appeal, the ten members, minus the member who resigned
contemporaneously, would be expected to resume working to gether as the collective they comprised
before.
109 See Motau at paragraph [90] where the court held that the reinstatement order had to be set aside
also in circumstances where it was evident that the relationship between the Minister, on the one
hand, and General Motau and Ms Mokoena, on the other, had “ disintegrated irreparably ”.
[199] He significantly pointed out however that the Interim Board had managed the
affairs of the board for a lengthy period since the dissolution of the erstwhile Board
and should for this reason be allowed to continue to serve its purpose in the short
term while the Minister goes about the appointment of a new permanent Board .
Because the remaining term of office that would have applied in the ordinary course
but for t he respondents’ dismissals only extends to February 2025, reinstating them
for such a short period, so his argument went, would surely wreak instability .

[200] Ms. Stein argued conversely that it would not be just and equitable to preclude
the respondents from resuming their positions as members of the Board as this
would deprive them of their right in terms of section 34 of the Constitution to effective
relief for a breach of their rights. She emphasized that the unlawful dismissals had
not only occasioned them reputational harm , but that they had made themselves
available to serve as members of the Board and had done their utmost to discharge
the mandate of the Board despite the governance challenges. The r einstatement of
the respondents by the court below had in her view been entirely appropriate re lief
and warranted no interference by this court .

[201] The facts of this matter and nature of the infringement under scrutiny are
notably distinguishable from the circumstances in Motau . The appellant’s decision s
not only fail the requisite standard of rationality but also suffer from process
rationality deficits and the reasons advanced for them were patently disconnected
from the reality . But the re is no one size fits all approach to be adopted as Motau
and other judgments of our courts clearly demonstrate . Once the court has
determined the unlawful nature of the decisio ns, that is not the end of the matter.
The consequence of a declaration of unlawfulness is that it must then be dealt with
under s 172(1) (b) of the Constitution , which requires a careful consideration of all the
factors and a balancing of competing interests (where such arise ) to determine an
appropriate remedy .110

110 Section 172(1) of the Constitution provides in this respect that:
‘When deciding a constitutional matter within its power, a court -
(a) must declare that any law or cond uct that is inconsistent with the Constitution is invalid to the
extent of its inconsistency; and
(b) may make any order that is just and equitable, including -
(i) an order limiting the retrospective effect of the declaration of invalidity; and


[202] There is however merit in Mr . Erasmus’ submission that the two features
highlighted by him certainly militate against awarding any reinstatement of the
dismissed board members. The first concerns the fact that the respondents’ term of
office will indeed shortly come to an end as he correctly pointed out . In Motau the
Court pronounced upon the disadvantage that it faced in circumstances where
General Motau and Ms. Mokoena ’s terms of office had come to an end by the date of
its order , observing that it could not reinstate them for this reason.111 The same
obstacle applies in casu given that the terms of office of the respondents will expire
in just a few weeks .

[203] The second aspect concerns what has happened up to the present time since
the dissolution of the erstwhile Board and its replacement by the appointment of the
Interim Board that was up and ready to run contemporaneously with the appellant
clearing the deck as it were of the old order . This court is somewhat hampered by
the fact that it is not its place to question the appellant’s power or propriety to have
appoint ed an Interim Board in the crisis situation precipitated by his own doing and in
circumstances where the respondents have , not unreasonably so, cried foul . Indeed,
the contention on their behalf is that the latter appointments by cascading impact ,
and following on the ir unlawful dismissals, should automatically be reckoned as
unlawful as well .

[204] Whilst we can make no findings in respect of the appointment of the Interim
Board members , it is worth mentioning that i n Molefe the court found that the
Minister’s decision to appoint new members of the Board of directors before the
conclusion of the prosecution of the application to review her decision to have
dissolved the Board of Control of PRASA by removing the erstwhile mem bers was
invalid112 and in fact amounted to “constructive contempt of court ”. Perhaps a more
certain result could have been achieved if the interim order in casu had interdicted
the appellant from forging ahead with his purported appointment of the Interim Board

(ii) an order suspending the declaration of invalidity for any period and on any conditions, to allow
the competent authority to correct the defect.’
111 Motau at [88].
112 At paragraph [59].
pending the hearing of the review application, but we are here now, with this
collateral challenge having interposed itself into the mix . We must also deal with the
reality that Amatola Water cannot function without a board of control.

[205] If regard is had to the public’s interest in the continuity of the affairs of
Amatola Water , it strikes me as a matter of practicality that an order of reinstatement
will indeed wreak havoc. I n Motau the Court recognized a threat to the institutional
integrity of Armscor by a wholesale dissolution of its Board of control for the failures
of its two leaders only rather than being allowed to continue to function with its
desired institutional knowledge and wherewithal to attend to matters the subject of its
service delivery without compromise to its service goals.113 This sensitivity applies
equally in our view to the standing of the Interim Board that should , despite whatever
reservations may exist concerning its validity and its undecided status , be permitted
to continue with full operational capacity pending the appointment as soon as
possible of a permanent board of control subject to the necessary rigours and
safeguards in place ostensibly made provision for in section 35 (5) of the WSA , read
with Schedule 1 thereof.114

[206] In Bengwenyama Minerals (Pty) Ltd v Genorah Resources (Pty) Ltd115 the
Constitutional Court suggested the approach to be adopted in situations where
factual certainty might require some amelioration of legality given collateral
challenges intervening in the presenting circumstances of a matter and the impact of
colliding interests :

113 At [66]. See also Molefe and the court’s observations regarding the prejudicial nature of a
wholesale dissolution of a board of control.
114 In Allpay Consolidated Investment Holdings (Pty) Ltd and Others v Chief Executive Officer of the
South African Social Security Agency a nd Others (CCT 48/13) [2013] ZACC 42; 2014 (1) SA 604
(CC); 2014 (1) BCLR 1 (CC) (29 November 2013) the Constitutional Court emphasised the
importance of an appropriate order in terms of section 172 (1)(b) of the Constitution in order to
account for any unjust or impractical consequences of a declaration of invalidity. The circumstances
of that matter however allowed for an order suspending the invalidity to allow the defect to be
corrected, by ordering a “rerun” of an impugned tender process, allowing the invalid contract to
continue essentially by judicial warrant in the interim. Given that in the present matter the
respondents did not seek an interim order that the appointment s of the interim board members be put
on hold pending the hearing of the review application but tailored a different order that has received
judicial warrant so to speak , that arrangement should be tolerated in determining an appropriate
remedy.
115 (CCT 39/10) [2010] ZACC 26; 2011 (4) SA 113 (CC) ; 2011 (3) BCLR 229 (CC) (30 November
2010) .

“It would be c onducive 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 wou ld 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 a dministrative 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.

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 t he 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 f ollowing
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 .” 116


116 At paragraph s [84] - [85].
[207] In Chairperson: Standing Tender Committee and Others v JFE Sapela
Electronics (Pty) Ltd and Others (“Sapela”)117, in relation to a PAJA review
challenge, although the court was satisfied as to the invalidity of an impugned
tender, it was constrained by the fact that time had worn on since the application for
review had been launched and questioned whether, given the inevitable effluxion of
time and the extent of the work performed by the successful tenderer between the
launching of proceed ings and the granting of judgment, the relief sought
contemporaneously, and granted, was, by the time of granting its order on appeal,
capable of practical implementation. It observed that the order of the court a quo , if
implemented, was likely not only t o be “ disruptive ” but also to give rise to a host of
problems not only in relation to a new tender process but also in relation to the work
to be performed.118

[208] Thus , it confirmed, with reference to the seminal dictum in Oudekraal Estates
(Pty) Ltd v City of Cape Town119 (namely: ‘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.’ ) that in appropriate circumstances (a typical example being the
case where an aggrieved party fails to institute review proceedings within a
reasonable time) a court will decline, in the exercise of its discretion, to set aside an
invalid administrative act.120 It ultimately concluded that the circumstances of case
before it were such that it fell within the category of those cases where “ by reason of
the effluxion of time ( and intervening events ) an invalid administrative act must be
permitted to stand .” 121

[209] Joubert Galpin Searle Inc and Others v Road Accident Fund and Others122
concerned the award of a tender to certain firms of attorneys challenged under a
PAJA review in which the court concluded that the Fund acted irregularly in awarding

117 (511/2004) [2005] ZASCA 90; 2008 (2) SA 638 (SCA) ; [2005] 4 All SA 487 (SCA) (26 September
2005)
118 At paragraph [27].
119 Supra , at paragraph 36.
120 At paragraphs [27] and [28].
121 At paragraph [29].
122 (3191/2013) [2014] ZAECPEHC 19; [2014] 2 All SA 604 (ECP); 2014 (4) SA 148 (ECP) (25 March
2014)
it. Contrary to Sapela the court noted that it was not the type of tender in which relie f
should be withheld because “ too much water has flowed under the bridge by the time
the review is decided .” Indeed, a relatively short period of time had ensued from
when the new panellists were appointed to the hearing of the review , distinguishing
the matter from the typical situation where an irregularly awarded tender is allowed
to stand because the work concerned has all but been completed by the time the
review is heard.123

[210] In acknowledging the onerous obligation on it to carve out an appropriate
remedy, the court was not satisfied that a declarator, on its own, would remedy
effectively the unlawful administrative action that had been taken in the matter. That
can only be done, so the court reasoned, by setting it aside which , in the case of the
Fund’s situation, would have resulted in it having to conduct the tender process
again in order to appoint a panel of attorneys. It was however constrained by the
recognition of the effect of the setting aside of the award of the tender and that it
would hav e profound effects on all of the parties. In this regard, t he Fund would no
longer have a panel to do its litigious work. It would not be represented in the courts.
The new panellists would no longer be panellists. The old panellists would also not
be pane llists because their contracts with the RAF had been terminated. It
considered the problems that would manifest themselves in the courts such as, for
example, the plaintiffs taking default judgments against the unrepresented Fund and
matters being postpone d indefinitely, thus frustrating the rights of those plaintiffs who
have legitimate claims with good prospects of success. Both of these scenarios, so
the court emphasized, would undermine the public interest.124

[211] It concluded , in a careful weighing in of the circumstances and competing
interests , that it was therefore necessary to temper the setting aside of the tender in
a way that minimises the negative effects as follows:

“I intend to suspend the order reviewing and setting aside the tender so that
something remains in place, imperfect as it may be. I intend giving the RAF

123 At paragraph [101].
124 At paragraph [104].
what I consider to be a reasonable period within which to start and complete a
new tender process. It will, however, have to work with expedition t o complete
the process timeously. I have been guided by the time it took the RAF from
the publication of the request for proposals (on 13 July 2012) to the
anticipated finalisation date (31 March 2013) as stated in the RAF’s letter
dated 28 February 2013 t o old panellists terminating their contracts. Adding
time at the beginning of the process and reducing time to an extent during the
process, I consider it reasonable to expect the RAF to initiate and finalise the
new tender within a period of eight months. I shall therefore suspend the order
setting aside the tender for roughly eight months.”125

[212] A third case of Minister of Mineral Resources and Energy and Others v
Sustaining the Wild Coast NPC and Others126 concerned the grant of exploration
rights by the Minister of Mineral Resources and Energy (the Minister) to Impact
Africa Limited (Impact) to be exercised by Shell Exploration and Production South
Africa B.V. and the fourth appellant, BG International Lim ited (BG) (collectively
referred to as Shell) as well as two consecutive renewals thereof. The high court set
aside the relevant decisions. The S upreme Court of Appeal was satisfied there had
been a failure by the Minister to take relevant considerations i nto account and that
the decision was reviewable under s ection 6(2)(e)(iii) of PAJA but interposed itself to
deal with the consequence of the declaration of unlawfulness that is required under
section 172(1) (b) of the Constitution.127

[213] The SCA affirmed th at courts have the widest possible remedial discretion as
well as their need to be pragmatic in crafting just and equitable remedies in the
exercise of its extensive remedial powers. It emphasised that a just and equitable
remedy must be proportionate; fair and just in the context of the particular
dispute; ample and flexible; and should place substance above form.128


125 See paragraph [ 106] together with the order issued by the court.
126 (58/2023; 71/2023; 351/2023) [2024] ZASCA 84; 2024 (5) SA 38 (SCA) (3 June 2024) .
127 At paragraph [26].
128 At paragraph [27].
[214] It acknowledged in the peculiar circumstances of the matter that there had
been an almost eight -year delay between the granting of the exploration right and
the review and that, acting in reliance on the validity of the decisions, there had been
significant financial expenditure in the region of R1.1 billion, dating back to 2012
when Impact applied for its technical co -operation permit (which preceded the
exploration right). Since two renewals of the exploration right had already been
granted, it recognized that there would be only one more opportunit y to renew the
exploration right. A moratorium placed on exploration rights over the entire South
African coast was also taken into account , meaning that Shell and Impact might
never get the opportunity to exercise the right. The court further acknowledged the
adverse consequences for the public in whose interests the decision -maker
purportedly acts. Shell and Impact provided evidence of the economic and social
benefits that would fail to materialise without the exploration being undertaken. So
too the cour t recognised public interest in the finality of administrative decision -
making and that the degree or materiality of the irregularity or that the long delay and
lack of legal certainty may well have a chilling effect on foreign investment. It took
account of the appellants’ contention that all of these factors could be mitigated by
the possibility of directing that measures be implemented, including that a further
public participation process be undertaken.129

[215] With reference to Plasket J ’s resolve in Joubert Galpin Searle Inc130 that it
was necessary ‘ to temper the setting aside . . . in a way that minimises the negative
effects’ and to ‘suspend the order reviewing and setting aside . . . so that something
remains in place, imperfect as it may be’ the Court concluded that there was much to
commend such an approach in the matter before it. Having established that Impact
and BG had timeously submitted an application to the Petroleum Agency of South
Africa on 21 July 2023 to enter into a third renewal period as permitted by section
81(4) of the Mineral and Petroleum Resources Development Act131 allowing for the
exploration right to remain in force until the third renewal application ha d been
granted or refused , the court reckoned that it was within its power to direct that as
part and parcel of a proper consideration of the third renewal application, a further

129 At paragraphs [28] and [29].
130 Supra . See also paragraphs [209] - [211] of this judgment.
131 No. 28 of 2002.
public participation process be conducted to cure the identified defects in the
process already undertaken . This was especially so as the parties who claimed to
have an interest in the matter had been identified and the matters warranting
consider ation had been fully canvassed in a 19 -volume record consisting of some
4000 pages. In crafting appropriate relief the court of appeal thus suspend ed the
orders setting aside the granting of the exploration right and each of the two
renewals to meet the practical exigencies of the situation.

[216] Given the tricky dynamics and the various interests that stand to be affected in
the present setting , I am inclined to conclude that it would not be appropriate to
confirm the setting aside orders and related reinstatement of the respondents which
go hand in hand . Some tempering is called for to minimize the negative effects. The
erstwhile Board has not operated for a lengthy period . Even in the short term , it
should not be revived (whether comprised of five or nine mem bers)132 to compete
with the Interim Board that has ostensibly been responsible for the effective
operation of Amatola Water since the members’ removals in March 2022 . It is the
Interim Board that enjoys the confidence placed in it by the ministry which, as stated
above, is important in the context of the dynamic of the state owned entity . To use
the oft repeated metaphor referenced in similar settings where time has marched on
since the review of the impugned decision and change s have taken effect that are
better left un-interfered with , one cannot unscramble the proverbial egg.133

[217] In my view and in the unique circumstances of the matter a declarat or will
have to imperfectly suffice and will by way of obvious import censure the appellant
for his brusque unlawful termination decision s and the significant flaws in the
process adopted by him. The respondents will also by obvious import be vindicated
by such an order.

132 It is evident that the members other than the respondents (except the 12th respondent) have made
their peace with their removals as members of the Erstwhile Board.
133 See in this regard South African Property Owners Association (“SAPOA”) v Council of the City of
Johannesburg Metropolitan Municipality & Others 2013 (1) SA 42 (SCA) SAPOA Supra at [70] -
[71], Borbet South Africa (Pty) Ltd & Others v Nelson Mandela Bay Municipality 2014 (5) SA 256 ECP
[104] - [110], and Kalil N.O. & Others v Mangaung Metro politan Municipality & Others 2014 (5) SA
123 (SCA) at [14] where the court observed metaphorically that “ a great deal of water has flowed
under th e bridg e” with reference to a year having passed between an impugned budget resolution and
the date of the court’s order setting it aside in circumstances where the municipality was already
considering its next annual budget.

[218] Since the respondents did not ask that the issue of the costs order granted by
the court below be revisited or substituted by an order of punitive co sts against the
appellant, which may to a small extent have vindicated the violation of their “personal
brand and professional image ” as board members by their removals (which “risk” to
them by the appellant’s unlawful conduct was acknowledged by the court below ), this
aspect of the order of the court below will remain in place.

[219] As for the costs of appeal, the real success remains with the respondents in
opposing the matter and they should be awarded their full costs. Any other costs
order would be tantamount to rewarding the appellant for his unlawful decisions and
condoning the situation that has come to prevail in the Department’s favour by the de
facto situation currently in place concerning the tenuous position of the Interim
Board .134

Order:

[220] In conclusion the following order is made :

1. The orders of the court below are amended and substituted as follows:

134 Concerning the Minister’s power to appoint members of the Board under normal circumstances
pursuant to the provisions of section 3 of Schedule 1 to the WSA, Mr . Erasmus emphasized that
he/she is not compelled to require of a water board to constitute a selection panel to recommend
persons for appointment as members of a water board. He/she might decide to do so, so it was
contended on behalf of the appellant, but was not obliged to. This facile argument if correct means
that the minister may proceed to appoint persons as long as the period of office implicated thereby
does not exceed for years, without having required of it to constitute a selection panel for
recommendation of members to be so appointed as must have happened in the circumstances of the
appointment of the Interim Board which has ostensibly been responsible for the operation of Amatola
Water since the dismissals in contention. The use of the word “ may” in section 3 (1) of the Schedule
ought perhaps to be construed as “ must ” in line with other rigours of the appointment process of
board members mentioned in the rest of the section but this is not an aspect that this court needs to
decide, especially in view of the fact that there is no real challenge before us on appeal regarding the
court a quo ’s omission to have pronounced upon the validity of the appointment of the members of
the Interim Board , well at least not on the meri ts. The fact that the existence of the Interim Board has
interposed itself in this manner does however raise interesting questions: Does the Minister have the
autonomy to bypass a selection process through a panel envisaged in section 3 of Schedule 1 to the
WSA? And how must the word “ may, ” directing his steps in section 3 (1) of the schedule be
interpreted in the light of the peremptory injunction that he “ must ” take other steps in the process? It
appears to me to be the exact kind of concern sought to be counteracted by the National State
Enterprises Bill [B1-2024] awaiting the approval of Parliament. (See in this respect the Memorandum
on the Objects of the Bill.)

“(a) It is declared that the first respondent acted irrationally and
unlawfully in taking the decision on 25 March 2022 in terms of
section 35 (5) of the Water Services Act, No. 108 of 1977 to
dissolve the entire erstwhile Board of control of the Amatola
Water Board, thereby terminating the applicants’ appoint ments
as board members thereby .

(b) Despite the declarator in prayer (a), the first respondent’s
decision to dissolve the entire erstwhile Board, thereby
terminating the applicants’ appointments as board members
thereby, is not set aside.

(c) (deleted).

(d) The first respondent is ordered to pay the costs of the
application. ”

2. Save to the extent indicate above, the appeal is dismissed.

3. The appellant is directed to pay the costs of the appeal.


_________________
B HARTLE
JUDGE OF THE HIGH COURT

I AGREE,

_________________
N GQAMAN A
JUDGE OF THE HIGH COURT

I AGREE,

_________________
I BANDS
JUDGE OF THE HIGH COURT


DATE OF APPEAL : 3 June 2024
*DATE OF JUDGMENT : 20 January 2025

Appearances:

For the appellant: Mr. C Erasmus SC together with Mr.M Vimbi instructed by
Lulama Prince Inc., Makhanda (ref. Ms. L Prince) .

For the respondent s: Ms. N Stein instructed by B B Nyanda Attorneys c/o
Mabeca Tilana Inc., Makhanda (ref. Ms. Tilana Mabeca) .

Watching Brief on behalf of Amatola Water : Mr. Sokutu of Siyatemba Sokotu
Attorneys Inc, East London.

*Judgment delivered electronically on this date by email publication to the
parties.