CONSTITUTIONAL COURT OF SOUTH AFRICA


Case CCT 266/24

In the matter between:

FAMOUS IDEA TRADING 4 (PTY) LIMITED
t/a DELY ROAD COURIER PHARMACY Applicant

and

GOVERNMENT EMPLOYEES MEDICAL SCHEME First Respondent

CHAIRPERSON OF THE BOARD OF TRUSTEES
OF THE GOVERNMENT EMPLOYEES
MEDICAL SCHEME Second Respondent

BOARD OF TRUSTEES OF THE GOVERNMENT
EMPLOYEES MEDICAL SCHEME Third Respondent

MARARA PHARMACY (PTY) LIMITED
t/a MEDIPOST PHARMACY Fourth Respondent

PHARMACY DIRECT (PTY) LIMITED Fifth Respondent

HH DURRHEIM (PTY) LIMITED
t/a MEDIPOST PHARMACY Sixth Respondent



Neutral citation: Famous Idea Trading 4 (Pty) Ltd t/a Dely Road Courier Pharmacy
v Government Employee s Medical Scheme and Others [2026]
ZACC 5

Coram: Mlambo DCJ, Kollapen J, Majiedt J, Mathopo J, Mhlantla J,
Musi AJ, Rogers J, Savage AJ, Theron J and Tshiqi J


Judgment: Musi AJ (unanimous)

2


Heard on: 28 August 2025

Decided on: 11 February 2026

Summary: Rule 53 record — review jurisdiction — reviewability of tender
award — government employees medical scheme — exercise of
private power — review of commercial contract




ORDER



On application for leave to appeal against the order and judgment of the High Court of
South Africa, Gauteng Division, Pretoria:
1. Leave to appeal is granted.
2. The appeal is dismissed with costs, including the costs of two counsel where
so employed.



JUDGMENT




MUSI AJ ( Mlambo DCJ, Kollapen J, Majiedt J, Mathopo J, Mhlantla J, Rogers J,
Savage AJ, Theron J and Tshiqi J concurring):


Introduction
[1] This is an application for leave to appeal against a judgment and order of the
High Court of South Africa, Gauteng Division, Pretoria (High Court) , in which it
dismissed two applications: a review application and an application to compel the first
respondent, the Government Employees Medical Scheme, to produce a record in terms

MUSI AJ
3
of rule 53 of the Uniform Rules of Court (rule 53) .1 The genesis of the matter is the
reviewability of a decision by the first respondent not to award a tender to render courier
pharmacy services (tender) to the applicant.

Parties
[2] The applicant is Famous Idea Trading 4 (Pty) Ltd t/a Dely Road Courier
Pharmacy (Famous Idea), a private company incorporated in accordance with the laws
of South Africa. The first respondent is the Government Employees Medical Scheme,
a medical scheme registered in terms of section 24(1) of the Medical Schemes Act 2
(MSA). The second respondent is the chairperson of the first respondent’s board of
trustees. The third respondent is the board of trustees of the first respondent. I shall
henceforth refer to these three respondents collectively as GEMS.

[3] The fourth respondent is Marara Pharmacy (Pty) Ltd t/a Medipost Pharmacy
(Marara); the fifth respondent is Pharmacy Direct (Pty) Ltd (Pharmacy Direct); and the
sixth respondent is HH Durrheim (Pty) Ltd t/a Medipost Pharmacy (Medipost). These
respondents are private companies incorporated in terms of the company laws of
South Africa. No relief is sought against Medipost.

Factual background
[4] During 2022, GEMS issued an invitation for tender applications for the
appointment of a service provider who would render courier pharmacy services.
Famous Idea was among the entities that submitted a tender in response to th is
invitation. Marara and Pharmacy Direct formed a joint venture (JV) and submitted a
joint tender, whil e Famous Idea and Medipost submitted their respective tenders
independently.


1 Famous Idea Trading 4 (Pty) Ltd t/a Dely Road Courier Pharmacy v Government Employees Medical Scheme ,
unreported judgment of the Gauteng High Court, Pretoria, Case No B1205/2023 (5 February 2024) (High Court
judgment).
2 131 of 1998.

MUSI AJ
4
[5] The JV and Medipost were ultimately appointed by GEMS and Famous Idea’s
tender was rejected. Aggrieved by the outcome, Famous Idea decided to litigate.

Litigation history
[6] On 9 March 2023, Famous Idea launched a review application , in terms of
rule 53,3 in which it sought to challenge GEMS’ decisions to reject its bid and to award
the tender to the JV. Additionally, it sought an order that it be awarded the tender. In
the alternative, it sought an order compelling GEMS to conclude a contract with it; and
failing that, it sought an award of compensation and/or damages.

[7] In its founding affidavit, Famous Idea averred that it sought the setting aside of
the impugned decisions in terms of the Promotion of Administrative Justice Act 4
(PAJA), or legality, or the common law. GEMS refused to file the record in terms of
rule 53. Instead, it filed a rule 6(5)(d)(iii)5 notice in which it raised two questions of
law. First, it contended that the impugned decisions were not susceptible to judicial

3 Rule 53(1) reads:
“Save where any law otherwise provides, all proceedings to bring under review the decision or
proceedings of any inferior court and of any tribunal, board or officer performing judicial, quasi-
judicial or administrative functions shall be by way of notice of motion directed and delivered
by the party seeking to review such decision or proceedings to the magistrate, presiding officer
or chairperson of the court, tribunal or board or to the officer, as the case may be, and to all
other parties affected—
(a) calling upon such persons to show cause why such decision or proceedings
should not be reviewed and corrected or set aside, and
(b) calling upon the magistrate, presiding officer, chairperson or officer, as the
case may be, to despatch, within 15 days after receipt of the notice of motion,
to the registrar the record of such proceedings sought to be corrected or set

to the registrar the record of such proceedings sought to be corrected or set
aside, together with such reasons as the magistrate, presiding offi cer,
chairperson or officer, as the case may be is by law required or desires to give
or make, and to notify the applicant that such magistrate, presiding officer,
chairperson or officer, as the case may be has done so.”
4 3 of 2000.
5 Rule 6(5)(d) provides:
“Any person opposing the grant of an order sought in the notice of motion shall —
. . .
(iii) if such person intends to raise any question of law only such person shall
deliver notice of intention to do so, within the time stated in the preceding
subparagraph, setting forth such question.”

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5
review on any of the bases advanced by Famous Idea. Second, it contended that some
of the relief sought was incompetent. For present purposes, only the first contention is
relevant.

[8] Dissatisfied with GEMS’ refusal to produce the record, Famous Idea filed a
notice in terms of rule 30A seeking to compel GEM S to do so. GEMS delivered a
notice, in terms of rule 30, alternatively rule 30A, contending that Famous Idea’s notice
to compel constituted an irregular step. This was followed by an application by GEMS
to set aside Famous Idea’s application to compel because it constituted an irregular step.
Famous Idea then launched its own rule 30A application seeking to compel GEMS to
disclose the record. The application to compel was opposed by GEMS and the JV.

[9] Pursuant to a case management meeting, the parties agreed to file a joint practice
note. In that note, they requested the High Court to determine the first issue raised in
GEMS’ notice in terms of rule 6(5)(d)(iii), Famous Idea’ s application to compel and
GEMS’ application to set aside Famous Idea’s notice and application to compel. GEMS
submitted that the rule 6(5)(d)(iii) issue should be argued first as its resolution would
be dispositive of the other interlocutory applications. GEMS further contended that the
rule 6(5)(d)(iii) notice raised a ju risdictional objection which had to be determined at
the outset. Famous Idea disagreed and contended that the alleged jurisdictional issue
was in substance a defence on the merits of the review application and should be
adjudicated as part of the merits.

High Court
[10] GEMS argued that the High Court lacked jurisdiction to adjudicate the matter,
on the basis that GEMS’ decisions were not reviewable on any of the grounds advanced
by Famous Idea. This argument was based on GEMS’ contention that it was not obliged
to provide a record, as it was neither an organ of state, nor exercising public power when

to provide a record, as it was neither an organ of state, nor exercising public power when
making the impugned decision, which thus was not reviewable. In support of its

MUSI AJ
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contention, GEMS relied on the judgment of Supreme Court of Appeal in GEMS v
Public Protector.6

[11] Although Famous Idea pleaded that its review is based on the PAJA, legality or
the common law, it submitted that the matter could be decided as a common law review,
without regard to the public law grounds and stated that it was unnecessary for the
High Court to decide whether the decisions are reviewable under public law (i.e. the
PAJA or legality), because (so the applicant contended) GEMS was obliged to deliver
the rule 53 record even if the decisions are reviewable under common law. It contended
further that the GEMS v Public Protector decision was irrelevant at this stage, as
reviewability under the PAJA, the legality principle, or common law was a question on
the merits of the main application. It in voked Computicket,7 Standard Bank 8 and
Richards Bay9 in support of that submission. Famous Idea argued that once a rule 53
application was launched, disclosure of the record is triggered under the same rule and
further triggered by the court having jurisdiction to hear the application . Famous Idea
further contended that the rule 6(5)(d)(iii) notice was incompetent because it may not
be utilised in rule 53 proceedings.

[12] The High Court stated that the issue to be decided was whether GEMS was
obliged ( and should be ordered) to produce the record in terms of rule 53. The
High Court rejected Famous Idea’s contention that GEMS’ use of rule 6(5)(d)(iii) was
incompetent. It held that GEMS was entitled to show cause why its decisions ought not
to be reviewed. It reasoned that the entitlement to show cause was not circumscribed
and did not preclude a respondent’s right to show cause by virtue of a dispositive legal
question which is the very purpose of rule 6(5)(d)(iii).

6 Government Employees Medical Scheme v Public Protector of the Republic of South Africa [2020] ZASCA 111;

[2020] 4 All SA 629 (SCA); 2021 (2) SA 114 (SCA) (GEMS v Public Protector).
7 Competition Commission v Computicket [2014] ZASCA 185 at para 20.
8 Competition Commission v Standard Bank of South Africa Ltd [2020] ZACC 2; 2020 (4) BCLR 429 (CC) at
paras 120-1.
9 Commissioner for the South African Revenue Service v Richards Bay Coal Terminal (Pty) Ltd [2023] ZASCA
39 at para 28.

MUSI AJ
7

[13] After considering whether GEMS was exercising a public power or performing
a public function , the High Court concluded that “quintessentially, the impugned
decision is simply a commercial decision relating to the procurement of services by a
medical scheme”.10

[14] The High Court considered POLMED HC,11 and distinguished it from the
present matter on the basis that the Court in POLMED HC ordered production of the
record without first determining whether it had jurisdiction in the review. It found that
it is unnecessary to have regard to the merits of the main application in order to resolve
the jurisdictional challenge.

[15] With regard to the common law review ability of GEMS’ decisions , the
High Court held that “[a] dangerous precedent would be set if it were to be held that the
decisions taken by private parties to appoint service providers are capable of being
reviewed”.12 It further held that there is a difference between the situation of private
parties inviting tenders for service s from a public procurement process , where parties
know beforehand that their information will be disclosed should a decision be reviewed.
It concluded that the impugned decisions were not reviewable in terms of the common
law. It consequently held that there was no basis to compel GEMS to produce the record
and that GEMS’ rule 6(5)(d)(iii) point should be upheld with costs and that
Famous Idea’s application to compel should be dismissed. The High Court
subsequently dismissed Famous Idea’s application for leave to appeal with costs due to
lack of reasonable p rospects of success , and an application for leave to appeal to the
Supreme Court of Appeal suffered the same fate.


10 High Court judgment above n 1 at para 18.
11 Metropolitan Health Corporate (Pty) Ltd and Others v South African Police Servi ce Medical Scheme and
Another, unreported judgment of the Gauteng High Court, Pretoria, Case No 60445/2021 (9 May 2023).

12 High Court judgment above n 1 at para 27.

MUSI AJ
8
In this Court
[16] Famous Idea seeks leave to appeal the judgment of the High Court. It further
seeks condonation for the late filing of its application for leave to appeal and for leave
to file a replying affidavit.

[17] Famous Idea challenge s the High Court’s judgment on various grounds,
including that the Court erred in not finding that Famous Idea had demonstrated that the
Court’s jurisdiction was engaged. It contends that the jurisdiction al question ought
properly to have been determined during the adjudication of the merits, once the record
was produced. It relie s on Murray13 and POLMED FC14 in support of these
submissions. It points out that it had set out a factual basis to sustain its assertion that
the impugned decisions are reviewable. Additionally, it submits that its case was not
confined to the common law grounds of review, but also included public law review
grounds. Procedurally, it argues that GEMS’ rule 6(5)(d)(iii) notice was incompetent.
It disavows any reliance on section 27 of the Constitution.15

[18] GEMS contends that this Court’s constitutional jurisdiction is not engaged.
However, it concedes that this Court’s general jurisdiction might be engaged due to the
existence of divergent judgments in Murray and POLMED FC on the one hand and the
High Court’s judgment in the present matter, on the other . The JV did not budge from
its contention that neither our constitutional nor general jurisdiction is engaged.


13 Murray v Ntombela [2024] ZASCA 24; [2024] 2 All SA 342 (SCA); 2024 (4) SA 95 (SCA).
14 South African Police Service Medical Scheme (“POLMED”) v Metropolitan Health Corporate (Pty) Ltd ,
unreported judgment of the Gauteng High Court, Pretoria, Case No A288/2023 (6 February 2025). In this case,
a Full Court dismissed an appeal against POLMED HC.
15 Section 27, headed “Health care, food, water and social security” reads:
“(1) Everyone has the right to have access to—

“(1) Everyone has the right to have access to—
(a) health care services, including reproductive health care.”

MUSI AJ
9
Directions
[19] This Court issued directions for the parties to file written submissions on the
following question: whether, if the High Court was entitled to determine prior to the
production of the record in terms of rule 53(1)(b) that GEMS was not exercising a public
power subject to review in terms of rule 53, it was correct in its determination that
GEMS was not exercising a power subject to review in terms of rule 53.

Issues
[20] The issues that fall to be decided are—
(a) whether condonation ought to be granted for the late filing of the
application for leave to appeal;
(b) whether leave should be granted to file a replying affidavit;
(c) whether this Court has jurisdiction to entertain the matter and, if so,
whether leave to appeal should be granted and the related question of
mootness;
(d) whether rule 6(5)(d)(iii) is applicable in the context of review proceedings
instituted in terms of rule 53;
(e) whether the decisions taken by GEMS constitute administrative action;
(f) whether GEMS exercised a public power or function whe n procuring
goods and services;
(g) if not, whether GEMS’ decision is reviewable under private law; and
(h) whether rule 53 is applicable to private law reviews.

Condonation
[21] The application for leave to appeal was filed one day late. Famous Idea states
that the application was filed on 4 September 2024, but was rejected by the Registrar
because it was not served on Medipost. Famous Idea was under the impression that it
need not serve the application on Medipost , because the latter had not participated in
the proceedings before the High Court and the S upreme Court of Appeal. On
5 September 2024, the application was served on Medipost and duly filed.

MUSI AJ
10

[22] The condonation application is unopposed. The explanation is adequate and the
delay is not long. There is no prejudice to the respondents. It is in the interests of justice
that the application be granted. Accordingly, condonation is granted.

Leave to file a replying affidavit
[23] Famous Idea applies for leave to file a replying affidavit. Rule 19 of this Court’s
Rules does not make provision for the filing of a replying affidavit and a party is
therefore not entitled, as of right, to file a replying affidavit. The appli cation is
strenuously opposed. Famous Idea contends that the replying affidavit is necessary
primarily because the mootness issue raised by GEMS and the JV was not raised in the
High Court, when the application for leave to appeal was argued during May 2024,
which was months after GEMS alleges the contract lapsed. In addition, Famous Idea
seeks to address other matters raised in the answering affidavit filed by GEMS and the
JV.

[24] GEMS and the JV point out that the mootness issue was expressly mentioned in
their opposing papers in the Supreme Court of Appeal. They contend that Famous Idea
was therefore aware of the issue and should have dealt with it in its founding affidavit
in this Court. They further contend that Famous Idea followed an incorrect proces s by
incorporating the purported replying affidavit in its application to have it admitted.
They argue that Famous Idea should have sought the permission of this Court first
before filing the purported replying affidavit.

[25] My conclusion on the issue rende rs it unnecessary to pronounce on the process
issue raised by GEMS and the JV. The applicant was less than candid in asserting that
it was unaware of the mootness issue. This issue was directly mentioned in GEMS’ and
the JV’s answering affidavits in the Supreme Court of Appeal. The applicant also
sought to address issues beyond the mootness issue. This would be prejudicial to GEMS

sought to address issues beyond the mootness issue. This would be prejudicial to GEMS
and the JV, because they had already filed answers to the founding affidavit and would

MUSI AJ
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not get a chance to respond to the replying affidavit. Leave to file the proposed replying
affidavit is refused with costs.

Submissions on jurisdiction
[26] Famous Idea contends that this Court’s constitutio nal and general jurisdiction
are engaged.16 It submits that this Court’s constitutional jurisdiction is engaged because
its right to administrative action that is lawful, reasonable and procedurally fair, in terms
of section 33(1) of the Constitution , has been infringed. It further argues that by
dismissing the review and interlocutory appli cations, without giving Famous Idea an
opportunity to consider the rule 53 record and supplement its founding affidavit if
required, the High Court deprived it of its section 34 right to have its dispute resolved
by application of law decided in a fair pub lic hearing before a court or, where
appropriate, another independent and impartial tribunal or forum.17

[27] In respect of general jurisdiction, it contends that the matter raises an arguable
point of law. It submits that Murray was a split decision and that in POLMED FC, it
was found that the High Court’s decision in this matter was incorrect. Furthermore, the
question whether the Court should entertain a rule 6(5)(d)(iii) notice challenging its
jurisdiction when the record has not been produced must be definitively decided by this
Court. It urges the Court to consider its application favourably in the interests of justice,
citing, among st others, its prospects of success on the appeal. It submits that it is

16 Section 167(3) of the Constitution reads as follows:
“The Constitutional Court—
. . .
(b) may decide—
(i) constitutional matters; and
(ii) any other matter, if the Constitutional Court grants leave to appeal on the
grounds that the matter raises an arguable point of law of general public
importance which ought to be considered by that Court.”
17 Section 34 of the Constitution reads:

17 Section 34 of the Constitution reads:
“Everyone has the right to have any dispute that can be resolved by the application of law
decided in a fair public hearing before a court or, where appropriate, another independent and
impartial tribunal or forum.”

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12
currently hamstrung as it cannot prosecute its review due to the dismissal of the main
application. It contends that if the High Court’s decision is left unchallenged, many
review applications in terms of rule 53 would be frustrated by rule 6(5)(d)(iii) notices.
Further, it argues that the question whether GEMS was insulated from any review,
including on the basis of the common law, raises an important legal issue.

Jurisdiction and leave to appeal
[28] As to the section 33(1) argument, Famous Idea allege s that its application is
grounded in the PAJA. It may not rely directly on section 33, in terms of the principle
of subsidiarity. This Court stated in New Clicks18 that section 33 entrenches the right
to administrative action that is lawful, reasonable and procedurally fair. The PAJA was
enacted to give effect to the rights contained in section 33. 19 This Court held—

“[a] litigant cannot avoid the provisions of PAJA by going behind it, and seeking to
rely on section 33(1) of the Constitution or the common law. That would defeat the
purpose of the Constitution in requiring the rights contained in s ection 33 to be given
effect to by means of national legislation.”20

[29] This principle was echoed in My Vote Counts21 where this Court held:

“Subsidiarity denotes a hierarchical ordering of institutions, of norms, of principles, or
of remedies, and signifies that the central institution, or higher norm, should be invoked
only where the more local institution, or concrete norm, or detailed principle or remedy,
does not avail.”22

[30] This Court further held:


18 Minister of Health v New Clicks South Africa (Pty) Ltd [2005] ZACC 14; 2006 (1) BCLR 1 (CC); 2006 (2) SA
311 (CC).
19 Id at para 95.
20 Id at para 96.
21 My Vote Counts v Speaker of the National Assembly [2015] ZACC 31; 2016 (1) SA 132 (CC).
22 Id at para 46.

MUSI AJ
13
“These considerations yield the norm that a litigant cannot directly invoke the
Constitution to extract a right he or she seeks to enforce without first relying on, or
attacking the constitutionality of, legislation enacted to give effect to that right. This
is the form of constitutional subsidiarity Parliament invokes here. Once legislation to
fulfil a constitutional right exists, the Constitution’s embodiment of that right is no
longer the prime mechanism for its enforcement. The legislation is primary. The right
in the Constitution plays only a subsidiary or supporting role.”23

[31] As to section 34, the right to have a dispute determined by a court or tribunal is
indispensable for the promotion and advancement of access to justice. In Barkhuizen,24
Ngcobo J said:

“Our democratic order requires an orderly and fair resolution of disputes by courts or
other independent and impartial tribunals. This is fundamental to the stability of an
orderly society. It is indeed vital to a society that, like ours, is founded on the rule of
law. Section 34 gives expression to this foundational value by guaranteeing to
everyone the right to seek the assistance of a court.”25

[32] This Court has said that access to court—

“ensures the peaceful, regulated and institutionalised mechanisms to resolve disputes,
without resorting to self -help. The right of access to court is a bulwark against
vigilantism, and the chaos and anarchy which it causes. . . . As a result, very powerful
considerations would be required for its limitation to be reasonable and justifiable.”26

[33] The rule of law envisages access for all to a competent and impartial court or
tribunal that intends to ensure effective access to a fair hearing. The question whether
Famous Idea is entitled to the rule 53 record raises constitutional issues. It implicates

23 Id at para 53.
24 Barkhuizen v Napier [2007] ZACC 5; 2007 (5) SA 323 (CC); 2007 (7) BCLR 691 (CC).

24 Barkhuizen v Napier [2007] ZACC 5; 2007 (5) SA 323 (CC); 2007 (7) BCLR 691 (CC).
25 Id at para 31.
26 Chief Lesapo v North West Agricultural Bank [1999] ZACC 16; 2000 (1) SA 409 (CC) at para 22.

MUSI AJ
14
the right to access to court. 27 The question whether GEMS was exercising a public
power also engages our constitutional jurisdiction because “the definition of
administrative action under PAJA must be ‘construed consistently ’ with the right to
administrative justice in section 33 of the Constitution”.28

[34] In Paulsen,29 Madlanga J provided a comprehensive exposition of the
circumstances unde r which this Court’s general jurisdiction is engaged. GEMS’
concession that this Court’s general jurisdiction is engaged is well-founded. The issue
whether decisions which are neither administrative action nor the exercise of a public
power or the performance of a public function are reviewable in terms of the common
law is an arguable point of law of general public importance , which ought to be
considered by this Court , as is the question of whether rule 53 is applicable to the
common law review of the decisions of private bodies . The arguments raised on the
issue have a measure of plausibility and there are sufficient prospects of success. In the
circumstances, it is in the interests of justice that leave to appeal be granted.

Mootness
[35] GEMS and the JV argue that the matter is moot. They contend that the agreement
entered into as a result of the impugned decision was for a period of one year,
commencing on 1 January 2023, and subject to annual renewal. Accordingly, so the
argument goes, the initial agreement constituting the subject-matter of the relief claimed
by Famous Idea expired on 31 December 2023. They submit that the matter is moot
because it no longer presents an existing or live controversy and will have no immediate
practical effect.

[36] This Court has held:

27 Helen Suzman Foundation v Judicial Service Commission [2018] ZACC 8; 2018 (4) SA 1 (CC); 2018 (7) BCLR
763 (CC) at para 10.
28 Minister of Defence and Military Veterans v Motau [2014] ZACC 18; 2014 (5) SA 69 (CC); 2014 (8) BCLR

930 (CC) (Motau) at para 35 and New Clicks above n 18 at para 100.
29 Paulsen v Slip Knot Investments 777 (Pty) Limited [2015] ZACC 5; 2015 (3) SA 479 (CC); 2015 (5) BCLR 509
(CC).

MUSI AJ
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“A case is moot when there is no longer a live dispute or controversy between the
parties which would be practically affected in one way or another by a court’s decision
or which would be resolved by a court’s decision. A case is also moot when a court’s
decision would be of academic interest only.”30

[37] Mootness is not an absolute bar to the justiciability of an issue. This Court has
discretion and may entertain a moot appeal, where the interests of justice so require. 31

[38] The contract reads:

“18.1 The contract term shall be for a period of 12 months (the Initial Period). The
contract shall commence on 1 January 2023 or any other date agreed in writing
between the parties during negotiations.
18.2 Prior to the expiration of the initial period, GEMS may elect to renew this
Agreement for a further one (1) year period by giving the Service Provider at
least 3 months prior notice thereof in writing, failing which this Agreement
shall automatically expir e at the end of the term. This Agreement shall be
capable of renewal for a maximum of four (4) successive periods of one (1)
year each.”

[39] It is common cause that the contract was renewed in terms of its stipulations.
Any subsequent contract derives its l egal force from the initial contract. It is evident
that the parties agreed that this agreement may be renewed. The parties’ rights and
obligations were still governed by the terms of the initial contract. The matter is not
moot.


30 Minister of Tourism v Afriforum NPC [2023] ZACC 7; 2023 (6) SA 752 (CC) at para 23.
31 Police and Prisons Civil Rights Union v South African Correctional Services Workers ’ Union [2018] ZACC
24; 2018 (11) BCLR 1411 (CC); 2019 (1) SA 73 (CC) at para 44 and Normandien Farms (Pty) Ltd v South African
Agency for Promotion of Petroleum and Exploitation (SOC) Ltd [2020] ZACC 5; 2020 (4) SA 409 (CC) at
paras 47-8.

MUSI AJ
16
Is rule 6(5)(d)(iii) a competent procedure in rule 53 applications?
[40] Famous Idea argues that a rule 6(5)(d)(iii) notice is an incompetent procedure in
rule 53 applications before the record has been produced. It avers that many reviews in
terms of rule 53 would be frustrated if rule 6(5)(d)(iii) notices were allowed before the
record is produced.

[41] Rule 6 governs all applications including those under rule 53. Rule 53 does not
proscribe the filing of a rule 6(5)(d)(iii) notice. In fact, rule 53(1)(a) en joins a
respondent to show cause why a decision or proceedings should not be reviewed. A
legal point raised in a rule 6(5)(d)(iii) notice constitutes a legitimate mechanism through
which a respondent may discharge the obligation. I agree with the High Court that—

“[a] contrary interpretation would, bizarrely, entail that a respondent would never be
entitled to oppose a review in terms of Rule 53 by virtue of a dispositive anterior legal
question, be it in terms of rule 6(5)(d)(iii) or otherwise.”32

[42] A rule 6(5)(d)(iii) notice is a procedural mechanism available to a respondent to
resist an application that is devoid of legal grounds. The respondent may raise the legal
point in limine (preliminary legal objection) at the outset. The court does not have to
consider the merits. It will consider the allegations in the founding affidavit as
established facts. This is a potent procedural right as it enables the early disposal of
applications without requiring the respondent to file an answering affidavit. It is also a
cost-effective procedure. Serving a rule 6(5)(d)(iii) notice before the record has been
produced in rule 53 proceedings is competent and was correctly invoked in this matter.

[43] I agree with the minority judgment in Murray that:

“A respondent in motion proceedings is entitled to file a notice under rule 6(5)(d)(iii)
that she intends to raise a specified question of law. The rule requires this notice to be

that she intends to raise a specified question of law. The rule requires this notice to be
filed within 15 days of notifying the applicant of her intention to oppose. Under

32 High Court judgment above n 1 at para 24.

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17
rule 53(4), an applicant in review proceedings may file an amended notice of motion
and supplemented founding affidavit within ten days of being given access to the record
of the impugned decision. These comparative time periods demonstrate that the rules
presuppose that a notice under rule 6(5)(d)(iii) will precede any supplemented founding
affidavit filed by an applicant for review under rule 53.”33

Joint practice note
[44] The matter was submitted for adjudication by the High Court on the basis of the
joint practice note. The respondents allege that during oral argument and in its written
submissions in the High Court, the applicant submitted that the matter could be decided
as a common law review, without regard to the public law g rounds. According to
GEMS and the JV , the High Court consequently decided the matter based on the
common law ground only. In its written submissions in the High Court , Famous Idea
argued that “GEMS is obliged to deliver the rule 53 record even if the dec isions are
reviewable under the common law”. It further stated that “ [t]he only issue before this
Court (in this interlocutory application) is whether GEMS is obliged (and should be
ordered) to deliver the rule 53 record”. Famous Idea was of the view that GEMS should
be compelled to submit the record even if its review application was brought in terms
of the common law. It did not contend that the reviewability or jurisdiction issue be
adjudicated exclusively on the common law ground.

[45] In this Court too, in oral argument, Famous Idea submits that the issue of the
production of the record can be determined without regard to the public law review
grounds. It appears to me that Famous Idea i s referring to the determination of its
application for the production of the record and not the anterior question raised by
GEMS: whether the court’s jurisdiction to adjudicate the case as a review was
established by Famous Idea.

established by Famous Idea.

[46] Insofar as Famous Idea asserts that the only issue submitted for determination by
the High Court was whether GEMS is obliged to deliver the rule 53 record, it is wrong.

33 Murray above n 13 at para 64.

MUSI AJ
18
In terms of the joint practice note, the parties agreed that the issue whether the Court
had jurisdiction to adjudicate the review was in dispute and that the High Court would
be requested to determine it, since it might be dispositive of the entire issue. 34
Famous Idea is bound by that agreement.

[47] Although GEMS and the JV argue that the High Court disposed of the matter on
the common law review gro unds only, the judgment reflects that the High Court
considered the public law grounds when it dealt with the jurisdictional issue, and
concluded that GEMS’ decision is a commercial decision (and therefore not an
administrative one). It is only thereafter that it dealt with the common law grounds.

Reviewability
[48] GEMS and the JV contend that the impugned decisions do not constitute
administrative action, and when GEMS took the decisions it was not exercising a public
power or performing a public function. They further contend that GEMS’ decision
amounts to the exercise of private power and is not reviewable under the common law.
Therefore, the High Court did not have jurisdiction to adjudicate the matter on review.

[49] Famous Idea contends that GEMS was exerc ising a public power, inter alia
(among other things), because it operates in terms of the MSA, it was formed by and is
controlled by the government and it receives approximately 75% of its finances from
the government. It further argues that the jurisdic tion issue is an issue that should be
considered with the merits of the review and not at the stage when the production of the
record is sought. Additionally, it argues that, in any event, it established that the High
Court had territorial jurisdiction to determine the dispute.

[50] In Standard Bank ,35 this Court had to decide whether the
Competition Appeal Court, as a court of first instance, could order the production of the

34 Mighty Solutions t/a Orlando Service Station v Engen Petroleum Ltd [2015] ZACC 34; 2016 (1) SA 621 ( CC)
at paras 58-62.
35 Standard Bank above n 8.

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19
rule 53 record when its jurisdiction to determine the review was challenged. In a
minority judgment, Theron J said:

“The question then is whether Boqwana JA could have ordered the production of the
record before deciding whether the Competition Appeal Court had jurisdiction to hear
the review application. The answer must be no. Although the information contained
in the record might later be relevant to determining jurisdiction once Standard Bank
has supplemented its founding papers, Boqwana JA should have first decided the
question of jurisdiction on the founding papers before he r. Her failure to do so could
result in the order which she issued being a nullity should the
Competition Appeal Court find that it is incompetent to hear the review application as
a court of first instance. This would have irrevocable implications in the context of this
case. Compliance with the Boqwana JA order would have required the Commission to
disclose the record of its investigation, giving Standard Bank the information which it
sought. No subsequent court order could have changed that outcome.”36

[51] The majority agreed with this exposition:

“As mentioned, we agree with the first judgment that the appeal should succeed. Where
the jurisdiction of the court before which a review application is brought is contested,
a ruling on this issue must preced e all other orders. This is because a court must be
competent to make whatever orders it issues. If a court lacks authority to make an order
it grants, that order constitutes a nullity. Scarce judicial resources should not be wasted
by engaging in fruitless exercises like making orders which cannot be enforced.”37

[52] In Richards Bay,38 this Court, relying on the reasoning in Standard Bank, found
that when a court exercises its discretion not to entertain a review, the review is not to
be considered. This Court reasoned:

“Where review jurisdiction is not exercised, the right to a rule 53 record falls away.

“Where review jurisdiction is not exercised, the right to a rule 53 record falls away.
This negates the need for the rule 53 record, since the purpose of the record is to assist

36 Id at para 118.
37 Id at para 201.
38 Commissioner, South African Revenue Service v Richards Bay Coal Terminal (Pty) Ltd [2025] ZACC 3; 2025
(5) SA 617 (CC); 2025 (6) BCLR 639 (CC).

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20
a party in advancing its prosecution of the review and to assist a court in performing its
constitutionally entrenched review function. Therefore, a party is not entitled to the
production of a rule 53 record if a court has refused to exercise its review
jurisdiction.”39

[53] In Murray, the first and second respondents, who were husband and wife, bought
an immovable property from a company. Despite the full purchase price being paid by
the respondents, the property was not transferred into their names. A few years later
the company was put in liquidation. The applicants, who were appointed as liquidators,
refused to register the property in the names of the respondents, instead they decided to
sell it at auction. The respondents instituted review proceedings in terms of rule 53.
The liquidators delivered a rule 6(5) (d)(iii) notice asserting that their decision is not
reviewable, because they had neither exercised a public power nor performed a public
function when they made the decision. They refused to produce a rule 53 record , and
alternatively they stated further that in any event there is no record to produce.

[54] The respondents filed a n application in terms of rule 30 alternatively 30A,
seeking to set aside the rule 6(5)(d)(iii) notice as an irregular step and also sought an
order compelling the liquidators to produce a record of the impugned decision.
Although the liquidators initially relied on this Court’s judgment in Standard Bank, they
subsequently disavowed reliance on it. The majority (Petse DP, Mabindla-Boqwana
and Molefe JJA) (main judgment) correctly stated, with reference to Standard Bank,
that rule 53 provides for a procedure that follows as a matter of course after the issuance
and service of a review application except in limited circumstances where the court’s
jurisdiction to hear the review has to be determined first. The main judgment held that
the fact that the review application may be doomed to fail , because the relief sought

the fact that the review application may be doomed to fail , because the relief sought
therein is legally untenable matters not at the stage before the production of the record.
The issue of jurisdiction , so it reasoned, will only be ripe when the substantive merits
of the review are considered. Nonetheless, it accepted that where the jurisdiction of the

39 Id at para 154. See also United Manganese of Kalahari (Pty) Ltd v Commissioner of the South African Revenue
Service and four other cases [2025] ZACC 2; 2025 (5) BCLR 530 (CC) at paras 53-5.

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21
court is challenged it must determine that issue upfront. It stated that it had jurisdiction
to determine the review by dint of section 169 of the Constitution. 40

[55] The main judgment concluded that requiring the Court to enter into the
substantive merits of the review prior to the production of the record would have the
potential to disarm applicants in re view proceedings, and would likely frustrate their
pursuit of a review against the impugned decision. It distinguished Standard Bank on
the facts and concluded that its jurisdiction ha d been accepted without question. It
opined that the fact that the liq uidators requested it to adjudicate its rule 6(5)(d)(iii)
notice setting out the points of law attest ed to the fact that its jurisdiction was not
contested.

[56] The minority , per Kathree-Setiloane and Keightley AJJA (second judgment) ,
disagreed with the main judgment insofar as the main judgment found that the only
exception to the general rule , namely, that an applicant is entitled as of right to the
record of the impugned decision, is when the jurisdiction of the reviewing court is called
into question. It opined that the main judgment’s approach was too narrow. It held that
the rule 6(5)(d)(iii) notice should be considered as a preliminary point which does not

40 Section 169 reads:
“(1) The High Court of South Africa may decide—
(a) any constitutional matter except a matter that—
(i) the Constitutional Court has agreed to hear directly in terms of
section 167 (6)(a); or
(ii) is assigned by an Act of Parliament to another court of a status
similar to the High Court of South Africa; and
(b) any other matter not assigned to another court by an Act of Parliament.
(2) The High Court of South Africa consists of the Divisions determined by an Act of
Parliament, which Act must provide for—
(a) the establishing of Divisions, with one or more seats in a Division; and

(a) the establishing of Divisions, with one or more seats in a Division; and
(b) the assigning of jurisdiction to a Division or a seat within a Division.
(3) Each Division of the High Court of South Africa—
(a) has a Judge President;
(b) may have one or more Deputy Judges President; and
(c) has the number of other judges determined in terms of national legislation.”

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22
require the court to enter into the merits of the review. In its view the main judgment
erred in characterising the liquidator’s case as an attempt to subvert the general
principle.

[57] The second judgment made plain that the liquidators were not asking the court
to determine whether on the facts of the case the respondents had justifiable grounds to
sustain a review of their decision under the PAJA. Instead, the question was whether
the liquidators’ decision to resile from an executory agreement, rather than elect to
enforce it, constituted administrative action and was therefore reviewable. The minority
judgment held that if the legal question were determined in the liquidators’ favour, it
would follow that the rule 53 procedure had no application, and the respondents would
have no right to insist on access to the record.

[58] The POLMED matter similarly concerned a decision taken by a medical scheme
which had refused to produce a rule 53 record of its decision. The High Court41 directed
it to produce the record. Dissatisfied with the High Court’s ruling, POLMED appealed
to the Full Court. POLMED argued that its decision was not reviewable in terms of the
PAJA. It contended that the issue of the reviewability of the impugned decision affected
the jurisdiction of the High Court to adjudicate the review application.

[59] The Full Court 42 held that Murray was authority for the proposition that the
nature of a specific defence raised constitute s an enquiry into the merits and that the
High Court had jurisdiction under the circumstances. It opined that an enquiry into
whether POLMED was an organ of state or w hether its decision constituted
administrative action would be premature before the record was produced. Since the
review application had been instituted in a High Court with territorial jurisdiction as
well as jurisdiction over the person, so the Full Court reasoned, the filing of the record

well as jurisdiction over the person, so the Full Court reasoned, the filing of the record
should follow as a matter of course. It concluded that the High Court’s judgment in the

41 POLMED HC above n 11.
42 POLMED FC above n 14.

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23
present case (Famous Idea) had been wrongly decided. It thus dismissed POLMED’s
appeal.

[60] POLMED FC and the majority judgment in Murray misunderstood this Court’s
judgments. In Standard Bank, Theron J said that a review court must be able to assert
its jurisdiction based on the founding papers. 43 Where no facts are alleged in the
founding papers upon which review jurisdiction could be established, the applicant is
not entitled to the production of the record in the hope that it will clothe the court with
the necessary jurisdiction. 44 The purpose of examining the case made out in the
founding papers is to determine whether the alleged facts, in law, clothe the court with
review jurisdiction. It is not about whether the review is good or bad on the merits, but
whether it is properly a review case at all.

[61] In the majority judgment in Standard Bank it was stated:

“Therefore, the rule enables an applicant to raise relevant grounds of review, and the
court adjudicating the matter to properly perform its review function. However, for a
court to perform this function, it must have the necessary authority. It is not prudent
for a court whose authority to adjudicate a review application is challenged to proceed
to enforce rule 53 and order that disclosure should be made, before the issue of
jurisdiction is settled. The object of rule 53 may not be achieved in a court that lacks
jurisdiction.”45

[62] A “ground” or “relevant ground” is a legal basis used to validate a claim.46 Any
ground must be supported by relevant factual material. Litigants who seek to review a
decision have to identify both the facts upon which they base their cause of action, and
the legal basis of their cause of action.47 If litigants allege that a decision is reviewable

43 Standard Bank above n 8 at para 119.
44 Id.
45 Id at para 203.
46 Richards Bay above n 38 at para 111.

44 Id.
45 Id at para 203.
46 Richards Bay above n 38 at para 111.
47 Bato Star Fishing (Pty) Ltd v Minister of Environmental Affairs and Tourism [2004] ZACC 15; 2004 (4) SA
490 (CC); 2004 (7) BCLR 687 (CC) at para 27.

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24
based on the PAJA, legality or the common law, they should clearly set out the factual
basis for each review ground.

[63] If a party does not establish in its founding affidavit that the court has review
jurisdiction to adjudicate the subject matter of the controversy , it is not entitled to a
“review” record. If a party wants to review a decision based on the PAJA, it must allege
that the decision constitutes administrative action and why it says so. If a party fails to
lay a factual basis for the review ground, it will have failed to engage the court’s review
jurisdiction. Jurisdiction as used in Standard Bank and Richards Bay encapsulates
territorial, personal and subject -matter jurisdiction. The challenge to a court’s
jurisdiction may be made in terms of rule 6(5)(d)(iii) and that issue must be determined
upfront before the record is produced.

[64] In Gcaba, this Court accepted the definition of jurisdic tion as the “power or
competence of a court to hear and determine an issue between parties”.48 It pointed out
that jurisdiction is determined on the pleadings and not the substantive merits of the
case. This Court held:

“In the event of the court’s jurisdiction being challenged at the outset ( in limine), the
applicant’s pleadings are the determining factor. They contain the legal basis of the
claim under which the applicant has chosen to invoke the court’s competence. While
the pleadings – including in motion proceedings, not only the formal terminology of
the notice of motion, but also the contents of the supporting affidavits – must be
interpreted to establish what the legal basis of the applicant’s claim is, it is not for the
court to say that th e facts asserted by the applicant would also sustain another claim,
cognisable only in another court.”49

[65] The jurisdictional challenge raised in Murray, POLMED and the present matter
concerned the court’s jurisdiction to adjudicate the subject matter of the application on

concerned the court’s jurisdiction to adjudicate the subject matter of the application on

48 Gcaba v Minister of Safety and Security [2009] ZACC 26; 2010 (1) BCLR 35 (CC) ; 2010 (1) SA 238 (CC) at
para 74.
49 Id at para 75.

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25
review, rather than its constitutional jurisdiction to entertain and determine review
applications generally. In my view, the majority judgment in Murray was incorrectly
decided. The correct approach is that adopted in the minority judgment. Consequently,
POLMED, which followed Murray, must be regarded as having been wrongly decided.
I now turn to consider whether there is merit in the jurisdictional challenge in this
matter.

[66] Decisions are reviewable under the PAJA if they fall within t he definition of
“administrative action”. Administrative action is defined in the PAJA as follows:

“‘administrative action’ means any decision taken, or any failure to take a decision,
by—
(a) an organ of state, when—
(i) exercising a power in terms of the Constitution or a provincial
constitution; or
(ii) exercising a public power or performing a public function in
terms of any legislation; or
(b) a natural or juristic person, other than an organ of state, when
exercising a public power or performing a public function in terms of
an empowering provision,
which adversely affects the rights of any person and which has a direct, external legal
effect.”50

[67] In Motau, this Court said the concept of “administrative action” is the threshold
requirement for engaging in administrative law review.51 It went on to say:

“The rather unwieldy definition can be distilled into seven elements: there must be (a)
a decision of an administrative nature; (b) by an organ of state or a natural or juristic
person; (c) exercising a public power or performing a public function; (d) in terms of
any legislation or an empowering provision; (e) that adversely affects rights; (f) that

50 Section 1(i) of the PAJA.
51 Motau above n 28 at para 33.

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26
has a direct, external legal effect; and (g) that does not fall under any of the listed
exclusions.”52

[68] In terms of section 239 of the Constitution “organ of state” means—

“(a) Any department of state or administration in the national, provincial or local
sphere of government; or
(b) Any other functionary or institution—
(i) exercising a power or performing a function in terms of the
Constitution or a provincial constitution; or
(ii) exercising a public power or performing a public function in terms of
any legislation, but does not include a court or a judicial officer.”

[69] GEMS is not an organ of state; it is a medical scheme established in terms of the
MSA. It is a restricted medical scheme open only to certain persons who qualify for
membership in terms of its rules. Does GEMS exercise a public power or perform a
public function?

[70] In Calibre Clinical Consultants,53 which involved a procurement decision by a
bargaining council, the S upreme Court of Appeal surveyed some common law
jurisdictions in order to discern the characteristics of a body exercising a public power.
It concluded that a bargaining council is a voluntary association created for the benefit
of its members and expressed reservations as to whether such a body can be said to be
publicly accountable for procurement of services for the benefit of its members. 54 It
accordingly held:

“I do not find in the implementation of such a project any of the features that have been
identified in the cases as signifying that it is subject to judicial review. When
implementing such a project a bargaining council is not performing a functi on that is

52 Id.
53 Calibre Clinical Consultants (Pty) Ltd v National Bargaining Council for the Road Freight Industry [2010]
ZASCA 94; [2010] 4 All SA 561 (SCA); 2010 (5) SA 457 (SCA).
54 Id at para 41.

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27
‘woven into a system of governmental control’ or ‘integrated into a system of statutory
regulation’. Government does not ‘regulate, supervise and inspect the performance of
the function’, the task is not one for which ‘the public has assumed responsibility’, it is
not ‘linked to the functions and powers of government’, it is not ‘a privatisation of the
business of government itself’, there is not ‘potentially a governmental interest in the
decision-making power in question’, the council is not ‘ taking the place of central
government or local authorities’, and most important, it involves no public money. It
is true that a government might itself undertake a similar project on behalf of the public
at large – just as it might provide medical services generally and pensions and training
schemes to the public at large – but the council is not substituting for government when
it provides such services to employees with whom it is in a special relationship.”55

[71] Although GEMS v Public Protector 56 involved a complaint lodged by one of
GEMS’ members with the Public Protector and therefore the relationship between the
member and GEMS, the court had to decide whether GEMS performed a public
function. This was a jurisdictional fact to vest the Public Protector with jurisdiction to
investigate the complaint. Whilst the facts of this case are distinguishable from those
in GEMS v Public Protector, I am of the view that both in principle and precedent that
case is applicable and instructive. It is persuasive and of assistance in determining the
function performed by GEMS in this case. This is so because it is the function , rather
than the functionary, that is important in assessing the nature of the action.57

[72] The Supreme Court of Appeal made pertinent unassailable findings of a general
nature with regard to GEMS’ powers and functions. It found that the business of a
medical scheme does not appear to encompass the performance of a pub lic or

medical scheme does not appear to encompass the performance of a pub lic or
government function or the exercise of public power. It held─
(a) GEMS is a restricted medical scheme and only employees qualifying to
be registered as members and their depend ants may be registered as
beneficiaries of the scheme;

55 Id at para 42.
56 GEMS v Public Protector above n 6.
57 Motau above n 28 at para 36.

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28
(b) the rules of the scheme are not of general application as they only apply
to a restricted class of persons;
(c) although membership is restricted to government employees, such
membership is not compulsory – qualifying government employees may
therefore join other medical schemes;
(d) GEMS operates as a health insurance provider, it is a body corporate, it is
managed by a board of 12 trustees – the fact that 50% of the trustees are
appointed by the Minister does not mean that the governme nt exercises
control over GEMS; and
(e) GEMS’ rules ma y be changed by the trustees without regard to the
Minister.58

[73] To all of these should be added that the government contributes to GEMS qua
(in the capacity of) employer. If an employee joins any other medical scheme the
government will pay such scheme as part of its contribution on behalf of the member.
In any event, state funding is not a determinative indicator that a body or its functions
are public. Many indisputably private bodies such as cultural bodies receive state
funding; this does not make them governmental in nature.59 GEMS must compete with
other medical schemes to attract members from the public sector. There is no warrant
to subject GEMS to greater scrutiny just because its members are government
employees. For these reasons, GEMS’ decision to procure services for the benefit of
its members is not administrative action; it did not exercise a public power or perform
a public function when it procured the services of a courier. The PAJA and legality
would thus not be applicable and the High Court had no review jurisdiction in terms of
these pathways.


58 GEMS v Public Protector above n 6 at paras 22-3.
59 Mullins v Appeal Board of the Jockey Club [2005] EWHC 2197 (Admin); [2006] ISLR, SLR-30; (2006) ACD
2 at para 35.

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29
Private law review
[74] While there is no bright line between public and private law, courts in the United
Kingdom have generally been reluctant to interfere in the affairs of private bodies.
Courts have understandably been reluctant to adopt the fully developed rigour of the
principles of judicial review of administrative action in a contractual context. 60
Nonetheless, in the context of domestic tribunals based on contractual relationships ,
courts can and do interfere when the tribunal has disregarded its own rules or the
fundamental principles of justice.61

[75] In Turner,62 a matter concerning a disciplinary tribunal of a voluntary
association, the Court said:

“In the case of a statutory tribunal its obligation to observe the elementary principles
of justice derives from the expressed or implied terms of the relevant enactment, while
in the case of a tribunal created by contract, the obligation derives from the expressed
or implied terms of the agr eement between the persons affected. The test for
determining whether the fundamental principles of justice are to be implied as tacitly
included in the agreement between the parties is the usual test for implying a term in a
contract. . . . The test is, of course, always subject to the expressed terms of the
agreement by which any or all of the fundamental principles of justice may be excluded
or modified.”63

[76] In Aga,64 the Supreme Court of Canada held that jurisdiction to intervene in the
affairs of a voluntary association depends on the existence of a legal right which the
court is asked to vindicate.65 Legal rights which can ground jurisdiction include private
(law) rights – rights in property, contr act, tort or unjust enrichment – and statutory

60 Braganza v BP Shipping Limited [2015] UKSC 17; [2015] 4 All ER 639 (Braganza) at para 20.
61 Jockey Club of South Africa v Feldman 1942 A.D. 340 at 350-1.

61 Jockey Club of South Africa v Feldman 1942 A.D. 340 at 350-1.
62 Turner v Jockey Club of South Africa 1974 (3) SA 633 (A).
63 Id at 645H-646A.
64 Ethiopian Orthodox Tewahedo Church of Canada St. Mary Cathedral v Aga 2021 SCC 22; [2021] 1 SCR 868.
65 Id at para 3.

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30
causes of action.66 Where a party alleges that a contract exists, they would have to show
that there was an intention to form contractual relations.67

[77] Despite their reluctance to interfere in the affairs of pr ivate entities, courts do
sometimes intervene in private contracts where one of the parties exercises
decision-making or adjudicative powers. They emphasise that a decision-maker does
not have an unfettered discretion to subject the other party to its whi ms and fancies
without observing “certain fundamental principles of fairness which underlie our
system of law”.68 In Product Star (II), it was stated:

“For purposes of judicial review, the court is concerned to judge whether a
decision-making body has exceeded its powers, and in this context whether a particular
decision is so perverse that no reasonable body, properly directing itself as to the
applicable law, could have reached such a decision. But the exercise of judicial control
of administrative a ction is an analogy which must be applied with caution to the
assessment of whether a contractual discretion has been properly exercised. The
essential question always is whether the relevant power has been abused. Where A and
B contract with each other to confer a discretion on A, that does not render B subject
to A’s uninhibited whim. In my judgment, the authorities show that not only must the
discretion be exercised honestly and in good faith, but, having regard to the provisions
of the contract by which it is conferred, it must not be exercised arbitrarily, capriciously
or unreasonably. That entails a proper consideration of the matter after making any
necessary inquiries. To these principles, little is added by the concept of fairness: it
does no more than describe the result achieved by their application.”69

[78] In Thandroyen,70 the Court found that the principles of natural justice will apply,
in the realm of contract , only if the parties have imported them into their contract.

in the realm of contract , only if the parties have imported them into their contract.
Parties will not be held to have done so unless the contract has set up something in the

66 Id at para 29.
67 Id at para 34.
68 Turner above n 62 at 636.
69 Abu Dhabi National Tanker Co v Product Star Shipping Ltd [1993] 1 Lloyd’s Rep 397 at 404.
70 Thandroyen v Sister Annuncia 1959 (4) SA 632 (N).

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31
nature of a tribunal (which may be a tribunal of one) to decide matters affecting them.
The Court held that s uch a tribunal will be bound by the principles of natural justice,
unless the parties have in their contract provided otherwise, but if the contract does not
set up such a tribunal, there will be no room for the application of the principles of
natural justice, whether on the ground of public policy or otherwise.71

[79] In Damsell,72 the common law principles were summarised as follows:

“Where in a contract a right or benefit that may accrue to one party is made dependent
upon the holding of a particular opinion by the other party, it is implied that such
opinion must be both honestly and reasonably formed.
It does not follow ex lege [(by virtue of law)] in every such case that the subordinate
party is entitled to invoke the rules of natural justice and to be heard or that he has the
remedy of a judicial review in the event of a dispute.
It is only when on a proper construction of the contract one party is set up as a tribunal
or adjudicator with decision -making powers in regard to the rights of another party,
that the rules of natural justice or fundamental fairness apply.
This will be th e implication if the relevant contractual terms, properly interpreted,
appear to postulate a decision to be made upon an examination and consideration of
facts, circumstances or other objective or subjective factors, some of which may be
potentially in dispute.
Such an implication will follow unless there are clear indications in the contract that
the parties intended to vest the arbiter with an absolute and unfettered discretion.
However, the employment of words like ‘in the opinion of’ as opposed to words such
as ‘determination’ or ‘decision’, is not such a contrary indication, for the word
‘opinion’ does not necessarily connote an absolute and unfettered discretion: it may
also mean a judgment, conclusion or belief founded on factual e vidence and

also mean a judgment, conclusion or belief founded on factual e vidence and
circumstances or probabilities.
Generally, the test for determining whether the rules of fundamental fairness are to be
implied as having been tacitly agreed between the parties is the usual test for implying

71 Id at 639H-640A.
72 Damsell v The Southern Life Association Ltd (1992) 13 ILJ 533 (C).

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32
a term as laid down in Mullin (Pty) Ltd v Benade Ltd 1952 (1) SA 211 (A) and Van den
Berg v Tenner.”73

[80] The courts have sought to ensure that the decision -maker’s contractual powers
are not abused.74 This is done by limiting the decision-maker’s discretion to ensure that
it is exercised honestly, and in good faith, but having regard to the terms of the contract,
it must not be exercised arbitrarily, capriciously or unreasonably.75 In Socimer,76 it was
stated that the discretion will be limited as a matter of necessary implication, by
concepts of honesty, good faith and genuineness, and the need for the absence of
arbitrariness, capriciousness, perversity and irrationality. 77 Generally, the scope of a
contractual discretion will depend on the nature of the discretion and the construction
of the language conferring it. 78 The courts will, depending on the contractual terms,
imply a term that the principles of natural justice should be observed by the
decision-maker.

[81] The Supreme Court of the United Kingdom explained the principle thus:

“Contractual terms in which one party to the contract is given the power to exercise a
discretion, or to form an opinion as to relevant facts, are extremely common. It is not
for the courts to re-write the parties’ bargain for them, still less to substitute themselves
for the contractually agreed decision -maker. Nevertheless, the party who is charged
with making decisions which affect the rights of both parties to the contract has a clear
conflict of interest. That conflict is heightened where there is a significant imbalance
of power between the contracting parties as there often will be in an employment
contract. The courts have therefore sought to ensure that such contractual powers are
not abused. They have done so by implying a term as to the manner in which such

73 Id at 539. Van den Berg v Tenner is reported at 1975 (2) SA 268 (A).

73 Id at 539. Van den Berg v Tenner is reported at 1975 (2) SA 268 (A).
74 Braganza above n 60 at para 18.
75 Product Star (II) above n 69 at 404.
76 Socimer International Bank Ltd v Standard Bank London Ltd [2008] EWCA Civ 116; [2008] 1 Lloyd’s Rep
558.
77 Id at para 66.
78 British Telecommunications Plc v Telefonica O2 UK Ltd [2014] UKSC 42; [2014] 4 All ER 907 at para 37.

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powers may be exercised, a term which may vary according to the terms of the contract
and the context in which the decision-making power is given.”79

[82] When tender conditions pursuant to a public invitation for the procurement of
goods and services by private entities, like GEMS, stipulate that the acceptance of those
conditions constitute a contract between the procurer and the tenderer, the latter may
subsequently claim, depending on the contractual terms, that the rules of natural justice
should be implied as a term of their contract. However, for such a case to deserve
judicial intervention the aggrieved party will have to prove the existence of a contract.

[83] In Aga, it was held that there is no free -standing right to procedural fairness. 80
Natural justice is not a source of jurisdiction. Rather, where there is a legal right at
issue, such as a contractual right, natural justice may be relevant to whether that legal
right was violated.81

Conclusion
[84] GEMS exercised an adjudicatory function when it decided to grant the contract
to the JV. The Supreme Court of Appeal has accepted that the tender conditions may
in certain circumstances constitute a contract when they are accepted by a tenderer .82
Famous Idea did not plead that a contract came into being between it and GEMS. It did
not plead that the tender conditions constituted a contract between it and GEMS, thereby
triggering GEMS’ duty to act honestly, fairly, rationally and not capriciously or
arbitrarily. Rather, it sought to review the decision not to award the contract to it. There
was therefore no case made out for a quasi-review based on a contractual relationship
between Famous Idea and GEMS.


79 Braganza above n 60 at para 18.
80 Aga above n 64 at para 30.
81 Id.
82 Logbro Properties CC v Bedderson N.O. [2002] ZASCA 135; [2003] 1 All SA 424 (SCA); 2003 (2) SA 460
(SCA) at para 11.

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[85] Famous Idea’s reliance on Bae Estates83 is misplaced. In Bae Estates, the Court
found that Bae Estates, an estate agency, had a legitimate expectation to natural justice
because the body corporate had allowed it to do business, undisturbed for over a year,
in the scheme. Famous Idea did not plead that GEMS created any expectation.

[86] I disagree with the High Court that the position of private parties inviting tenders
for service is different from a public procurement process where parties know
beforehand that their information will be disclosed should a decision be reviewed. 84
The same considerations apply in both instances, because a party to a private law tender
process ought to foresee that its information might be disclosed in the event of a review.
It is always open to such a party to request the court to order that certain sensitive
information should not be disclosed. In my view , however, the High Court was
nevertheless correct in finding that it did not have jurisdiction to adjudicate the dispute,
because Famous Idea did not make out a proper case for determination under the public
law or the common law grounds.

[87] Because Famous Idea failed in its founding papers to make out a case that GEMS
had exercised a power that was subject to review at common law, it is unnecessary to
consider whether – if such a case had been made out – rule 53 would be applicable.
This would depend on whether GEMS’ decision was a “decision or proceedings of any
inferior court and of any tribunal, board or officer performing judicial, quasi-judicial or
administrative functions” within the meaning of rule 53(1).

[88] The applicant has shown prospects of success. It would be in the interests of
justice to grant leave to appeal; however, the appeal ought to be dismissed. There is no
reason why costs should not follow the result.

83Trustees for the time being of the Legacy Body Corporate v Bae Estates and Escapes (Pty) Ltd [2021] ZASCA
157; [2022] 1 All SA 138 (SCA); 2022 (1) SA 424 (SCA).
84 High Court judgment above n 1 at para 28.

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35
Order
[89] I therefore make the following order:
1. Leave to appeal is granted.
2. The appeal is dismissed with costs, including the costs of two counsel
where so employed.

For the Applicant:



For the First, Second and Third
Respondents:


For the Fourth and Fifth Respondents:
S Tshikila, T Kgomo and P Vabaza
instructed by Malatji and Company
Attorneys

A Bava SC and J W Schabort instructed
by Geldenhuys Malatji Incorporated
Attorneys

E Kromhout and H P Wessels instructed
by Van der Merwe and Associates