THE SUPREME COURT OF APPEAL
OF SOUTH AFRICA
CASE NO: 467/04
REPORTABLE
In the matter between
ARCHIBALD BARRY NICHOL First Appellant
THE S AGE S CHACH AT P ENS ION F UND Second A ppellant
and
THE REGISTRAR OF PENSION FUNDS Firs t R espond en t
THE FINANCIAL SERVICES BOARD Second Respondent
THE SA GE GR OUP LIMITE D STAFF PENSION
FUND Third Respondent
THE SAGE LIFE LIMITED STAFF PENSION &
LIFE ASSURANCE SCHEME (now known as
The S age Group P ension F und) Four th Res pondent
SAGE LIFE LIMITED Fifth R espondent
THE PENSION FUNDS ADJUDICATOR Sixth Respondent
RONALD HENRY CECIL SMALL Seventh R espondent
Coram: Mpati DP, Navsa et Van Heerden JJA, Maya et Cachalia AJJA
Heard: 13 September 2005
Delivered: 29 September 2005
Summary: Promotion of Administrative Justice Act 3 of 2000, s 7(2) –
failure to exhaust internal remedies before institution of judicial review proceedings –
application for exemp tion in terms of s 7( 2)(c) of PAJA – mean ing of ‘exceptional
circumstances’
JUDGMENT
VAN HEERDEN JA:
2
Introduc tion
[1] The main issues in this appeal are the interp retation and application
of the provisions of s 7(2) of the Prom otion of Administrative Justice Act 3
of 2000 (‘PAJA’). Both the first and t he second appellants appeal against
an order made by the Pretori a High Court ( per Legodi AJ) dism issing an
application, brought by the former in terms of s 7(2)(c) of PAJA, to exempt
him fro m the obligation 1 to exhaust an internal remedy available to him
before pursuing review proceedings wh ich he had previously instituted in
the same high court . The first, sec ond, fourth and fifth respondents cross
appeal against the order of the Preto ria High court postponi ng the review
application sine die, the costs of such applicati on to be reserved. Both the
appeal and the cross appeal are with the leave of this court.
Parties
[2] The first appellant, Mr Arch ibald Barry Nichol (‘Nichol’), is a
pensioner who, until his retirement in 1994, was an active, contributing
member of the second appellant, the Sage Schachat Pension Fund (‘t he
Sage Schachat Fund’), a pension fu nd registered in accordance with t he
Pension Funds Act 24 of 195 6 (‘the PF Act’). The first respondent i s the
Registrar of Pension Funds (‘t he Registrar’), appointed in terms of the PF
1 Imposed on him by s 7(2)(a) of PAJA.
3
Act and vested with extensive powers and functions in terms thereof. The
second respondent is the Fi nancial Services Board (‘the FSB’), a statutory
body established in term s of the Financ ial Services Board Act 97 of 1990
(‘the FSB Act’) with the primary functi on of supervising t he com pliance
with laws regulating financial institu tions and the provision of financial
services.2 This supervisory function includes co mpliance with the PF A ct
by pension fund organisations regi stered in term s of such Act. 3 Section 3
of the PF Act provides that the executive officer of the FSB and his or her
deputy shall, respectively, also be the Registrar and Deputy-Registrar of
Pension Funds. The fourth respondent is the Sage Life Lim ited Staff
Pension and Life Assurance Sche me, now known as the Sage Group
Pension Fund (‘the Sage Group Fund’), also a pension fund registered in
accordance with the PF Act. The fi fth respondent is Sage Life Limited
(‘Sage), a public com pany which, for present purposes, may be described
as the employer of persons employed within the Sage Group of companies.
Factual bac kground
[3] The present dispute between the pa rties has a long and convoluted
history, most of which is dealt with in considerable detail in the Cape High
2 Section 3(a) of the FSB Act.
3 In term s of s 1 of the FSB Act, ‘financial institution’ is defined as m eaning, inter alia, ‘any pension
fund o rganisation registered in t erms of t he Pensi on Funds Act’, while ‘financial serv ice’ is in turn
defined as ‘any financial service rendered by a financial institution to the public or a juristic person…’.
4
Court judgment in Sage Schachat Pension Fund & others v Pension Funds
Adjudicator & others. 4 It began in 1997 with a regrouping of operational
activities within the Sage Group of com panies. This resulted in a decision
taken in August 1998 by the management of the Sage Group to amalgamate
the Sage Schachat Fund, the Sage Group Limited Staff Pension Fund (the
third respondent) and the Sage Group Fund by transferring t he businesses
(members, pensioners, assets and liab ilities) of the first two pension fund s
to the third in accordance wit h the provisions of s 14 of the PF Act. On 9
and 10 Decem ber 1998 t he boards of t rustees of all three pension funds
adopted resolutions approving the proposed amalgamation.
[4] The three funds were merged w ith effect from 1 Decem ber 1998,
from which date the merged fund has been operating under the name of the
Sage Group Fund. It was, however, only in October 1999 t hat the three
funds applied to the Registrar in term s of s 14 of the PF Act for
retrospective approval of the tr ansfers.5 In the meantime, on 2 April 1999,
Nichol, acting in term s of s 30A(3) of the PF Act, had lodge d a com plaint
regarding the transfer of the Sage Sc hachat Fund with the sixth respondent,
the Pension Funds Adjudicator appoint ed in terms of Chapter VA of that
4 [2003] 4 All SA 394 (C).
5 It is not necessary for present purposes to consider Nichol’s contention that the boards of trustees of the
funds were not, at that time, lawfully constituted in that there had not been compliance with s 7A of the
PF Act providing for the right of members of a pension fund to elect at least 50 per cent of t he members
of its board of trustees.
5
Act (‘the Adjudicator’).6 The basis of Nichol’s complaint was that he (and
others in the same position) had not been consulted on the proposed merger
of the Sage Schachat Fund wit h the ot her two funds. The Sage Schachat
Fund was smaller and in a much m ore favourable surplus position than
either of the other funds. Nichol thus opposed the merger on the ground
that, should it take place, the Sage Schachat Fund surplus would
‘effectively be diluted by the cross-su bsidisation of the other funds’ as a
result of ‘the pooling of resources’.
[5] On 13 Novem ber 2001 the Adjudicat or made his de termination,
holding that, since the Registrar had not yet approved the merger of the
funds by issuing the requisite cer tificates in term s of s 14(1) (e) of the Act,
an ‘indispensable requirement for the legal validity of the new scheme’ had
not been met. Thus, according to the Adjudicator, ‘the legal position is that
the funds are still three separate le gal entities, no matte r what may be
occurring in practice’. The Adjudicator accordingly declared that the Sage
Schachat Fund ‘still exists as an i ndependent pension f und organisation as
defined in the Act’.7
6 On 27 M ay 1999, t he se venth respondent, M r R onald Henry C ecil S mall (‘Small’), a pensioner i n
exactly the same position as Nichol, lodged a similar complaint with the Adjudicator. Small passed away
in December 2004.
7 For the full order made by the Adjudicator, see Sage Schachat Pension Fund & others v Pension Funds
Adjudicator & others n 4 above para 21 at 400e-j.
6
[6] On 18 Decem ber 2001 the Registrar approved the amendm ents to
the rules of the Sage Group fund an d also issued certificates under
s 14(1)(e) of the PF Act approving the tr ansfer of the businesses of th e
Sage Schachat Fund and the Sage Gr oup Limited Staff Pension Fund to the
Sage Group Fund. The effect of these decisions was made retrospective to
1 December 1998, from which date the de facto merger had been in
operation.
[7] An application to the Cap e High Court, launche d on 27 Decem ber
2001 by t he Sage Schachat Fund, the Sage Group Lim ited Staff Pension
Fund, the Sage Group Fund and Sage to set aside the Adjudicator’s
determination, was ultim ately dism issed with costs by Van Zyl J on 17
October 2003.8
[8] On 7 January 2002 Nichol became aware of the fact that the
Registrar had issued the s 14(1)(e) certificates giving retrospective approval
to the transfers of business, as set out above. A month la ter, on 8 February
2002, Nichol launc hed review procee dings in t he Pretori a High Court,
seeking the following relief:
8 See Sage Schachat Pension Fund & others v Pension Fund Adjudicator & others n 4 above.
7
‘1. To review and set aside the decision or decisions referred to in the letter of JEREMY
ANDREW (Chief Actuary) addressed to Mr JOHN MURPHY, Pension Funds
Adjudicator, dated 29 November 2001…
2. To review and set as ide the certification in terms of section 14 (1) (e) of the Pension
Funds Act, No 24 of 1956, that the re quirements referred to in paragraph (a) to (d) of
the above section with regard to the transfer of business wi th effect from 1 Dece mber
1998 of 17 Mem bers and 52 Pensioners from the SAGE SCHACHAT PENSION
FUND to the SAGE GROUP PENSION FUND have been satisfied’.
The review application (‘ the main a pplication’) was brought in term s of
Uniform Rule 53, but it is now co mmon cause that, notwithstanding the
fact that no mention is m ade anywhere in the papers filed in the main
application of PAJA or any of its pr ovisions, the review would fall t o be
decided in terms of PAJA.9
[9] According to Nichol , at the ti me when t he review application was
lodged, his attorney of record advised hi m that ‘all forms of internal appeal
against administrative acts must be exhausted before a court m ay be
approached to review an ad ministrative act’. It was explained to him,
however, that ‘in the event of the ad ministration a cting in bad faith, th e
court may be approached directly’. As Nichol ‘firm ly believed that the
9 See Bato Star Fishing (Pty) Ltd v Minister of Environmental Affairs and Others 2004 (4) SA 490 (CC)
paras 20 – 27.
8
Registrar and the FBS acted in bad fa ith’, he apparently instructed his
attorney to lodge the review application with High Court.
[10] In the answering affidavit fil ed in April 2002 on behalf of the
Registrar and the FSB, it was specifically pointed out that the relief sought
by Nichol was inapp ropriate in that any person aggrieved by a decision of
the Registrar had a right of appeal ag ainst such decision to the Bo ard of
Appeal constituted under s 26(1) of th e FSB Act (‘the FSB Appeal Board’)
and that ‘the nature and intricacies of this matter more appropriately fell to
be dealt with by [this] e xpert tribunal’. Nichol’s response to this, in his
replying affidavit fil ed during March 2003, was sim ply to state that he
‘honestly believed’ that the High Cour t was ‘the right tribunal to address
[his] grievances’.
[11] In the respondents’ heads of argum ent filed in the court below in
late March and early April 2004 it was pointed out that, as Nichol had an
internal remedy provided for in anot her law (ie an appeal to the F SB
Appeal Board), s 7(2) (a) of PAJA rendered it im permissible for a court to
review the decision of the Registrar be fore such internal remedy had been
exhausted. It was also poi nted out that Nichol had not made any
application in terms of s 7(2)(c) of PAJA for exemption from the obligation
to exhaust his internal remedies. Th is provoked a response from Nichol in
9
the form of an application in term s of s 7(2)(c), filed on 8 April 2004, for
an order ‘granting t he applicant exem ption from the obligation to exhaust
the internal remedy available to him in terms of section 26 of the Financial
Services Board Act, No 97 of 19 90, on the grounds that exceptional
circumstances exist and th at such exem ption is in the interest of justice’.
Unsurprisingly, this application was opposed by the Registrar, the FSB, the
Sage Group Fund and Sage.
[12] The s 7(2) (c) application was heard by the Pretoria High Court on
28 and 29 April 2004 and, on the latter date, Legodi AJ dism issed the
application with costs; directed Nic hol to exhaust the internal remedy as
provided for under s 26 of the FSB Act, and postponed the main
application sine die, reserving the costs thereof. As indicated above, these
orders form the subject of the present appeal and cross appeal.
[13] The affidavits filed on behalf of Nichol in the s 7(2) (c) application
make it clear that, at the time the main application was launched, he and his
legal advisers were aware of th e possibility of an appeal to the FSB Appeal
Board in term s of s 26(2) of the FSB Ac t. However, as Nichol’s attorney
of record stated in the replying a ffidavit deposed t o by him on Nichol ’s
behalf in the s 7(2) (c) application, this subsec tion ‘only came to [his]
attention when the Respondents filed thei r Heads of Argument’ in the main
10
application and he was then ‘obliged to inform [Nichol] of the problem and
the need to bring thi s [s 7(2) (c)] application.’ Nichol’s attorney of record
stated further that, this notwit hstanding, he would have advised Nichol to
bring the exem ption application at th e o utset, had he been aware of t he
provisions of s 7(2) (c). The decision not to pursue the internal remedy
provided in s 26(2) of the FSB Act was thus a deliberate one. It is clear
that Nichol’s legal advisors were simply unaware of the provisions of
PAJA until a very late stage of the review proceedings.
Section 7(2) of PAJA
[14] Section 7(2) of PAJA provides as follows:
‘(a) Subject to paragraph (c), no court or tribunal shall review an administrative action
in terms of this Act unle ss any inte rnal remedy provided for in any other law has first
been exhausted.
(b) Subject to paragraph (c), a court or tribu nal m ust, if it is no t sa tisfied that any
internal remedy referred to in parag raph (a) has been exhausted, di rect that the person
concerned must first exhaust such remedy before instituting proceedings in a court or
tribunal for judicial review in terms of this Act.
(c) A court or tribunal m ay, in exceptional circumstances and on application by the
person concerned, exempt such person from the obligation to exhaust any internal
remedy if the court or tribunal deems it in the interest of justice.’
11
[15] Under the co mmon law, the mere exis tence of an internal remedy
was not, by itself, sufficient to defer access to judicial review until th e
remedy had been exhausted. Judicial review would in general only be
deferred where the re levant statutory or contra ctual provi sion, properly
construed, required that the intern al remedies first be exhausted. 10
However, as is pointed out by Ia in Cu rrie and Jonathan Klaaren, 11 ‘by
imposing a strict duty to exhaust domestic remedies, [PAJA] has
considerably reformed the co mmon l aw’. It is now com pulsory for the
aggrieved party in all cases to exhaust the relevant internal remedies unless
exempted from doing so by way of a successful appl ication under s 7(2)(c).
Moreover, the person seeking exem ption m ust satisfy the court of t wo
matters: first, that there are exceptional circumstances and second, that it is
in the interest of justice that the exemption be given.12
The meaning of excepti onal circumstances
[16] Counsel for the Registrar and the FSB submitted that, while there is
no definit ion of ‘exceptional circum stances’ in PAJA, t hese must b e
circumstances that are out of the ordi nary and that render it inappropriate
10 See eg Shames v Sou th Africa n Ra ilways & H arbours 1922 A D 228 at 23 3-234; Welkom Village
Management Board v Leteno 1958 (1) SA 490 (A) at 502D-503D; Local Road Transportation Board &
another v Durban City Council & another 1965 (1) SA 58 6 (A) at 592F-594C. See also Daniel Malan
Pretorius ‘The Wisdom of Sol omon: The Obligation t o Exhaust I nternal R emedies in S outh A frican
Administrative Law’ (1999) 116 SALJ 113 and the other authorities there cited.
11 The Promotion of Administrative Justice Act Benchbook p 182.
12 See Earthlife Africa (Cape To wn) v Di rector-General: Department o f Environmental Affa irs &
Tourism & another 2005 (3) SA 156 (C) para 45.
12
for the court to require the s 7(2) (c) applicant first to pursue the av ailable
internal remedies. The cir cumstances must in other words be such as to
require the immediate intervention of t he courts rather than resort to th e
applicable internal remedy. I agree w ith this contention. In the words of
Sir John Donaldson MR in R v Secr etary of State for the Home
Department, Ex parte Swati:13
‘By definition, exceptional circum stances defy definition, but, w here Parliam ent
provides an appeal procedure, judicial rev iew will have no place unle ss the applicant
can distinguish his case from the type of case for which the appeal procedure was
provided.’
[17] The exceptional circum stances upon which reliance is placed in
support of an application for exem ption in terms of s 7(2) (c) should
primarily be facts and circumstances ex isting before or at the time of th e
institution of the review proceedings. This does not mean that the court
may not, in principl e, take into c onsideration even ts occurring after t he
launch of such proc eedings. Apart from the judgment of the Cape High
Court handed down on 17 October 2003 – the relevance of which I will
discuss below – the alleged ‘exceptional circumstances’ ultimately relied
upon by Nichol all existed prior to the commencement of the main
application.
13 [1986] 1 All ER 717 (CA) at 724a-b, as cited with approval in Earthlife Africa para 31.
13
[18] As ‘exceptional circumstances’ which might justify an exemption in
terms of s 7(2) (c) would exist where th e available i nternal remedy wou ld
not be able to provide the applicant with effective redress for his or her
complaint,14 it is necessary to exam ine m ore closely the nature of the
internal remedy provided for in the FSB Act.
The internal remedy
[19] Section 26(2) of the FSB Act –
‘Any person aggrieved by a decision by the executive officer [the Registrar] under a
power conferred or a duty imposed upon him by or under this Act or any other law may
within the period and in the m anner and upon payment of t he fees prescribed by the
Minister [of Finance] by regulation, appeal ag ainst su ch decisi on to the board of
appeal.’
[20] The FSB Appeal Bo ard, established in terms of s 26(1) of the FSB
Act, is a specialist tribunal with a wide range of expertise available to it. It
consists of three persons appoi nted by the Minister of Fi nance on the basis
of their ‘wide experience’ and ‘expert knowledge’ of, respectively, law, 15
financial institutions and financial services, and the acco untants’ and
auditors’ profession. In addition th e Board may co-opt an assessor having
14 See eg Marais v Democratic Alliance [2002] 2 All SA 424 (C) paras 59-62 and cf Governing Body,
Mikro Primary School & another v Minister of Education, Western Cape , & others 2005 (3) SA 504 (C)
at 515F-G. On the common law position in this regard, see Lawrence Baxter Administrative Law p 721-
722 and the authorities there cited.
15 This person is the chair of the Appeal Board.
14
‘expert knowledge of a partic ular matter’ to assist it where this is deemed
necessary for the hearing of a particular appeal. 16 It has been held to be an
independent tribunal as contemplated in s 34 of the Constitution.17
[21] In terms of s 26(7), the Commissi ons Act 8 of 1947 applies to the
Appeal Board and i t thus has all the powers of a High Court to summon
and examine witnesses and to call fo r the production of books, documents
and objects.18 It has very wide powers on appeal, including t he power to
confirm, set aside or vary the decisi on of the Regi strar again st which t he
appeal is brought; to refer the ma tter back for consideration or
reconsideration by t he Registrar in acco rdance with such directions as the
Board may lay down; or to order that its own decisions be given effect to. 19
In addition, it is em powered under s 26(2A) to grant interim relief by
suspending the operation or execution of the decision appealed against and,
under s 26(14), it can make an appropriate order as to costs.
[22] The Appeal Board therefore conducts an appeal in the fullest sense
– it is not restricted at all by t he Registrar’s decision and has the power to
conduct a com plete reheari ng, reconsideration and fresh determ ination of
the entire matter that was before th e Registrar, with or without new
16 Section 26(1B) of the FSB Act.
17 Financial Services Board & another v Pepkor Pension Fund & another 1999 (1) SA 167 (C) at 175I-J.
18 Section 3 of the Commissions Act 8 of 1947.
19 Section 26(10) of the FSB Act.
15
evidence or information.20 This is not disputed by Nichol. It has also never
been suggested that the Appeal Board has been tainted by any of the
alleged procedural or substantiv e irregulariti es of which Nichol
complains.21 I therefore cannot agree w ith the argum ent advanced by
counsel for the appellants to t he effe ct that the Appeal Board would be
unable to give effect to their constitu tional rights to fair adm inistrative
action and would not be able to ‘make a declaration of invalidity’ in respect
of the im pugned decisions of t he Registrar, as opposed to ‘si mply setting
aside’ such decisions. As detailed in the previous paragraph, the powers of
the Appeal Board are certainly extensive enough t o afford Nichol the same
relief (if justified) as that sought by hi m in the main application, namely an
order ‘reviewing and setting aside’ the relevant decisions of t he Registrar,
in particular the issue of a certificate in terms of s 14(1) (e) of the PF Act in
respect of the transfer of business fro m the Sage Schachat Fund to the Sage
Group Fund.
The grounds for Nichol’s s 7(2)(c) appl icat ion
[23] In his founding affi davit in support of the exem ption appli cation,
Nichol contended that all of the grounds of review on which he relied in the
20 See e g Paarlse Munisipale Weduwee-e n Wese-Pensioenfonds v Re gistrar of Pension Funds [2000] 3
BPLR 247 (PFA).
21 Cf Earthlife Africa (Cape Town) v Director-General: Department of Environmental Affairs & Tourism
& another n 12 above para 40.
16
main application in them selves cons titute ‘exceptional circum stances’.
This subm ission was elaborated upon in great detail in the heads of
argument filed on hi s behalf in this cour t, reference being made (inter alia)
to the majority of the grounds of review listed in s 6 of PAJA. Not only are
the numerous grounds of review canva ssed in Nichol’s heads of argument
by and large not the grounds relied upon in his affidavits in the mai n
application, but he also failed dism ally to demonstrate why the FSB Board
of Appeal would not be able effectiv ely to consider a nd remedy each of
these ‘complaints’.
[24] Moreover, as was pointed out by counsel for both sets of
respondents, Nichol’s contenti on in th is regard ‘puts the cart before t he
horse’. It is based on the proposition that Nichol is entitled to be ex empted
from complying with the requirements of s 7(2)(a) of PAJA and exhausting
his internal remedies merely because – so it is contended – his case on the
merits of the m ain application is stro ng. This cannot be so. Taken to its
logical conclusion, such an approach would defeat the purpose of s 7(2),
which requires an applicant for judicial review to have exhausted his or her
internal remedies before resorting to review proceedings. Allegations of
procedural or substantive ad ministrative irregularities per se ar e not
‘exceptional’ in review proceedings.
17
[25] So too, Nichol’s allegations of mala fides on the part of the
Registrar and the FSB in various form s do not ta ke his case any further.
One of the listed grounds of review in s 6(2) of PAJA is that the relevant
administrative action ‘was taken in bad faith’. 22 As pointed out above,
there was no suggestion that the FSB Appeal Board was itself tainted or the
appeal procedure com promised in an y way. For the purposes of the
exemption application under discussion, the allegation of bad faith does not
per se constitute an ‘exceptional circumstance’.
[26] For the same reasons as those set out in the three preceding
paragraphs, Nichol’s contention that th e alleged failure on the part of the
Registrar and the FSB to co mply with the provisions of s 3 of PAJA also
constitutes an ‘exceptional circu mstance’ in term s of s 7(2) (c) must b e
rejected. Even assum ing there to have been non-com pliance with the
requirements for procedural fairness set out in s 3, this would simply afford
the aggrieved party grounds for review o n the basis that the administrative
action in question ‘was procedurally unfair’. 23 As with any of the other
grounds of review listed in s 6 of PA JA, however, the manner of review of
such procedurally unfair administrative action is still governed by s 7(2), in
22 Section 6(2)(e)(v).
23 Section 6(2)(c).
18
terms of which the aggrieve d party is obliged to exhaust his or her internal
remedies before bringing review proceedings.
[27] Nichol also contended that the existence of the determination by the
PFA precluded the Registrar from issuing the s 14(1)(e) certificate and that,
in so doing, the Registrar acted in ‘clear and deliberate disregard of an
existing court order’. He relied in this regard on the provisions of s 30O of
the PF Act, in term s of which ‘any determ ination of the Adjudicator shall
be deemed to be a civil judgment of any court of law had the matter in
question been heard by such court’. Nichol argued further that, as the
application to the Cape High court to have the Adjudicator’s determination
set aside was dis missed, albeit after the launch of the review proceedin gs,
the s 14(1)(e) certification by the Registrar was in direct contravention (and
in contempt) of ‘an Order deemed to be an Order of C ourt and confirmed
as such by the Cap e High Court’. A ccording t o Nichol, this ‘anomaly’
constituted an ‘exceptional circum stance’ entitling him to exemption in
terms of s 7(2)(c).
[28] Counsel for the Registrar and th e FSB argued, on the other hand,
that, once the rules of the Sage Group Fund had been amended and the
s 14(1)(e) certificates had been issued, the necessary result was that the
amalgamation of the three funds became lawful, even if this m ight have
19
had the result of rendering redundant so me or all of the term s of the
Adjudicator’s determination. Counsel contended that this position was not
altered in any way by the judgment in the proceedings before the Cape
High Court.
[29] The relationship between the PFA a nd the Registrar, and the status
of the determ ination m ade by the former in the light of the issue of th e
s 14(1)(e) certificates by the latter, ar e clearly central to the disput e
between the parties. However, for pr esent purposes, it is not necessary to
decide these issues one way or the ot her. Suffice it to say that these ar e
exactly the sort of issues that can – and should – be addressed by the FSB
Appeal Board. They do not, in m y view, constitute ex ceptional
circumstances entitling Nichol to ask the court to exem pt him fro m the
obligation to co mply with s 7(2) (a) of PAJA and exhaust his internal
remedy before instituting review proceedings.
[30] In terms of the Regulations in Respect of Appeals to the Board of
Appeal made by the Minister of Fina nce under s 26(2) of the FSB Act, 24
any person aggrieved by a decision of the Registrar ‘shall within twenty
business days after the date of the decision in writing note an appeal against
24 Government Notice R6 in GG 14514 dated 8 January 1993, as amended by Government Notice R1024
in GG 14870 dated 18 June 1993 and Government Notice R1666 in GG 15096 dated 3 September 1993.
20
the decision’ to the FSB Board of Appeal. 25 Nichol contended that by the
time he b ecame aware of the decision of the Registrar on 7 January 2002,
the 20 day time period provided for appeals to the Board of Appeal had
already expired. This, according to Nichol, precluded him from pursuing
his internal remedy under the FSB Act and constit uted exceptional
circumstances making an exem ption in term s of s 7(2) (c) clearly in the
interests of justice.
[31] As was pointed out by counsel for both sets of respondents, this
contention was not raised in Nichol’s exemption application, but surfaced
for the fi rst tim e in Nichol’s second set of supplementary heads of
argument filed a day before the hearing in the court a quo. This meant that
none of the respondents had the opportunity of responding to this matter in
the course of the exem ption application. In addition, on the facts, counsel
for the respondents disputed the cont ention that the tim e period within
which to lodge an appeal had passed by the time Nichol became aware of
the Registrar’s decision.
[32] Counsel also subm itted that, alt hough the regulations do not make
explicit provisi on for the Appeal Bo ard to condone non-com pliance with
the prescribed time period, the regulatio ns are capable of an interpretation
25 Regulation 2.
21
that the Appeal Bo ard does have such powers of condonation. In any
event, as pointed out a bove, it is clear from the a ffidavits deposed to by
Nichol and his attorney that consideration was given to pursuing an internal
appeal and that the decision not to do so and to proceed by way of judic ial
review was a deliberate one. There is no suggestion whatsoever in t he
papers that the reason for this decision was that the internal appeal was out
of time. Nichol’s case is that he was unaware of th e provisions of s 7(2) of
PAJA, but that had he been made awar e of those provisions at an earl ier
stage, he would still have proceeded by way of judicial review and not by
way of an appeal to the Appeal Board. This being so, he cannot now raise
the expiry of the time lim it for the lodging of such an appeal as an
exceptional circu mstance for the purposes of an exem ption application in
terms of s 7(2)(c) of PAJA.
[33] It is thus not necess ary to decide wh ether or not t he FSB Appeal
Board does have the power to condone non-compliance with the tim e limit
prescribed for the lodging of appeals to it. It should, however, be noted
that, in argum ent before this c ourt, counsel for the Registrar and the FSB
gave an undertaking on their behalf th at, shoul d Nichol lodge an appeal
22
with the Appeal Board in terms of s 26(2) of the FSB Act, they would not
rely on the expiry of the twenty day time period as a bar to such appeal
[34] It follows from the above that, in m y view, the court below
correctly held that there were no exceptional circu mstances in term s of
s 7(2)(c) of PAJA for exem pting Nichol fro m his obligation t o exhaust his
internal remedy prior to instit uting revi ew proceedings. Accordingl y the
appeal should be dismissed with costs.
[35] It is apparent from what I have al ready said that the question of the
continued existence as se parate entities of the Sage Schachat Fund, of the
third respondent and of the fourth re spondent (as a ‘merged fund’) after the
issue of the s 14(1)(e) certificates by the Registrar is one of the main issues
that will have to be decid ed by the FSB Appeal Board. This question
cannot be resolved in the present app eal. So too, the correctness of the
contention by counsel for bot h sets of respondents that the Sage Schachat
Fund had no standi ng to prosecute this appeal cannot be determ ined at this
stage.
The cross appeal
[36] In my view, the cro ss appeal against the order of the court a quo
postponing the m ain application sine die and reserving the costs thereof i s
23
misconceived. This ‘order’ does no t satisfy the first jurisdictional
requirement for appealabilty under s 20 of the Supreme Court Act 59 of
1959 in t hat it lacks the attributes of a ‘judgm ent or order’ within the
meaning of those words in s 20(1). It is not final in its effect an d is
susceptible of alteration by the court of first instance; it is no t definitive of
the rights of the parties; and it does not have the effect of disposi ng of at
least a substantial portion of the relie f claimed in the main proceedings. 26
That being so, the cross appeal should be struck from the roll.
Order
[37] In the circumstances, the following order is made:
(a) The appeal is dismissed with costs.
(b) The cross-appeal is struck from the roll with costs.
B J VAN HEERDEN
JUDGE OF APPEAL
Concur: Mpati DP, Navsa JA, Maya AJA, Cachalia AJA
26 See in th is regard Zweni v Minister of Law and Orde r 1993 (1) SA 523 (A); see further LTC Harms
Civil Procedure in the Superior Courts paras C1.15-C1.18 and the other authorities there cited.