Minister of Defence and Military Veterans v Motau and Others (CCT 133/13) [2014] ZACC 18; 2014 (8) BCLR 930 (CC); 2014 (5) SA 69 (CC) (10 June 2014)

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Minister of Defence and Military Veterans v Motau and Others (CCT 133/13) [2014] ZACC 18; 2014 (8) BCLR 930 (CC); 2014 (5) SA 69 (CC) (10 June 2014)

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CONSTITUTIONAL
COURT OF SOUTH AFRICA
Case
CCT 133/13
In
the matter between:
MINISTER
OF DEFENCE AND MILITARY
VETERANS
..................................................
Appellant
and
MAOMELA
MORETI
MOTAU
...................................................................................
First
Respondent
REFILOE
MOKOENA
.............................................................................................
Second
Respondent
ARMAMENTS
CORPORATION OF
SOUTH
AFRICA (SOC)
LIMITED
............................................................................
Third
Respondent
Neutral
citation:
Minister of Defence and
Military Veterans v Motau and Others
[2014] ZACC 18
Coram:
Moseneke ACJ, Skweyiya ADCJ, Cameron J, Dambuza
AJ, Froneman J, Jafta J, Khampepe J, Madlanga J, Majiedt AJ,
Van der Westhuizen
J and Zondo J
Heard
on:
17 February 2014
Decided
on:
10 June 2014
S
umma
ry:
Armaments Corporation of South Africa Limited Act 51 of 2003
—
section 8(c)
— Minister’s power to dismiss board member
“on good cause shown” — Minister had good cause to
dismiss
the first and second respondents
Promotion
of Administrative Justice Act 3 of 2000
—
section 1
—
definition of administrative action — distinction between
administrative and executive action — Minister’s
power to
dismiss is executive action
Companies
Act 71 of 2008
—
section 71
— section regulates procedure
by which board members may be dismissed by shareholders —
section must be read with
section 8(c)
of the
Armaments Corporation
of South Africa Limited Act — Minister
did not comply with
section 71
’s procedural requirements
ORDER
On
appeal from the North Gauteng High Court, Pretoria (Legodi J):
1.
Condonation for the late filing of the
written submissions of both General Motau and Ms Mokoena, and of the
Armaments Corporation
of South Africa (SOC) Limited
(Armscor),
is granted.
2.
The appeal is upheld to the extent set out
below.
3.
The order of the High Court is set aside
and replaced with the following:
“
(a)
It is declared that the Minister acted unlawfully insofar as she
terminated the services of General Motau and Ms Mokoena on
the
Armscor Board without following the procedure set out in
section
71(1)
and (2) of the
Companies Act.
(b
)
The Minister’s decision to terminate the services of
General Motau and Ms Mokoena on the Armscor Board is not set
aside.
(c)
The Minister is ordered to pay the costs incurred by General Motau
and Ms Mokoena in the High Court.”
4.
There is no order as to costs in this
Court.
JUDGMENT
KHAMPEPE
J (Moseneke ACJ, Skweyiya ADCJ, Cameron J, Dambuza AJ, Froneman J,
Majiedt AJ and Van der Westhuizen J concurring):
Introduction
[1]
This is a case about accountability.
To what standard of performance may a Minister, as the responsible
member of the Executive,
hold the leadership of a state owned
entity that falls under her supervisory control?  And to what
standard should a
court of law hold that Minister when she exercises
her powers of oversight in relation to that state-owned entity?
These
are important questions for any democracy that takes seriously
the values of accountability and good governance.
[2]
This
matter comes before us by way of an application for leave to appeal
directly against a judgment of the North Gauteng High Court,
Pretoria
(High Court).
[1]
It
relates to the decision of the appellant, the Minister of Defence and
Military Veterans (Minister), to remove the first
and second
respondents (General Motau
[2]
and Ms Mokoena) from the Board of Directors (Board) of the third
respondent, the Armaments Corporation of South Africa (SOC) Limited

(Armscor).  General Motau and Ms Mokoena served as the
Chairperson and Deputy Chairperson of the Board respectively.
Facts
[3]
Armscor
is a wholly state-owned entity regulated by the Armscor Act.
[3]
The
state exercises ownership control of Armscor through the
Minister.
[4]
Armscor
was incorporated primarily to provide South Africa’s armed
services with military material, equipment, facilities
and
services,
[5]
as
well as to meet the “defence technology, research, development,
analysis, test and evaluation requirements” of the
Department
of Defence (Department).
[6]
In
essence, Armscor is the Department’s armaments and technology
procurement agency.
[7]
[4]
Armscor’s
affairs are managed and controlled by its Board, comprising nine
non-executive members and two executive members
(a chief executive
officer (CEO) and a chief financial officer (CFO)).
[8]
General
Motau and Ms Mokoena were appointed to the Board (as non-executive
members) by the Minister’s predecessor in terms
of section 7(1)
and (2) of the Armscor Act.  Those provisions read as follows:
“
(1)
The non-executive members of the Board must be appointed by the
Minister on the grounds of their knowledge and experience which,
when
considered collectively, should enable them to attain the objectives
of [Armscor].
(2)
The Minister must designate one of the non-executive members of the
Board as chairperson of the Board and another one as deputy

chairperson of the Board.”
In
terms of section 7(5)(a) of the Armscor Act, non-executive Board
members are appointed for a period of three years.  On
1 May
2011 General Motau was designated as Chairperson and Ms Mokoena was
designated as Deputy Chairperson.  The terms of
General Motau
and Ms Mokoena expired on 30 April 2014.
[5]
The Minister took office on 12 June 2012.  At that time, there
was a live dispute between General Motau and the Minister’s

predecessor, who had attempted to dismiss General Motau as the
Chairperson and appoint Ms Mokoena in his stead.  General Motau,

however, refused to accept his dismissal, asserting that it was
vitiated by a procedural irregularity.
[6]
In order to resolve any uncertainty at the start of her tenure, the
Minister, having discussed the matter with the Board, appointed
a
committee consisting of three of its members to resolve the issue.
After consulting the affected parties, the committee
recommended that
General Motau be retained as Chairperson and that Ms Mokoena
remain as Deputy Chairperson.  This was
accepted by the Minister
and communicated to the parties.
[7]
In order to address various governance issues, the
Minister convened three meetings with the Board (on 19 March
2013, 28 March
2013 and 4 June 2013), none of which was attended by
General Motau.
Ms Mokoena failed to attend the meeting
held on 4 June 2013.
The Minister expressed
her displeasure to General Motau in a letter dated 11 June
2013.  In reply the following day, General Motau
bemoaned
the late notice which the Minister had given of the meetings and
explained that he had been away when the meetings were
held.  He
also reminded her that Board members “make a living in other
endeavours”, and asked that she schedule
future meetings with
the Board through him, as the Chairperson.
[8]
On 8 August 2013, by letter, the Minister
terminated General Motau and Ms Mokoena’s membership of
the Board in terms
of section 8(c) of the Armscor Act.  Section
8(c) provides that “[a] member of the Board must vacate office
if his or
her services are terminated by the Minister on good cause
shown.”  The letter to General Motau explained that―
“
the
manner in which you exercised your powers, through your managerial
style and the decisions you took . . . has resulted in a
situation
where [Armscor] has not been able to meet the defence matériel
requirements of the Department effectively, efficiently
and
economically.”
[9]
The
Minister justified her decision on three bases.  First, she
cited various procurement projects which had failed to progress

timeously, allegedly as a result of the Board’s decisions or
inaction.
[9]
The Minister
further listed
nine projects as examples of this trend, placing particular emphasis
on Project Swatch and Project Porthole
.
Project Swatch was initiated to replace obsolete camping equipment
for deployed South African National Defence Force (SANDF)
troops.
Owing in large part to the Board’s failure to grant the
necessary approvals, the project had been delayed by
36 months,
during which time no funds could be spent.  Ultimately, less
equipment could be procured with the funds allocated
for the project
because of inflation.
[10]
Project Porthole, a “high priority
project” for the South African Special Forces, was established
to acquire a specialised
high-altitude parachute system.  The
system had become outdated and was in need of replacement.  Due
to delays in the
contracting process, the funds of the Special Forces
Portfolio were not used to acquire the parachuting equipment in the
2011/12
and 2012/13 financial years.  It appears that the
equipment had still not been procured when the Minister removed
General
Motau and Ms Mokoena.  The Department estimates the
financial loss flowing from the delays to be in excess of R70
million.
[11]
The
details of the delays were confirmed before the High Court in an
affidavit attested to by the Department’s Chief of Defence

Matériel, Mr Visser.  He had been tasked by the Secretary
of Defence, at the Minister’s behest, to investigate
and report
on procurement delays at Armscor.  Although the report and the
procurement projects were classified as confidential,
with the result
that the report could not be attached to his affidavit, Mr Visser was
given licence to talk to three of the most
important projects.
In addition to Projects Porthole and Swatch, Mr Visser discussed
delays in relation to Project Vagrant
(one of the nine projects
referred to in the Minister’s correspondence).
[10]
[12]
Second, the Minister was unhappy that
Armscor had not been able to conclude a service level agreement with
the Department as required
by section 5 of the Armscor Act.
In particular, she cited the latest proposal by the Board for a
service charge to be
included in the agreement, which the chief
financial officer of the Department had described as “unaffordable”.

She partially ascribed the inability to conclude a service level
agreement to the manner in which General Motau and Ms Mokoena

had been leading Armscor.
[13]
Lastly,
the Minister’s decision was premised on complaints she had
received about Armscor from members of the defence industry.

From these she inferred that the Corporation’s relationship
with the industry had broken down.
[11]
This, it was suggested, rendered Armscor unable to “provide
marketing support to defence-related industries in respect
of defence
matériel” as required by the Armscor Act.
[12]
[14]
The Minister concluded her correspondence
by stating that, in her opinion, General Motau and Ms Mokoena had
“not acted in
the best interests of the Department” and
that their services as Chairperson and Deputy Chairperson of the
Board were therefore
terminated.
[15]
Following the termination of General Motau
and Ms Mokoena’s services, the Minister convened a meeting on
14 August 2013 with
the remaining members of the Board.  In a
statement made at the start of the meeting, the Minister explained
her decision
in much the same terms as she had in her correspondence
with General Motau and Ms Mokoena.  In addition, however,
the
Minister made some remarks which became points of contention in
the High Court and in this Court.  First, the Minister said
she
believed that the removal of General Motau and Ms Mokoena was “not
a legal matter”, but a “political matter
. . . informed
by [her] experience”.  She expressed the hope that the
matter would not get to a point where the Department
would need to
“engage a legal rep” as she did not think that this was
necessary.  In relation to the removal of
Ms Mokoena, the
Minister also made the following statement:
“
For
me it was the correct thing to do that when I removed the chair, I
removed both the chair and the deputy.  Because I also
think
there would have been an expectation that I had an obligation to
appoint the deputy chair because I’m removing the
chair.”
This
expectation, the Minister seemed to reason, arose from Ms Mokoena’s
previous temporary appointment as Chairperson and
was evinced in a
letter penned by Ms Mokoena on 27 February 2013, in which she
requested clarification from the Minister on
her “decision on
the chairmanship of Armscor.”  The Minister understood
this letter to intimate that Ms Mokoena
still had aspirations of
being Chairperson.
[16]
The Minister also explained her decision to
target General Motau and Ms Mokoena for dismissal, rather than
relieving the entire
Board.  While she acknowledged that the
Board as a collective might be blamed for some of Armscor’s
failings, the Minister
stated that she was concerned about the impact
of the wholesale dismissal of the Board on the continued functioning
of the Corporation.
In
the High Court
[17]
Following the Minister’s decision to
terminate their services, General Motau and Ms Mokoena approached the
High Court for
urgent relief.  They sought to have the
Minister’s decision set aside on the basis that it was
unlawful, unconstitutional
and invalid.  They also sought a
declarator confirming them in their respective positions as
Chairperson and Deputy Chairperson
of the Board.  The only
opposition came from the Minister.  Armscor, although cited, did
not participate.
[18]
Legodi
J granted judgment in favour of General Motau and Ms Mokoena.
He concluded that the Minister’s decision was administrative

rather than executive action.  This was because the decision met
the positive requirements of the administrative action

definition and because it was not expressly excluded from the ambit
of the Promotion of Administrative Justice Act
[13]
(PAJA), as are some other forms of conduct by members of the National
Executive.
[19]
Flowing
from that conclusion, the High Court held that the decision fell to
be set aside on several grounds.  First, the Minister
committed
an error of law
[14]
in
terminating the services of General Motau and Ms Mokoena insofar as
she acted under the misapprehension that her conduct was
executive
rather than administrative in nature.  Second, the Minister
acted unfairly
[15]
in failing
to give General Motau and Ms Mokoena an opportunity, with appropriate
notice, to explain why their appointments should
not be terminated.
Third, the Minister acted on the basis of an ulterior motive
[16]
in that she expressly acknowledged that the removal of General Motau
and Ms Mokoena was a “political” rather than
a legal
matter.
[17]
Fourth, in
relation to Ms Mokoena, the Minister’s decision to dismiss her
was not rational
[18]
to the
extent that her membership of the Board was “terminated simply
on the basis that the Minister [did] not know what
to do with
her.”
[19]
[20]
Non-compliance with PAJA was not the only
source of unlawfulness identified by the High Court.  It also
found that it was inappropriate
for the Minister to have singled out
General Motau and Ms Mokoena for termination of their membership on
the Board.  This
was because of the Board’s collective
responsibility for the management of Armscor, and the fact that there
are two executive
directors (the CEO and the CFO) who are responsible
for the management and control of Armscor’s daily affairs.  It
reasoned
that the Minister failed to identify particular occurrences
for which General Motau and Ms Mokoena were directly responsible, and

thus failed to show the good cause required by section 8(c) of
the Armscor Act.
[21]
Finally,
the High Court granted a punitive costs order (on an attorney-and-own
client scale) against the Minister.  As justification
it cited
the Minister’s failure to observe the requirements of
procedural fairness, which it deemed to be unreasonable; her
failure
to respond to a letter General Motau had addressed to her, which
supposedly conveyed the respect the Board had for the
Minister; and
the Minister’s comments during the meeting of 14 August
2013,
[20]
which
revealed that she had no rational basis for terminating General Motau
and Ms Mokoena’s services.
Preliminary
matters
[22]
In terms of an order dated 8 November 2013
the Minister was granted leave to appeal directly to this Court.
Therefore, nothing
further needs to be said in this regard.
[23]
All
the respondents have filed applications for condonation.
Armscor filed their written submissions two weeks out of time.
Counsel
for General Motau and Ms Mokoena also filed their submissions
late.  The Court would like to thank
Advocates
Dewrance and Muvangua of the Johannesburg Bar Society, who appeared
pro bono on behalf of General Motau and Ms Mokoena,
for their valued
assistance in this matter.
[21]
[24]
I
t
would not be in the interests of justice
[22]
to refuse condonation in this case.
This
is a matter of great public importance,
[23]
and we should be slow to refuse argument that might provide
assistance on complex issues.
The
Minister did not object to the granting of condonation to any of the
respondents, nor did she cite any prejudice suffered as
a result of
the respondents’ delays.
[24]
The applications for condonation are therefore granted.
Issues
[25]
Having already thus disposed of the
preliminary issues regarding jurisdiction and condonation, we are
required to determine the
following in order to resolve this dispute:
(a)
Does the Minister’s decision to
dismiss General Motau and Ms Mokoena constitute administrative
or executive action?
(b)
Has the Minister shown good cause for her
decision to terminate the services of General Motau and Ms Mokoena,
as required by section
8(c) of the Armscor Act?
(c)
Was the Minister bound by any procedural
constraints in exercising her section 8(c) power?
The
distinction between administrative and executive action
[26]
The
Minister argues that the power to appoint and dismiss members of the
Board is conferred especially on her for the effective
pursuit of
government business, particularly the national and territorial
security of South Africa.
[25]
She submits that her decision to terminate General Motau and Ms
Mokoena’s services constituted executive action as
contemplated
in the Constitution
[26]
and is
excluded from administrative-law scrutiny under PAJA.
[27]
The respondents, on the other hand, argue that the Minister’s
section 8(c) power does not involve “policy considerations”

but the implementation of the Armscor Act.  They contend that
the decision was administrative action as it meets the definitional

requirements in PAJA.
[27]
Does
the Minister’s decision amount to administrative or executive
action?  Answering this question is important.
If it
amounts to administrative action, it is subject to a higher level of
scrutiny in terms of PAJA.  If it is executive
action, it is
subject to the less exacting constraints imposed by the principle of
legality.
[28]
I
undertake this enquiry in three stages.  First, I consider the
powers and functions provided for in section 85 of
the Constitution
and their relevance to PAJA.  Second, I set out the means by
which we should assess the nature of the power
in question.
Finally, I apply the principles that emerge from our jurisprudence to
the facts of this case.
Section
85(2) of the Constitution and PAJA
[28]
Section 85 of the Constitution, entitled
“Executive authority of the Republic”, reads:
“
(1)
The executive authority of the Republic is vested in the President.
(2)
The President exercises the executive authority, together with the
other members of the Cabinet, by―
(a)
implementing national legislation except where the Constitution or an
Act of Parliament provides otherwise;
(b)
developing and implementing national policy;
(c)
co-ordinating the functions of state departments and administrations;
(d)
preparing and initiating legislation; and
(e)
performing any other executive function provided for in the
Constitution or in national legislation.”
As
is apparent from the scheme of chapters 4 to 8 of the Constitution,
the purpose of section 85(2) is to allocate functions to
the
executive arm of government – the National Executive in
particular – just as the Constitution allocates functions
to
the Legislature and the Judiciary.  The adjective “executive”
thus indicates that the enumerated powers inhere
in the President and
the Cabinet rather than in Parliament or the Courts.  The
section selects the functionary to whom the
powers are allocated,
rather than determining the nature of the power.  Put
differently, the section should not be read as
categorising all
powers referred to in it as executive action, as opposed to
administrative action, for the purpose of determining
the appropriate
standard of judicial review.  That is not to say that section 85
of the Constitution is irrelevant in the
administrative action
enquiry, since it is referred to in PAJA.
[29]
[29]
PAJA
gives content to the right to just administrative action in section
33 of the Constitution.
[30]
The
Act categorises certain powers as administrative (through a rather
complex taxonomy) and thereby determines the appropriate
standard of
review.
[31]
Among
the powers excluded from this category and the Act’s remit are―
“
the
executive
powers or functions of the National Executive
,
including the powers or functions referred to in sections
79(1) and (4), 84(2)(a),
(b), (c), (d), (f), (g), (h), (i) and (k),
85
(2)(b),
(c), (d) and (e)
,
91(2),
(3), (4) and (5), 92(3),
93,
97,
98,
99
and 100
of the Constitution”.
[32]
(Emphasis added.)
[30]
PAJA thus expressly excludes the “executive
powers or functions of the National Executive” from
administrative-law review.
In addition to this general
exclusion, the section lists particular executive powers that are
excluded.  This list includes
those powers bestowed upon the
National Executive in terms of section 85(2)(e) of the
Constitution.
[31]
The
power to
implement
national legislation under section 85(2)(a) of the Constitution is,
however, conspicuously absent from PAJA’s list
of excluded
executive powers.  The failure expressly to exclude the
implementation of legislation by the National Executive
was
deliberate.
[33]
This
Court has held that the implementation of legislation by a senior
member of the Executive ordinarily constitutes administrative

action.
[34]
Had PAJA
excluded section 85(2)(a) from its reach, it would have excluded what
has been described as the “core of administrative
action”
and may well have rendered PAJA inconsistent with section 33 of the
Constitution.
[35]
[32]
Nevertheless,
the fact that a functionary performs a certain act in terms of an
empowering legislative provision does not, without
more, mean that
the functionary is implementing legislation.  This is evident
from the fact that section 85 contemplates a
distinction between
“implementing national legislation”, under section
85(2)(a), and “performing any other executive
function
provided
for
. . .
in
national legislation
”,
under section 85(2)(e).
[36]
As appears from a close reading of the provisions, the distinguishing
feature is the verb “implement” in section
85(2)(a), and
the content of this distinction is discussed below.
Assessing
the nature of a power
[33]
The
concept of “administrative action”, as defined in section
1(i) of PAJA, is the threshold for engaging in administrative-law

review.  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 has a direct, external
legal
effect; and (g) that does not fall under any of the listed
exclusions.
[37]
In
the present matter there are two elements in dispute: whether the
Minister’s decision under section 8(c) of the Armscor
Act is of
an administrative nature (element (a)) and whether it falls under any
of the listed exclusions (element (g)).
Both can be
answered by interrogating the nature of the power.
[34]
To
determine what constitutes administrative action by asking whether a
particular decision is of an administrative nature may,
at first
blush, appear to presuppose the outcome of that enquiry.  But
the requirement has two important functions.
First, it obliges
courts to make a “positive decision in each case whether a
particular exercise of public power . . . is
of an administrative
character”.
[38]
Second, it makes clear that a decision is not administrative action
merely because it does not fall within one of the listed
exclusions
in section 1(i) of PAJA.  In other words, the requirement
propels a reviewing court to undertake a close analysis
of the nature
of the power under consideration.
[39]
[35]
As
a starting point, in
New
Clicks
Chaskalson
CJ suggested that the definition of administrative action under PAJA
must be “construed consistently” with
the right to
administrative justice in section 33 of the Constitution.
[40]
As section 33 itself contains no express attempt to delimit the scope
of “administrative action”,
[41]
it is helpful to have reference to jurisprudence regarding the
interpretation of that section.
[36]
It
is the function rather than the functionary that is important in
assessing the nature of the action in question.
[42]
The mere fact that a power is exercised by a member of the Executive
is not in itself determinative.  It is also true
that the
distinction between executive and administrative action is often not
easily made.  The determination needs to be
made on a
case-by-case basis; there is no ready-made panacea or solve-all
formula.
[43]
[37]
Executive
powers are, in essence, high-policy or broad direction-giving
powers.  The formulation of policy is a paradigm case
of a
function that is executive in nature.  The initiation of
legislation is another.
[44]
By
contrast, “[a]dministrative action is . . . the conduct of the
bureaucracy (whoever the bureaucratic functionary might
be) in
carrying out the daily functions of the state, which necessarily
involves the application of policy, usually after its translation

into law, with direct and immediate consequences for individuals or
groups of individuals.”
[45]
Administrative powers are in this sense generally lower-level powers,
occurring after the formulation of policy.  The
implementation
of legislation is a central example.  The verb “implement”,
which also appears in section 85(2)(a)
of the Constitution and
distinguishes it from section 85(2)(e), may serve as a useful
guide: administrative powers usually
entail the application of
formulated policy to particular factual circumstances.  Put
differently, the exercise of administrative
powers is policy brought
into effect, rather than its creation.
[38]
In
determining the nature of a power, it is helpful to have regard to
how closely the decision is related to the formulation of
policy, on
the one hand, or its application, on the other.  A power that is
more closely related to the formulation of policy
is likely to be
executive in nature and, conversely, one closely related to its
application is likely to be administrative.
[46]
In
SARFU
,
the Court was ultimately swayed by the fact that the President’s
power to appoint a commission of inquiry was closely related
to his
broad, policy-formulating function in concluding that it was an
executive power.  In the words of the Court
―
“
[a]
commission of inquiry is an adjunct to the policy formation
responsibility of the President.  It is a mechanism whereby
he
or she can obtain information and advice.”
[47]
[39]
As
further assistance, a number of pointers can be extracted from
previous decisions which are helpful in assessing the nature of
a
particular power.  First, it may be useful to consider the
source of the power.
[48]
Where
a power flows directly from the Constitution, this could indicate
that it is executive rather than administrative in nature,
as
administrative powers are ordinarily sourced in legislation.
[49]
In
Masetlha
Moseneke DCJ held that the President’s power to dismiss the
Director-General of the National Intelligence Agency was sourced
in
and flowed from section 209(2) of the Constitution.
[50]
This
was partly the basis for the conclusion that the power under
consideration was an executive power as contemplated in section

85(2)(e) of the Constitution, despite the fact that section 209(2)
had an analogue in national legislation.
[51]
[40]
Special
care must, however, be exercised when reliance is placed on this
factor.  While administrative powers more commonly
flow from
legislation, PAJA’s definition of administrative action
expressly contemplates that the administrative power of
organs of
state may derive from a number of sources, including the
Constitution.
[52]
Conversely,
and as borne out by section 85(2)(e) of the Constitution read with
section 1(i)(aa) of PAJA, an executive power may
be sourced in
legislation.  This feature of a power is thus only useful in
this context, if at all, as a tentative signpost:
constitutional
powers are often wide-ranging and direction-giving, while statutory
powers are generally more narrow and the concretisation
of formulated
policy.
[41]
Second,
the constraints imposed on the power should be considered.  The
fact that the scope of a functionary’s power
is closely
circumscribed by legislation might be indicative of the fact that a
power is administrative in nature.  In
Ed-U-College
this Court considered the nature of a Member of the Executive
Council’s power to determine a formula for the payment of
subsidies to independent schools.  It was persuaded that the
power was administrative by, among other things, “the
constraints
upon [the] exercise [of the power]”, as well as its
relatively restricted scope.
[53]
[42]
Again,
caution is required when reliance is placed on the absence of
constraints or the level of discretion afforded to a functionary.

This factor’s utility is that, when a discretion is
particularly broad, it suggests that the exercise of the power is
akin
to the formulation of policy.  However, while the presence
of a wide-ranging discretion is often indicative of a broad
policy-making
power, it may equally be an incident of the subject
matter on which it is brought to bear.  A functionary may, for
example,
be afforded a considerable discretion in the exercise of a
certain power simply because its exercise is heavily dependent on the

factual circumstances that obtain in a particular case.
[54]
Context is thus crucial in assessing the relevance of this
factor.
[43]
Third,
it should be considered whether it is appropriate to subject the
exercise of the power to the higher level of scrutiny under

administrative-law review.  It may be that this level of
scrutiny is not appropriate given that the power bears on
particularly
sensitive subject matter or policy matters for which
courts should show the Executive a greater level of deference.
Thus,
this Court has found that administrative-law review is not
appropriate where the power under consideration: is legislative in
nature
and influenced by political considerations for which public
officials are accountable to the electorate;
[55]
is based on considerations of comity or reciprocity between South
Africa and foreign states, involving policy considerations regarding

foreign affairs;
[56]
is
closely related to the special relationship between the President and
the Director-General of a security agency;
[57]
or involves the balancing of complex factors and sensitive subject
matter relating to judicial independence.
[58]
[44]
In summary, the important question in this
context is whether the power is more closely related to the
formulation of policy, which
would render it executive in nature, or
the implementation of legislation, which would make it
administrative.  Underpinning
this enquiry is the question
whether it is appropriate to subject the power to the more rigorous,
administrative-law review standard.
The other pointers –
the source of the power and the extent of the discretion afforded to
the functionary – are ancillary
in that they are often symptoms
of these bigger questions.
Was
the Minister’s decision administrative or executive action?
[45]
In
order to determine the nature of the Minister’s section 8(c)
power, we must have regard to the legal framework imposed
by the
Armscor Act.  The Minister’s powers under the Act are
fairly broad.  For example, she “exercises ownership

control . . . on behalf of the State”;
[59]
imposes such conditions on Armscor’s interactions with foreign
states “as may be necessary in the national interest”;
[60]
appoints the non executive members of the Board and designates
the Chairperson and the Deputy Chairperson from their number;
[61]
is consulted by the Board in its selection of the CEO;
[62]
determines Armscor’s share capital;
[63]
and approves the formation and disposal of subsidiaries.
[64]
She is also empowered to make regulations stipulating “conditions
or restrictions subject to which the Board must manage
and control
the affairs of the Corporation”.
[65]
[46]
The
business of military procurement, on the other hand, is left to the
Board.  Thus, while it is Armscor’s responsibility
to see
to the practical aspects of procuring defence matériel in
order to meet the needs of the SANDF, the Minister is charged
with
the high-level supervision of the Corporation to ensure that it
discharges its statutory mandate and operates in the national

interest.  This, in turn, must be understood in the context of
the Minister’s political responsibility and constitutional
duty
to see to the defence of the Republic, its territorial integrity and
its people.
[66]
[47]
In
the light of the aforegoing and for the reasons that follow, I am of
the view that the Minister’s decision is executive
rather than
administrative in nature.  First, the Minister’s section
8(c) power is an adjunct of her power to formulate
defence
policy.
[67]
In terms of
this power, the Minister formulates policy on, among other things,
the acquisition and maintenance of “air
navigation systems”
[68]
and “arms, ammunition, vehicles, aircraft, vessels, uniforms,
stores and other equipment”.
[69]
Of course, this is policy in the broad sense: overarching and
direction-giving, with the minutiae of individual procurement

decisions left to Armscor.
[48]
As
is apparent from the scheme of the Armscor Act, the Minister does not
provide direction through interventions in individual projects
or by
prescribing particular procurement policies.  Rather, she
discharges her political responsibility to ensure that the

Department’s procurement agency meets its statutory obligations
by appointing and dismissing leaders who have the “knowledge

and experience which . . . should enable them to attain the
objectives of the Corporation”.
[70]
The Minister must have in mind the Department’s policy aims
when selecting Board members, including the Chairperson
and Deputy
Chairperson.  She must select people who are capable of carrying
out those aims and who share the Department’s
policy vision.
Similarly, the Minister arrests the failure to follow proper policy
by terminating the directorships of people
who have not assisted
Armscor to discharge its statutory functions.
[71]
The formulation of defence procurement policy and the appointment and
dismissal of people who will supervise the implementation
of that
policy are thus closely linked.
[72]
While the appointment and dismissal of Board members is not the
formulation of policy as such, it is the means by which the
Minister
gives direction in the vital area of military procurement, and is
therefore an adjunct to her executive policy formulation
function.
[49]
Second,
and relatedly, the exercise by the Minister of her section 8(c) power
is not a low-level
bureaucratic
power which merely involves
the
application of policy in
the
discharge of the daily functions of the state
,
which is the ordinary remit of administrative law.
[73]
Rather, it operates at a different level, for the section is a
constitutive part of the Minister’s power to supervise

high-level public office-bearers in the performance of their official
duties.  She does so by means of the corporate relationship
that
she has with the Board members.  They are the directors she has
selected, in accordance with her policy dictates, to
manage the
Corporation – and thereby determine defence procurement policy.
[50]
Third,
under the Armscor Act the Minister need only demonstrate good cause
in order to justify the termination of the services of
a Board
member.  She does not have to satisfy a list of jurisdictional
requirements before she can take the decision, or need
to demonstrate
that a particular ground such as incapacity or misconduct exists.
The Minister thus has a level of discretion
in determining when
directors should be removed, which points to the fact that her power
under section 8(c) is executive in nature.
[74]
The fact that the power is sourced in legislation is, as noted above,
not in itself determinative, and thus does not dilute
the force of
the other considerations canvassed.
[51]
For these reasons, I am persuaded that the
impugned decisions are not subject to review under PAJA.
Because section 8(c) of
the Armscor Act is an adjunct of the
Minister’s power to make defence policy, and thus more closely
related to the formulation
of policy than its application, the
decision to terminate the services of Board members amounts to the
performance of an executive
function in terms of section 85(2)(e)
of the Constitution, rather than the implementation of national
legislation in terms
of section 85(2)(a).
Compliance with
the requirement of good cause
[52]
The Minister submits that Armscor’s
failure to ensure that the SANDF was adequately equipped was a
dereliction of its cardinal
duty and was sufficient reason for her to
have lost all trust in the Corporation’s leadership.
Armscor’s failures
under the leadership of General Motau and Ms
Mokoena precipitated the breakdown in their relationship with the
Minister and constituted
the necessary good cause for the termination
of their services in terms of section 8(c) of the Armscor Act.
Accordingly,
so the Minister argues, she acted lawfully.
[53]
General Motau and Ms Mokoena contend that
“
the Minister’s decision to
dismiss them on all grounds stipulated in her letters of 8 August
2013 was arbitrary”.
Armscor
agrees with this submission.  The respondents assert that the
Minister’s decision does not withstand scrutiny
because she
cannot show that any of the Corporation’s failures are solely
or directly attributable to their leadership.
[54]
Good
cause may be defined as a substantial or “legally sufficient
reason” for a choice made or action taken.
[75]
Assessing whether there is good cause for a decision is a factual
determination dependent upon the particular circumstances
of the case
at hand.
[76]
It goes
without saying that what constitutes good cause must be understood in
the context of the Armscor Act as a whole,
with a particular focus on
the objectives and functions of Armscor and the important role played
by the members of the Board.
[55]
As
set out above, Armscor is the SANDF’s armament and technology
procurement agency.
[77]
Its objectives, as prescribed by the Armscor Act, are to meet the
defence matériel, technology and research requirements
of the
Department effectively, efficiently and economically.
[78]
In order to meet these objectives the Corporation must, inter alia,
acquire and dispose of defence matériel as required
by the
Department;
[79]
manage the
technology projects required by the Department;
[80]
establish tender, contract-management and programme-management
systems in relation to the acquisition of defence matériel
and
defence technology;
[81]
“support and maintain such strategic and essential defence
industrial capabilities, resources and technologies as may be

identified by the Department”;
[82]
“manage facilities identified as strategic by the Department in
a service level agreement”;
[83]
and “maintain such special capabilities and facilities as are
regarded by the Corporation not to be commercially viable,
but which
may be required by the Department for security or strategic
reasons.”
[84]
What
is immediately apparent from this excursus is that Armscor does not
interact with the Department as it might with any
other player in the
defence industry or a commercial third party.  Rather, it
procures at the instance of the Department and
exists primarily to
serve the military’s defence matériel needs.  The
Department is in the driving seat.
With this in mind, I am
satisfied that the Minister advanced ample and cogent reasons to
disclose good cause as required by section
8(c) of the
Armscor Act.
[85]
[56]
First,
in terms of section 5(1)(a) of the Armscor Act, the Corporation is
obliged to enter into a service level agreement with the
Department.
The purpose of this service level agreement is to ensure that Armscor
fulfils its core functions in an efficient
and effective manner.
[86]
The service level agreement must “specify measurable objectives
and milestones”;
[87]
“specify a system to monitor the delivery of service”;
[88]
“provide for the maintenance of [Armscor’s] capabilities
over the long term”;
[89]
and “provide for the terms and conditions applicable to the
service to be rendered by [Armscor]”.
[90]
Section 5(2) expressly imposes the obligation to conclude a service
level agreement on the Board and the Department’s
accounting
officer.
[57]
A
service level agreement was only concluded in the closing months of
the 2012/13 financial year.  At the time General Motau
and Ms
Mokoena approached the High Court, a service level agreement had
still not been concluded for the 2013/14 financial year.
As the
service level agreement is the means by which Armscor is able to
supply the Department with defence matériel, the
Corporation
was unable for large parts of a two-year period to discharge its
statutory mandate.  And it would seem that the
only reason for
the ongoing delays was the Board’s insistence that it be paid a
ten per cent service commission, notwithstanding
the fact that this
was unaffordable for the Department and that the Corporation was
funded by the National Treasury through budgetary
transfers from the
Department.
[91]
Such
intransigence in the face of the SANDF’s ongoing procurement
needs justifiably concerned the Minister
[58]
Second, the Board failed to complete a
number of procurement projects efficiently and timeously.  The
Department prioritised
the replacement of its parachute system and
sought Armscor’s assistance in this regard in 2010.  Yet
when General Motau
and Ms Mokoena approached the High Court, a
supplier had still not been engaged.  The SANDF needed to
replace its “absolute
camping capability”, and the
necessary documentation was placed before the Board.  However,
at three separate meetings
during 2011 and 2012 the Board failed,
without reason, to consider the procurement proposal.  Further
delays were incurred
when the Corporation decided on a “new
approach” to the procurement of the camping equipment.
Ultimately, the
SANDF’s operational requirements could not be
met as a result of the 36-month delay occasioned by the Board’s
conduct.
[59]
When the Department decided to acquire
protection technology for the South African Air Force, the approval
of the Board was required
to undertake the contracting process with
the preferred bidder.  This approval was sought in November
2011, yet at the time
of the hearing in the High Court it had neither
been granted nor refused.  From the record before us, it seems
that to date,
no decision has been made by the Board.  These
examples indicate Armscor’s material and continuing failure to
discharge
its statutory mandate: the acquisition of defence matériel
at the instance of the Department.  Millions of Rand allocated

to the Department were left wastefully unspent.  Evidently
Armscor was not operating in an effective, efficient or economic

manner.
[60]
From the above, it is perspicuous that
Armscor was not discharging its statutorily prescribed mandate.
The delays in question
amounted to a failure to procure much-needed
equipment in accordance with the Department’s needs.
[61]
The
Board is empowered to manage the affairs of Armscor.
[92]
It controls the decisions made and the actions taken by the
Corporation.  It follows that Armscor’s widespread
and
systemic failures outlined above are attributable to the Board, which
must account and ultimately take responsibility for its
conduct.
I am also compelled to point out that the non-executive members of
the Board (General Motau and Ms Mokoena
included) are highly
skilled specialists who were appointed on account of their knowledge
and experience, with a view to ensure
that Armscor’s affairs
are properly and effectively managed.
[93]
As seasoned professionals in their field, they had to show diligence
and professionalism.  They are remunerated from
the funds of
Armscor
[94]
and are expected
not only to act in the interests of the Corporation but also to
ensure that the affairs of the Board are in order.
There is no
adequate explanation for the unsatisfactory state of affairs at
Armscor.  The Minister therefore had good cause
to take action.
[62]
But did she have good cause to single out
General Motau and Ms Mokoena for removal?  The respondents say
no.  Relying
on the collective responsibility of the Board for
the management of Armscor’s affairs, they contend that the
Minister acted
unfairly in differentiating between the leadership of
the Board, on the one hand, and the remaining members of the Board,
on the
other.
[63]
I am constrained to disagree.  First,
as the directors appointed to lead the Board in the discharge of its
duties, General
Motau and Ms Mokoena must bear a special
responsibility for its failures.  They voluntarily acceded to
the Minister’s
decision to appoint them as the leadership of
the Board and must therefore take responsibility for its successes
and failures.
This conclusion seems inherent in the notion of
leadership, and therefore axiomatic.
[64]
During the High Court proceedings, the
Minister sought to justify her conduct in part by reference to
Armscor’s failure to
conclude a service level agreement with
the Department.  Despite admitting the crucial importance of
this agreement, General Motau
and Ms Mokoena’s only
response was that they had no knowledge of the ten per cent service
charge.  The Minister also
drew attention to the delays and
failures regarding the various procurement projects, and the
consequent under spending of
millions of Rand by the
Department.  In response, General Motau and Ms Mokoena denied
any knowledge of the details regarding
these projects and refused to
respond to the information contained in Mr Visser’s affidavit
on the basis that his report
was “not disclosed in its
entirety.”  There was – and remains – no
denial of the delays, no explanation
for the procurement failures, no
justification for their ignorance of critical procurement projects
and no attempt to show why
they were not culpable for Armscor’s
dereliction of its statutory duty.
[65]
This
is not in any way undone by whatever statements the Minister made to
the Board at a meeting following the dismissal of General
Motau and
Ms Mokoena, some of which may have been unclear and confusing.
[95]
Although her comment concerning Ms Mokoena
[96]
was ill-advised, it does not, without more, demonstrate that she
acted with an ulterior motive.  It must be recalled that
at the
same meeting the Minister reiterated the serious and sufficient
reasons given in her letters to General Motau and Ms Mokoena
for
their dismissal.  The statements, though unfortunate, do not
disturb the conclusion that the Minister demonstrated good
cause in
exercising her section 8(c) power.
[66]
Second, the Minister’s response as to
why she dismissed only General Motau and Ms Mokoena was resoundingly
sound and logical.
Had she dismissed the entire Board, she
would have left Armscor, which has crucial obligations to fulfil,
disabled and completely
rudderless.  The less invasive approach
was to dismiss only the leadership of the Board, and to leave the
Corporation with
the necessary institutional knowledge to continue
functioning.  As the Minister explained to the Board on
14 August 2013,
by allowing the directors other than General
Motau and Ms Mokoena to retain their positions, she was attempting to
ensure that
Armscor had “the capacity, the know-how and the
willingness . . . [to] bring solutions to urgent matters affecting
[the SANDF]
and the [defence] industry.”
[67]
The
Minister’s choice not to dismiss the day-to-day management
structure of Armscor (particularly the CEO and the CFO) can
also not
be impugned.  It is the Board, headed by the Chairperson and the
Deputy Chairperson, which has the principal obligation
to manage and
control Armscor.
[97]
Board
approval was also required before key decisions could be made around
the conclusion of the service level agreement and critical

procurement projects.
[68]
In conclusion, the Minister was not
prompted to act by one or two poor managerial decisions, but by the
continued failings of the
Armscor Board under the leadership of
General Motau and Ms Mokoena.  Given this, the facts do not
admit of any other conclusion
but that the Minister had good cause to
terminate their services.
Rationality
[69]
General
Motau and Ms Mokoena also contend that the Minister’s decision
falls to be set aside on the basis that it was “not
rationally
connected to the purpose she sought to achieve.”  I take
the view that the Minister not only showed the necessary
good cause
required to dismiss General Motau and Ms Mokoena, but that her
decision was also rational.  The principle of legality
requires
that every exercise of public power, including every executive act,
be rational.
[98]
For an
exercise of public power to meet this standard, it must be rationally
related to the purpose for which the power was
given.
[99]
It is also well-established that the test for
rationality
is objective
[100]
and
is distinct from that of reasonableness.
[101]
[70]
In the circumstances of this case, we are
not required to determine whether the Minister’s decision was
the best decision
she could have made, or whether she could have made
a different decision.  Rather, we are concerned with whether the
Minister
responded rationally to the indications of widespread
dysfunction in Armscor, and whether her response was rationally
connected
to her executive oversight function.
[71]
A rational link therefore exists between
the need to address the failures of Armscor and the termination of
the services of General
Motau and Ms Mokoena: with them at the helm,
the Corporation was not operating in an efficient or effective manner
and was not
properly fulfilling its statutorily prescribed mandate.
Section 8(c) was properly used by the Minister, in the exercise of

her executive oversight, to abate the problems that had set in at
Armscor.  Given this, I believe that the Minister’s

decision was rational.
Procedural
constraints on the exercise of the Minister’s section 8(c)
power
[72]
General
Motau and Ms Mokoena contend that, should this Court find against
them on the question whether the Minister’s decision

constituted administrative action, we should nevertheless conclude
that the Minister had to comply with
section 71(1)
and (2) of
the
Companies Act
[102
]
when
she exercised her power in terms of section 8(c) of the Armscor Act.
It is not disputed by any of the parties that the
Minister did not
comply with those provisions.  The Minister’s answer is
that she was not required to comply with them.
[73]
Section 71 reads, in relevant part:
“
(1)
Despite anything to the contrary in a company’s Memorandum of
Incorporation or rules, or any agreement between a company
and a
director, or between any shareholders and a director, a director may
be removed by an ordinary resolution adopted at a shareholders

meeting by the persons entitled to exercise voting rights in an
election of that director, subject to subsection (2).
(2)
Before the shareholders of a company may consider a resolution
contemplated in subsection (1)—
(a)
the director concerned must be given notice of the meeting and the
resolution, at least equivalent to that which a shareholder
is
entitled to receive, irrespective of whether or not the director is a
shareholder of the company; and
(b)
the director must be afforded a reasonable opportunity to make a
presentation, in person or through a representative, to the
meeting,
before the resolution is put to a vote.”
Section
71(1) and (2) is the mechanism under the
Companies Act through
which
shareholders may dismiss a director whom they have elected.
Importantly,
section 71(2)
requires that a shareholder must give
a director notice and a chance to make representations before a
resolution is adopted to
dismiss him or her.
[74]
In
my view section 8(c) of the Armscor Act must be read together with
section 71(1)
and (2) of the
Companies Act.
[103
]
First, it is not disputed that Armscor falls within the definition of
a “state owned company” in terms of
the
Companies Act:
[104
]
as
required, it is listed in Schedule 2 of the Public Finance Management
Act
[105]
as a “Major
Public Entity” and it is registered under the
Companies Act.
Furthermore
,
section 9
of the
Companies Act
deals
specifically with the statute’s application to the affairs of
state owned companies.
[106]
The effect of that provision is that state-owned companies are, for
all intents and purposes, to be treated as public companies,
unless a
Cabinet member has procured an exemption (in whole or in part) from
the obligation to comply with the
Companies Act.  It
was
conceded by counsel for the Minister during the hearing that there is
nothing before us to indicate that she has applied for
an exemption.
All indications point to Armscor’s affairs being subject to
that statute.
[75]
Second,
the Minister is, for the purpose of
section 71(1)
and (2), the
shareholder of Armscor.
[107]
The Minister appoints the Chairperson and the Deputy Chairperson of
the Board and is thus empowered through those provisions
to terminate
their services.  She is thus required to comply with the
prescripts of the section in dismissing them.
[76]
Third,
on my reading, section 8(c) of the Armscor Act and
section 71(1)
and
(2) of the
Companies Act are
perfectly compatible: the former
provides the substantive criterion, and the latter the process, by
which Board members may be
dismissed.
Section 71(1)
and (2)
does not put any substantive constraint on the exercise of the
Minister’s dismissal power.  Of course, it would
be a
different matter if the section obliged the Minister to dismiss a
director for some other substantive reason (for example,

ineligibility, incapacitation or negligence), notwithstanding the
fact that she had good cause under the Armscor Act.
[108]
But it makes no such provision.  Put simply, section 71 is the
procedure by which the Minister exercises her section
8(c) power.
I see nothing undesirable or unduly constraining in that.
[77]
The Armscor Act is not designed, and does
not purport, to regulate each aspect of Armscor’s governance
and corporate affairs.
It seems clear, at least generally, that
both the Armscor Act and the
Companies Act apply
– and must
have been intended to apply – concurrently.  Were that not
the case, the Corporation would be operating
without any statutory
guidance over a wide range of areas.
[78]
Fourth,
the Minister’s reliance on
Sasol
v Lambert
[109]
at the hearing as authority for the proposition that
section 8(c)
operates to the exclusion of
section 71(1)
and (2) is misplaced.
In that case the Supreme Court of Appeal restated the
generalia
specialibus non derogant
maxim: general words and rules do not derogate from special
ones.
[110]
However,
this maxim is only of application where a reading of the general
statute could alter the meaning of the specific
statute.
[111]
As explained above, that possibility does not arise here, for section
8(c) of the Armscor Act regulates the substantive
basis upon
which the Minister may terminate the services of a director and
section 71(1) and (2) regulates the process the Minister
must
follow.  And it must be noted that
Sasol
v Lambert
emphasised that statutes, where possible, “must be read
together”.
[112]
[79]
It would not lead to an absurdity to hold
that the Minister, as sole shareholder for these purposes, was
obliged to comply with
section 71(1) and (2) in the circumstances of
this case.  For the purpose of those provisions is not only to
ensure that a
majority of shareholders assent to a decision to
dismiss a director, but also to ensure that those whose interests may
materially
be affected by the decisions taken are given an
opportunity to put forward relevant information, and to ensure that
the decision makers
are appropriately informed before taking a
serious decision.
[80]
The Minister took no steps required by the
Companies Act when
she exercised her
section 8(c)
power.  She
therefore failed to observe the prescribed procedure, and acted
unlawfully, when she sought to terminate General
Motau and Ms
Mokoena’s membership of the Board without first affording them
a reasonable opportunity to make representations.
[81]
Were
it not for the operation of the
Companies Act, would
there be an
obligation on the Minister to dismiss directors in a procedurally
fair manner?  This Court’s decision in
Masetlha
,
which was extensively relied on by the Minister in her submissions,
has been interpreted to exclude the requirement of procedural

fairness in the review of executive action as a stand-alone
requirement under the principle of legality.
[113]
Masetlha
does not stand for this unequivocal proposition, however.  The
decision was limited to the specific context of that case and
the
power under consideration:  the distinguishing feature which
rendered the observance of procedural fairness inapposite
in that
case was “the special legal relationship that obtains between
the President as head of the National Executive, on
the one hand, and
the Director General of an intelligence agency, on the
other”.
[114]
The
sensitive nature of this special relationship, lying as it did in the
heartland of “the effective pursuit of national
security”,
[115]
meant that Mr Masetlha, the spymaster-in-chief, could continue to
occupy his position only as long as he enjoyed the trust of the

President, his principal.
[116]
Moreover, the power to appoint and dismiss in
Masetlha
was “conferred specially upon the President for the effective
business of government and . . . for the effective
pursuit
of national security.”
[117]
[82]
This
Court has also subsequently acknowledged in
Albutt
[118]
that procedural fairness obligations may attach independently of a
statutory obligation in virtue of the principle of legality.
In
that case, the President was required, as a matter of rationality, to
allow some form of participation by interested persons
when issuing
pardons to prisoners under a special dispensation.
[119]
[83]
However,
whether the principle of legality or some other principle in this
case required the Minister to act in a procedurally fair
manner, does
not, in the light of the applicability of the
Companies Act, need
to
be decided here.  It suffices to note that our law has a long
tradition – which was endorsed by this Court in
Mohamed
–
of
strongly entrenching
audi
alteram partem
(“hear the other side”),
[120]
which
attains particular force when prejudicial allegations are levelled
against an individual.  And it is for this reason
that dismissal
from service has been recognised as a decision that attracts the
requirements of procedural fairness.
[121]
Relief
[84]
The Minister acted rationally and for good
cause in terminating the services of General Motau and Ms Mokoena.
However, she
failed to follow proper procedure in terms of
section
71(1)
and (2) of the
Companies Act.  It
follows that the
Minister acted unlawfully in that regard.  Does that mean that
the High Court’s order – setting
aside the Minister’s
decision and confirming General Motau and Ms Mokoena as Board members
– should be upheld?
[85]
To
grant appropriate relief, we must determine what is fair and just in
the circumstances of a particular case.
[122]
The various interests that might be affected by the remedy should be
weighed up.  This should at least be guided by
the objective to
address the wrong occasioned by the infringement; deter future
violations; make an order which can be complied
with; and which is
fair to all those who might be affected by the relief.
[123]
It also goes without saying that the nature of the infringement will
provide guidance as to the appropriate relief.
[124]
And
the right to be heard has value both instrumental and
intrinsic.
[125]
One
cannot excuse an unfair process because it led to the right
result.
[126]
[86]
So the setting aside of the Minister’s
decision and the reinstatement of the aggrieved parties or an award
of compensation
would usually follow from a finding that a dismissal
was procedurally defective and did not comply with the relevant
legislative
prescripts.  But the very exceptional circumstances
of this case mean that it would not be just and equitable for this
Court
to award such remedies here.  A declaration is sufficient
to address the flaws in the Minister’s conduct, and to draw
her
attention to the importance of complying with the
Companies Act and
adopting a fair process in making such decisions.  Limiting the
relief to a declaration would, at the same time, vindicate
the
Minister’s efforts to address the dereliction of duty by
General Motau and Ms Mokoena.
[87]
First,
the Minister, on a number of occasions, had expressed her
dissatisfaction with their conduct.
[127]
The Minister convened three meetings with the Board to address
various governance issues.  None of these was attended
by
General Motau
whilst Ms Mokoena failed to attend the last of the meetings
.
[128]
And General Motau’s response to the Minister’s letter in
which she registered her disapproval of his non attendance
was
insouciant, reminding her that Board members had other jobs and
obligations.  So General Motau and Ms Mokoena were certainly
on
notice of the Minister’s dissatisfaction and her wish to
reconstitute the Board.
[88]
Second, General Motau and Ms Mokoena’s terms of office came to
an end in April 2014.  The Court cannot reinstate
them.
[89]
Finally,
despite
the
procedural defects of her decision, the Minister had substantively
good, and indeed compelling, reasons for terminating the
membership
of
General
Motau and Ms Mokoena
.
As set out above, she had demonstrable good cause within the meaning
of that term in the Armscor Act: the Corporation had,
with General
Motau and Ms Mokoena as its leadership, failed to discharge its
mandate.
[129]
In
the proceedings before this Court the high-water mark of General
Motau and Ms Mokoena’s defence seems to be their
ignorance
of Armscor’s parlous affairs, which is no defence at all.
[90]
It is evident that the relationship between
the Minister, on the one hand, and General Motau and Ms Mokoena, on
the other, has disintegrated
irreparably.  The order of the High
Court reinstating General Motau and Ms Mokoena must therefore be set
aside.
Costs
[91]
General Motau and Ms Mokoena were
represented by counsel appointed by this Court, who acted on their
behalf pro bono.  Their
attorneys acted on the same basis.
Although they were partly successful, this makes it unnecessary to
grant a costs order
in their favour.  I therefore make no order
as to costs in this Court.
[92]
Armscor
approached the Court out of concern for the rights of Board members.
This Court’s finding that the Minister
was required to comply
with the procedure for the dismissal of directors in the
Companies
Act in
dismissing General Motau and Ms Mokoena is some
vindication of Armscor’s position.  However, given that
the Corporation
is itself an organ of state, no order as to costs is
justified.
[130]
[93]
The
order of the High Court with regard to costs cannot stand, however.
There was no justification for the costs order on
an attorney-and-own
client scale made against the Minister.
[131]
The reasons relied on by the High Court disclose no basis for a
punitive and exceptional costs order.
[132]
I therefore replace this order with an order for costs in favour of
General Motau and Ms Mokoena on a party-party scale.
Armscor
was not involved in the High Court proceedings, and thus no costs
order need be made in its favour insofar as those proceedings
are
concerned.
Order
[94]
In the result the following order is made:
1.
Condonation for the late filing of the
written submissions of both General Motau and Ms Mokoena, and of
the Armaments Corporation
of South Africa (SOC) Limited (Armscor), is
granted.
2.
The appeal is upheld to the extent set out
below.
3.
The order of the High Court is set aside
and replaced with the following:
“
(a)
It is declared that the Minister acted unlawfully insofar as she
terminated the services of General Motau and Ms Mokoena on
the
Armscor Board without following the procedure set out in
section 71(1)
and (2) of the
Companies Act.
(b
)
The Minister’s decision to terminate the services of
General Motau and Ms Mokoena on the Armscor Board is not set
aside.
(c) The Minister is
ordered to pay the costs incurred by General Motau and Ms
Mokoena in the High Court.”
4.
There is no order as to costs in this
Court.
JAFTA
J (Madlanga J and Zondo J concurring):
[95]
I have read the judgment prepared by my
Colleague Khampepe J (main judgment).  But I do not agree with
the outcome proposed
and the reasons supporting it.  In my view,
the narrow question raised in this matter is whether the Minister’s
termination
of the first and second respondents’ membership of
the Armscor Board violated their procedural fairness rights.  If
it did, then the High Court was right to set the termination aside.
[96]
The
factual background is set out in detail in the main judgment and it
is not necessary to repeat it here, save to mention the
facts
essential to a proper understanding of this judgment.  The first
and second respondents were Chairperson and Deputy
Chairperson of the
Armscor Board.  Their membership was terminated
[133]
without any pre-decision hearing by the Minister on 8 August 2013.
The respondents were notified of the Minister’s
decision in
letters of the same date.
[97]
The main reason for the termination was
that the Minister was unhappy with the Board’s performances of
its functions.
In the letter, the Minister listed a number of
instances in respect of which the Board had failed to perform to her
expectations.
The Board’s primary function is to procure
equipment and other matériel for the South African National
Defence Force.
The Minister was concerned that the Board’s
inaction, under the leadership of the respondents, was prejudicial to
the Defence
Force and had put its members at risk.  Their
non-performance was, in the opinion of the Minister, sufficient cause
to terminate
the respondents’ membership.
[98]
Discontent with the Minister’s
decision, the respondents took it on review to the High Court.
Apart from disputing the
non-performance relied on by the Minister,
the respondents contended that the decision was procedurally unfair.
In opposing
the review, the Minister argued that her decision did not
constitute administrative action and therefore was not subject to the

procedural fairness requirements in PAJA.  This is how the need
to classify the decision arose.
[99]
It
is common cause that the respondents were not afforded a hearing
before the Minister terminated their membership.  What
is in
dispute instead is whether the respondents were entitled to a hearing
before the decision was taken.  If so, whether
the right to be
heard was located in section 33 of the Constitution,
[134]
as given effect to by PAJA.
[135]
[100]
The High Court was persuaded that the
impugned decision amounted to administrative action and set it aside
because of, among other
grounds, the fact that it was procedurally
unfair.  The unfairness arose from the fact that the respondents
were denied a
pre-decision hearing.
[101]
Although the main judgment agrees that the
respondents were entitled to a pre decision hearing, it,
however, locates their
right in
section 71
of the
Companies Act.
This
finding is prompted by the conclusion that the Minister’s
decision constitutes executive action.  I disagree.
[102]
The
main judgment relies on three considerations for the conclusion that
the Minister’s decision was executive action.
The first
is that the power exercised by the Minister “is an adjunct of
her power to formulate defence policy”.
[136]
The second is that the Minister did not exercise “a low-level
bureaucratic power which merely involves the application
of policy in
the discharge of the daily functions of the state”.
[137]
The third is that, in order to terminate membership of the Board,
“the Minister need only demonstrate good cause”.
[138]
[103]
Before
examining each of these considerations, it is necessary to outline
the process followed in determining whether a particular
decision
constitutes administrative or executive action.  First, there is
no standard established or test laid down for this
enquiry.  The
determination is made on a case-by-case basis.
[139]
It is a difficult enquiry and, as the main judgment observes, caution
must be exercised when determining whether an act is
executive and
not administrative.  This is so because, if it is executive, it
cannot be subjected to the review scrutiny in
section 33 of the
Constitution and PAJA.  This means that those who are adversely
affected by an executive act cannot invoke
any of the administrative
justice rights conferred by section 33 to challenge the validity of
the executive act.
[104]
This
is because section 33 and PAJA do not apply to executive acts.
PAJA defines an administrative act as a decision taken
by an organ of
state, when exercising a public power in terms of the Constitution or
performing a public function in terms of legislation.
The
decision must also have direct external effect.  More
importantly, for present purposes, the decision must not arise from

the exercise of the executive powers contained in certain sections of
the Constitution, as listed in PAJA.  Notably, in those

exclusions, the power in section 85(2)(a) is left out.
[140]
[105]
Therefore,
as I see it, for any decision to be reviewed as an administrative
act, it must constitute an administrative act as defined
in PAJA.
That act does not include executive acts expressly excluded by the
definition section in PAJA.  In respect
of the National
Executive, to which the Minister belongs, the executive powers and
functions excluded from the scope of administrative
action are those
in sections 79(1) and (4); 84(2), leaving out (e) and (j); 85(2),
excluding (a); 91; 92(3); 93; 97; 98; 99; and
100 of the
Constitution.
[141]
[106]
By
leaving out the powers in section 84(2)(e) and (j) from the list of
exclusions, PAJA suggests that appointments made by the President
in
terms of the Constitution, when not acting in his capacity as head of
the National Executive, constitute administrative decisions
and so is
his or her decision to pardon offenders and remit penalties.
The same applies to decisions taken in terms of section

85(2)(a).
[142]
In
terms of PAJA, read with section 85(2)(a) of the Constitution,
implementation of national legislation, like the Armscor
Act, amounts
to administrative action unless the Constitution or an Act of
Parliament provides otherwise.  Therefore, ordinarily,
the
implementation of legislation constitutes administrative action,
except where there is a clear indication that it does not.
[107]
It cannot be gainsaid that what we are
concerned with here is the implementation of the Armscor Act.
To be precise, we are
dealing with the exercise of power by the
Minister in terms of which the respondents’ membership of the
Board was terminated.
The Minister does not derive this power
from the Constitution.  Instead, it is a power conferred on her
by section 8(c) of
the Armscor Act.  The section provides:
“
A
member of the Board must vacate office if—
.
. .
(c)
his or her services are terminated by the Minister on good cause
shown.”
[108]
The exercise of the power to terminate
membership of the Board is subject to one condition.  The
Minister may terminate the
membership of any Board member if the
Minister has a good cause to do so.  Put differently, good cause
triggers and justifies
the exercise of that power by the Minister.
In exercising the power, the Minister implements the Armscor Act and
her decision
would, ordinarily, amount to administrative action
unless the Armscor Act indicates otherwise.
[109]
In
Metcash
Trading
,
[143]
this Court confirmed that the exercise of a statutory power
constitutes implementation of legislation and that such action is
administrative action, contemplated in section 33 of the
Constitution.  There it was stated:
“
The
Commissioner, in exercising the power under section 36, is clearly
implementing legislation and as such the exercise of the
section 36
power constitutes administrative action and falls within the
administrative justice clause of the Constitution.
I cannot
agree with Snyders J to the extent that she considered the exercise
of the discretion conferred upon the Commissioner
in section 36 of
the Act not to be reviewable.  The Act gives the Commissioner
the discretion to suspend an obligation to
pay.  It
contemplates, therefore that notwithstanding the ‘pay now,
argue later’ rule, there will be circumstances
in which it
would be just for the Commissioner to suspend the obligation to make
payment of the tax pending the determination of
the appeal.
What those circumstances are will depend on the facts of each
particular case.  The Commissioner must, however,
be able to
justify his decision as being rational.  The action must also
constitute ‘just administrative action’
as required by
section 33 of the Constitution and be in compliance with any
legislation governing the review of administrative
action.”
[144]
[110]
The question that arises is whether the
Armscor Act provides clearly that the implementation of legislation
here does not amount
to administrative action.  The Armscor Act
is a short statute, comprising five chapters and 24 sections.
Chapter one
is devoted to the establishment of the Armaments
Corporation of South Africa (SOC) Limited (Corporation) and also sets
out its
objectives, powers and functions.  Chapter two
deals with the Board of Directors, including the appointment of
directors
by the Minister, powers and functions of the Board, as well
as their removal from office.  Section 8, in terms of which the

Minister terminated the respondents’ membership, is located in
this chapter.
[111]
Chapter three, which is one of the shorter
chapters, deals with the financial and audit affairs of the
Corporation.  The shortest
chapter is chapter four.  It
consists of two sections only, one of which empowers the Minister to
make regulations.
This chapter also empowers the Board to
delegate any of its powers to its officials.  Chapter five
contains miscellaneous
provisions on safeguarding records and the
property of the Corporation, including intellectual property,
formation of subsidiaries
to the Corporation and the repeal of laws.
[112]
A reading of the entire Armscor Act shows
that none of its provisions explicitly provides that its
implementation does not constitute
administrative action.  What
needs to be determined is whether, by implication, the Act provides
that its implementation amounts
to executive action.  This
enquiry requires us to examine the entire Act for factors indicating
that the exercise of the power
in section 8(c) constitutes an
executive act.
[113]
The difficulty in making a determination
here normally arises if there is some overlap in executive powers
giving rise to administrative
action and those which do not, for
example, the power in terms of which legislation is implemented and
the power in terms of which
policy is formulated.  Thus, in
SARFU
,
this Court remarked:
“
Determining
whether an action should be characterised as the implementation of
legislation or the formulation of policy may be difficult.
It
will, as we have said above, depend primarily upon the nature of the
power.  A series of considerations may be relevant
to deciding
on which side of the line a particular action falls.  The source
of the power, though not necessarily decisive,
is a relevant factor.
So, too, is the nature of the power, its subject matter, whether it
involves the exercise of a public
duty and how closely it is related
on the one hand to policy matters, which are not administrative, and
on the other to the implementation
of legislation, which is.
While the subject matter of a power is not relevant to determine
whether constitutional review
is appropriate, it is relevant to
determine whether the exercise of the power constitutes
administrative action for the purposes
of section 33.  Difficult
boundaries may have to be drawn in deciding what should and what
should not be characterised as
administrative action for the purposes
of section 33.  These will need to be drawn carefully in the
light of the provisions
of the Constitution and the overall
constitutional purpose of an efficient, equitable and ethical public
administration.
This can best be done on a case by case
basis.”
[145]
(Footnotes omitted.)
[114]
Ordinarily the formulation of policy in
broad terms does not amount to administrative action.  This is
because the power to
develop and implement national policy in section
85(2)(b) of the Constitution is one of the exclusions in the
definition section
of PAJA.  The exercise of that executive
power is not an administrative act.  However, the emphasis is
usually placed
on the formulation part of the power and not on
implementation.  Once a policy has been formulated and
translated into legislation,
its implementation would ordinarily
constitute an administrative act.
[115]
Engaged in the determination of whether the
exercise of public power amounted to an administrative or executive
action, our courts
have drawn a bright line between formulation of
policy, on the one hand, and, on the other, its implementation.
In
Ed-U-College
,
this Court drew the distinction in these terms:
“
It
should be noted that the distinction drawn in this passage is between
the implementation of legislation, on the one hand, and
the
formulation of policy on the other.  Policy may be formulated by
the Executive outside of a legislative framework.
For example,
the Executive may determine a policy on road and rail transportation
or on tertiary education.
The
formulation of such policy involves a political decision and will
generally not constitute administrative action.  However,
policy
may also be formulated in a narrower sense where a member of the
Executive is implementing legislation.  The formulation
of
policy in the exercise of such powers may often constitute
administrative action
.”
[146]
(Emphasis added.)
[116]
The same approach was adopted by the
Supreme Court of Appeal in
Grey’s
Marine Hout Bay
:
“
There
will be few administrative acts that are devoid of underlying policy
– indeed, administrative action is most often the

implementation of policy that has been given legal effect – but
the execution of policy is not equivalent to its formulation.

The decision in the present case was not one of policy formulation
but of execution.”
[147]
[117]
If
the exercise of power results in the formulation of policy, this is a
strong factor which supports the view that the act arising
from that
exercise is an executive one.  But this is not always a decisive
factor, as this Court observed in
Ed U College
.
[148]
In that case, this Court was confronted with the question whether the
adoption of a subsidy formula by the MEC and the allocation
of
subsidies in terms of that formula constituted administrative action
or formulation of policy.  There, like here, the power
exercised
was contained in an Act of Parliament.  This Court held that the
exercise of the power involved formulation of policy
in the narrow
sense but, despite that, the Court reached the conclusion that the
exercise of power constituted administrative action.
[118]
In
Ed-U-College
,
the Court explained the distinction between wide and narrow policy
formulation thus:
“
In
the present case, section 48(2) of the Schools Act empowers the MEC
to grant subsidies to independent schools from money allocated
for
that purpose by the Legislature.  Clearly, therefore, unless
money is allocated by the Legislature for this purpose, no
subsidy
may be granted.  The principle of subsidy allocation to
independent schools is determined in the first instance by
the
Legislature.  Once it has allocated money for independent
schools, the MEC is then empowered to determine the manner of
how it
is to be spent.  Although there are a range of ways in which
this power can be exercised, it must always be exercised
within the
constraints of the budget set by the Legislature.  Furthermore,
it is not a power which the Legislature would be
suited to exercise.
The determination of which schools should be afforded subsidies and
the allocation of such subsidies
are primarily administrative tasks.
The determination of the precise criteria or formulae for the grant
of subsidies does
contain an aspect of policy formulation but it is
policy formulation in a narrow rather than a broad sense.
The
decision apparently constitutes a broad policy decision because it
purports to determine how the allocated budget is to be distributed

and not the amount to be given to each school.  However, on
closer scrutiny it is in fact not so broad because the MEC determines

not only the formula but also in effect the specific allocations to
each school
.
This case may be close to the borderline.
However,
I am persuaded that the source of the power, being the Legislature,
the constraints upon its exercise and its scope point
to the
conclusion that the exercise of the section 48(2) power constitutes
administrative action, not the formulation of policy
in the broad
sense as suggested by the applicants
.”
[149]
(Emphasis added.)
[119]
It is now convenient to examine section
8(c) of the Armscor Act, to determine whether it confers power for
formulating policy or
implementing the Act.  As mentioned
earlier, the power in the section is for the termination of Board
membership.  When
exercising it, the Minister does not formulate
any policy.  Nor does she set out to collect information which
may help her
to formulate policy.  But she does so for a proper
implementation of the Armscor Act.  The good cause that triggers
the
exercise of the power must be something done by a Board member
that is not in line with the objects of the Armscor Act or the
Corporation
itself.
[120]
On the approach adopted by the Court in
Ed-U-College
and having noted that the source of the power is the Armscor Act, the
question is whether the scope of and constraints for the
exercise of
the section 8(c) power shed some light on whether its exercise
amounts to administrative action.  The scope of
the power is
limited to terminating membership of the Board.  The constraint
for its exercise is the presence of good cause
to terminate that
membership.  Just like in
Ed-U-College
,
these factors show that the exercise of the power constitutes
administrative action, and not the formulation of the defence
policy.
Moreover, here unlike in
Ed-U-College
,
we are not dealing with a borderline case.  It is not a case of
formulation of policy, even in the narrow sense.
[121]
However, the main judgment holds that “the
Minister’s section 8(c) power is an adjunct of her power to
formulate defence
policy”.  For this finding, reliance is
placed on
SARFU
.
I disagree.  First, the termination of the Board’s
membership is not supplementary to the Minister’s power,
if she
has the power to formulate defence policy.  The position here is
different from
SARFU
where the establishment of a commission was taken to be a mechanism
in terms of which information could be collected and advice
given.
These could help the President to formulate policy.  It was in
this context that in
SARFU
,
this Court said the commission itself was an adjunct to the policy
formulation function.  The Court stated:
“
A
commission of inquiry is an adjunct to the policy formation
responsibility of the President.  It is a mechanism whereby he

or she can obtain information and advice.  When the President
appointed the commission of inquiry into rugby he was not
implementing
legislation; he was exercising an original
constitutional power vested in him alone.  Neither the subject
matter, nor the
exercise of that power was administrative in
character.  The appointment of the commission did not,
therefore, constitute
administrative action within the meaning of
section 33.  It should, however, be emphasised again, that this
conclusion relates
to the appointment of the commission of inquiry
only.  The conduct of the commission, particularly one endowed
with powers
of compulsion, is a different matter.”
[150]
[122]
It is apparent from this statement that the
Court was influenced by two considerations in concluding that the
appointment of the
commission of inquiry did not constitute
administrative action.  The first consideration was that the
commission would facilitate
the procurement of information and advice
which could help the President in performing the function of
formulating policy.
The second consideration was that, when
appointing the commission, the President was not implementing
legislation but was exercising
an original constitutional power
vested in him as head of state and not as head of the Executive.
The Court distinguished
between implementation of legislation and the
performance of functions which are essentially political.
[123]
The present is not such a case.
[124]
The second consideration relied on in the
main judgment is that “the exercise by the Minister of her
section 8(c) power is
not a low-level bureaucratic power which merely
involves the application of policy in the discharge of the daily
functions of the
state”.  It is asserted that the section
operates at a different level and empowers the Minister to perform
her oversight
responsibilities and supervise “high-level public
office-bearers in the performance of their official duties”.

As I read it, there is an inconsistency in this consideration.
On the one hand, it says that the exercise of the power does
not
involve the implementation of policy in the daily functions of the
state, and on the other, it says that the section empowers
the
Minister to supervise public office-bearers in the performance of
their duties.
[125]
But the inconsistency aside, the level at
which the Minister operates is not material to the enquiry because
even the President
has responsibilities that are administrative and
others that are executive.  As was observed in
SARFU
,
some responsibilities of the President and Ministers may amount to
administrative action and others not.  In
SARFU
the Court proclaimed:
“
As
we have seen, one of the constitutional responsibilities of the
President and Cabinet Members in the national sphere (and premiers

and members of executive councils in the provincial sphere) is to
ensure the implementation of legislation.  This responsibility

is an administrative one, which is justiciable, and will ordinarily
constitute ‘administrative action’ within the meaning
of
section 33.  Cabinet Members have other constitutional
responsibilities as well.  In particular, they have
constitutional
responsibilities to develop policy and to initiate
legislation.  Action taken in carrying out these
responsibilities cannot
be construed as being administrative action
for the purposes of section 33.  It follows that some acts of
members of the Executive,
in both the national and provincial spheres
of government will constitute ‘administrative action’ as
contemplated by
section 33, but not all acts by such members will do
so.”
[151]
(Footnote omitted.)
[126]
The
last consideration on which the main judgment relies is that the
Minister has a discretion to terminate membership of any Board
member
on the basis of a good cause.  In my view, the vesting of a
discretion in the Minister does not indicate that the function
is
executive rather than administrative.  Indeed, the conferment of
a discretion is the hallmark of most administrative functions.

In
Dawood
,
[152]
this Court affirmed the importance of discretionary powers in
administrative decisions.  There it was said:
“
Discretion
plays a crucial role in any legal system.  It permits abstract
and general rules to be applied to specific and particular

circumstances in a fair manner.  The scope of discretionary
powers may vary.  At times, they will be broad, particularly

where the factors relevant to a decision are so numerous and varied
that it is inappropriate or impossible for the Legislature
to
identify them in advance.  Discretionary powers may also be
broadly formulated where the factors relevant to the exercise
of the
discretionary power are indisputably clear.  A further situation
may arise where the decision-maker is possessed of
expertise relevant
to the decisions to be made.  There is nothing to suggest that
any of these circumstances is present here.”
[153]
(Footnote omitted.)
[127]
I conclude that the Minister’s
termination of the respondents’ membership of the Board
constituted administrative action
envisaged in section 33 of the
Constitution.  Consequently, her decision is reviewable under
PAJA.  Since the respondents
were not given a hearing before
that decision was taken, it was procedurally unfair and the High
Court was right to set it aside.
[128]
In the view I take of the matter, it is not
necessary to determine whether
section 71
of the
Companies Act
finds
application in this matter.  It is also unnecessary to
decide whether the termination of the respondents’ membership

was based on a good cause.
[129]
For all these reasons, I would dismiss the
appeal.
For
the Appellant:
Advocate
M Erasmus SC and Advocate M Kgatla instructed by the State Attorney.
For
the First and Second Respondents:
Advocate
M Dewrance and Advocate N Muvangua instructed by Mkhabela Huntley
Adekeye Attorneys.
For
the Third Respondent:
Advocate
O Mooki instructed by
Hogan Lovells Attorneys.
[1]
Motau
and Another v Minister of Defence and Military Veterans and Another
,
Case No: 51258/13, 18 September 2013 (High Court judgment).
[2]
The
first respondent is referred to as “Lieutenant General
(Retired) Maomela Motau” in the first and second respondents’

papers in the High Court.  I simply refer to him as “General
Motau” in this judgment.
[3]
Armaments
Corporation of South Africa Limited Act 51 of 2003 (Armscor Act).
Armscor was established in terms of section
2(1) of the Armaments
Development and Production Act 57 of 1968.  In terms of section
3(1) of that Act, the corporation’s
object was “to meet
as effectively and economically as may be feasible the armaments
requirements of the Republic, including
armaments required for
export”.  Section 23 of the Armscor Act, read with
the Schedule of the Act, repealed the
Armaments Development and
Production Act.  However, section 2 of the Armscor Act provides
for the “Continued existence
of Corporation”, and reads
in relevant part:
“
(1)
[Armscor] established by section 2 of the Armaments Development and
Production Act continues to exist under that name despite
the repeal
of that Act.
.
. .
(3)
The Corporation is a juristic person capable of suing and being sued
in its own name.
(4)
Subject to this Act, the Corporation may―
(a)
purchase or otherwise acquire, hold or alienate property, movable or
immovable; and
(b)
perform such acts as are necessary for or incidental to the carrying
out of its objectives and the performance of its functions.”
[4]
Section
2(2) of the Armscor Act reads as follows:
“
(a)
The State remains the sole shareholder of the Corporation.
(b)
The Minister exercises ownership control over the Corporation on
behalf of the State.”
[5]
Defined
in section 1(g) of the Armscor Act as “defence matériel”.
[6]
These
objectives are set out in section 3(1) of the Armscor Act.
[7]
See
section 4(2) of the Armscor Act.
[8]
Section
6(1) of the Armscor Act.  The High Court judgment erroneously
states that the Armscor Act requires two further Board
members: the
Secretary of Defence and the Chief of the South African National
Defence Force.  The provision stipulating
this requirement –
section 6(1)(c) of the Armscor Act – was repealed with effect
from May 2006.
[9]
According to the Minister, in a speech made at a meeting with the
Board on 14 August 2013, delays in the procurement of defence
matériel
“had a direct impact on deployed troops around the continent”
and in particular on troops deployed
in the Democratic Republic of
Congo.
[10]
The
Project, which related to the acquisition of protection technology
for the South African Air Force and “deployed elements”,

had not progressed since Armscor had made a submission to the Board
on its preferred bidder in November 2011.  After a work
session
convened between Armscor and the Department’s Defence Matériel
Division on 18 June 2013, Armscor and the
Department “agreed
to disagree” on the way forward.  It was thus decided
that the matter would be submitted
to the Secretary of Defence and
the Chairperson of the Board to seek ministerial intervention so
that Armscor and the Department
could come to a mutually acceptable
agreement.
[11]
The Minister does not elaborate on the breakdown of this
relationship in her letter.  However, from her subsequent
meeting
with the Board on 14 August 2013, it seems that the
breakdown related to a range of disputes and matters of contention
between
Armscor and various stakeholders in the defence industry,
including the Department, the South African Aerospace Maritime and

Defence Industries Association, Denel and “organised labour”.
Most of these disputes apparently emanated from
the “provisions
contained in the draft Armscor business strategy”.
[12]
Section 4(2)(k) reads:
“
[Armscor]
must provide marketing support to defence-related industries in
respect of defence
matériel, in
consultation with the Department and the defence-related industries
in question”.
[13]
3
of 2000.
[14]
Section
6(2)(d) of PAJA allows a court to review an administrative decision
if it was “materially influenced by an error
of law”.
[15]
Section
3(1) of PAJA requires that administrative action be procedurally
fair.  Section 6(2)(c) in turn provides that administrative

action may be reviewed if it is procedurally unfair.
[16]
Section
6(2)(e)(ii) of PAJA allows administrative action to be reviewed if
it “was taken for an ulterior purpose or motive”.
[17]
This
finding was based on the High Court’s consideration of the
minutes of a meeting held between the Minister and the remaining

members of the Board following her termination of the services of
General Motau and Ms Mokoena.  See [15] above.
[18]
Section
6(2)(f) of PAJA provides that an administrative decision may be
reviewed if it was not rationally connected to the purpose
for which
it was taken; the purpose of the empowering provision; the
information before the administrator; or the reasons given
for it by
the administrator.
[19]
High
Court judgment above n 1 at paras 72-3.
[20]
See
[15] above.
[21]
After
no notice of opposition or submissions were received from General
Motau and Ms Mokoena, a letter was directed to the Chairperson
of
the Pretoria Society of Advocates requesting that it appoint one of
its members to assist the Court by making submissions
on their
behalf.  The matter was then referred to the Johannesburg Bar
Society for their assistance.
[22]
See
eThekwini
Municipality v Ingonyama Trust
[2013]
ZACC 7
;
2014 (3) SA 240
(CC);
2013 (5) BCLR 497
(CC)
at paras 24-5, relying on
Brummer
v Gorfil Brothers Investments (Pty) Ltd and Others
[2000]
ZACC 3
;
2000 (2) SA 837
(CC);
2000 (5) BCLR 465
(CC)
.
[23]
Shilubana
and Others v Nwamitwa
[2008] ZACC 9
;
2009 (2) SA 66
(CC);
2008 (9) BCLR 914
(CC) at
para 8.
[24]
See
in this regard
Oriani-Ambrosini
v Sisulu, Speaker of the National Assembly
[2012] ZACC 27
;
2012 (6) SA 588
(CC);
2013 (1) BCLR 14
(CC) at paras
16-9.
[25]
The
Minister is the member of Cabinet responsible for the defence of
South Africa (see section
201(1)
of the Constitution read with the definition of “Minister”
in
section 1
of the
Defence Act 42 of 2002
).  She notes
that,
in terms of section 200(2) of the Constitution, the primary object
of the SANDF “is to defend and protect [South Africa],
its
territorial integrity and its people in accordance with the
provisions of the Constitution and the principles of international

law regulating the use of force.”
[26]
Section
85(2)(e).
[27]
By
virtue of the exclusion in section 1(i)(aa) of the definition of
administrative action in PAJA.
[28]
President
of the Republic of South Africa and Others v South African Rugby
Football Union and Others
[1999]
ZACC 11
;
2000 (1) SA 1
(CC);
1999 (10) BCLR 1059
(CC)
(
SARFU
)
at para 148
.
The correct order of enquiry is to consider, first, whether PAJA
applies, and only if it does not, what is demanded by
general
constitutional principles such as the rule of law.  As noted by
O’Regan J in
South
African National Defence Union v Minister of Defence and Others
[2007] ZACC 10
;
2007 (5) SA 400
(CC);
2007 (8) BCLR 863
(CC) at para
52, “
a
litigant who seeks to assert [a constitutional right] should in the
first place base his or her case on any legislation enacted
to
regulate the right, not [the Constitution].”
[29]
See
section 1(i)(aa) of PAJA, which is discussed immediately below.
[30]
Section
33 is quoted in relevant part at n 41 below.
[31]
This
is done through the definition of “administrative action”,
which is set out in more detail at [33] below.
[32]
Section
1(i)(aa) of PAJA.
[33]
Chaskalson CJ in
Minister
of Health and Another NO v New Clicks South Africa (Pty) Ltd and
Others (Treatment Action Campaign and Another as Amici
Curiae)
[2005]
ZACC 14
;
2006 (2) SA 311
(CC);
2006 (8) BCLR 872
(CC) (
New
Clicks
)
at
para 126.  See also the judgment of Ngcobo J at para 461.
[34]
Permanent
Secretary, Department of Education and Welfare, Eastern Cape and
Another v Ed-U-College (PE) (Section 21) Inc
[2000] ZACC 23
;
2001 (2) SA 1
(CC);
2001 (2) BCLR 118
(CC)
(
Ed-U-College
)
at para 18 and
SARFU
above
n 28 at para 142.
[35]
Chaskalson CJ in
New
Clicks
above
n 33
at
para 126.
[36]
Emphasis
added.  This is also apparent from the decisions of this
Court.  See, for example,
Association
of Regional Magistrates of Southern Africa v President of the
Republic of South Africa and Others
[2013] ZACC 13
;
2013 (7) BCLR 762
(CC) (
ARMSA
)
at paras 40-2 and
Geuking
v President of the Republic of South Africa and Others
[2002] ZACC 29
;
2003 (3) SA 34
(CC);
2004 (9) BCLR 895
(CC) at
para
26 where, notwithstanding the fact that a power derived from
legislation, it was considered executive in nature.
[37]
Chirwa
v Transnet Ltd and Others
[2007] ZACC 23
;
2008 (4) SA 367
(CC);
2008 (3) BCLR 251
(CC) at
para 181 (per Langa CJ);
Grey’s
Marine Hout Bay (Pty) Ltd and Others v Minister of Public Works and
Others
[2005] ZASCA 43
;
2005 (6) SA 313
(SCA) (
Grey’s
Marine
)
at para 21; and
Sokhela
and Others v MEC for Agriculture and Environmental Affairs
(KwaZulu-Natal
)
and
Others
[2009] ZAKZPHC 30;
2010 (5) SA 574
(KZP) (
Sokhela
)
at para 60.  See also
Hoexter
Administrative
Law in South Africa
2ed
(Juta & Co Ltd, Cape Town 2012)
at
197.
[38]
Sokhela
id
at
para 61.  See also
ARMSA
above n 36 at para 41.
[39]
Id.
[40]
New
Clicks
above n 33 at paras 100 and 128.  See also para 466 (per Ngcobo
J) and
Grey’s
Marine
above n 37 at para 22.
[41]
Section 33 of the Constitution provides in relevant part:
“
(1)
Everyone has the right to administrative action that is lawful,
reasonable and procedurally fair.
(2)
Everyone whose rights have been adversely affected by administrative
action has the right to be given written reasons.”
It
is apparent that, while using the term “administrative
action”, the section makes no positive attempt to define
the
term’s scope.
[42]
SARFU
above n 28 at para 141.
[43]
Id at para 143.
[44]
See
Ed-U-College
above
n 34 at
para 18 and
SARFU
above
n 28 at para 142
.
[45]
Grey’s
Marine
above n 37 at para 24.  See also
ARMSA
above n 36 at para 43.
[46]
SARFU
above
n 28
at
para 142.
[47]
Id
at para 147.
[48]
Id
at para 143
.
[49]
Ed-U-College
above n
34
at para 21.
[50]
Masetlha
v President of the Republic of South Africa and Another
[2007] ZACC 20
;
2008 (1) SA 566
(CC);
2008 (1) BCLR 1
(CC) at p
aras
65 and 69-70.
[51]
Id at paras 69 and 75-6.
[52]
Section 1(i)(a)(i) of PAJA.
[53]
Ed-U-College
above n 34 at para 21.
[54]
For
example, in terms of section 36(1) of the Cape Land Use Planning
Ordinance 15 of 1985, planning officials may approve and
refuse
land-use applications purely on the basis of whether they consider
the particular development to be “desirable”.
This
requirement imports a large degree of discretion in the evaluation
of land-use applications, but it cannot seriously be
contended that
the taking of decisions in relation to such applications constitutes
anything other than administrative action.
See also
Dawood
and Another v Minister of Home Affairs and Others; Shalabi and
Another v Minister of Home Affairs and Others; Thomas and
Another v
Minister of Home Affairs and Others
[2000] ZACC 8
;
2000 (3) SA 936
(CC);
2000 (8) BCLR 837
(CC)
(
Dawood
).
As noted by O’Regan J at para 53, a broad discretionary power
may equally be conferred “where the factors
relevant to a
decision are so numerous and varied that it is inappropriate or
impossible for the Legislature to identify them
in advance”,
where the relevant factors are “indisputably clear” or
“where the decision-maker is possessed
of expertise relevant
to the decisions to be made.”
[55]
Fedsure
Life Assurance Ltd and Others v Greater Johannesburg Transitional
Metropolitan Council and Others
[1998] ZACC 17
;
1999
(1) SA 374
(CC);
1998 (12) BCLR 1458
(CC) at paras 41 and 45.
[56]
Geuking
above n 36 at
paras
26-7.
[57]
Masetlha
above
n 50
at
paras 77 and 86.
[58]
ARMSA
above n 36 at paras 43-5.
[59]
Section
2(2)(b) of the Armscor Act.
[60]
Id
section 4(3)(b).
[61]
Id
section 7(1) and (2).
[62]
Id
section 10(1).
[63]
Id
section 15(1)(a).
[64]
Id
section 21.
[65]
Id
section 18(1)(b).
[66]
Section
201(1) read with section 200(2) of the Constitution.
[67]
Regarding
the inclusion of policy formulation and adjuncts thereto within the
notion of “executive action”, see
SARFU
above n 28 at para 147.
[68]
Section
80(2)(b)
of the
Defence Act.
[69
]
Id
section 80(2)(c).
[70]
Section
7(1) of the Armscor Act.
[71]
As
noted in
Masetlha
above n 50 at para 77, the power to dismiss is “a corollary of
the power to appoint”.
[72]
Compare
Sokhela
above n 37 at para 76.  Similar reasoning is contained in the
judgment of the KwaZulu Natal High Court, Pietermaritzburg,
in
relation to the appointment of board members to a statutory body.
That Court concluded, however, that the power to suspend
and
terminate the services of certain board members on the grounds of
incapacity, misconduct or neglect entailed administrative
rather
than executive action (see paras 78-83).  Given the
difference between this power and the Minister’s section
8(c)
power, it is not necessary to examine the correctness of the High
Court’s decision in
Sokhela
.
[73]
See,
for example,
Grey’s
Marine
above n 37 at para 24.
[74]
See
Ed-U-College
above n 34 at para 21.
[75]
Garner
(ed)
Black’s
Law Dictionary
8 ed (Thomson West, St Paul 2004) at 235.
[76]
See,
for example,
Union
of Refugee Women and Others v Director: Private Security Industry
Regulatory Authority and Others
[2006] ZACC 23
;
2007 (4) SA 395
(CC);
2007 (4) BCLR 339
(CC) (
Union
of Refugee Women
)
at para 86.
[77]
See
[3] above.
[78]
Section
3(1) of the Armscor Act reads as follows:
“
The
objectives of the Corporation are to meet―
(a)
the defence matériel requirements
of the Department effectively, efficiently and economically; and
(b)
the defence technology, research,
development, analysis, test and evaluation requirements of the
Department effectively, efficiently
and economically.”
[79]
Section
4(2)(a) and (f) of the Armscor Act.
[80]
Id
section 4(2)(b).
[81]
Id
section 4(2)(c) and (e).
[82]
Id
section 4(2)(h).
[83]
Id
section 4(2)(l).
[84]
Id
section 4(2)(m).
[85]
As I believe that the reasons cited by the Minister in her
correspondence to General Motau and Ms Mokoena were sufficient to

demonstrate good cause, I do not consider it necessary to deal with
the further reasons cited by the Minister for her decision
in her
papers in this Court and the High Court.  In any event, I have
reservations about whether it would be permissible
for her to rely
on these reasons as they were not relied on or disclosed when she
took her decision (see in this regard Cachalia
JA’s judgment
in
National
Lotteries Board and Others v South African Education and Environment
Project
[2011]
ZASCA 154
;
2012 (4) SA 504
(SCA)
at paras 27-8).
[86]
Section
5(1)(a) of the Armscor Act read with section 3.
[87]
Id
section 5(2)(c).
[88]
Id
section 5(2)(d).
[89]
Id
section 5(2)(e).
[90]
Id
section 5(2)(f).
[91]
Section
5(2)(g) of the Armscor Act provides that the service level agreement
must “set out the rate at which [Armscor] may
charge for its
services.”  This is, however, not something which the
Corporation is compelled to charge.  The
Armscor Act also
provides for a number of funding mechanisms through which the
Corporation may be funded.  These include,
inter alia, the
appropriation of funds from Parliament and revenue derived from its
investments (section 15 of the Armscor Act).
It would thus be
consistent with the statutory framework for Armscor to be funded
solely by appropriation from Parliament and
investment income rather
than by way of a service charge.
[92]
Section
6 of the Armscor Act, entitled “Corporation managed by Board
of Directors”, reads:
“
(1)
The affairs of the Corporation are managed and controlled by a Board
of Directors consisting of―
(a)
nine non-executive members;
(b)
two executive members, namely a Chief Executive Officer and a Chief
Financial Officer.
(2)
The Board is the accounting authority for the Corporation as
contemplated in section 49(2)(a) of the Public Finance
Management Act.”
[93]
Section
7(1) and (2) of the Armscor Act, set out in [4] above.
[94]
Section
7(6) of the Armscor Act reads:
“
A
non-executive member of the Board must be paid out of the funds of
the Corporation such remuneration for his or her services
as the
Minister, after consultation with the Minister of Finance, may
determine.”
[95]
See [15] above.
[96]
Her comment was to the effect that the failure to remove her would
have created an expectation that she would be made Chairperson
on
General Motau’s removal.
[97]
Sections
6(1) and 7(2) of the Armscor Act.
[98]
See
in this regard
Democratic
Alliance v President of the Republic of South Africa and Others
[2012] ZACC 24
;
2013 (1) SA 248
(CC);
2012 (12) BCLR 1297
(CC) at
para 27 and
Pharmaceutical
Manufacturers
Association of South Africa and Another: In re Ex Parte President of
the Republic of South Africa and Others
[2000]
ZACC 1
;
2000 (2) SA 674
(CC);
2000 (3) BCLR 241
(CC) (
Pharmaceutical
Manufacturers
)
at para 85.
[99]
Pharmaceutical
Manufacturers
id at para 85.
[100]
On
the importance of objective rather than subjective rationality in
the context of assessing statutory standards, see
Democratic
Alliance
above n 98 at paras 14-26.
[101]
Review
for reasonableness is about testing “the decision itself”,
whereas review for rationality is about testing
whether there is a
sufficient connection between the means chosen and the objective
sought to be achieved – rationality
is not about whether other
means could have been used.  Rationality review, as an
evaluation of whether the “minimum
threshold” for the
exercise of public power has been met, involves judicial restraint.
See in this regard
Democratic
Alliance
above n 98 at paras 29-32 and 42-3, relying on
Affordable
Medicines Trust and Others v Minister of Health and Others
[2005] ZACC 3
;
2006 (3) SA 247
(CC);
2005 (6) BCLR 529
(CC)
(
Affordable
Medicines
).
[102]
71
of 2008.
[103]
This
is reiterated by
section 5(4)
of the
Companies Act, which
deals with
the situation where there is “inconsistency between any
provision of this Act and a provision of any other national

legislation”.  In the event of such inconsistency,
section 5(4)(a) provides that “the provisions of both Acts

apply concurrently, to the extent that it is possible to apply and
comply with one of the inconsistent provisions without contravening

the second”.
[104]
That
definition reads as follows:
“
[A]n
enterprise that is registered in terms of this Act as a company, and
either―
(a)
is listed as a public entity in Schedule 2 or 3 of the [Public
Finance Management Act]; or
(b)
is owned by a municipality, as contemplated in the [Local
Government: Municipal Systems Act], and is otherwise similar to
an
enterprise referred to in paragraph (a)
”
.
[105]
1
of 1999.
[106]
The
section, entitled “Modified application with respect to
state-owned companies
”
,
reads as follows:
“
(1)
Subject to section 5(4) and (5), any provision of this Act that
applies to a public company applies also to a state-owned
company,
except to the extent that the Minister has granted an exemption in
terms of subsection (3).
(2)
The member of the Cabinet responsible for―
(a)
state-owned companies may request the Minister to grant a total,
partial or conditional exemption from one or more provisions
of this
Act, applicable to all state-owned companies, any class of
state-owned companies, or to one or more particular state-owned

company; or
(b)
local government matters may request the Minister to grant a total,
partial or conditional exemption from one or more provisions
of this
Act, applicable to all state-owned companies owned by a
municipality, any class of such enterprises, or to one or more

particular such enterprises,
on
the grounds that those provisions overlap or duplicate an applicable
regulatory scheme established in terms of any other national

legislation.
(3)
The Minister, by notice in the
Gazette
after receiving the
advice of the Commission, may grant an exemption contemplated in
subsection (2)―
(a)
only to the extent that the relevant alternative regulatory scheme
ensures the achievement of the purposes of this Act at
least as well
as the provisions of this Act; and
(b)
subject to any limits or conditions necessary to ensure the
achievement of the purposes of this Act.
”
[107]
Section
57(1) defines “shareholder” for the purposes of section
71 as including “a person who is entitled to
exercise any
voting rights in relation to a company, irrespective of the form,
title or nature of the securities to which those
voting rights are
attached.”  The Minister is thus the shareholder of
Armscor as she “exercises ownership control
over the
Corporation on behalf of the State” (section 2(2)(b) of the
Armscor Act).
[108]
For
example, section 71(3), which relates to the dismissal of a director
by the board, requires the board to determine that the
director in
question is ineligible or disqualified; incapacitated; or negligent
or derelict in the performance of his or her
functions.
[109]
Sasol
Synthetic Fuels (Pty) Ltd and Others v Lambert and Others
[2001] ZASCA 133
;
2002 (2) SA 21
(SCA) (
Sasol
v Lambert
).
[110]
Id
at para 17.
[111]
Id
and the authority cited there.
[112]
Id at para 15, quoting from
Kent
NO v South African Railways and Another
1946 AD 398
at 405.  See generally paras 16-7.
[113]
See,
for example, Hoexter above n 37 at 418; Murcott “Procedural
Fairness as a Component of Legality: Is a Reconciliation
between
Albutt
and
Masetlha
Possible?”
(2013) 130
SALJ
260
at 271; and Price “The Evolution of the Rule of Law”
(2013) 130
SALJ
649 at 654-5.
[114]
Masetlha
above n 50 at
para
75.
[115]
Id
at para 77.
[116]
Id at para 86.
[117]
Id
at
para
77.
[118]
Albutt
v Centre for the Study of Violence and Reconciliation and Others
[2010] ZACC 4; 2010 (3) SA 293 (CC); 2010 (5) BCLR 391 (CC).
[119]
Id
at paras 61 and 68-72.
[120]
National
Director of Public Prosecutions and Another v Mohamed NO and Others
[2003] ZACC 4
;
2003 (4) SA 1
(CC);
2003 (5) BCLR 476
(CC).
Ackermann J stated at para 37, relying on the Appellate Division’s
decision in
R
v Ngwevela
1954 (1) SA 123
(A) at 131H and the other cases referred to in fn 34
of that judgment, that “[i]t is well established that, as a
matter
of statutory construction, the
audi
rule should be enforced unless it is clear that the Legislature has
expressly or by necessary implication enacted that it should
not
apply or that there are exceptional circumstances which would
justify a court not giving effect to it.”
[121]
See,
for example,
Administrator,
Transvaal and Others v Zenzile and Others
[1990] ZASCA 108
;
1991 (1) SA 21
(A) at
37A-G
and 39A.  See also
Administrator,
Natal and Another v Sibiya and Another
[1992] ZASCA 115
;
1992 (4) SA 532
(A) at 539B-C.
[122]
Section
172(1) of the Constitution reads as follows:
“
When
deciding a constitutional matter within its power, a court―
(a)
must declare that any law or conduct that is inconsistent with the
Constitution is invalid to the extent of its inconsistency;
and
(b)
may make any order that is just and equitable, including―
(i)
an order limiting the retrospective effect of the declaration of
invalidity; and
(ii)
an order suspending the declaration of invalidity for any period and
on any conditions, to allow the competent authority
to correct the
defect.
”
See
also
Hoffmann v South African Airways
[2000] ZACC 17
;
2001
(1) SA 1
(CC);
2000 (11) BCLR 1211
(CC) at para 42.
[123]
Hoffmann
id
at
para 45.  See also
Fose
v Minister of Safety and Security
[1997]
ZACC 6
;
1997 (3) SA 786
(CC);
1997 (7) BCLR 851
(CC) at para 96.
[124]
Hoffmann
above n 122 at para 45.
[125]
In
John
v Rees
[1970]
Ch 345
at 402 Megarry J observed:
“
It
may be that there are some who would decry the importance which the
courts attach to the observance of the rules of natural
justice. . .
.  Those who take this view do not, I think, do themselves
justice.  As everybody who has anything to
do with the law well
knows, the path of the law is strewn with examples of open and shut
cases which, somehow, were not; of unanswerable
charges which, in
the event, were completely answered; of inexplicable conduct which
was fully explained; of fixed and unalterable
determinations that,
by discussion, suffered a change.  Nor are those with any
knowledge of human nature who pause to think
for a moment likely to
underestimate the feelings of resentment of those who find that a
decision against them has been made
without their being afforded any
opportunity to influence the course of events.”
[126]
Allpay
Consolidated Investment Holdings (Pty) Ltd and Others v Chief
Executive Officer, South African Social Security
Agency,
and Others
[2013] ZACC 42
;
2014 (1) SA 604
(CC);
2014 (1) BCLR 1
(CC) at paras
23-4 and 26.
[127]
I
have in mind the Minister’s letter of 19 February 2013 to
General Motau, wherein she threatened dismissal over their repeated

attempts to set the remuneration levels of Board members.
Section 7(6) of the Armscor Act reserves this for ministerial

determination.
[128]
See [7] above.
[129]
See
[52]-[68] above for the discussion on good cause.
[130]
See
City
of Johannesburg Metropolitan Municipality v Gauteng Development
Tribunal and Others
[2010]
ZACC 11
;
2010 (6) SA 182
(CC);
2010 (9) BCLR 859
(CC) at para 94
.
See generally M du Plessis et al
Constitutional
Litigation
(Juta & Co Ltd, Cape Town 2013) at 135.
[131]
See para 81.6 of the High Court judgment above n 1.
[132]
See
[21] above.  The High Court reasoned that the Minister’s
failure to observe the requirements of procedural fairness
in making
her decision to terminate the services of General Motau and Ms
Mokoena was unreasonable.  Even if this were the
case –
which the High Court failed to demonstrate sufficiently – it
is not clear that it would justify the exceptional
costs order the
Court granted.  The High Court’s other reasons –
that the Minister did not deal with General
Motau’s letter on
12 July 2013 which “displayed [his] respect” for her and
the Minister’s “utterances”
in her meeting with
the Board succeeding her decision on 14 August 2013 –
similarly provide no exceptional basis to mulct
the Minister with a
punitive costs order.
[133]
Although
section 8(c), in terms of which the Minister acted, speaks of
termination of services, it is clear from its text that
it deals
with the termination of membership and not employment.
[134]
Section
33(1) of the Constitution provides:
“
Everyone
has the right to administrative action that is lawful, reasonable
and procedurally fair.”
[135]
Section
3(1) of PAJA reads:
“
Administrative
action which materially and adversely affects the rights or
legitimate expectations of any person must be procedurally
fair.”
[136]
Main
judgment above at [47].
[137]
Id
at [49].
[138]
Id
at [50].
[139]
SARFU
above
n 28 at para 143.
[140]
See
the definition of administrative action in PAJA.
[141]
The
various sections of the Constitution mentioned here are all listed
in the exclusions to the definition of administrative action
in
PAJA.
[142]
Section
85(2)(a) reads:
“
The
President exercises the executive authority, together with the other
members of Cabinet, by—
(a)
implementing national legislation except
where the Constitution or an Act of Parliament provides otherwise”.
[143]
Metcash
Trading Limited v Commissioner for the South African Revenue Service
and Another
[2000]
ZACC 21
;
2001 (1) SA 1109
(CC);
2001 (1) BCLR 1
(CC) (
Metcash
Trading
).
[144]
Id
at para 42.
[145]
SARFU
above n 28 at para 143.
[146]
Ed-U-College
above
n 34 at para 18.
[147]
Grey’s
Marine Hout Bay
above
n 37 at para 27.
[148]
Above
n 34 at para 18.
[149]
Ed-U-College
above n 34 at para 21.
[150]
SARFU
above
n 28 at para 147.
[151]
SARFU
above n 28 at para 142.
[152]
Dawood
above
n 54.
[153]
Id
at para 53.