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[2016] ZACC 9
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Provincial Government North West and Another v Tsoga Developers CC and Others (CCT 91/15) [2016] ZACC 9; 2016 (5) BCLR 687 (CC) (24 March 2016)
Heads of arguments
CONSTITUTIONAL
COURT OF SOUTH AFRICA
Case CCT
91/15
In the matter between:
PROVINCIAL GOVERNMENT:
NORTH WEST
PROVINCE
First
Applicant
DIRECTOR GENERAL:
OFFICE OF THE
PREMIER
Second
Applicant
and
TSOGA DEVELOPERS
CC
First
Respondent
WANDILE
BOZWANA
Second
Respondent
HANNES PEYPER
INCORPORATED
Third
Respondent
SHERIFF OF THE HIGH COURT:
MAHIKENG
Fourth
Respondent
HEAD OF DEPARTMENT:
NORTH WEST DEPARTMENT OF PUBLIC
WORKS
Fifth
Respondent
HEAD OF DEPARTMENT:
NORTH WEST DEPARTMENT OF
HEALTH
Sixth
Respondent
HEAD OF DEPARTMENT:
NORTH WEST DEPARTMENT OF
FINANCE
Seventh
Respondent
Neutral citation:
Provincial Government: North West
Province and Another v Tsoga Developers CC and Others
[2016]
ZACC 9
Coram:
Mogoeng CJ, Moseneke DCJ, Cameron J, Jafta J, Khampepe
J, Madlanga J, Matojane AJ, Nkabinde J, Van der Westhuizen J, Wallis
AJ
and Zondo J
Judgment:
Madlanga J (unanimous)
Heard on:
29 September 2015
Decided on:
24 March 2016
ORDER
On application for leave to appeal the decision of the High Court of
South Africa, North West Division, Mahikeng (Djaje AJ):
1. Condonation of the late filing of the applicants’ written
submissions is granted.
2. Leave to appeal is refused.
3. The applicants must pay the costs of the first and third
respondents, including costs of two counsel.
JUDGMENT
MADLANGA J (Mogoeng CJ, Moseneke DCJ, Cameron J, Jafta J, Khampepe J,
Matojane AJ, Nkabinde J, Van der Westhuizen J, Wallis AJ
and Zondo J
concurring):
Introduction
[1]
This
is an application for leave to appeal directly to this Court against
the refusal of interim relief by the North West Division
of the High
Court (High Court).
[1]
At the centre of the dispute is the lawfulness of a writ of
execution. The writ flowed from an order granted pursuant
to a
settlement agreement (settlement order). The writ was issued in
favour of the first respondent, Tsoga Developers CC
(Tsoga), against
the Department of Public Works of the North West Province (Department
of Public Works). An amount of
R30 476 839.71,
held in a bank account in the name of the Department of Public Works,
was attached in terms of the writ.
The applicants, the
Provincial Government: North West Province and the Director-General:
Office of the Premier, North West Province,
brought a two-part
application before the High Court. In Part A – brought on
an urgent basis – they asked for
interim relief that the
execution process be halted pending finalisation of Part B, which was
not urgent. It is this interim
relief that Djaje AJ refused.
[2]
Argument
on the Part B relief was heard on 29 October 2015. The High
Court has reserved judgment. The Part B relief
has more than
one prong. In the main,
[2]
the applicants are asking for (a) the review and setting aside of the
settlement agreement that was the basis of the settlement
order and
(b) a declarator that the writ is unlawful.
[3]
After
interim relief had been refused, the attached sum of R30 476 839.71
was paid over to the third respondent, Hannes
Peyper Incorporated,
who are Tsoga’s attorneys of record.
[3]
As a result, before us the interim relief has morphed and –
subject to leave to appeal being granted – the
applicants
are asking us to order the repayment of the R30 476 839.71
pending finalisation of the Part B proceedings.
In part, this
relief is based on section 3(10) of the State Liability Act.
[4]
Background
[4]
In
July 2008, the Department of Public Works awarded a tender for the
construction of the Brits Hospital to a joint venture formed
by Tsoga
and Ilima (Pty) Ltd (Ilima). Applicants for the tender had to
have a Construction Industry Development Board (CIDB)
contractor
grading certificate of at least 9GB.
[5]
Tsoga was graded 2GB and Ilima was graded 9GB. This gave the
joint venture a grading of 11GB. A building contract
was
subsequently concluded in the sum of R456 548 505 between
the joint venture and the Department of Public Works.
[5]
The
agreement stipulated that in the event of either of the parties to
the joint venture becoming insolvent, the Department of Public
Works
was entitled to terminate the contract. In August 2009, Ilima
was liquidated on account of insolvency. Following
litigation
between Tsoga and Ilima, a court settlement was concluded allowing
Tsoga to continue with the construction contract.
Although the
Department of Public Works was informed of Ilima’s insolvency
in October 2009, it did not terminate the contract
immediately.
[6]
There
is some detail on: payment certificates that Tsoga issued in the name
of the joint venture subsequent to the liquidation of
Ilima; the odd
payment by the Department of Public Works; pressure brought to bear
by senior officials of the Department of Public
Works and the then
Premier on officials of the North West Department of Health to make
certain payments to Tsoga;
[6]
and an unwavering refusal by the officials of the Department of
Health to bow to the pressure. I need not get into this
detail. Suffice it to say that progress on site was
unsatisfactory.
[7]
Agitation by the Brits community, who were anxious that
construction of the hospital be completed without delay, caused the
national
Minister of Health to intervene. As a result, a
contract was concluded with another entity to take over
construction.
The Department of Public Works was forced to
terminate the contract with the joint venture. It then found
itself in a predicament.
Tsoga – claiming to rely on a
lien – refused to leave the site. Tsoga’s stance
was that the cancellation
amounted to a repudiation. And it
claimed that it had suffered damages in the amount of
R30 647 381.91. Negotiations
resulted in the
Department of Public Works making a written settlement offer in an
amount of R22 608 794.39, which Tsoga
accepted. Tsoga
vacated the site. The newly appointed entity continued with
construction, which it completed in due
course.
[8]
In
the event, the Department of Public Works failed to make payment to
Tsoga. Tsoga instituted proceedings in the High Court
to
enforce the agreement. The matter came before Leeuw JP on 16
May 2013. A settlement was concluded which, by consent,
was
made an order of Court.
[7]
The Department of Public Works was ordered to pay the R22 608 794.39
plus VAT, together with interest at 15.5%
per annum from 30 July 2010
and costs.
[9]
In
March 2014, the Department of Public Works brought an application for
rescission of the settlement order on the basis that the
settlement
agreement on which it was premised was fraudulent and that the
Department of Public Works’ legal representatives
did not have
a mandate to settle the matter. The application was dismissed
by Hendricks J.
[8]
An application for leave to appeal the dismissal was later
withdrawn. Thus the settlement order stands.
[10]
The
Registrar of the High Court issued a writ (first writ) in September
2014 for the attachment of the Department of Public Works’
motor vehicles. The Sheriff of the High Court attached and
removed 44 vehicles belonging to the Department. Apparently,
this led to another agreement between the Department of Public Works
and Tsoga, which was concluded in November 2014. In
terms of
this agreement, the Department of Public Works acknowledged that it
was indebted to Tsoga in an amount of R47 002 201.57.
In their High Court affidavits the applicants claim that this amount
is “inexplicable”. It is understandable
why the
amount would have escalated to this extent. On 16 May 2013 the
judgment debt was pronounced as R22 608 794.39
attracting
interest at the rate of 15.5% per annum from 30 July 2010.
Unsurprisingly, interest at that rate on
so huge an amount over so
long a period would amount to quite a lot. Added to this were
costs awarded against the Department
of Public Works. Surely
then, this demystifies any confusion there might have been about the
figure of R47 002 201.57.
[9]
[11]
Under
the November 2014 agreement R20 million was payable immediately and
the balance was to be paid by 28 February 2015.
The Department
of Public Works paid the R20 million. The end of February
2015 came and went without the outstanding
balance being paid.
During March 2015, at the instance of Tsoga, the writ for the
attachment of the R30 476 839.71
(second writ)
[10]
was issued by the Assistant Registrar of the High Court. The
second writ instructed the Sheriff to attach a “bank account
of
the Department of Public Works . . . in the amount of R30 476 839.71
due and payable in terms of a court order dated
16 May 2013”.
The Sheriff acted on the writ. And this is the amount now held
in trust by Hannes Peyper Incorporated.
[12]
The
applicants approached the High Court on an urgent basis seeking the
relief set out in paragraph 1 above. The applicants
also raised
the issue of a claim for R8.8 million that they say is yet to be
instituted against Tsoga. It was said to arise
from damages
suffered by the Department of Public Works when the entity that took
over from Tsoga on site had to perform corrective
work in respect of
alleged malperformance by Tsoga. The applicants asked that
execution of the order of 16 May 2013
be stayed pending the
determination of this claim.
[13]
In
those proceedings they lumped together six respondents, half of whom
are the North West Province’s own Heads of Departments,
namely,
the Head of Department: Department of Public Works,
[11]
the Head of Department: Department of Health
[12]
and the Head of Department: Department of Finance.
[13]
[14]
In
refusing interim relief, the High Court held that the applicants
lacked standing, had not shown that the balance of convenience
favoured them, nor had they proved irreparable harm.
Leave to appeal
[15]
The
applicants contend that they are entitled to the return of the
R30 476 839.71 for a number of reasons. First,
they
claim that the second writ is invalid, as it was not issued in
accordance with the requirements of the State Liability Act.
In this respect, they aver that the writ was issued without the
settlement order having been served by Tsoga on the provincial
treasury in terms of section 3(4) of the State Liability Act.
[14]
Second, they argue that they have satisfied the requirements for the
grant of interim relief. Third, they contend that
the
attachment of a government bank account and the resultant transfer of
funds from it constitute a withdrawal from the Provincial
Revenue
Fund which is proscribed by section 226 of the Constitution.
[15]
[16]
In
substantiating this revenue fund argument, the applicants submit that
the attachment and transfer of funds were in contravention
of section
226(2). The substratum of this contention is that the bank
account was, in fact, part of the Provincial Revenue
Fund.
This, despite indications that the attached amount was in an account
held by the Department of Public Works.
[16]
[17]
The
basis of the applicants’ contention seems to be regulation 15.2
of the Regulations
[17]
made under the Public Finance Management Act (PFMA).
[18]
This regulation provides that each Provincial Revenue Fund must have
a bank account configuration that consists of at least
an Exchequer
bank account and a Paymaster General bank account. If a
department requires a separate bank account, the
relevant treasury
may approve one sub-account within the Paymaster-General account of
the relevant revenue fund. The subaccount
remains an integral
part of the bank account configuration of the relevant revenue fund.
This part of the Regulations appears
to get its force from sections
7(1) and 21(3) of the PFMA.
[19]
[18]
The
argument continues that section 226(2) permits withdrawals from the
Provincial Revenue Fund – including the Paymaster-General
account – only “(a) in terms of an appropriation by a
provincial Act; or (b) as a direct charge against the Provincial
Revenue Fund when it is provided for in the Constitution or a
provincial Act”. The applicants point out that in
Golden
Arrow
[20]
the Supreme Court of Appeal cast doubt on whether a judgment sounding
in money constitutes a “direct charge” against
the
Provincial Revenue Fund. The attachment and transfer of funds
do not fall under either of the permitted forms of withdrawal
and are
invalid, concludes the submission.
[19]
What
guides us on whether to entertain a direct appeal is section
167(6)(b) of the Constitution. Section 167(6) provides:
“National legislation or the rules of the Constitutional Court
must allow a person, when it is in the interests of justice
and with
leave of the Constitutional Court—
(a) to bring a matter directly to the Constitutional Court; or
(b) to appeal directly to the Constitutional Court from any other
court.”
In essence, interests of justice are paramount in deciding whether to
accept a direct appeal. This is true of direct appeals
brought
either on an urgent basis or in the normal course.
[20]
Two
issues that warrant being disposed of at the outset, without
considering their merits and demerits, are the revenue fund argument
and the validity of the first writ in terms of which the Department
of Public Works’ motor vehicles were attached.
It is not
in the interests of justice to entertain them.
[21]
The
revenue fund argument raises complex issues, some of which have
serious implications. For example, does “withdrawn”
in section 226(2) imply that an attachment of State monies in a
revenue fund – whether national or provincial – in
satisfaction of a judgment debt is subject to the strictures of
section 226(2)? Put differently, is an attachment a
“withdrawal”
at all? The argument presented on this
aspect was minimal.
[22]
Another
question is whether – in view of the applicants’ argument
set out in paragraph 18 above – a judgment sounding
in money is
a direct charge against a Provincial Revenue Fund as
envisaged in section 226(2)(b). But this question
is ancillary
to the first.
[23]
Not
unmindful of the provisions of sections 7 and 21 of the PFMA and
regulation 15.2,
[21]
the question arises whether – once monies are sitting in an
account held by a government department – they have not,
in
fact, been appropriated to that department as envisaged in section
226(2)(a).
[22]
If they have been, can their attachment amount to a contravention of
this section? If – in accordance with
section 226(2) – “appropriate”
includes the transfer of monies from a Provincial Revenue Fund
to an account held by a department, can that understanding
be trumped
by the provisions of sections 7 and 21 of the PFMA and regulation
15.2?
[24]
Section
3(3)(b)(ii) of the State Liability Act makes specific reference to
funds appropriated to a department. This section
provides that
payment of a judgment debt by the accounting officer of a department
“must be charged against the
appropriated budget of the
department concerned
”.
[23]
If payment is expected to be from an “appropriated”
budget, how is it that funds held under that same budget
are somehow
no longer “appropriated” and thus no longer available for
attachment, as the applicants appear to contend?
[25]
Further,
does the scheme of the State Liability Act permit the attachment of
State monies at all in terms of section 3(6)?
States do go
bankrupt, their major creditors often being international
entities, and sometimes other States. At times
– through
sovereign default
[24]
– they may not honour their financial obligations. Should
that happen to South Africa, must it be taken to have laid
itself
wide open for its monies – possibly all its monies where huge
debts are involved – to be attached by these international
creditors, bringing the State to a grinding halt? But then, as
section 3(6) of the State Liability Act undoubtedly sanctions
the attachment of movables like motor vehicles, machinery, office
furniture, computers and other office equipment and fittings,
the
effect might well be the same if an international creditor owed vast
sums of money were to attach virtually all these categories
of the
State’s movable assets. The question then is: is there
much in seeking to draw a distinction between sanctioning
the
attachment of State monies, on the one hand, and movables other than
money, on the other? What is the position in other
jurisdictions? How comparable are their laws on this to ours?
[26]
Some
of these questions may not be that difficult to answer. But
others definitely do not admit of easy resolution.
I am not
comfortable that we have enough before us to grapple with them
meaningfully. This applies even in respect of those
questions
that are not necessarily too complex. Nor, for reasons that now
emerge, are these proceedings apposite for their
resolution.
Accordingly, it is not in the interests of justice to pronounce on
them. This is more so now that the Part
B relief has been
argued before the High Court and judgment is awaited.
[27]
The
first writ should not detain us. That is so because, from the
papers, it is plain that what precipitated these proceedings
was the
attachment of the R30 476 839.71, not the motor vehicles.
In argument before us, Tsoga said the Department
of Public Works is
at liberty to take back the motor vehicles and that the keys are with
the Department. In addition, the
Department of Public Works had
previously been advised as much. The applicants did not suggest
that there would be any difficulty
in collecting the motor vehicles.
I do not consider it in the interests of justice for us to deal with
this aspect of the
case as it is as good as settled between the
parties. Any insistence that we should would border on trifling
with this Court.
In fact, it passes more than strange that the
applicants, who portray themselves as being concerned with service
delivery, have
not recovered the motor vehicles, which are obviously
necessary tools in service delivery.
Jurisdiction
[28]
If we
are not to deal with the revenue fund argument, do we still have
jurisdiction? The alleged non-compliance with section
3(4) of
the State Liability Act raises a constitutional issue related to the
principle of legality and thus, the rule of law.
The reason is
that the Registrar of the High Court has power to issue a writ
against movable property owned by the State only in
compliance with
the provisions of the State Liability Act. Issuing a writ in
contravention of the provisions of this Act
– as is the
allegation here – implicates the principle of legality.
[29]
The
exercise of all public power – which the issuing of a writ is –
must be in accordance with the law. As Chaskalson
P, Goldstone
J and O’Regan J held in
Fedsure Life Assurance
, organs
of state “may exercise no power and perform no function beyond
that conferred upon them by law”.
[25]
This was echoed in
Pharmaceutical Manufacturers
,
[26]
Affordable Medicines Trust
[27]
and
Masetlha
.
[28]
This issue concerns the possible violation of the principle of
legality and the rule of law. That is an issue that
is clearly
within this Court's jurisdiction.
Interests of justice
[30]
This
Court has a “wide appellate jurisdiction” to determine
appeals from any court provided it is in the interests of
justice so
to do.
[29]
This includes appeals against refusals of interim relief in cases
where “the interests of justice so demand”.
[30]
But this Court will entertain appeals against interim relief only in
exceptional circumstances.
[31]
This is especially so in matters brought to it on an urgent
basis.
[32]
[31]
It
must be tempting to many litigants in pending review proceedings who
believe themselves to have strong or unanswerable law points
pertaining to interim relief to appeal directly to this Court and
skip the perceived inconvenience of first going to the Full Court
and
the Supreme Court of Appeal. There must be countless cases of
that nature. If we were not to be strict and, instead,
readily
allow direct appeals in matters involving interim relief, we would
soon face an impossible deluge. Other appellate
courts may
minimise this deluge. In addition, these courts exist for a
laudable purpose within our court hierarchy.
Without doubt,
this Court only stands to benefit from their views. This is
especially so now that our jurisdiction is no
longer restricted to
constitutional matters.
[33]
Pronouncements by the other appellate courts, in particular the
Supreme Court of Appeal, will undoubtedly help enrich this
Court’s
jurisprudence. In a slightly different but relevant context,
this Court in
Amod
held:
“When a constitutional matter is one which turns on the direct
application of the Constitution and which does not involve
the
development of the common law, considerations of costs and time may
make it desirable that the appeal be brought directly to
this Court.
But when the constitutional matter involves the development of
the common law, the position is different. The
Supreme Court of
Appeal has jurisdiction to develop the common law in all matters
including constitutional matters. Because
of the breadth of its
jurisdiction and its expertise in the common law, its views as to
whether the common law should or should
not be developed in a
‘constitutional matter’ are of particular importance.
Assuming, as Mr Omar contends,
that this Court’s
jurisdiction to develop the common law in constitutional matters is
no different to that of the Supreme
Court of Appeal, it is a
jurisdiction which ought not ordinarily to be exercised without the
matter having first been dealt with
by the Supreme Court of
Appeal.”
[34]
[32]
There
are also practical considerations why – unless circumstances
are exceptional – litigants must be discouraged from
rushing
directly to this Court. In
African National Congress
, it
was held that “this court is not suited to hear urgent matters,
because of its composition and functions”.
[35]
[33]
On
whether to entertain an appeal against an interim order, in
Informal
Traders
Moseneke DCJ made the point that “[t]
he
applicable test is whether hearing the appeal serves the interests of
justice”.
[36]
He then proceeded to make a useful
collection of factors that
assist this Court in deciding whether it is in the interests of
justice to hear an appeal against interim
relief. He gleaned
these factors from a number of cases.
[37]
They include:
“(a) The kind and importance of the constitutional issue
raised;
(b) whether irreparable harm would result if leave to appeal is not
granted;
(c) whether the interim order has a final effect or disposes of a
substantial portion of the relief sought in a pending review;
(d) whether there are prospects of success in the pending review;
(e) whether, in deciding an appeal against an interim order, the
appellate court would usurp the role of the review court;
(f) whether interim relief would unduly trespass on the exclusive
terrain of the other branches of government, before the final
determination of the review grounds; and
(g) whether allowing the appeal would lead to piecemeal adjudication
and prolong the litigation or lead to wasteful use of judicial
resources or legal costs.”
[38]
(Footnotes omitted.)
[34]
Importantly,
these factors constitute neither a closed list nor a checklist.
Where they take us is a balancing exercise and
a matter of
judgement. The relevance and relative weight of the factors
will vary depending on the circumstances of each
case. In this
case, I deal with only some of the above factors and two others.
I take the view that these are dispositive
of the matter. They
are: the final effect of the interim order; irreparable harm;
prospects of success in the pending review;
the gravity of an
attachment and transfer of government money in violation of the
provisions of the State Liability Act; and the
continued
non-satisfaction of a court order that dates as far back as 16 May
2013. I deal with them in turn.
Final effect
[35]
The
refusal of interim relief by the High Court cannot be divorced from
the consequences that flowed from it. After interim
relief had
not been granted, Tsoga secured transfer of the attached
R30 476 839.71 from the Department of Public Works’
account. The Department of Public Works now does not have
access to that money and cannot use it. Surely then, in this
sense, the refusal of interim relief has had a final effect.
This makes the order appealable.
Irreparable harm
[36]
In
Machele
, this Court held that the primary consideration in
determining whether it is in the interests of justice for a litigant
to be granted
leave to appeal against an interim order of execution
is whether irreparable harm would result if leave to appeal is not
granted.
[39]
In
TAC 1
, the Court tells us:
“Ordinarily, for an applicant to succeed in such an
application, the applicant would have to show that irreparable harm
would result if the interim appeal were not to be granted – a
matter which would, by definition, have been considered by the
Court
below in deciding whether or not to grant the execution order.
If irreparable harm cannot be shown, an application
for leave to
appeal will generally fail. If the applicant can show
irreparable harm, that irreparable harm would have to
be weighed
against any irreparable harm that the respondent (in the application
for leave to appeal) may suffer were the interim
execution order to
be overturned.”
[40]
[37]
The
applicants must show that irreparable harm will result if the appeal
against the refusal of interim relief does not succeed.
The
applicants argue that the attached funds were earmarked for service
delivery and important capital and infrastructure projects
in the
Department of Public Works and that, as a result of the attachment,
all these have come to a halt. Although on the
face of it this
seems convincing, the applicants have done no more than make bald
unsubstantiated allegations. They do not
disclose how much had
been allocated to the Department of Public Works for the financial
year in issue. They do not say how
much of that had been spent
and how much still remained at the time of the attachment. It
is only with that kind of detail
that this Court would be in a
position to assess whether, indeed, the Department cannot deliver
services or finance capital or
infrastructure projects. The
bare assertions placed before us will not suffice. The
applicants must take the Court
into their confidence and give all the
necessary detail.
[38]
That
the applicants’ averments are bald and unsubstantiated is not
surprising. It is not the Department of Public Works
–
the affected department – that is telling us what exactly it
was going to do with the money, which it can now no
longer do.
Rather, it is the applicants who are giving us information that is
totally lacking in specificity. In fact,
the information is so
generic that it describes virtually what any government department
would do with money allocated to it.
That cannot be enough.
[39]
I am
not satisfied that the applicants have placed enough before us to
demonstrate that, pending finalisation of Part B of the High
Court
application, the Department of Public Works cannot deliver services
and pay for capital and infrastructure projects.
[40]
This
conclusion takes care of the section 3(10) issue as well.
[41]
[41]
Without
casting any aspersions, I am not unmindful that the very fact that
government money is in the hands of a private entity
is fraught with
hazards for the Province. This does raise the possibility –
and I put it no higher – of irreparable
harm. But then,
the private entity – a firm of attorneys – has undertaken
to keep the money in its trust account
pending finalisation of Part
B. Although in the High Court founding affidavit the applicants
do express fear that the attorneys
will not make good on their
undertaking, in the written and oral submissions this point was not
pursued. This is not to suggest
that it was abandoned.
[42]
Of importance in this regard, the Attorneys’ Fidelity Fund does
reimburse persons who suffer loss at the hands of errant
attorneys.
[43]
In the unlikely event that – despite the undertaking –
the money were to be frittered away, the Department of
Public Works
would be entitled to claim reimbursement by the Attorneys’
Fidelity Fund.
Prospects of success in the pending review
[42]
Axiomatically, prospects of success in the pending review
involve some consideration of the merits of the issues to be
determined
in the review. The question is: to what extent does
an appellate court like ours delve into those merits? In
OUTA
Moseneke DCJ said:
“Yet another important consideration is whether in deciding an
appeal against an interim order, the appellate court would
in effect
usurp the role of the review court. Ordinarily the appellate
court should avoid anticipating the outcome of the
review except
perhaps where the review has no prospects of success whatsoever.”
[44]
[43]
The
Part B proceedings pending before the High Court are bifurcated.
First, the applicants are asking for a declarator that
the writ in
terms of which the R30 476 839.71 was attached was issued
unlawfully. As indicated above, I limit the discussion
on this to the argument which relies on section 3(4)
of the State Liability Act. Second, they
are seeking
to review, under the Promotion of Administrative
Justice Act
[45]
(PAJA): (a) the decision to conclude the agreement that resulted in
the settlement order of 16 May 2013; and (b) the settlement
agreement
itself.
[44]
There
are reasonable prospects of success on the facet concerning the
State Liability Act argument. What is to be gleaned
from
the scheme of the Act is an insistence on a number of formal steps
before movable property belonging to the State may be attached.
Section 3(1) appears to emphasise that attachment, execution or “like
process” may only take place in accordance with
the procedure
set out in section 3(4) to (8).
[46]
In terms of section 3(2) the State Attorney or attorney of record
appearing for the department concerned must – within
seven days
of an order sounding in money becoming final
[47]
– inform the executive authority and accounting officer of the
department and the relevant treasury of the order in writing.
Section 3(3) stipulates that the judgment debt must be satisfied
within 30 days of the order becoming final or within such
period as
may be agreed between the judgment creditor and the accounting
officer of the department.
[45]
If the
judgment debt is not satisfied within 30 days or the period agreed
upon between the accounting officer and the judgment creditor,
that
still does not entitle the judgment creditor to proceed to
execution. Instead, the judgment creditor “may serve
the
court order in terms of the applicable Rules of Court on the
executive authority and accounting officer of the department
concerned, the State Attorney or attorney of record appearing on
behalf of the department concerned and the relevant treasury”.
[48]
Within 14 days of service of the order, the relevant treasury must
ensure that the judgment debt is satisfied or acceptable
arrangements
for its satisfaction have been made with the judgment creditor.
[49]
It is only upon the treasury failing in this that, at the request of
the judgment creditor, the Registrar or Clerk of the
Court concerned
must issue a writ of execution.
[50]
[46]
Of the
steps provided for in the State Liability Act, the applicants
complain only about lack of service in terms of section 3(4).
Tsoga has not denied this. It seems to me that a necessary
jurisdictional fact entitling the Assistant Registrar of the High
Court to issue the second writ was lacking. There are good
prospects that this writ may be found to be invalid for having
been
issued in violation of the principle of legality. But this
question cannot be viewed in isolation. It must be
looked at in
conjunction with the other prong of the applicants’ attack.
And that is the PAJA review relating to the
settlement agreement that
was made an order of Court on 16 May 2013. Do the
applicants have prospects of success on
this prong as well? I
will assume, without deciding, that the proposed PAJA review is
legally competent.
[47]
The
applicants raise a number of review grounds for setting aside the
settlement agreement.
[51]
The question is: even assuming that the settlement agreement were to
be set aside, where does that take them? The fact
of the matter
is that not everything ended with the settlement agreement. An
order of court was granted pursuant to the agreement.
To this
day, that order stands. Whatever underlying dispute there was
between the parties may very well have been rendered
res judicata
(a matter judicially determined) by the order.
[52]
An application was brought to rescind it but it did not succeed.
A subsequent application for leave to appeal against
the refusal of
rescission was later abandoned. That means the settlement order
is final. The applicants suggested that
the order will come
crumbling down on the authority of two Supreme Court of Appeal
judgments,
Changing Tides
[53]
and
Motala
.
[54]
In oral argument the applicants jettisoned reliance on
Motala
on the basis that it did not support them. But they persisted
with their reliance on
Changing Tides
. I do not
understand the distinction they seek to draw between the two
judgments.
[48]
Changing
Tides
involved the eviction of a number of people who occupied a
building as tenants of other people who had unlawfully taken it
over.
[55]
Before Court there was a measure of uncertainty on whether the list
of occupants presented was comprehensive enough.
A full list
was considered necessary for purposes of the provision of temporary
emergency accommodation to the occupants by the
municipality upon
their eviction. The South Gauteng High Court ordered the
Sheriff to draw up a comprehensive list of the
occupants for the
municipality. On appeal, Wallis JA held that, in terms of the
Sheriffs Act,
[56]
the functions of the Sheriff did not include what the High Court had
ordered, i.e. the drawing of the list.
[57]
He declared this part of the order a nullity.
[49]
In
Motala
the North Gauteng High Court – in making an order
of judicial management of a company – had also made
appointments
of judicial managers. On appeal, Ponnan JA held
that in terms of the Companies Act
[58]
the power to appoint judicial managers vests in the Master of the
High Court, not the High Court.
[59]
He held the appointments to be a nullity.
[50]
I read
both judgments to say that, if on the face of the order, one is able
to conclude that what the court has ordered cannot be
done under the
enabling legislation, the order is a nullity and can be
disregarded.
[60]
These cases are distinguishable from the instant scenario and are not
authority for the proposition that the order of 16
May 2013 may
suddenly be of no force and effect. On its face, that order is
perfectly valid and competent. If
there be a need to explain
this, the so-called nullity of the settlement order does not –
so to speak – jump out of
the page, as was the case with the
nullity of the orders in
Changing Tides
and
Motala
.
There has to be an antecedent step: proof of the grounds of review.
In any event, it seems to me that the applicants
may well not be in a
position to prove these grounds.
Eke
stands in their
way.
[61]
If the issues they raise did not form part of the defences to Tsoga’s
claim before the High Court, they could
have. That they
were not raised matters not.
[51]
In
oral argument and in supplementary written submissions the applicants
attempted to avoid the effect of
Eke
by relying on paragraph
26 of that judgment:
“‘[T]he agreement must not be objectionable, that is, its
terms must be capable, both from a legal and a practical
point of
view, of being included in a court order’. That means,
its terms must accord with both the Constitution and
the law.”
[62]
(Footnotes omitted.)
[52]
The
applicants point to some of the grounds of review that suggest
non compliance with the Constitution and the law
[63]
and argue that, based on the preceding quote from
Eke
, the
settlement order was invalid. This misses the point.
First, what
Eke
was dealing with was what the Court had to
ascertain before making a settlement agreement an order of court.
Second, once
the order has been made, it is an order like any other.
That means it can only be set aside by means of a legally cognisable
process like, for example, rescission.
[64]
In this instance, rescission was abandoned.
[53]
Except
for those already dealt with here, no other bases have been suggested
for avoiding the effect of the order of 16 May 2013.
If any,
prospects of success of the PAJA review are minimal.
[54]
On the
matter of the stay of execution pending finalisation of the R8.8
million claim, not much more detail was given besides what
is set out
in paragraph 12 above. It is so that a stay of the execution of
a judgment pending the determination of proceedings
still to be
instituted is legally cognisable. An order of that nature may
be granted where real and substantial injustice
would otherwise
result.
[65]
It goes without saying that the applicant for the stay of execution
must demonstrate that the proposed claim has prospects
of success.
Otherwise, what would the point of the stay be? In
Cooper
[66]
the Court held that the applicant must show a
prima facie
right. The information we have here is so scanty as to come
nowhere near demonstrating prospects of success or a
prima facie
right.
Other interests of justice factors
[55]
There
are other factors that are of specific relevance to this matter.
It cannot be gainsaid that the attachment of state
monies in a manner
that is at variance with the carefully crafted process in the State
Liability Act is a serious matter.
As indicated above, the
attachment implicates the rule of law, a founding value of our
Constitution. One cannot make light
of it. That said,
attachments of State bank accounts are rare. The fear of a
flood of attachments should not be overplayed.
Also, there is
the countervailing consideration of a Court order that stands and
remains unsatisfied after an inordinately long
time.
[56]
Section
165(5) of the Constitution provides that “[a]n order or
decision issued by a court binds all persons to whom and organs
of
state to which it applies”. In
Nyathi
[67]
this Court held that “deliberate non-compliance with or
disobedience of a court order by the State detracts from the
‘dignity, accessibility and effectiveness of the courts’”.
[68]
The Court also quoted Jafta J with approval in
Mjeni
:
[69]
“The constitutional right of access to courts would remain an
illusion unless orders made by the courts are capable of being
enforced by those in whose favour such orders were made. The
process of adjudication and the resolution of disputes in courts
of
law is not an end in itself but only a means thereto; the end being
the enforcement of rights or obligations defined in the
court
order.”
[70]
[57]
With
this in mind, the order of 16 May 2013 stands. Unless set aside
by some competent legal process, at some point it will
have to be
complied with. In the special circumstances of this case, it
seems to accord with the interests of justice not
to order repayment
of the money.
[58]
It is
particularly disturbing to note that the applicants are not –
in the least − prepared to make provision
for
satisfying the judgment debt; not even as a contingent claim.
Their language sounds as though the judgment debt does
not exist at
all. This comes out where they say, if the amount were not to
be paid back to the provincial government, that
would constitute a
recurring deficit in the budget of the Department of Public Works.
That tells us that – in perpetuity
– they are not
prepared to take the necessary steps to make sure that some future
appropriation will make provision for the
judgment. That
attitude evokes dismay.
[71]
Conclusion
[59]
Having
considered the factors set out in
Informal Traders
,
[72]
in particular those discussed above, and the additional factors that
are of particular relevance to this case discussed in the
four
preceding paragraphs, I conclude that on balance it is not in the
interests of justice to grant leave to appeal.
The
application must fail.
Costs
[60]
As
to costs, they must follow the result.
Condonation
[61]
The
applicants did not file their written submissions timeously.
They brought an application for condonation. The first,
second,
and third respondents did not oppose this application. Viewed
cumulatively, the explanation given in the main and
supplementary
affidavits is satisfactory. Condonation should be granted.
Order
[62]
The
following order is made:
1. Condonation of the late filing of the applicants’ written
submissions is granted.
2. Leave to appeal is refused.
3. The applicants must pay the costs of the first and third
respondents, including costs of two counsel.
For the Applicants: T Ngcukaitobi, R Tulk and N Muvangua
instructed by Werksmans Attorneys
For the First, Second and Third Respondents:
K J Kemp SC, S Grobler and K Hofmeyr instructed by
Peyper Attorneys
[1]
Provincial Government: North West and Another
v Tsoga Developers CC and Others
[2015]
ZANWHC 36
(Djaje AJ judgment).
[2]
The applicants
filed a multi-prayer notice of motion. I do not set out all
its details, but merely capture what I see as
its essence.
[3]
The firm of
attorneys was not a respondent before the High Court.
[4]
20 of 1957.
Section 3(10) provides:
“
(a) A party having a direct and material
interest may, before the attached movable property is sold in
execution of the judgment
debt, apply to the court which granted the
order, for a stay on grounds that the execution of the attached
movable property—
(i) would severely disrupt service delivery, threaten
life or put the security of the public at risk; or
(ii) is not in the interests of justice.
(b) If an application referred to in paragraph (a) is
brought by the department concerned, the application must contain a
list
of movable property and the location thereof, compiled by the
department concerned, that may be attached and sold in execution
of
the judgment debt.
(c) Notice of an application in terms of paragraph (a)
must be given to the judgment creditor and sheriff concerned.”
[5]
The CIDB awards “General Building” – abbreviated
“GB” – grading certificates to contractors.
[6]
Although the
contractual obligation to pay rested on the Department of Public
Works, apparently this Department would get monies
for payment from
the Department of Health.
[7]
This is the settlement order referred to at [1] above.
[8]
Mokgothi Samuel Thobakgale, NO and Another v
Tsoga Developers CC and Others
[2014] ZANWHC
9.
[9]
The detail to
be gleaned from the agreement itself is as follows:
·
R22 608 794.36 being the agreed capital amount;
·
R3 165 231.21 being VAT;
·
R3 994 973.86 being interest at 15.5% per annum
from 1 August 2010 until 30 July 2011;
·
R4 614 194.93 being interest at 15.5% per annum
from 1 August 2011 until 30 July 2012;
·
R5 329 395.14 being interest at 15.5% per annum
from 1 August 2012 until 30 July 2013;
·
R6 155 451.38 being interest at 15.5% per annum
from 1 August 2013 until 30 July 2014;
·
R1 164 160.69 being interest at 9% per annum from 1
August 2014 to 11 November 2014.
The agreement states the total amount based on the
above calculations to be R47 002 201.57. This
appears to be
mathematically incorrect, but I will accept this as
the total based on the parties’ agreement. After the
Department
of Public Works effected payment in the amount of R20
million on 12 November 2014, the outstanding balance was
R27 002 201.57.
[10]
This is the
writ referred to at [1] above.
[11]
Before us
this is the fifth respondent, the fourth respondent before the High
Court.
[12]
In this
Court this is the sixth respondent, the fifth respondent before the
High Court.
[13]
Here this
is the seventh respondent, the sixth respondent before the High
Court. For completeness, the second respondent
was Mr Wandile
Bozwana, cited by the applicants as the “purported
representative of [Tsoga]”. He is reported
to have been
murdered a few days after the hearing before this Court.
Because no suggestion of conduct by him in his personal
capacity has
been made and, therefore, no relief can appropriately be sought
against him, no issues of substitution arise.
The last
respondent is the Sheriff of the High Court, Mahikeng, who is the
fourth respondent before us and was the third respondent
before the
High Court.
[14]
Section
3(4) of the State Liability Act provides:
“
If a final court order against a department for
the payment of money is not satisfied within 30 days of the date of
the order
becoming final as provided for in subsection (3)(a)(i) or
the time period agreed upon as provided for in subsection
(3)(a)(ii),
the judgment creditor may serve the court order in terms
of the applicable Rules of Court on the executive authority and
accounting
officer of the department concerned, the State Attorney
or attorney of record appearing on behalf of the department
concerned
and the relevant treasury.”
[15]
Section 226
of the Constitution provides:
“
(1) There is a Provincial Revenue Fund for each
province into which all money received by the provincial government
must be paid,
except money reasonably excluded by an Act of
Parliament.
(2) Money may be withdrawn from a Provincial Revenue
Fund only—
(a) in terms of an appropriation by a provincial Act;
or
(b) as a direct charge against the Provincial Revenue
Fund, when it is provided for in the Constitution or a provincial
Act.”
[16]
See the
wording of the writ, which says:
“
You are hereby directed to attach and take into
execution . . . the right, title, and interest in and to the bank
account of the
Department of Public Works, Roads and Transport:
North West Provincial Government, the respondent . . . held at First
National
Bank, Batho Pele with account number 622 5840 2917 in the
amount of R30 476 839.71 due and payable in terms of a
court
order dated 16 May 2013.”
The applicants have not suggested that the attached and
transferred funds were not in an account held by the Department of
Public
Works.
[17]
Treasury
Regulations for departments, trading entities, constitutional
institutions and public entities, GN R225
GG
27388, 15 March 2005.
[18]
1 of 1999.
[19]
Section
7(1) provides:
“
The National Treasury must prescribe a framework
within which departments, public entities listed in Schedule 3 and
constitutional
institutions must conduct their cash management.”
Section 21(3) provides:
“
A provincial treasury must establish appropriate
and effective cash management and banking arrangements for its
Provincial Revenue
Fund in accordance with the framework that must
be prescribed in terms of section 7.”
In terms of section 1, the definition section in the
PFMA, “prescribe” means “prescribe by regulation”.
[20]
Minister
of Finance v Golden Arrow Bus Services (Pty) Ltd
[2009] ZASCA 174
;
2010 (2) All SA 237
(SCA) at para 14.
[21]
In respect
of both, see [17] accept above.
[22]
Annually,
at both national and provincial level, an
Appropriation Act is
passed by the relevant legislature. The purpose of this Act is
to provide for the appropriation of money from the relevant
revenue
fund for the financial requirements of the State as well as to
provide for incidental matters. During argument,
no reference
was made to this legislation which is a matter of public record and
has to be passed before any department can spend
anything. The
fact that this was not dealt with strengthens the point that it is
not in the interests of justice to grant
leave in respect of the
section 226
argument.
[23]
Emphasis
added.
[24]
Sovereign
default refers to the failure of a sovereign state to pay its debts
as they come due. This often occurs in the
context of
political or economic turmoil; the 2010 Euro zone crisis provides
one recent example, as Greece, Ireland and Portugal
sought to stave
off sovereign default by seeking help from their creditors.
Because there is no universal sovereign insolvency
regime, the
options available to the struggling state will vary, with creditors
likely to impose strict conditions for any debt
relief or debt
restructuring. See Tirado “Sovereign Insolvency in the
Euro Zone Public and Private Law Remedies”
(2012) 28
Annual
Review of Insolvency Law
and Mushell “The
Weight of the World on its Shoulders: How US-Style Reform at the IMF
Can Ease the Global Sovereign Debt
Crisis” (2016) 31
Journal
of International Banking Law and Regulation
151.
[25]
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
para 58.
[26]
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) at para 19.
[27]
Affordable Medicines Trust and Others v
Minister of Health and Another
[2005] ZACC
3
; 2006 (3) SA 247 (CC)
[2005] ZACC 3
; ;
2005 (6) BCLR 529
(CC) at para
49.
[28]
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 para 173, where Ngcobo J said:
“
Another source of constraint on the exercise of
public power is the rule of law which is one of the foundational
values of our
constitutional democracy. The rule of law
principle requires that the actions of all those who exercise public
power must
comply with the law, including the Constitution. It
is central to the conception of our constitutional order that those
who exercise public power including the President, are constrained
by the principle that they may exercise only those powers and
perform only those functions which are conferred upon them by the
law. Their sole claim to the exercise of lawful authority
rests in the powers allocated to them under the law. The
common law principle of ultra vires is now underpinned by the
constitutional doctrine of legality which is an aspect of the rule
of law. Thus what would have been ultra vires under
the common
law by reason of a public official exceeding a statutory power is
now invalid according to the doctrine of legality.”
(Footnotes omitted.)
[29]
South African Informal Traders Forum and
Others v City of Johannesburg and Others
[2014] ZACC 8
; 2014 (6) BCLR 726 (CC);
2014 (4) SA 371
(CC)
(
Informal Traders
) at
para 17.
[30]
Id.
[31]
Id.
[32]
Id at paras 18-9.
[33]
Section
167(3) of the Constitution, which was amended by the Constitution
Seventeenth Amendment Act of 2012, now reads:
“
The Constitutional Court—
(a) is the highest Court of the Republic; and
(b) may decide—
(i) constitutional matters, and issues connected with
decisions on constitutional matters; and
(ii) any other matter, if the Constitutional Court
grants leave to appeal on the grounds that the matter raises an
arguable point
of law of general public importance which ought to be
considered by that Court; and
(c) makes the final decision whether a matter is within
its jurisdiction.”
[34]
Amod
v Multilateral Motor Vehicle
Accidents Fund
[1998]
ZACC 11
;
1998 (4) SA 753
(CC);
1998 (10) BCLR 1207
(CC) at para 33.
[35]
African
National Congress v Chief Electoral Officer of the Independent
Electoral Commission
[2009] ZACC 13;
2010 (5) SA 487
(CC);
2009 (10) BCLR 971
(CC) at para 11. See
also
President of the Republic of South
Africa and Others v United Democratic Movement (African Christian
Democratic Party and Others
Intervening; Institute for Democracy in
South Africa and Another as Amici Curiae)
[2002] ZACC 34
;
2003 (1) SA 472
(CC);
2002 (11) BCLR 1164
(CC) at
para 30, where the Court held:
“
[The Court] consists of 11 members and a
quorum
of the Court is eight of them. This Court is in recess for
some months of each year and during those times its members
disperse
to their homes which, in some cases, are a considerable distance
from the seat of the Court in Johannesburg. . . .[I]t
is not always
possible to convene a
quorum
of the Court at very short
notice during a recess.” (Footnotes omitted.)
[36]
Informal
Traders
above n 29 at para 20.
[37]
See
International Trade Administration Commission
v SCAW South Africa (Pty) Ltd
[2010] ZACC 6
;
2012 (4) SA 618 (CC);
2010 (5) BCLR 457
(CC) at paras 50 and
55;
Machele and Others v Mailula and Others
[2009] ZACC 7
;
2010 (2) SA 257
(CC);
2009 (8) BCLR 767
(CC)
(
Machele
) at paras
23-8; and
National Treasury and Others v
Opposition to Urban Tolling Alliance and Others
[2012] ZACC 18
; 2012 (6) SA 223 (CC);
2012 (11) BCLR 1148
(CC) (
OUTA
) at paras
25-6.
[38]
Informal Traders
above
n 29 at para 20.
[39]
Machele
above n 37 at
para 24. Importantly, this factor is also listed in the
collection of factors in
Informal Traders
above n 29 at para 20.
[40]
Minister of Health and Others v Treatment
Action Campaign and Others (No 1)
[2002]
ZACC 16
;
2002 (5) SA 703
(CC);
2002 (10) BCLR 703
(CC) at para 12.
[41]
See [3].
[42]
An issue
that was emphasised was that the Department of Public Works cannot
use the money.
[43]
Section 26 of the Attorneys Act 53 of 1979 provides:
“
Subject to the provisions of this Act, the fund
shall be applied for the purpose of reimbursing persons who may
suffer pecuniary
loss as a result of—
(a) theft committed by a practising practitioner, his
candidate attorney or his employee, of money or other property
entrusted
by or on behalf of such persons to him or to his candidate
attorney or employee in the course of his practice or while acting
as executor or administrator in the estate of a deceased person or
as a trustee in an insolvent estate or in any other similar
capacity.”
As to the extent of the Attorneys’ Fidelity Fund
liability, section 47 provides:
“
(2) A claim for reimbursement as contemplated in
section 26 shall be limited, in the case of money entrusted to a
practitioner,
to the amount actually handed over, without interest,
and, in the case of securities or other property, to an amount equal
to
the average market value of such securities or property at the
date when written demand is first made for their delivery, or, if
there is no average market value, the fair market value as at that
date of such securities or other property, without interest.
(3) Only the balance of any loss suffered by any person
after deduction from the loss of the amount or value of all money or
other
benefits received or receivable by him from any source other
than the fund, may be recovered from the fund.”
In future,
sections 55
and
56
of the
Legal Practice Act
28 of 2014
shall regulate these aspects when the provisions are
brought into effect. For present purposes, the new provisions
are,
for practical purposes, largely to the same effect.
[44]
OUTA
above n 37 at
para 26.
[45]
3 of 2000.
[46]
Section
3(1)
provides:
“
Subject to subsections (4) to (8), no execution,
attachment or like process for the satisfaction of a final court
order sounding
in money may be issued against the defendant or
respondent in any action or legal proceedings against the State or
against any
property of the State, but the amount, if any, which may
be required to satisfy any final court order given or made against
the
nominal defendant or respondent in any such action or
proceedings must be paid as contemplated in this section.”
[47]
In terms of
the definition of “final court order” in
section 4A
an
order is final if given or confirmed by a court of final instance or
otherwise becomes final after expiry of the period within
which an
appeal to a higher court may be lodged.
[48]
Section
3(4).
[49]
Section
3(5).
[50]
Section
3(6).
[51]
Examples of
these are the following. The applicants contend that when
Ilima went into liquidation, the Principal Building
Agreement came
to an end. As a result, the applicants contend that the
settlement agreement at issue is invalid as there
was no foundation
for its existence in the first place. They also claim that the
decision to allow Tsoga to remain on site
after the purported
termination of the Principal Building Agreement violated section 217
of the Constitution. They further
contend that the settlement
agreement is invalid because it was concluded without the provisions
of the Preferential Procurement
Framework Act 5 of 2000 (Procurement
Act) or section 217(1) of the Constitution having been complied
with.
[52]
In
Eke
v Parsons
[2015] ZACC 30
;
2015 (11) BCLR
1319
(CC) (
Eke
) at
para 29, this Court states that “[o]nce a settlement agreement
has been made an order of court, it is an order like
any other [and]
will be interpreted like all court orders”. It further
states, at para 31, that—
“
[t]he effect of a settlement order is to change
the status of the rights and obligations between the parties.
Save for litigation
that may be consequent upon the nature of the
particular order, the order brings finality to the
lis
between the parties; the
lis
becomes
res
judicata
.
. . . It changes the terms of a settlement agreement to an
enforceable court order. The type of enforcement may
be
execution or contempt proceedings. Or it may take any other
form permitted by the nature of the order.”
(Footnotes
omitted.)
[53]
City
of Johannesburg v Changing Tides 74 (Pty) Ltd and Others
[2012] ZASCA 116
;
2012 (6) SA 294
(SCA) (
Changing
Tides
).
[54]
The
Master of the High Court (North Gauteng High Court, Pretoria) v
Motala NO and Others
[2011] ZASCA 238
;
2012
(3) SA 325
(SCA) (
Motala
).
[55]
The
takeover had happened by means of the so-called hijacking of
buildings that often takes place in, especially, central
Johannesburg.
[56]
90 of 1986.
[57]
Changing
Tides
above n 53 at para 8.
[58]
61 of 1973.
[59]
Motala
above n 54 at para 6.
[60]
Member
of the Executive Council for Health, Eastern Cape and Another v
Kirland Investments (Pty) Ltd
[2014] ZACC 6
;
2014 (3) SA 481
(CC);
2014 (5) BCLR 547
(CC) clarifies that the
position with court orders is different from that of administrative
action:
“
In [
Motala
] the Supreme Court of Appeal,
reaffirming a line of cases more than a century old, held that
judicial decisions issued without
jurisdiction or without the
citation of a necessary party are nullities that a later court may
refuse to enforce (without the
need for a formal setting aside by a
court of equal standing). This seems paradoxical but is not.
The court, as the
font of legality, has the means itself to assert
the dividing line between what is lawful and not lawful. For
the court
itself to disclaim a preceding court order that is a
nullity therefore does not risk disorder or self-help.”
[61]
Eke
above n 52.
[62]
Id at para
26.
[63]
These
include the allegation that the settlement agreement violated
section 217 of the Constitution as well as various provisions
of the
Procurement Act.
[64]
According
to the Supreme Court of Appeal in
Changing
Tides
and
Motala
there is the possibility of an order being a nullity. Although
I have set out what the two cases were about, it is not
necessary
for present purposes to pronounce one way or the other on what they
held.
[65]
Dumah
v Klerksdorp Town Council
1951 (4) SA
519
(T);
R
oad
Accident Fund v Strydom
2001
(1) SA 292
(C
).
[66]
Cooper
v Feinstein
[2005] ZAWCHC at para 28.
[67]
Nyathi v Member of the Executive Council for
the Department of Health Gauteng and Another
[2008] ZACC 8; 2008 (5) SA 94 (CC); 2008 (9) BCLR 865 (CC).
[68]
Id at para 43.
[69]
Mjeni v Minister of Health and Welfare,
Eastern Cape
2000 (4) SA 446 (Tk).
[70]
Id at para 453C-D.
[71]
Unsurprisingly, the High Court observed that the Department of
Public Works’ budget allocation for the 2014/2015 financial
year made no provision for Tsoga’s claim (Djaje AJ judgment
above n 1 at para 25).
[72]
Informal Traders
above n 29 at para 20.