Merafong City Local Municipality v AngloGold Ashanti Limited (CCT106/15) [2016] ZACC 35; 2017 (2) BCLR 182 (CC); 2017 (2) SA 211 (CC) (24 October 2016)

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Merafong City Local Municipality v AngloGold Ashanti Limited (CCT106/15) [2016] ZACC 35; 2017 (2) BCLR 182 (CC); 2017 (2) SA 211 (CC) (24 October 2016)

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CONSTITUTIONAL
COURT OF SOUTH AFRICA
Case CCT 106/15
In the matter
between:
MERAFONG CITY
LOCAL
MUNICIPALITY
Applicant
and
ANGLOGOLD ASHANTI
LIMITED
Respondent
Neutral
citation:
Merafong
City Local Municipality v AngloGold Ashanti Limited
[2016] ZACC 35
Coram:
Moseneke DCJ, Bosielo AJ, Cameron J, Froneman J,
Jafta J, Khampepe J, Madlanga J, Mhlantla J, Nkabinde J and Zondo J
Judgments:
Cameron J (majority): [1] to [84]
Jafta J (dissenting): [85] to [178]
Heard on:
18 February 2016
Decided on:
24 October 2016
Summary:
collateral or reactive challenge by
organ of state — inter governmental dispute —
national and local functional
areas of competence — exclusive
municipal power to levy surcharge on water supply binding nature of
administrative action
— permissibility of collateral or
reactive challenge by organ of state — justification of delay —
distinction
between declaration of constitutional invalidity and just
and equitable remedy
ORDER
On appeal from the
Supreme Court of Appeal (hearing an appeal from the High Court of
South Africa, Gauteng Division, Pretoria):
1.
Leave to appeal is granted.
2.
The appeal is upheld.
3.
The orders of the High Court of South
Africa, Gauteng Division, Pretoria and the Supreme Court of
Appeal are set aside.
4.
In their stead, the matter is remitted to
the High Court to determine, after the lodging of further affidavits
as the applicant,
Merafong City Local Municipality, and the Minister
of Water Affairs and Forestry may consider appropriate, on the
lawfulness of
the Minister’s decision of 18 July 2005,
and, if necessary, what remedy is to be granted.
5.
The Minister is to lodge the record of the
decision by 4 November 2016.
6.
The further affidavits, if any, by the
applicant are to be lodged by 18 November 2016 and by the
Minister by 25 November 2016.
7.
The respondent, AngloGold Ashanti Limited,
may lodge its affidavits, if any, by 6 December 2016.
8.
Costs are reserved for consideration by the
High Court.
JUDGMENT
CAMERON J (Moseneke
DCJ, Froneman J, Khampepe J, Madlanga J, Mhlantla J and Nkabinde J
concurring):
Introduction
[1]
At issue is a decision the Minister of
Water Affairs and Forestry (Minister) took on 18 July 2005 in which
she overturned a decision
by the applicant, Merafong City Local
Municipality (Merafong), to levy a surcharge on water for industrial
use by the respondent,
AngloGold Ashanti Limited (AngloGold).
In addition, on the portion of water used for domestic purposes, the
Minister ruled
that Merafong, the other mining houses affected and
Rand Water, which is a statutorily established organ of state,
[1]
“should negotiate a reasonable tariff”.  Merafong
seeks to overturn a decision of the Supreme Court of Appeal,

dismissing an appeal to it from a decision of the Gauteng Division of
the High Court, Pretoria,
[2]
which gave effect to the Minister’s decision.
[2]
Merafong contends that the Minister’s
decision was invalid because it intruded on an exclusive
constitutional competence which
section 156(1) of the Constitution
confers on Merafong.
[3]
This empowers Merafong to deal with “[w]ater and sanitation
services limited to potable water supply systems and domestic

waste-water and sewage disposal systems”.
[4]
The Minister purported to act in pursuance of section 8(4) of
the Act, which permits a party who has applied to a local
authority
for certain services to appeal to the Minister “against any
decision, including any condition imposed”.
The Act
empowers the Minister on appeal to “confirm, vary or overturn
any decision” of a water services authority.
[5]
Merafong was the water services authority in question.  It says
there is a clash between its executive constitutional
competences and
the power the Minister purported to exercise.
Background and
litigation history
[3]
AngloGold owns mines in Merafong.  Its
mining operations require water.  It also supplies water for
domestic use to its
employees staying on the mines.  From 1958
until 2004, that water came to AngloGold directly from Rand Water,
with whom it
had a number of written water supply agreements.
The water reached AngloGold through a system of reservoirs, pipelines
and
other apparatus maintained by Rand Water.
[4]
In December 1997, when the Act came into
effect, all this changed.  The Act gave statutory recognition to
local government’s
new constitutional authority to administer
water and sanitation services.  It designated municipalities as
water services
authorities responsible for progressively ensuring
access to water services by consumers in their areas of
jurisdiction.
Municipalities flexed these new statutory muscles
only from 1 July 2003.
[5]
On 11 February 2004, Merafong sent a
written notice to all the mining houses operating in its area,
including AngloGold.  The
notice said Merafong had been accorded
the powers and functions of a water services authority.  It
asked the mining houses
to apply for approval for the supply of water
for industrial use in terms of section 7 of the Act.  After
the notice,
at meetings with the mining houses, Merafong explained
the implications of the Act and its role as a water services
authority.
On 31 May 2004, Merafong sent another written
notice informing the mining houses that new tariffs would come into
operation
from 1 July 2004.
[6]
In response, on 8 April 2004, AngloGold
sought Merafong’s approval “in terms of section 7 of the
[Act] to continue obtaining
water from Rand Water for its mining
operations and associated domestic applications at the tariff set by,
and under the conditions
imposed by Rand Water”.
[6]
[7]
Merafong announced the new tariffs in May
2004.  They were a lot higher than Rand Water’s tariffs.
But Merafong
couldn’t provide water services itself.  So
it appointed Rand Water as its agent to do so and to collect
payment.
After deducting its share, Rand Water would pay the
balance – the surcharge Merafong had added – into the
coffers of
Merafong.  Merafong said it imposed the surcharge
because it had to “find new sources of income to ensure [its]
financial
sustainability”.  Its executive Mayor justified
the surcharge as necessary to fulfil “the promise of better
service
delivery to the total community,” and noted the impact
of the surcharge on “the economy of the region”.
[8]
Merafong told the mining houses they had a
right to appeal to the Minister against the new charges.
AngloGold appealed to
the Minister.
[7]
It complained that the tariff Merafong proposed was much higher than
the Rand Water tariff (an extra half a million rand
per month)
without “adding any value to, or assuming any responsibility
for any aspect of the water supply”.
It also complained
that Merafong failed to recognise AngloGold’s role as a water
service provider or make any attempt, other
than to ask for
information on the mine’s consumption, to understand its
economic situation.
[9]
The Minister, purporting to exercise her
powers under the Act, upheld AngloGold’s appeal.  She
found the tariff increase
unreasonable because Merafong would add no
value to the services Rand Water provided to AngloGold.  On
18 July 2005,
she made a ruling.
[8]
She overturned the Municipality’s decision to levy the
surcharge on water for industrial purposes.  She ruled
that a
surcharge could be levied only on the portion of water AngloGold was
using for domestic purposes.  The Minister then
directed
Merafong, AngloGold and Rand Water to negotiate a reasonable tariff
on this portion.
[10]
In September 2005, Merafong obtained legal
advice that the Minister’s decision was “void in law”.
As a result,
in September 2007 it threatened to discontinue
AngloGold’s supply of water unless it paid the disputed
surcharge, plus arrears.
The cut-off would have been
catastrophic.  So AngloGold paid, under protest, and has
continued doing so.
[11]
During 2006 and 2007 Merafong and the
mining houses tried to work out an arrangement but their negotiations
ran aground.  A
draft interim agreement was drawn up and
discussed.  It provided that the mines would be charged
Merafong’s tariff (with
surcharge) for domestic water use and
Rand Water’s industrial tariff (without surcharge) for the mine
hostels and operational
water use.  But the agreement was never
bolted down.  The Municipality remained adamant that the
Minister’s decision
was unlawful.  It refused to buckle
down under it.
[12]
That is where things stand.  AngloGold
claims it has been unlawfully overcharged nearly R31 million for
water,
[9]
and forced to pay up under an enterprise throttling threat of
cut-off.  The Municipality continues to levy a surcharge
on
AngloGold’s industrial water use.
[13]
Against this background, AngloGold, in
April 2011, launched proceedings in the High Court to compel Merafong
to comply with the
Minister’s ruling.  In response,
Merafong conditionally counter-applied for a declarator that it has
exclusive executive
authority to set, adopt and implement tariffs on
the provision of water services in its jurisdiction, including
surcharges.
It also sought a declarator that section 8 of
the Act did not confer authority on the Minister “to interfere
with a
tariff set and implemented” by it for water services
provided in its area of jurisdiction.  In the alternative, it
sought
to strike down the provision allowing appeals to the Minister,
section 8(9), as unconstitutional and invalid.
[14]
The High Court granted AngloGold’s
application and dismissed Merafong’s counter application.
It found that
AngloGold had validly applied to Merafong under the
statute,
[10]
and that the Minister was vested with appellate power,
[11]
which she exercised.  But the High Court found that the
Minister’s decision, even if impugnable, was in any event

binding on the Municipality until set aside.  For this it relied
on
Oudekraal
.
[12]
The High Court accordingly ordered that Merafong comply with the
Minister’s ruling.
[15]
On appeal, with leave of the High Court,
the Supreme Court of Appeal endorsed this outcome.
[13]
It held that Merafong was obliged to approach the court to set aside
the Minister’s ruling, and that it breached the
principle of
legality by simply disregarding it.
[14]
Its failure to challenge the Minister’s ruling in judicial
review proceedings, rather than the constitutional attack
it launched
against the empowering statutory provisions, posed an insuperable
difficulty for it.
[15]
Citing
Kirland
,
[16]
the Court held that the notion that an organ of state could remain
inert or passive in the face of a ruling adverse to its powers,
only
to use the alleged invalidity of that ruling as a shield when it was
sought to be enforced, was unacceptable.  Further
that a
collateral challenge to the validity of an administrative action is a
remedy available only to an individual threatened
by a public
authority with coercive action: “[t]he notion that an organ of
state can use this shield against another organ
of state is simply
untenable”.
[17]
In this Court
[16]
In this Court, as in the Supreme Court of
Appeal, Merafong did not persist with its argument that section 8(9)
of the Act is invalid,
and the powers the Act conferred on the
Minister are unconstitutional, though counsel said the argument “was
alive on the
papers”.
[18]
Merafong also conceded that the supply of water for industrial
purposes could competently be subjected to ministerial scrutiny.
[17]
Merafong’s principal contention is
that the Supreme Court of Appeal misapplied
Oudekraal
and
Kirland
.
This is because of an alleged fundamental distinction between
decisions that fall within the scope of powers with which
a public
official is clothed, but are merely wrongly taken, and those that are
“on their face, beyond the powers of the decision-maker”.

In the latter case, so the contention goes, the person or entity
subject to the decision is entitled to ignore it until, as a matter

of process, that decision is sought to be enforced against it.
Then, the person or entity is entitled to raise the nullity
of the
decision as a defence.  That, Merafong says, is what it did
here.  In oral argument, Merafong also contended that
the
particular circumstances surrounding its defence permitted it to be
raised in these proceedings.
[18]
Rand Water initially filed a notice of
opposition, which it later withdrew, indicating that it would abide
in the litigation’s
outcome.  Though the Minister was
cited in the High Court, neither of the parties sought any direct
relief against her.
She filed no papers and did not appear in
either the High Court or the Supreme Court of Appeal.
[19]
After oral argument, this Court on 1 April
2016 issued directions inviting the Minister to indicate whether it
was proper for the
Court to determine whether: (i) the
Municipality has the exclusive competence to implement tariffs and
levy surcharges; (ii) section
8(9) of the Act confers authority
upon the Minister to interfere with tariffs; alternatively, (iii) if
she has authority under
section 8(9) to interfere, whether
section 8(9) is unconstitutional and invalid.  The Minister
was also directed
to file written submissions setting out the grounds
of her opposition if she opposed the determination of the
constitutional issues.
The parties were given an opportunity to
respond.
[19]
[20]
The Minister in her submissions contended
that, as a matter of procedure, the Court has the power to decide
Merafong’s conditional
counter-application, and that, although
an organ of state may not avail itself of a collateral challenge,
this was no bar to the
Court deciding the direct constitutional
challenge.  She submitted that the Court should nevertheless not
decide the counter-application
because, on the facts of her ruling,
it was unnecessary for the issue to be reached.
Jurisdiction and leave
to appeal
[21]
The dispute about the Minister’s
power to intervene on a matter of municipal competence raises
constitutional issues that
fall within this Court’s
jurisdiction.  It also raises arguable points of law of general
public importance that the
Court ought to consider.  Merafong’s
arguments have substance, and leave to appeal should be granted.
Issues
[22]
The principal question is whether the
Supreme Court of Appeal and High Court were right to enforce the
Minister’s ruling.
Behind that question is the broader
issue of when a public authority may collaterally or reactively
challenge an administrative
act, like the Minister’s ruling,
that is sought to be enforced against it, outside proceedings brought
to review it.
Merits
Collateral or reactive challenges
[23]
As noted above, the Supreme Court of Appeal
held against Merafong on the basis that, so long as an administrative
decision has not
been set aside, an organ of state may not raise its
invalidity as a defence to proceedings against it to enforce that
decision.
[20]
Relying on the invalidity of an administrative act as a defence
against its enforcement, while it has not been set aside,
has been
dubbed a collateral challenge
[21]
– “collateral” because it is raised in proceedings
that are not in themselves designed to impeach the validity
of the
act in question.
[22]
While the object of the proceedings is directed elsewhere, invalidity
is raised as a defence to them.
[24]
The Supreme Court of Appeal, citing its own
jurisprudence
[23]
and
Kirland
,
[24]
held that Merafong could not invoke a challenge to the validity of
the Minister’s ruling in reaction to AngloGold’s

application at all.  This was because that remedy is available
only to a person whom a public authority threatens with coercive

action.  In those cases, the Court held, citing
Oudekraal
,
[25]
the rationale was that “the legal force of the coercive action
will most often depend upon the legal validity of the administrative

action in question”.
[26]
That was why the disputed validity of the decision could be
questioned in those proceedings; but not beyond that.
[25]
This knockout blow to Merafong derived from
a category-approach to who can raise a collateral challenge.
Only an individual
whom a public authority threatens with coercive
action can; and no one outside the category.  Never a public
authority.
This approach squeezes collateral challenge into a
rigid format – one that neither doctrine nor practical reason
appears
to warrant.
Collateral challenges
pre-Constitution
[26]
The first reported challenge to
administrative action designed to ward off criminal proceedings was
not strictly collateral, but
reactive, for it was not raised in the
criminal proceedings themselves.
[27]
In
Johnstone
,
the Appellate Division of the Supreme Court (the predecessor of
the Supreme Court of Appeal) held that a corporation against
which a
charge of transgressing a wage determination had been laid could
obtain a declaratory order, outside the criminal court,
declaring
that the determination was not applicable to it.  Schreiner JA
warned that where a prosecution had already been
instituted, a court
asked to exercise its discretion by in effect declaring that the
person is innocent “would do well to
exercise great caution
before granting such an order”.
[28]
But where there was no dispute about the facts, an application for a
declaration could be entertained, in a proper case,
even though, if
the applicant’s argument was wrong, he may already have
contravened the law.
[29]
[27]
In
Johnstone
there was an impending prosecution.  But reactive challenges to
administrative decisions can be raised in any coercive setting,
not
only criminal.  In
Panasonic
,
[30]
a trade union sought to attack collaterally the validity of
industrial council proceedings on whose validity the employer’s

lock-out depended.  The complaint, the Court held, had to be
raised by way of review, and not collaterally in other
proceedings.
[31]
Conradie J located the reason in the nature of the employer/employee
contest, in which the Court acts as a referee.
The referee may
intervene if a blow is struck below the belt.  But the referee
“would be astounded while the bout is
in progress to receive a
complaint that something had gone wrong with the weigh-in”.
[32]
In other words, in contests of force between organised labour and
employers, the fight had to proceed regardless of possible
defects in
the preconditions giving rise to it.
[28]
But the
Panasonic
Court found that it was “impossible
to lay down any fixed rule” on when a reactive challenge should
be countenanced:
“
Each
case will depend on its own circumstances, in particular the nature
of the alleged irregularity, the reason that it had not
been raised
earlier, the stage which the economic contest had reached and
whatever other factors may be relevant.”
[33]
[29]
By contrast, in
Photocircuit
,
[34]
also with no prosecution in issue, a reactive attack on the validity
of the establishment of an industrial council was allowed.
The
council sought an order to force employers to render returns to
enable it to exact contributions from them.  The employers

responded by challenging the validity of the establishment of the
council and of the extension to them of agreements requiring
the
contributions.  Scott J pointed out that in collateral
challenges judicial scrutiny of an administrative act or subordinate

legislation arises not because a discretionary remedy is sought,
namely review or a declaratory order, but to determine “the

entitlement of the party seeking enforcement or the guilt or
innocence of an accused person”.
[35]
He concluded that the defendant or accused in collateral challenge
proceedings cannot be precluded from raising the invalidity
defence
merely on the grounds of delay.  But, as in
Panasonic
,
the Court emphasised that whether a collateral attack will be
permitted depends on the circumstances.
[36]
[30]
These cases predate the Constitution.
But they show that, in South African law, the permissibility of a
reactive attack on
administrative action has always been approached
with a measure of flexibility.
[37]
And its availability is not limited to those at risk of
criminal conviction.
[38]
A subject at risk of criminal conviction or other coercive action by
the state may indeed raise a reactive or defensive challenge
to the
lawfulness of the administrative act on which the prosecution or
coercion is based.  But reactive challenges in our
law have
never been limited to these circumstances.  In
Panasonic
,
the challengers were employees facing a lockout.  They were
denied a collateral challenge not because of the absence of state

coercion, but because the challenge was inappropriate to the
proceedings they brought. Given the power play taking place, it would

have been unjust to allow the challenge to be brought.
The Constitution and
collateral challenges
[31]
The pre-Constitution approach was rooted in
features of the common law remedy of review, which was discretionary,
and which took
account of delay, process and other considerations in
determining whether relief should be granted.
[39]
By contrast a party relying on a collateral challenge was insulated
from the vicissitudes of the discretionary award of the
review
remedy, or its unavailability on grounds of delay.
[40]
The defence should be capable of being raised simply because a forced
levy was disputed.  Indeed, the very point of
refusing to permit
a collateral attack, on occasion, was not only that the source of the
impugned act would be brought before a
review court, but that
unreasonable delays could be punished.
[41]
The consequence was, and is, that delay may insulate irregular
administrative actions from review.
[42]
By contrast, to coerce a citizen into payment or prison on the basis
of an unlawful administrative action, however ancient,
would itself
offend the rule of law.  Hence the continued permissibility of
reactive or collateral challenges.
[32]
So the remedies of review and collateral
challenge differ distinctively in object, application and scope.
The Supreme Court
of Appeal explained in
Oudekraal
that where the validity of an administrative act is challenged
collaterally a court has no discretion to allow or disallow the

raising of the defence: “the right to challenge the validity of
an administrative act collaterally arises because the validity
of the
administrative act constitutes the essential prerequisite for the
legal force of the action that follows”.
[43]
It follows that the subject may not be precluded from challenging its
validity.
[44]
On the other hand, a court asked to set aside an invalid
administrative act in proceedings for judicial review has a
discretion
whether to grant or withhold the remedy:
“
It
is that discretion that accords to judicial review its essential and
pivotal role in administrative law, for it constitutes the

indispensable moderating tool for avoiding or minimising injustice
when legality and certainty collide.  Each remedy thus
has its
separate application to its appropriate circumstances and they ought
not to be seen as interchangeable manifestations of
a single remedy
that arises whenever an administrative act is invalid.”
[45]
[33]
It is here, where “legality and
certainty collide”, that AngloGold’s dispute with
Merafong asks for answers that
have not previously been provided.
Those must be grounded in the Constitution.  The Constitution is
the supreme law,
and conduct inconsistent with it is invalid.
[46]
The Constitution provides that, when deciding a constitutional matter
within its power, a court “must declare that
any law or conduct
that is inconsistent with [it] is invalid to the extent of its
inconsistency”.
[47]
To this injunction the Constitution adds a discretionary “may”:
a court deciding a constitutional matter “
may
make any order that is just and equitable”.
[48]
[34]
In
Bengwenyama
,
[49]
this Court explored the
Oudekraal
paradox, that an unlawful act can produce legally effective
consequences.  The apparent anomaly, Froneman J noted, “is

not one that admits easy and consistently logical solutions”:
“
But
then the law often is a pragmatic blend of logic and experience.
The apparent rigour of declaring conduct in conflict
with the
Constitution and PAJA unlawful is ameliorated in both the
Constitution and PAJA by providing for a just and equitable
remedy in
its wake.  I do not think that it is wise to attempt to lay down
inflexible rules in determining a just and equitable
remedy following
upon a declaration of unlawful administrative action.  The rule
of law must never be relinquished, but the
circumstances of each case
must be examined in order to determine whether factual certainty
requires some amelioration of legality
and, if so, to what extent.
The approach taken will depend on the kind of challenge presented –
direct or collateral;
the interests involved and the extent or
materiality of the breach of the constitutional right to just
administrative action in
each particular case.”
[50]
[35]
In
AllPay
[51]
the same judge, speaking on behalf of the Court, took this further.
He noted that there was a “clear distinction”
between
“the constitutional invalidity of administrative action”,
on the one hand, and, on the other, “the just
and equitable
remedy that may follow from it”.
[52]
It was for this reason that the Court declared invalid a tender whose
award was riddled with suggestive irregularities, while
nevertheless
suspending the declaration of invalidity pending determination of a
just and equitable remedy.
[53]
Upsetting the award might have had disastrous consequences for
millions of vulnerable grant recipients.  Hence it was
just and
equitable to keep the unlawful award temporarily in place by the
exercise of the broad remedial powers the Constitution
has vested in
this Court.
[36]
Hence the central conundrum of
Oudekraal
,
that “an unlawful act can produce legally effective
consequences”,
[54]
is constitutionally sustainable, and indeed necessary.  This is
because, unless challenged by the right challenger in the
right
proceedings,
[55]
an unlawful act is not void or non-existent, but exists as a fact and
may provide the basis for lawful acts pursuant to it.
[56]
This leads to a logical corollary, which this Court recognised in
Giant Concerts
,
[57]
that an own-interest litigant may be denied standing “even
though the result could be that an unlawful decision stands”.
[58]
[37]
These consequences follow from the wording
of section 172(1) itself, which requires a court to declare any law
or conduct inconsistent
with the Constitution invalid to the extent
of its inconsistency, but requires the court to do so only “when
deciding”
a constitutional matter within its jurisdiction.
The provision does not dictate to courts when or how they must
decide.
It contemplates that a court may decline to decide a
matter because the right complainant is not before it, or because the
challenge
is not warranted in the particular proceedings before it.
[38]
All this illuminates whether Merafong
should be permitted, in these enforcement proceedings, to raise the
alleged invalidity of
the Minister’s ruling.
The
import of Oudekraal and Kirland
[39]
In
Oudekraal
,
a provincial executive officer, the Administrator, had granted
Oudekraal township development rights.  That was in 1957,
more
than 40 years before the dispute.  Now Oudekraal asked the
City Council to approve its engineering services plan
for the
township.  The City Council refused.  It said the
Administrator’s approval, decades back, was bad for lack
of
compliance with the provincial law under which it was granted.
Was the City Council entitled to refuse approval because
the
underlying grant of development rights was bad?  The High Court
said Yes.  The Supreme Court of Appeal said
No.  The City
Council could not simply treat the Administrator’s act as
though it did not exist.  Until it was
properly set aside by a
court of law, the approval engendered legal consequences.  The
Court however refused Oudekraal the
declaratory relief it sought.
This was because the approval was vulnerable to being set aside in
proceedings properly brought
for judicial review, and that had to be
done first.
[59]
[40]
In
Kirland
,
an official had refused an authorisation Kirland sought, but, before
that decision was communicated, an acting stand-in, in dubious

circumstances, granted the permission.  The question was whether
the Department of Health, Eastern Cape (Department)
knowing the
grant was dubious, could treat it as non-existent.  This Court,
applying
Oudekraal
,
said No.  Doing so affected Kirland’s rights.  E
ven
though the second decision (which was communicated first) might be
defective, government should generally not be exempt from
the forms
and processes of review.  It could not take a shortcut across
Kirland’s legal and constitutional protections.
[60]
Kirland may have acted to its detriment in reliance on the second
decision.  It would be unfair to Kirland to allow
government to
ignore the decision.  In addition, government in bringing
proceedings to set aside the suspect decision would
have to explain
its dilly-dallying, which suggested acquiescence.
[61]
It therefore had to apply formally for a court to set aside the
defective decision, so that a court could properly consider
its
effects on those subject to it, as well as the Department’s
delay in making the challenge.
[62]
[41]
The import of
Oudekraal
and
Kirland
was that government cannot simply ignore an apparently binding ruling
or decision on the basis that it is invalid.  The validity
of
the decision has to be tested in appropriate proceedings.  And
the sole power to pronounce that the decision is defective,
and
therefore invalid, lies with the courts.  Government itself has
no authority to invalidate or ignore the decision.
It remains
legally effective until properly set aside.
[63]
[42]
The underlying principles are that the
courts’ role in determining legality is pre-eminent and
exclusive; government officials,
or anyone else for that matter, may
not usurp that role by themselves pronouncing on whether decisions
are unlawful, and then ignoring
them; and, unless set aside, a
decision erroneously taken may well continue to have lawful
consequences.  Mogoeng CJ explained
this forcefully, referring
to
Kirland
,
in
Economic Freedom Fighters
.
[64]
He pointed out that our constitutional order hinges on the rule
of law:
“
No
decision grounded [in] the Constitution or law may be disregarded
without recourse to a court of law.  To do otherwise would

‘amount to a licence to self-help’.  Whether the
Public Protector’s decisions amount to administrative action
or
not, the disregard for remedial action by those adversely affected by
it, amounts to taking the law into their own hands and
is illegal.
No binding and constitutionally or statutorily sourced decision may
be disregarded willy-nilly.  It has
legal consequences and must
be complied with or acted upon.  To achieve the opposite outcome
lawfully, an order of court would
have to be obtained.”
[65]
[43]
But it is important to note what
Kirland
did not do.  It did not fossilise possibly unlawful – and
constitutionally invalid – administrative action as

indefinitely effective.  It expressly recognised that the
Oudekraal
principle puts a provisional brake on determining invalidity.
The brake is imposed for rule of law reasons and for good
administration.  It does not bring the process to an
irreversible halt.  What it requires is that the allegedly
unlawful
action be challenged by the right actor in the right
proceedings.  Until that happens, for rule of law reasons, the
decision
stands.
[44]
Oudekraal
and
Kirland
did not impose an absolute obligation on private citizens to take the
initiative to strike down invalid administrative decisions
affecting
them.  Both decisions recognised that there may be occasions
where an administrative decision or ruling should be
treated as
invalid even though no action has been taken to strike it down.
[66]
Neither decision expressly circumscribed the circumstances in which
an administrative decision could be attacked reactively
as
invalid.
[67]
As important, they did not imply or entail that, unless they bring
court proceedings to challenge an administrative decision,
public
authorities are obliged to accept it as valid.
[68]
And neither imposed an absolute duty of proactivity on public
authorities.  It all depends on the circumstances.
Merafong’s
reactive challenge
[45]
Against this background, the question is
whether, when AngloGold sought an order enforcing the Minister’s
decision, Merafong
was entitled to react by raising the invalidity of
her ruling as a defence.  AngloGold lodged its application on
19 April 2011.
Merafong lodged its
counter-application some months after, on 3 August 2011.
At that time, the Minister’s
ruling, which was given on
18 July 2005, had stood for more than six years.
[46]
This lapse of time deserves context.
In September 2005, some two months after the Minister’s ruling,
Merafong obtained
a detailed opinion from its attorneys.  This
concluded that the Minister had no power to prescribe a specific
tariff or to
interfere in the tariff-setting functions of a
municipality.  Hence any act on her part to interfere with those
functions
was “void in law”.  Furthermore, both
Merafong and the Minister had “misdirected themselves by
seeking to
subject the tariff-setting powers of Merafong to an appeal
process”.  The attorneys recommended that Merafong should

engage the Minister further and “point out that both Merafong
and the Minister have misconstrued their positions in law”
and
that the Minister “must withdraw the decision to set aside the
decision of Merafong to levy tariffs on the mines”.
[47]
Soon after receiving this opinion, Merafong
sent it to the Minister on 31 October 2005.  And it drew
her attention to
the opinion again, on 30 March 2006 and on 24
October 2007.  Meanwhile, it tried repeatedly to secure meetings
with the Minister.
As the second part of the Minister’s
ruling required, Merafong negotiated with the mining houses in its
area, including AngloGold.
From the time of the ruling, until
October 2007, it held numerous meetings with the mining houses and
Rand Water.  Draft
agreements on tariffs were negotiated.
But they were never signed.  The parties remained at odds.
In its letter
to the Minister of 24 October 2007, Merafong
complained that the mines “have not responded favourably to our
proposals”.
In its answering affidavit, it described the
mines’ attitude during these negotiations as “increasingly
obstructive
and uncooperative”.
[48]
As a last resort, on 30 March 2006,
Merafong sought to declare a formal dispute with the Minister.
The Minister’s response
was that the parties should try to
resolve the matter through dialogue before declaring a dispute.
She proposed a meeting.
But this never materialised.
Merafong says this was “through no lack of trying” on its
part.
[49]
But after that, activity ceased.
Merafong says that after failing to reach agreement with the mining
houses, and with the
Minister “also not complying with the
principles of cooperative government”, it “imposed and
implemented the
tariffs”.  It did so by holding its hand
on the tap, leaving it to AngloGold to institute proceedings to
enforce the
Minister’s ruling.  In its affidavit opposing
AngloGold, Merafong complained about AngloGold’s “inordinate”

delay in bringing the proceedings.  They were brought, Merafong
claimed, “out of time”.  The application,
it said,
should be dismissed on this ground alone.  As will more fully
emerge, coming from Merafong, which itself delayed
for nearly five
years after the impasse arose, and responded only when AngloGold went
to court, that was rich.
[50]
Merafong argued it should be permitted to
raise a reactive challenge to AngloGold’s attempt to enforce
the Minister’s
ruling because there is a fundamental
distinction between decisions that fall within the scope of powers
with which a public official
is clothed, but are merely wrongly
taken, and those that are palpably and obviously beyond the powers of
the decision maker.
In the latter case, where a decision “lacks
the facial imprimatur of lawfulness”, a person subject to the
decision
is entitled to ignore it until, as a matter of process, that
decision is sought to be enforced against it.  At that point the

nullity of the decision may be raised as a defence.  Counsel
contended that decisions of this nature “on their face
fall
beyond the ostensible scope of the powers conferred upon a public
officer [and] have no validity and should be treated as
such even
though they have yet to be set aside on review”.
[69]
[51]
But this approach is not sound.
Neither the Constitution, nor the Promotion of Administrative Justice
Act
[70]
(PAJA), offer warrant for it.  And logic offers no support
either.  Merafong accepts that the Minister’s ruling

constituted administrative action.  PAJA provides that
administrative action may be reviewed if the administrator who took

it “was not authorised to do so by the empowering
provision”.
[71]
In addition, administrative action may be set aside if it
“contravenes a law or is not authorised by the empowering

provision”.
[72]
The grounds on which administrative action may be set aside are
consonant with the statute’s definitions.  “Decision”

means any decision “under an empowering provision”.
[73]
“Empowering provision”, in its turn, means a law or other
source of authority “in terms of which an administrative
action
was purportedly taken”.
[74]
[52]
From this it can be seen that even
decisions “purportedly taken” under a statute, but which
in fact lack authorisation,
are subject to review under PAJA.
The plain premise of PAJA is that remedies are available to all who
are affected by unlawful
administrative action, whether the
unlawfulness resides in a process-defect or in the absence of
authority.
[53]
In addition, Merafong’s argument
suggests that decisions that are invalid on their face are limited to
those that are taken
entirely without statutory or other authority.
That is wrong.  A decision taken within statutory authority may
be equally
plainly vitiated – for instance by palpable fraud,
or error of law, or mistake of fact.
[54]
If we were to sustain Merafong’s
argument that it was entitled to ignore the Minister’s decision
until it was sought
to be enforced, this must extend to all cases of
patent invalidity.  This would suggest that an official may
ignore a decision,
taken under statutory power (
intra
vires
), that is tainted by patently
improper influence or corruption.  But that is precisely what
happened in
Kirland
–
and the self-help argument was not countenanced.  What is more,
not only would what is or is not “patently unlawful”
be
decided outside the courts, but there would be no rules on who gets
to decide and how.  If failure to review a disputed
decision is
defensible on the basis that the decision was considered patently
unlawful, the rule of law immediately suffers.
So the argument
is not tenable.
[55]
Nevertheless, our case law offers little
support for a rigid doctrinal limitation upon the viability of a
reactive challenge.
While reactive challenges, in the first
instance, and perhaps in origin, protect private citizens from state
power, good practical
sense and the call of justice indicate that
they can usefully be employed in a much wider range of
circumstances.  There is
no practical, or conceptual,
justification for strait-jacketing them to private citizens.  It
is readily conceivable, for
instance, that an organ of state may
through legal proceedings seek unjustly to subject another organ of
state to a form of coercion.
Where appropriate, that other
should be able to raise a defensive or reactive challenge.
Categorical exclusions should be
eschewed.  A reactive challenge
should be available where justice requires it to be.  That will
depend, in each case,
on the facts.
[56]
In oral argument, Merafong suggested that
the permissibility of its challenge should be judged by whether the
right person brought
the challenge in the appropriate tribunal,
timeously, citing the decision-maker, with all the relevant evidence
available, in light
of rule of law considerations.  It seems to
me that the approach in
Bengwenyama
,
[75]
albeit in the context of review remedies, offers practical guidance
here.  The permissibility of a reactive challenge by an
organ of
state must depend on a variety of factors, invoked with a “pragmatic
blend of logic and experience”.
And – as in
Bengwenyama
– it would be imprudent to pronounce any inflexible rule.
[57]
It is correct that, in contrast to the
government department in
Kirland
,
Merafong here did formally counter-apply for a declarator that the
Minister had no authority to issue her ruling.  It asked
for the
Minister’s ruling to be set aside.  Its notice of motion
sought a declaration that it was vested with exclusive
executive
authority to set and adopt tariffs relating to the provision of water
services within its area of jurisdiction and to
impose and recover
service fees and surcharges.  It also sought a declaration that
section 8 of the Act did not confer authority
on the Minister “to
interfere with a tariff set and implemented” by Merafong.
And the Minister was served with
the papers.  Though not
appearing in either the High Court or the Supreme Court of
Appeal, she signified in this Court
that she had no objection to the
reactive challenge being determined, though she said the Court should
not reach it.
[58]
The Supreme Court of Appeal in effect
imposed a duty of proactivity on Merafong, though it did so without
the benefit of the Minister’s
views before it.  It held
that Merafong could not simply ignore the Minister’s ruling.
Once it concluded the Minister’s
decision was wrong, it was
duty bound to initiate proceedings to set it aside – and until
it did, the decision remained binding
on it.  So far, so good.
But the Court went further.  It held that Merafong’s
inaction in the face of a ruling
it considered invalid later
disqualified it entirely from resisting AngloGold’s application
to enforce that ruling.
To counter-apply in the enforcement
proceedings AngloGold had initiated was not competent.  The
ruling had to stand because
Merafong, though disputing it, had never
itself gone to court to have it set aside.
Constitutional
citizenship and co-operative governance
[59]
Was the Supreme Court of Appeal correct to
disbar Merafong from raising a reactive defence because it failed to
take the initiative?
The answer is No – but the path to
that answer must first be cleared.  First, as a matter of
practice, and good constitutional
citizenship, it is undoubtedly so
that Merafong should have gone to court to set aside the Minister’s
ruling.  As a
state organ, Merafong had the resources, and the
responsibility, to obtain judicial clarity in its dispute with
AngloGold about
the ruling.  Instead of doing so, it threatened
to cut off AngloGold’s water.  That was not nice.
Worse,
it was not good constitutional citizenship.
[60]
As a good constitutional citizen, Merafong
should either have accepted the Minister’s ruling as valid, or
gone to court to
challenge it head-on.  AngloGold did what
Merafong advised it to do – it appealed to the Minister.
On legal advice,
Merafong later recanted its view that AngloGold was
entitled to appeal.  But that didn’t give it warrant to
bully one
of its ratepayers.  In enforcing its view of the
Minister’s disputed ruling, Merafong was resorting to a form of
self-help.
[61]
This was out of kilter with Merafong’s
duty as an organ of state and a constitutional citizen.  This
Court has affirmed
as a fundamental principle that the state “should
be exemplary in its compliance with the fundamental constitutional
principle
that proscribes self-help”.
[76]
What is more, in
Khumalo
,
[77]
this Court held that state functionaries are enjoined to uphold and
protect the rule of law by, inter alia, seeking the redress
of their
departments’ unlawful decisions.
[78]
Generally, it is the duty of a state functionary to rectify
unlawfulness.  The courts have a duty “to insist that
the
state, in all its dealings, operates within the confines of the law
and, in so doing, remains accountable to those on whose
behalf it
exercises power”.
[79]
Public functionaries “must, where faced with an irregularity in
the public administration, in the context of employment
or otherwise,
seek to redress it”.
[80]
Not to do so may spawn confusion and conflict, to the detriment of
the administration and the public.
[81]
A vivid instance is where the President himself has sought judicial
correction for a process misstep in promulgating legislation.
[82]
[62]
Section 41(3) of the Constitution requires
an organ of state involved in an inter governmental dispute to
“make every
reasonable effort” to settle it before it
approaches a court.  The provision’s cognate statute,
section 40(1)
of the Intergovernmental Relations Framework
Act
[83]
(Framework Act) similarly requires organs of state to avoid legal
proceedings in favour of co-operative amelioration.  This

Merafong did.  But, when amelioration failed, the Constitution
and the statute required more of it.
[63]
In abjuring legal proceedings on the part
of organs of state until there is no reasonable alternative, both
section 41 and the Framework
Act imply a corollary.  This is
that, when all reasonable measures and alternative remedies have been
exhausted, an organ
of state to which a contested ruling applies
should ordinarily go to court to have the legal rights and wrongs of
the ruling determined.
In the circumstances, without holding
that Merafong was under a stand-alone duty to clarify the Minister’s
decision, once
Merafong disputed the decision, and decided it did not
wish to comply with it, Merafong owed a duty to AngloGold, which
relied
on the decision.  That duty was to seek clarification
from the courts.  What it could not do was sit on its hands or
defy the ruling by enforcing its own unilateral view.
[64]
So although the principle of
intergovernmental cooperation negates recourse to courts of law until
every other avenue has been exhausted,
when this point has been
reached, the Constitution may require responsible governmental
citizens to take recourse to law.
[65]
So Merafong should not have been content to
hold its hand over the tap, ready to turn it off if AngloGold got
stroppy.  But
is this enough to disqualify Merafong’s
reactive defence now that it raises it in response to AngloGold’s
attempt to
enforce the Minister’s ruling?  I would say
No.  For considerations springing largely, but not solely, out
of convenience,
I would permit Merafong’s challenge to be
decided.
[66]
First, even if belatedly, Merafong’s
“conditional counter-application” in substance challenges
the Minister’s
ruling.  Unlike
Kirland
,
[84]
where the government department made no effort to counter-apply,
Merafong formally sought an order embodying its approach to the

dispute.  That order did not seek the setting aside of the
Minister’s ruling, but a declaration only that she had no

statutory or constitutional power to take it.  To that extent
Merafong has joined issue with AngloGold.  And to that
extent
its merits in seeking to have that challenge determined in these
proceedings deserve to be taken into consideration.
[67]
Second, there is the obtrusive fact that
dismissing Merafong’s appeal, without more, would further
protract a dispute that
has already run very long.  It would
force Merafong to reinstitute proceedings, with all the expense,
further delay and multiplication
of formalities, pleadings and
lawyerly exchanges this would entail.
[68]
Since Merafong’s status as an organ
of state does not categorically exclude it from a reactive challenge,
I would not close
the court’s door in its face in these
proceedings.  For the reasons that follow, I would however remit
its challenge
to be decided afresh by the High Court.
[69]
First, we must note that Merafong’s
reactive challenge has distinctive attributes.  These render it
different from those
a subject raises when the state threatens
imprisonment or coerces payment.  In these cases, which we may
call “classical”
collateral challenges, delay plays no
role.  The subject is entitled, as of right, to scrutinise the
lawfulness of coercive
action because the rule of law requires that
official power not be exercised against the liberty or property of a
subject unless
it is lawfully sourced.
[85]
[70]
The virtue of “classical”
reactive challenges lies precisely in the fact that they provide a
defence to parties who
face the enforcement of the law but who never
previously confronted it.  And it is for this reason that they
may sometimes
be disallowed.  Where a statute provides for an
appeal or other remedy, and the disputed decision was specifically
directed
to the challenging party, our courts have forbidden a
collateral challenge.
[86]
[71]
The point of these cases is that the ruling
or decision was not directed to the world at large.  It was
specific.  It
was known to the subject.  They stand in
contrast to instances where the law is of general application, and is
possibly unknown
to the person against whom it is sought to be
enforced.  There, delay cannot be a disqualifying consideration.
[72]
Here, Merafong was well aware of the
Minister’s decision, which was specifically addressed to it.
It does not dispute
that it knew that a legal challenge was
immediately available to it.  This means that Merafong’s
reactive challenge
is of the category that necessitates scrutiny in
regard to delay.
[73]
A further and related reason to remit the
matter to the High Court is this.  Merafong accepts that the
Minister’s ruling
was administrative action.  Whether
under PAJA, or legality review,
[87]
it was obliged to institute proceedings to review the decision
without unreasonable delay.
[88]
The rule against delay in instituting review exists for good reason:
to curb the potential prejudice that would ensue if
the lawfulness of
the decision remains uncertain.  Protracted delays could give
rise to calamitous effects.  Not just
for those who rely upon
the decision but also for the efficient functioning of the
decision-making body itself.  Had Merafong
instituted a review
application, as it ought, the Court hearing it would have had to
consider whether the delay precluded its challenge.
[89]
[74]
In
Khumalo
,
this Court held that state functionaries must act without delay in
setting right their own legal missteps.
[90]
The Court also held that an assessment of a plea of undue delay
involves examining: (i) whether the delay is unreasonable
or undue (a
factual enquiry upon which a value judgment is made in the light of
all the relevant circumstances); and if so (ii)
whether the court’s
discretion should be exercised to overlook the delay and nevertheless
entertain the application.
[91]
[75]
The approach in
Khumalo
is apposite here.  It is not necessary to decide whether
Merafong would or could have obtained an extension, for the present

proceedings, which were initiated by AngloGold, are not under PAJA.
But the factors this Court endorsed in
Khumalo
require consideration.  And there is nothing pertinent before
this Court.  Merafong’s answering affidavit in the
High
Court nowhere addresses its failure to bring proceedings, and hence
the delay in its counter-challenge.  That, of course,
was
because Merafong was content to keep its hand on the tap.  It
awaited AngloGold’s move, which eventually came in
April 2011.
[76]
But, on remittal to the High Court, with
appropriate explanation in further affidavits, there may be
convincing reasons for Merafong’s
approach.  These may
arise from the fact that it was advised, as its answering affidavit
in the High Court averred, that it
was “entitled” to
ignore the ministerial ruling and compel AngloGold to pay the
surcharge.  Ordinarily this would
not be an excuse.  But,
Merafong may urge, the law was not clear.  The reasons may
conceivably relate, also, to the quality
of Merafong’s good
faith belief in the lawfulness of its powers and approach.
Further information will enable the hurdles
of lateness and potential
and actual prejudice to be raised, debated and properly considered.
[77]
What is more, because delay, though
relevant, need not be conclusive in a reactive challenge, Merafong
may also invoke the fact
that the Minister in these proceedings has
expressed the view that its challenge can be considered (though
decided against it).
[78]
A third reason to remit for the High Court
to decide the validity of the Minister’s decision is that
Merafong’s counter-challenge
was bare.  It relied solely
on the statutory and constitutional setting to decry the Minister’s
invocation of appellate
powers over its surcharge.  The record
of the Minister’s decision was not before it.  The High
Court nevertheless
decided the statutory and constitutional issues
against Merafong.  But it did so without considering whether
Merafong’s
delay should disqualify its challenge.  That
was because it held that Merafong was categorically excluded from
raising a collateral
challenge.  And the Supreme Court of Appeal
dismissed Merafong’s appeal solely on the basis of Merafong’s
categorical
exclusion.
[79]
Once Merafong’s categorical exclusion
has been set aside, the proper process is for the High Court to have
before it the Minister’s
record of decision, together with
Merafong’s explanation for the delay, on appropriate terms for
AngloGold to respond, and
for the question of delay to be decided
first.  Thereafter the validity of the Minister’s
decision, based on anything
arising pertinently from the record, in
its statutory and constitutional setting, may be considered.
[80]
A fourth and final reason to remit the
matter to the High Court is for it to consider argument and, if
necessary, evidence on the
question of remedy, should Merafong’s
challenge be time-barred or otherwise fail.  This Court has had
no submissions
on this important issue, and the High Court, though
rejecting Merafong’s challenge, did not consider it.
[81]
This approach, instead of shutting the door
in Merafong’s face, conditionally permits its challenge to
proceed.  In doing
so, this Court recognises that a range of
reactive or collateral challenges exists.  In some, delay is
axiomatically irrelevant.
In others, it counts.  It is not
necessary, here, to consider the factors specific to each kind: those
will be developed
in the case law.  For now, it is enough to
free Merafong’s challenge from the categorical
disqualification, and to allow
it to go ahead on appropriate terms.
[82]
I should add that it is also inapposite for
this Court to determine Merafong’s constitutional challenge.
Merafong avowedly
did not persist in this before the SCA.
Before us, it did not mention the issue in its written argument, nor
did it allude
to it in oral argument.  When counsel for Merafong
was asked about it, he averred simply “it’s alive on the
papers”.
[92]
This Court invited submissions from the Minister, who had not
appeared in the High Court and SCA.  The Court itself
here
inquired about the constitutional point.  The Minister urged
that the point not be decided.  But Merafong now seized
the
opportunity to assert that it could be decided.  That is belated
opportunism the Court should not countenance.  Since
Merafong
had in effect let the point lie, so far as not even to make written
or oral submissions on it, it is not in the interests
of justice to
allow it to now try to resuscitate it.  In any event, counsel
for Merafong submitted in oral argument that the
constitutional point
was “conditional on this Court finding that the Minister’s
decision was lawful - that she had
jurisdiction in terms of the Act
to make the decision”.  Since, for the reasons I have set
out we relay that very question
to the High Court, it follows that,
even on Merafong’s approach, the constitutional point should be
decided only later.
Summary
[83]
Unlike the Supreme Court of Appeal, I would
not disqualify Merafong’s reactive defence because it is an
organ of state.
Merafong must be permitted to raise a challenge
to the Minister’s decision, but on appropriate terms that call
for it to
explain properly its delay in challenging that decision.
In those circumstances, the most equitable order as to the costs
is
to allow the reviewing court to determine them. Because AngloGold was
seeking to enforce an order of an organ of state it should
not,
according to the well-known principle in
Biowatch
,
[93]
be made to pay the costs of its effort to do so, thus far.
Order
[84]
I propose the following order:
1.
Leave to appeal is granted.
2.
The appeal is upheld.
3.
The orders of the High Court of South
Africa, Gauteng Division, Pretoria and the Supreme Court of
Appeal are set aside.
4.
In their stead, the matter is remitted to
the High Court to determine, after the lodging of further affidavits
as the applicant,
Merafong City Local Municipality, and the Minister
of Water Affairs and Forestry may consider appropriate, on the
lawfulness of
the Minister’s decision of 18 July 2005,
and, if necessary, what remedy is to be granted.
5.
The Minister is to lodge the record of the
decision by 4 November 2016.
6.
The further affidavits, if any, by the
applicant are to be lodged by 18 November 2016 and by the
Minister by 25 November 2016.
7.
The respondent, AngloGold Ashanti Limited,
may lodge its affidavits, if any, by 6 December 2016.
8.
Costs are reserved for consideration by the
High Court.
JAFTA J (Bosielo AJ
and Zondo J concurring):
Introduction
[85]
I have read the judgment of my colleague
Cameron J (first judgment) and agree that leave must be granted and
that the orders of
the High Court and the Supreme Court of
Appeal be set aside.  However, I do not support the further
orders proposed in
the first judgment.
[86]
With regard to jurisdiction and leave the
first judgment asserts that “the dispute about the Minister’s
power to intervene
on a matter of municipal competence raises
constitutional issues that fall within this Court’s
jurisdiction”.
It adds that Merafong’s arguments in
this regard have substance.  But in addressing the merits of the
case the first
judgment does not reach the very dispute that
motivated it to grant leave nor does it consider Merafong’s
arguments which
it holds, have substance.
[87]
However, I agree with the first judgment
that the enforcement of the Minister’s decision of 18 July 2005
in terms of which
she overturned Merafong’s decision to levy a
surcharge on the supply of water within its area of jurisdiction is
the core
issue in this matter.  Merafong impugns the Minister’s
decision on two grounds.  First, it argues that, properly

construed, the provision in terms of which the Minister claims to
have taken the decision does not vest her with the necessary
power.
Second and if it does, the provision is inconsistent with the
Constitution and for that reason is invalid.  I
agree that on
the face of it, there is substance in these arguments.
Consequently, they must be addressed to test that substance.
[88]
Additional to the reasons advanced by the
first judgment for leave is the fact that this case presents this
Court with an opportunity
of defining the reach of the principles in
both
Oudekraal
[94]
and
Kirland
[95]
in the context of the Constitution and the principle of
constitutional supremacy.  This is because the two decisions
derive
their validity, as every precedent and other law, from the
Constitution.  Here the judgments of the High Court and Supreme

Court of Appeal illustrate a misapplication of the two decisions.
For example, both Courts held that even if it was illegal,
the
Minister’s decision was valid and binding for as long as it
remained in existence.
[89]
The proposition that both Courts distilled
from
Oudekraal
and
Kirland
was that an invalid administrative act that exists in fact is binding
and enforceable until set aside by a competent court.
This
proposition collides head-on with the principle of legality which is
an integral part of the rule of law.  And the first
judgment
endorses this proposition.
[96]
I disagree for reasons I shall outline in a moment.
[90]
A further issue raised is the question
whether, as the High Court and Supreme Court of Appeal
concluded, a collateral challenge
is a defence not available to an
organ of state.  This Court is yet to express its view on the
issue.  The other Courts
already have asserted that the right to
raise a collateral challenge is limited to individuals because
liberty or property of an
individual may be taken away on authority
of a lawful decision.  The first judgment prefers to leave the
question open for
now.
[91]
I propose to begin with the question
whether in law an organ of state is prohibited from raising a
collateral challenge.  It
is necessary for this Court to put
this issue to rest, one way or the other.  Leaving it open means
that courts in this country
are bound by decisions of the Supreme
Court of Appeal that say a collateral challenge is not available to
the state.  Therefore,
it is in the interests of justice that
there be certainty on whether this Court affirms that conclusion or
not.  Next in analysis
will be the scope and content of the
Oudekraal
and
Kirland
principles before addressing the merits.
Collateral challenge
[92]
A collateral challenge is raised to resist
coercive compliance with a legal act or law.  It is nothing else
but an argument
advanced in proceedings before a court, to the effect
that the legal decision or law sought to be enforced is invalid and
therefore
the party against whom enforcement is pursued must not be
ordered to comply with an invalid act or law.
[93]
As the Supreme Court of Appeal held in
Helderberg Park Development
,
[97]
a collateral challenge may be raised only when the impugned act is
invoked to coerce a party raising it into compliance.
This is
so because the target of the challenge is the compulsion to comply.
This means that there is no time limit within
which the defence may
be invoked.  The defendant may have been supine until an attempt
to compel is made and only then she
can contend that she should not
be ordered to comply because the act is itself invalid.  In
Oudekraal
the Supreme Court of Appeal stated that a person may mount a
collateral challenge “because the legal force of the coercive

action will most often depend upon the legal validity of the
administrative act in question”.
[94]
Later the Court emphasised the point in
these words:
“
[T]he
right to challenge the validity of an administrative act collaterally
arises because the validity of the administrative act
constitutes the
essential prerequisite for the legal force of the action that follows
and
ex hypothesis
the
subject may not then be precluded from challenging its validity.”
[98]
[95]
This statement underscores the fact that,
for an administrative act to be enforceable, it must be valid.
And for it to be
valid it must, among other requirements, be lawful.
If it is illegal, an administrative act cannot be enforced because it

would be inconsistent not only with the rule of law but also with
section 33 of the Constitution which guarantees “an
administrative
action that is lawful, reasonable and procedurally
fair”.
[99]
[96]
Therefore a successful collateral challenge
promotes the objects of the rights guaranteed by section 33 of the
Bill of Rights and
the rule of law by prohibiting enforcement of
invalid and illegal decisions.  Ordinarily our courts do not
enforce illegal
decisions because their duty is to uphold the
Constitution and the law.
[100]
Therefore, no court may close its eyes to a collateral challenge
raised by a party with interest if there is substance in
the
defence.  It is against this backdrop that the proposition that
a collateral challenge is not available to the state must
be
evaluated.
Collateral challenge by
the state
[97]
Relying on
Kirland
and its decision in
Cable City
,
[101]
the Supreme Court of Appeal here endorsed the conclusion that it is
not competent for the state to raise a collateral challenge.

The Court stated:
“
It
is clear from these dicta that Merafong was obliged to approach the
court to set the Minister’s ruling aside and that it
breached
the principle of legality by simply disregarding it.  And the
collateral challenge it sought to mount against the
ruling does not
avail it because it is an organ of state.  It is established in
our law that a collateral challenge to the
validity of an
administrative action is a remedy available to a person threatened by
a public authority with coercive action precisely
because the legal
force of the coercive action will most often depend on the legal
validity of the administrative action in question.
The notion
that an organ of state can use this shield against another organ of
state is simply untenable.  These findings
dispense with the
need to deal with the substantive issues raised in the matter.  The
appeal must fail.”
[102]
[98]
But the referenced paragraphs in
Kirland
and
Cable City
do not support this proposition.  Paragraph 35 of
Kirland
on which reliance was placed is part of a minority judgment and deals
with the question whether the order sought by
Kirland
could be granted despite a finding that
the decision it sought to confirm had been held to be invalid.
No reference was made
to a collateral challenge in that paragraph.
Whereas in
Cable City
the
Court merely stated the principle that “a party has a right to
raise a collateral challenge to the validity of an administrative
act
if he was threatened by a public authority with coercive action”.
In that case it was a private company that raised
a collateral
challenge and therefore the statement in paragraph 15 must be read in
that context.
[99]
In
Kirland
the majority too did not address the question of a collateral
challenge, let alone that the defence could not be raised by an organ

of state.  While
Cable City
considered and upheld the collateral
challenge raised there, the Court did not determine whether the state
could advance that defence.
[100]
The fact that in both
Oudekraal
and
Cable City
,
the Supreme Court of Appeal stated that a citizen threatened with
coercive action by a public authority is entitled to raise a

collateral challenge does not, without more, mean that the defence is
not available to an organ of state threatened by another
organ of
state with coercive action based on an illegal administrative
decision.  Nor does it mean that, when coercive action
is
exacted by a private party against an organ of state, the latter may
not raise a collateral challenge.
[101]
I can think of no reason in logic or
principle that militates against the state raising a collateral
challenge where it faces a
claim that it should comply with an
illegal decision.  Take for example, a decision that is
inconsistent with the Constitution,
it can hardly be said that an
organ of state is precluded from resisting its enforcement by showing
that it is invalid by reason
of being in violation of the
Constitution.  And the prohibition being that the party raising
it is precluded from doing so
on the sole basis that it was an organ
of state and nothing more.
[102]
The proposition becomes more untenable if
the fact that the same organ of state may advance exactly the same
ground in a counter-application
in the same proceedings.  On the
authority of
Kirland
,
if a public official harbours an opinion that an administrative act
is invalid, she may not simply disregard the act.  She
must
institute a review application to have it set aside.
[103]
In
Kirland
Cameron J said:
“
PAJA
requires that the government respondents should have applied to set
aside the approval, by way of formal counter-application.
They
must do the same even if PAJA does not apply.  To demand this of
government is not to stymie it by forming upon it a
senseless
formality.  It is to insist on due process, from which there is
no reason to exempt government.  On the contrary,
there is a
higher duty on the state to respect the law, and to fulfil procedural
requirements and to tread respectfully when dealing
with
rights.”
[103]
[104]
To insist that, if an organ of state
challenges the validity of an administrative act, it is compelled to
do so only by a counter-application
would amount to placing form
above substance.  That would be a narrow technical approach that
serves nothing but that a particular
form should be followed.
This is because the same objection could be raised
regardless of whether it is framed
as a counter-application or a
collateral challenge.  This sort of formalism is not required by
PAJA or rules of procedure
for our courts.
[105]
The Constitution recognises the inherent
power our courts have to regulate and protect their process if the
interests of justice
so demand.
[104]
This power enables courts to depart from their rules in the interests
of justice.  In
PFE International
this Court remarked:
“
Since
the rules are made for courts to facilitate the adjudication of
cases, the superior courts enjoy the power to regulate their

processes, taking into account the interests of justice.  It is
this power that makes every superior court the master of its
own
process.  It enables a superior court to lay down a process to
be followed in particular cases, even if that process deviates
from
what its rules prescribe.  Consistent with that power, this
Court may in the interests of justice depart from its own

rules.
”
[105]
[106]
I conclude that an organ of state may raise
a collateral challenge.  This brings me to the scope of the
principles in
Oudekraal
and
Kirland
.
Principles
[107]
Because of the misapplication of the
principle laid down in
Oudekraal
it has become necessary for this Court to determine the scope and
content of that principle.  Its misapplication has muddled
up
our law, turning on its head basic principles like: an illegal
administrative act has no legal force and as such cannot be
enforced.  This is a principle that flows from the rule of law
principle of legality which is to the effect that an illegal

administrative act, although it may exist in fact, does not exist in
law and consequently it may not be enforced because it is
not
binding.  This is so because an administrative act derives its
legal force from its validity.  Simply put an invalid
act is
unenforceable.
[108]
These principles have been part of our law
from time immemorial and no authority is necessary to be cited.
But since the adoption
of the Constitution, these principles have
been reinforced by making the rule of law a foundational value and
part of the Constitution.
Significantly what this means for
present purposes is that the rule of law is entrenched as part of our
Constitution and in turn
that means that any administrative act
inconsistent with the rule of law is invalid and therefore has no
legal force and consequently
cannot be enforced.  This is
because the Constitution is our supreme law and any conduct that is
inconsistent with it is invalid.
[109]
This is what
Affordable
Medicines Trust
emphatically tells us.
In that case Ngcobo J said:
“
Our
constitutional democracy is founded on, among other values, the
‘[s]upremacy of the constitution and the rule of law.’

The very next provision of the Constitution declares that the
‘Constitution is the supreme law of the Republic; law or
conduct
inconsistent with it is invalid’.  And to give
effect to the supremacy of the Constitution, courts ‘must
declare
that any law or conduct that is inconsistent with the
Constitution is invalid to the extent of its inconsistency’.
This commitment to the supremacy of the Constitution and the rule of
law means that the exercise of all public power is now subject
to
constitutional control.
The exercise of public power must therefore
comply with the Constitution, which is the supreme law, and the
doctrine of legality,
which is part of that law
.
The doctrine of legality, which is an
incident of the rule of law, is one of the constitutional controls
through which the exercise
of public power is regulated by the
Constitution
.
It
entails that both the legislature and the executive ‘are
constrained by the principle that they may exercise no power and

perform no function beyond that conferred upon them by law.’
In this sense the Constitution entrenches the principle
of legality
and provides the foundation for the control of public power
.”
[106]
[110]
Consistent with these principles this Court
held that administrative acts that were
ultra
vires
(beyond the powers) were in
breach of the doctrine of legality and as a result were not binding
as they lacked the necessary force.
This Court outlined the
invalidity of such acts in these terms:
“
In
exercising the power to make regulations, the Minister had to comply
with the Constitution, which is the supreme law, and the
empowering
provisions of the Medicines Act.  If, in making regulations the
Minister exceeds the powers conferred by the empowering
provisions of
the Medicines Act, the Minister acts
ultra
vires
(beyond
the powers) and in breach of the doctrine of legality
.
The finding that the Minister acted
ultra vires
is in effect a finding that the Minister
acted in a manner that is inconsistent with the Constitution and his
or her conduct is
invalid
.  What
would have been
ultra vires
under
common law by reason of a functionary exceeding his or her powers, is
now invalid under the Constitution as an infringement
of the
principle of legality.  The question, therefore, is whether the
Minister acted
ultra vires
in making regulations that link a licence to compound and dispense
medicines to specific premises.  The answer to this question

must be sought in the empowering provisions.”
[107]
[111]
This legal position is further buttressed
by section 33 of the Constitution which guarantees “administrative
action that is
lawful, reasonable and procedurally fair”.
This means that an unlawful administrative act is not an act
contemplated
in the Constitution.  An act of that kind would be
inconsistent with the Constitution and for that reason invalid.
[112]
Notwithstanding these fundamental
principles, the High Court here held:
“
The
Municipality has not in its papers sought to review or overturn the
Minister’s decision and thus based on the
Oudekraal
principle the Minister’s decision stands until set aside by a
court of law.  The decision is therefore binding and enforceable

and the municipality should abide by it.”
[108]
[113]
For its part the Supreme Court of Appeal
held that, even if the Minister’s decision was
ultra
vires
and unlawful, Merafong was bound
by it.  This conclusion is approved by the first judgment.
It says:
“
The
Supreme Court of Appeal in effect imposed a duty of proactivity on
Merafong, though it did so without the benefit of the Minister’s

views before it.  It held that Merafong could not simply ignore
the Minister’s ruling.  Once it concluded the Minister’s

decision was wrong, it was duty bound to initiate proceedings to set
it aside –
until it did, the
decision remained binding on it.  So far, so good
.
But the Court went further.”
[109]
[114]
With respect the conclusion reached by the
High Court and Supreme Court of Appeal, endorsed by the first
judgment, is incorrect.
It suggests that an unlawful
administrative act that exists in fact, and not in law, has legal
force and is binding for as long
as it is not set aside.  This
is in direct conflict with established authority like
Affordable
Medicines Trust
and many others.
But most importantly, the conclusion pays no regard to the supremacy
of the Constitution which expressly
declares that conduct that is
inconsistent with it is invalid.
[115]
The source of this wrong statement of the
law, as the High Court suggests, is said to be
Oudekraal
.
While the Supreme Court of Appeal placed reliance on the decision of
this Court in
Kirland
.
Therefore it is necessary to consider these cases.
Oudekraal
[116]
I must state at the outset that
Oudekraal
is not authority for the proposition that an invalid administrative
act is binding as long as it is not set aside by a competent
court.
No court has the power of converting an unconstitutional and invalid
act with no legal force into a valid act with
binding effect.
This is so, it must be stressed, because the Constitution is supreme
and it declares that conduct inconsistent
with it is invalid.
That which is proclaimed to be invalid by the Constitution cannot be
overruled by any court.  Courts
are established and derive their
powers from the Constitution which is binding on all arms of
government, including the Judiciary.
[117]
Consistent with its supremacy, in section
172(1)(a) the Constitution obliges every court, in deciding a matter
within its competence,
to declare law or conduct inconsistent with it
invalid.
[110]
In
Bengwenyama
[111]
this Court affirmed that the duty imposed by the section is
mandatory.  This Court went further to dispel the common law
notion that a court in review proceedings has a discretion to
withhold the remedy and declared that once it is proved that an
administrative
act is inconsistent with the Constitution and PAJA; a
court must declare it invalid.
[112]
In this regard no court has discretion.  But the consequences of
the declaration of invalidity may be ameliorated by
a further
granting of a just and equitable order.  It is at this stage
that a court has a discretion to exercise.
[118]
In
Bengwenyama
Froneman J remarked:
“
The
apparent rigour of declaring conduct in conflict with the
Constitution and PAJA unlawful is ameliorated in both the
Constitution
and PAJA by providing for a just and equitable remedy in
its wake.  I do not think that it is wise to attempt to lay down
inflexible rules in determining a just and equitable remedy following
upon a declaration of unlawful administrative action.
The rule
of law must never be relinquished, but the circumstances of each case
must be examined in order to determine whether
factual certainty
requires some amelioration of legality and, if so, to what extent.
The approach taken will depend on the
kind of challenge presented –
direct or collateral; the interests involved and the extent or
materiality of the breach of
the constitutional right to just
administrative action in each particular case.”
[113]
[119]
Therefore, the judgments in
Oudekraal
and
Kirland
must be read in the context just outlined here.
Oudekraal
lays down the principle that in the limited situation of consecutive
administrative decisions and if the empowering provision requires,
as
a  pre-decision condition, that the first act be in existence
for the second act to be made, the mere factual existence
of the
first act would be enough for the validity of the second act.
Depending on the terms of the empowering provision,
the validity of
the second act may not be challenged on the ground that the first act
was substantively invalid even though it
was not set aside.
[120]
Stating the ratio in
Oudekraal
the Supreme Court of Appeal said:
“
Thus
the proper enquiry in each case – at least at first – is
not whether the initial act was valid but rather whether
its
substantive validity was a necessary precondition for the validity of
consequent acts.  If the validity of consequent
acts is
dependent on no more than the factual existence of the initial act
then the consequent act will have legal effect for so
long as the
initial act is not set aside by a competent court.”
[114]
[121]
What happened in
Oudekraal
was that a landowner had obtained
approval to establish a township on its property subject to a number
of subsequent decisions.
One of them was the approval of a
general plan of the proposed township by the Surveyor-General and the
other was lodgement
of the approval with the Registrar of Deeds.
These acts had to occur within a “specified period, failing
which the
approval to establish the township would lapse”.
However, the period could be extended and indeed it was purportedly

extended but after the expiry of the prescribed period.  During
the purported extension the general plan was approved and
lodged with
the Registrar of Deeds.  This was obviously unlawful because
after the expiry of the prescribed period the relevant
functionary
had no power to extend.
[122]
Years later the landowner sought approval
of the engineering services plan, as a further step towards the
establishment of the township.
The Municipality refused to
approve this plan, citing the fact that the landowner’s right
to establish the township lapsed
when it failed to obtain approval of
the general plan and its lodgement within the prescribed period.
In an application to
the High Court to compel the Municipality to
approve the engineering services plan, the Court declined to grant
the relief sought
on the ground that its effect would be to proclaim
that an “illegal action had somehow evolved into a legal
decision and
that would undermine the principle of legality”.
[123]
The question that arose was whether the
approval to establish the township which was shown on the facts to
have been unlawfully
granted, could lead to subsequent valid acts.
It was in this context that the Supreme Court of Appeal said an
invalid administrative
act may have legal consequences.  For
this proposition the Court cited as authority the following
statement:
“
[A]n
invalid administrative act may, notwithstanding its non-existence [in
law], serve as the basis for another perfectly valid
decision.  Its
factual existence, rather than its invalidity, is the cause of the
subsequent act, but that act is valid since
the legal existence of
the first act is not a precondition for the second.”
[115]
And the Court further
quoted and emphasised this:
“
The
crucial issue to be determined is whether that second actor has legal
power to act validly notwithstanding the invalidity of
the first act.
And it is determined by an analysis of the law against the
background of the familiar proposition that an
unlawful act is
void.”
[116]
[124]
Consecutive administrative acts referred to
in
Oudekraal
occur
where, for example, the empowering provision requires the existence
of a recommendation as a pre-condition for the making
of an
administrative decision.  In this instance both the
recommendation and the ensuing decision constitute consecutive
administrative acts.  As this Court observed in
Walele
[117]
a provision that empowered a municipality to approve building plans
required the municipality when exercising that power to consider
a
recommendation by a building control officer.  In this instance
the approval of the plans must be preceded by the recommendation

which constitutes a jurisdictional fact.
[125]
If the empowering provision requires the
mere existence of the recommendation as was the case in both
Walele
and
Bakgatla
,
then a recommendation that is invalid in law but exists in fact is
capable of giving rise to a valid approval.  This is what
Oudekraal
means by the proposition that an invalid administrative act may have
legal consequences.  In this context the invalid act
refers to
the recommendation and not the approval.  But if the approval
itself is illegal, it can never have legal consequences
flowing
solely from its factual existence.  That is not what
Oudekraal
pronounced.
[126]
But even in the case of consecutive acts,
if the empowering provision requires the recommendation to be valid,
its factual existence
alone will not result in a valid approval.
This is because the legal existence of the recommendation as opposed
to its factual
existence is a precondition for the approval.
This much is clear from the analysis of Prof. Forsyth’s work
quoted in
paragraph 36 above on which
Oudekraal
relies.  It all comes down to what
the empowering provision permits.  What is clear though is that
the
Oudekraal
principle
is limited to the situation of consecutive acts and even then to the
first act.
[127]
But most importantly, Prof. Forsyth himself
accepts the simple proposition that an invalid administrative act
does not exist in
law and that an unlawful act is void.  A plain
consequence of this is that such administrative act is not binding
because
it has no legal force.  This reflects an accurate
position in our law.  Therefore the conclusion reached by the
High
Court, based on
Oudekraal
arose from its mistaken understanding of
Oudekraal
.
Kirland
[128]
The majority in this Court in
Kirland
,
with respect, extended the reach of
Oudekraal
far beyond its scope when it declared:
“
The
essential basis of
Oudekraal
was that invalid administrative action may not simply be ignored, but
may be valid and effectual, and may continue to have legal

consequences, until set aside by proper process.”
[118]
[129]
Happily this statement was not part of the
ratio.  The issue that arose in
Kirland
was whether an administrative act which
was facially unlawful could be set aside in those proceedings without
a formal application
from the MEC for Health to have a fraudulent
administrative approval set aside.  It was in this context that
the majority
said:
“
In
summary: having failed to counter-apply during these proceedings, the
Department must bring a review application to challenge
the approval
granted to Kirland, which remains valid until set aside.  In
those proceedings, the Department will no doubt
explain its
dilly-dallying by accounting for the long months before it acted.
As respondent, Kirland will in turn be entitled
to defend the
decision, whether on the ground of its validity, or on the ground
that it should not be set aside, even if it is
invalid.”
[119]
[130]
The true position in our law is as set out
in
Affordable Medicines Trust
.
An illegal administrative act is inconsistent with the Constitution
and the rule of law.  The inconsistency renders
it invalid,
regardless of the fact that it is not set aside, because in our
constitutional order the Constitution is supreme.
In our law an
unlawful act is void
ab initio
and thus it can have no legal force and effect.
[131]
As a result,
Kirland
must be construed as laying down the principle that public officials
must, for the sake of certainty in law and preventing innocent

parties from acting on invalid acts, apply for the setting aside of
acts which they consider to be invalid.  They should not
ignore
such administrative acts.  But this does not mean, if they fail
to do so, the invalid act automatically morphs into
a valid act with
binding legal effect.  The inaction on the part of the official
cannot render valid an act that is inconsistent
with the
Constitution.  There is no constitutional or other legal basis
for such evolution which is at odds with the constitutional

supremacy.
[132]
The one difficulty with the statement that
says an invalid administrative act may be valid and binding until set
aside is how it
is applied in practice.  Bearing in mind that
what gives validity to such act is not the correct exercise of power
by the
decision-maker, but the failure to seek the setting aside of
the invalid act, the question that arises is: at what point of the

invalid act does the failure trigger validity and binding effect?
Surely it cannot be as soon as the invalid decision is
made.  It
is not clear to me whether the invalid act automatically changes into
a valid act or some further decision must
be taken.
[133]
With regard to an illegal administrative
act, the difficulty is at what point does the legality principle
cease to operate.
As observed in
Affordable
Medicines Trust
, an illegal act “is
now invalid under the Constitution as an infringement of the
principle of legality”.  How
then can it be said that an
illegal act becomes valid merely because public officials failed to
have it set aside?  Does this
imply that section 33 of the
Constitution which requires that administrative action be lawful
ceases to apply if there is a failure
to set the action aside?
All these questions are not addressed in the first judgment.
[134]
These questions were also not addressed by
the majority in
Kirland
.
Moreover, no reasons were advanced in
Kirland
for departing from the unanimous decision of this Court in
Affordable
Medicines Trust
.  The principle in
Kirland
is
also at odds with the constitutional rule of objective invalidity.
Conduct that is inconsistent with the Constitution
is invalid from
the moment the decision is taken and remains invalid, regardless of
whether it is set aside or not.
[135]
Section 2 of the Constitution declares its
supremacy and provides that “law or conduct inconsistent with
it is invalid”.
According to the principle of objective
invalidity, pre-Constitution legislation which is inconsistent with
the Constitution became
invalid on the date the Constitution came
into force.  But legislation that was passed after the
Constitution came into operation
became invalid from inception.
This is because section 2 tells us that such legislation is invalid.
This principle
applies with equal force to administrative action
which constitutes conduct contemplated in section 2.  In
light of this
section there can be no justification for treating
conduct differently from law because both are mentioned in in one
sentence.
Both are subject to the supremacy of the
Constitution.  This principle is buttressed by section 172(1)
which obliges every
court, when deciding a constitutional matter
within its power, to declare law or conduct inconsistent with the
Constitution invalid
to the extent of the inconsistency.
[136]
But the declaration of invalidity of law or
conduct does not invalidate the law or conduct in question.  The
court order merely
declares the law or conduct invalid.  In
contrast it is the Constitution itself which invalidates laws or
conduct inconsistent
with it.  In
Ferreira
[120]
this Court proclaimed:
“
The
Court’s order does not invalidate the law; it merely declares
it to be invalid.  It is very seldom patent, and in
most cases
is disputed, that pre-constitutional laws are inconsistent with the
provisions of the Constitution.  It is one
of this Court’s
functions to determine and pronounce on the invalidity of laws,
including Acts of Parliament.  This
does not detract from the
reality that pre-existing laws either remained valid or became
invalid upon the provisions of the Constitution
coming into
operation.  In this sense laws are objectively valid or invalid
depending on whether they are or are not inconsistent
with the
Constitution.  The fact that a dispute concerning inconsistency
may only be decided years afterwards, does not affect
the objective
nature of the invalidity.  The issue of whether a law is invalid
or not does not in theory therefore depend
on whether, at the moment
when the issue is being considered, a particular person’s
rights are threatened or infringed by
the offending law or not.”
[121]
[137]
Similarly the invalidity of administrative
action depends on whether it is inconsistent with the Constitution.
If the decision
was taken after the Constitution had come into
effect, the decision becomes invalid at the time it is taken.
The fact that
the question of its inconsistency is determined years
after it was taken “does not affect the objective nature of
invalidity”.
Nor does the failure to institute a review
on the part of a public official render the act valid.
[138]
By declaring the duty on public officials
to apply for the setting aside of invalid administrative decisions,
Kirland
sought to avoid uncertainty arising from self-help, whereby public
officials ignore decisions they regard to be invalid.
But by
adding that an invalid administrative act that is not set aside “may
become valid and effectual”,
Kirland
achieves quite the opposite by introducing uncertainty in our law
with regard to legal force of illegal administrative decisions.

The questions raised here illustrate this point.
[139]
But over and above uncertainty the
proposition that an invalid act becomes valid and binding is a
licence to subverting the Constitution
and the rule of law.  It
means that the longer an invalid act is not set aside, the
Constitution and its supremacy cease to
apply to the act which
becomes valid and binding.  And once such act has morphed into
being valid, there is no reason in logic
and principle that precludes
the person in whose favour the valid act was made, from enforcing it
not only against the state but
against the whole world.  This is
so because in our law we do not have administrative decisions that
are enforceable against
the state only.  Administrative
decisions confer rights on those persons in whose favour they are
made and such rights once
created are enforceable against everybody.
[140]
But that proposition is not supported by
any specific clause in the Constitution.  As mentioned, the
proposition is inconsistent
with sections 2 and 33 of the
Constitution.  Whereas properly construed the principle in
Oudekraal
acknowledges
that even in the case of consecutive administrative acts, the first
invalid act is not enforceable but may result into
a valid second act
if the empowering provision requires a mere factual existence of the
first act when the decision on the second
act is made.
[122]
[141]
In contrast
Kirland
introduces a new brand of
administrative action into our law.  The origin of the new
action is not the exercise of public power
but a default position.
It derives its validity not from any empowering provision but from
the failure to institute review
proceedings.  This brand of
administrative action exists outside the Constitution which first and
foremost is the source of
all public power.  The Constitution
does not envisage administrative action that springs from inaction by
public officials.
[142]
This approach suggests that there are two
systems of law which regulate validity of administrative actions.
The one system
is sourced from the Constitution. In terms of this
system an unlawful administrative action is invalid.  The other
system
flows from case law.  In terms of this system an unlawful
administrative action becomes valid and binding, for as long as it
is
not set aside on review.  In the same vein the Supreme Court of
Appeal in
Container Logistics
declared:
“
Judicial
review under the Constitution and under the common law are different
concepts.  In the field of administrative law
constitutional
review is concerned with the Constitution and legality of the
administrative action, the question in each case being
whether it is
or is not consistent with the Constitution and the only criterion
being the Constitution itself.  Judicial review
under the common
law is essentially also concerned with the legality of administrative
action, but the question in each case is
whether the action under
consideration is in accordance with the behests of the empowering
statute and the requirements of natural
justice.”
[123]
[143]
In
Pharmaceutical
Manufacturers
this Court rejected the
view that there are two systems of law that control the exercise of
public power.  This Court held
that the common law principles
have been subsumed under the Constitution from which they gain their
force.  Chaskalson P proclaimed:
“
I
cannot accept this contention which treats the common law as a body
of law separate and distinct from the Constitution.  There
are
not two systems of law, each dealing with the same subject matter,
each having similar requirements, each operating in its
own field
with its own highest court.  There is only one system of law.
It is shaped by the Constitution which is the
supreme law, and
all law, including the common law, derives its force from the
Constitution and is subject to constitutional control.”
[124]
[144]
But notably of the important principles
emerging from
Pharmaceutical Manufacturers
is that under both the common law and
the Constitution, an unlawful administrative action is invalid.
The Court stated:
“
What
would have been ultra vires under the common law by reason of a
functionary exceeding a statutory power is invalid under the

Constitution according to the doctrine of legality.  In this
respect, at least, constitutional law and common law are intertwined

and there can be no difference between them.  The same is true
of constitutional law and common law in respect of the validity
of
administrative decisions within the purview of section 24 of the
interim Constitution.  What is ‘lawful administrative

action’, ‘procedurally fair administrative action’
and administrative action ‘justifiable in relation to
the
reasons given for it’, cannot mean one thing under the
Constitution, and another thing under the common law.”
[125]
[145]
The irony here is that
Kirland
invokes the rule of law requirement for certainty in support of the
proposition that an invalid administrative act becomes valid
if not
set aside.
[126]
But this is done in breach of legality which also forms part of the
rule of law.  In plain terms the rule of law is
invoked to
justify its breach and the principle of constitutional supremacy.
The purpose of constitutional supremacy is to
prevent abuse of public
power.  This is achieved by declaring invalid any conduct
inconsistent with the Constitution.
Yet the
Kirland
principle creates space for corrupt public officials to abuse public
power for their selfish interests.
[146]
Two examples are sufficient to illustrate
the point.  Take a case of a corrupt head of department who, in
breach of section
217 of the Constitution and the relevant statutory
framework, illegally extends a contract for procurement of services
for 10 years,
at a cost of R50 million per month.  He
ensures that for five years the extension is not set aside because
the power to institute
legal proceedings by the department vests in
him.  According to the principle in
Kirland
,
the unconstitutional and illegal extension of the corrupt functionary
becomes valid and binding for as long as it is not set aside.

This means that the service provider in whose favour the decision was
made may enforce it with impunity for the duration of the
extension.
This is because the extension would, according to
Kirland
,
have become valid and effectual.  These facts reflect what
occurred in
Tasima
where, on authority of
Kirland
the Supreme Court of Appeal held:
“
According
to general principles laid down by this Court in
Oudekraal
(paragraph 26) administrative decisions must be treated as valid
until set aside, even if actually invalid.”
[127]
[147]
In a similar vein here too the Supreme
Court of Appeal held that even if the Minister’s decision was
ultra vires
and unlawful, it was valid for as long as it was not set aside in a
review application.
[128]
But I have already pointed out here that the ratio of
Oudekraal
is in paragraph 31 and not 26.
[148]
Yet in
Prodiba
the Supreme Court of Appeal declared an extension made by the same
head of department in identical circumstances to be void
ab
initio
.  This was done even though
the review was brought two years after the decision to extend was
taken.  There the Supreme
Court of Appeal said:
“
By
not embarking on a competitive bid process, particularly given the
nature and scale of the services to be provided, including
the cost
implications, Mr Mahlalela erred fundamentally.  By concluding
the agreement without the approval of his employer
and political
principal and/or of the Cabinet, he acted without authority.  By
concluding the agreement and incurring a liability
for which there
had been no appropriation, he not only erred, but acted against
mandatory statutory prescripts and against the
constitutional
principles of transparent and accountable governance.  For all
these reasons the agreement is liable to be
declared void
ab
initio
.  Consequently the appeal
must be upheld
.
”
[129]
[149]
The Court in
Prodiba
could not have reached the conclusion that the extension was void
ab
initio
if during the course of the two
years, between the time the decision was taken and the stage at which
it was set aside, that extension
had become valid.  On the
contrary this conclusion shows that the Court regarded the extension
to have been invalid from inception
up to the time it was set aside.
[150]
Consequently, an illegal or unlawful
administrative act may not be enforced or complied with, regardless
of how long it remains
in existence.  The High Court and the
Supreme Court of Appeal here erred in concluding that, an illegal act
is binding until
it is set aside.
[151]
What is said here about
Kirland
is in line with what was stated in
Economic Freedom
Fighters
.
[130]
There
Kirland
was cited to make the point that “no decision grounded on the
Constitution or law may be disregarded without recourse to
a court of
law”.  The emphasis was on the fact that decisions based
on the Constitution may not be disregarded.
This point was made
clearer in these terms:
“
The
rule of law requires that no power be exercised unless it is
sanctioned by law and no decision or step sanctioned by law may
be
ignored based purely on a contrary view we hold.  It is not open
to any of us to pick and choose which of the otherwise
effectual
consequences of the exercise of constitutional or statutory power
will be disregarded and which given heed to.
Our foundational
value of the rule of law demands of us, as a law-abiding people, to
obey decisions made by those clothed with
the legal authority to make
them or else approach courts of law to set them aside, so we may
validly escape their binding force.”
[131]
[152]
It is apparent from this statement that in
Economic Freedom Fighters
this Court reaffirmed the rule of law to the extent that “no
power [may] be exercised unless it is sanctioned by law and
no
decision or step sanctioned by law may be ignored based purely on a
contrary view we hold”.  The statement goes further
to
state that everybody must “obey decisions made by those clothed
with legal authority to make them”.  This is
an antithesis
of the proposition that illegal administrative decisions are valid
and binding if not set aside.  Therefore
reliance placed on
Economic Freedom Fighters
is misplaced.  Moreover, that case was concerned with the
question whether the remedial action taken by the Public Protector

was binding until set aside on review.  Furthermore, there the
President conceded that the remedial action was binding.
The
power to take remedial action comes directly from the
Constitution.
[132]
Merits
[153]
The facts have been comprehensively set out
in the first judgment and there is no need to repeat them here,
except to the extent
of making this judgment understandable.
Soon after the coming into force of the Water Services Act
[133]
(Act) which gave effect to municipalities’ authority to supply
potable water and sanitation services, Merafong gave notice
to mining
companies operating within its area to apply for approval for the
supply of water.  In May 2004 Merafong imposed
new tariffs which
were higher than those of Rand Water which until then had been
providing water services.
[154]
The source of the power for Merafong to
impose tariffs is section 229 of the Constitution.  This section
sets out municipal
fiscal powers and functions.  It provides:
“
(1)
Subject to subsections (2), (3) and (4),
a
municipality may impose
—
(a)
rates on property and
surcharges on fees for services provided by
or on behalf of the municipality
; and
(b)
if authorised by national legislation, other taxes, levies and duties
appropriate
to local government or to the category of local
government into which that municipality falls, but no municipality
may impose income
tax, value-added tax, general sales tax or customs
duty.
(2)
The power of a municipality to impose rates on property, surcharges
on fees for services
provided by or on behalf of the municipality, or
other taxes, levies or duties—
(a)
may not be exercised in a way that materially and unreasonably
prejudices national
economic policies, economic activities across
municipal boundaries, or the national mobility of goods, services,
capital or labour;
and
(b)
may be regulated by national legislation.”
[155]
It is apparent from this provision that the
Constitution allocates to municipalities the power to impose property
rates and surcharges
on the fees for services, irrespective of
whether those services were provided by the municipality itself or
its agent.  Barring
income tax, value-added tax, general sales
tax and customs duty, a municipality may also impose other taxes and
levies assigned
to it by national legislation.  However the
power to impose taxes and surcharges on fees for services may not be
exercised—
“
in
a way that materially and unreasonably prejudices national economic
policies, economic activities across municipal boundaries
or the
national mobility of goods, services, capital or labour.”
[156]
The section prescribes conditions that
apply to the exercise of municipal fiscal powers and functions.
It also empowers Parliament
to pass legislation to regulate the
exercise of the power by municipalities themselves.  The Act is
such legislation.
[157]
Although the Constitution limits the
municipal competence on water services to potable water supply
systems,
[134]
the Act empowers municipalities to supply water even for industrial
use by prohibiting procurement of water from anybody else except
a
municipality duly designated under the Act as a water services
authority or its nominee.
[135]
[158]
The Act goes further to regulate the power
of municipalities to approve the supply of water for both domestic
and industrial purposes.
It proclaims that a water services
authority may not unreasonably withhold the approval and may give the
approval subject to reasonable
conditions.
[136]
[159]
However section 8 of the Act is not
restricted to regulating the exercise of power by municipalities.
It goes further to subject
decisions of municipalities on approvals
to the Minister of Water Affairs.  The section achieves this by
granting a person
aggrieved by the municipality’s decision a
right of appeal to the Minister who may confirm, vary or overturn a
decision of
the municipality.  The Minister is also empowered to
prescribe the procedure “for conducting an appeal” under
section 8 which must be lodged within 21 days of the appellant
becoming aware of the impugned decision.  In addition the
section
authorises a relevant province to intervene as a party in the
appeal lodged in terms of the Act.
[137]
[160]
Dissatisfied with the tariffs imposed by
Merafong, AngloGold appealed to the Minister.  In her ruling the
Minister upheld the
appeal.  The Minister’s ruling, which
is dated 18 July 2005, reads:
“
1
Your Notice of Appeal dated 4 June 2004 lodged in terms of
section
8(4)
of the
Water Services Act, 1997
has reference.
2
Decision
2.1
I differ with the conditions imposed by the Merafong City Local
Municipality when
approving the application.  I regard a tariff
increase of 62% with no value added as unreasonable.  Water
Services Authorities
are required to exercise their rights in a
manner that is fair, equitable and reasonable, and support national
fiscal and economic
policy.  Where a Water Services Authority
adds no
value to the services provided to a
person or institution from another source it would be unreasonable to
impose a fee, charge,
surcharge or levy on the services provided.
2.2
Since water for industrial use is not defined as a municipal service
in terms of
section 1(xxv)
of the
Water Services Act, 1997
no
surcharge can therefore be levied on water for industrial use.
Surcharges may only be levied on the portion of water that
the mines
are using for domestic purposes.
2.3
The Merafong City Local Municipality is of the view that it
appropriately consulted
with the mines and also considered the mines
economic assessment presented by the Chamber of Mines on behalf of
the mines.
Based on the appeal submitted to me, it is debatable
whether the mines support the view that appropriate consultation has
taken
place.  When considering the merits of the appeals, I am
not convinced that the Municipality has provided a reasonable
opportunity
for the mines to present themselves.
2.4
In terms of the power vested on me by
section 8(9)
of the
Water Services Act, 1997
, I therefore overturn
the decision of the Merafong City Local Municipality to levy a
surcharge on water for industrial use and
rule that the Municipality,
the Mines and Rand Water should negotiate a reasonable tariff on the
portion of water that the mines
are using for domestic purposes
.”
[161]
The Minister motivates her decision by
asserting that the tariff increase of 62% was unreasonable and that
where a municipality
adds no value to the service provided by another
person “it would be unreasonable to impose a fee, charge,
surcharge or levy
on the service provided”.  The Minister
proceeds to express her opinion on circumstances under which
surcharges may
be levied.  She said since water used for
industrial purposes is not defined in the Act as a municipal service,
no surcharge
can be levied for its supply.  A surcharge may only
be levied, she concluded, on the portion of water that AngloGold was
using
for domestic purposes.
[162]
The Minister’s reasons reveal the
misconception of the legal position under which she laboured when she
considered the appeal.
She completely overlooked the fiscal
power conferred on municipalities by section 229(1) of the
Constitution which expressly declares
that a municipality is entitled
to levy a surcharge on services provided by it and also those that
are provided by a third party
on its behalf.  Moreover, section
7 of the Act authorises the Municipality where the supply of water
for industrial use is
not done by itself, to nominate a service
provider.  Here it is common cause that Rand Water was so
nominated.
[163]
Therefore on the Minister’s
understanding, even where water for industrial use is supplied by the
Municipality, it may not
levy a surcharge for the service because
that service is not defined as a municipal service in the Act.
The Minister was
wrong on both fronts.  Section 229 authorises
municipalities to levy a surcharge on services provided by it or on
its behalf,
regardless of whether there is value added or not.
[164]
Taking the view that the Minister acted
unconstitutionally, Merafong disregarded the ruling and insisted on
the payment of the surcharge.
AngloGold paid under protest.
When resolution of the dispute eluded the parties, AngloGold
approached the High Court for
relief.  It sought an order
directing Merafong to comply with the Minister’s decision of 18
July 2005.
[165]
For its part Merafong opposed the relief
and counter-applied that the decision be set aside.  In support
of its counter-application
Merafong advanced two grounds.
First, it contended that the Minister acted without power.
Second, in the event that
the Court held that she had the authority,
Merafong challenged the constitutionality of section 8 of the Act, to
the extent that
it authorised the Minister to interfere in the
exercise of a municipal fiscal power.
[166]
The Minister was cited as a party in the
proceedings but this notwithstanding she declined to participate.
The stance taken
by the Minister was indeed unusual.
Legislation she was given the responsibility to administer was being
challenged and yet
she chose not to get involved.  Despite the
fact that it was her decision that was under attack.  This was
not in line
with the duty members of the Executive have towards
courts when the validity of legislation they administer is impugned.
That duty arises even when a Minister concedes invalidity.  They
are obliged to furnish the court with any information which
may help
it adjudicate the claim of constitutional invalidity.  It is
through Ministers that information on impugned legislation
passed by
Parliament, reaches the courts.  An applicant does not have to
cite Parliament every time legislation is impugned.
After all
Ministers enjoy the right to introduce legislation in Parliament.
[167]
Following its interpretation of the
relevant provision, the High Court held that here the Minister
exercised power duly conferred
on her when she reached the impugned
decision.  The Court proceeded to consider the constitutional
challenge.
[168]
The High Court accepted that Merafong
exercised a municipal fiscal power contained in section 229 of the
Constitution in imposing
the surcharge.  But the Court concluded
that the tariff increase was unreasonable and as a consequence, the
Minister’s
intervention was justified.
[169]
In this regard the Court reasoned thus:
“
With
regard to water for domestic use, the authority of a municipality to
impose surcharges on fees for the supply of water for
domestic use
provided by or on behalf of a municipality emanates from the
Constitution itself.  This, as already stated, is
provided for
in section 229(1)(a) read with section 229(2) of the Constitution.
The parties are agreed that in terms of the
Constitution a
municipality
has the original legislative
and executive powers to impose tariffs and surcharges on fees for
services provided by or on behalf
of the municipality in respect of
the supply of domestic
water to members of
the community within its area of Jurisdiction.  See
Fedsure
Life Assurance v
Greater
Johannesburg TMC
[1998] ZACC 17
;
1999 (1) SA 374
(CC)
at para
[39]
.
In
this instance, it is common cause that the Municipality imposed
tariffs and surcharges in respect of water supplied for domestic
use
to AngloGold.  It is also common cause that AngloGold was not
satisfied with the Municipality’s decision to impose
the
surcharges on these services and appealed to the Minister in respect
thereof.  When considering the appeal the Minister
made a
finding that where a water services authority adds no value to the
services provided to a person or institution from another
source it
would be unreasonable to impose a fee, charge, surcharge or levy on
the services provided, based on the appeal submitted
to her, the
Minister was not convinced that the Municipality provided a
reasonable opportunity for the mines (including AngloGold)
to present
themselves.  This in my view resulted in an unreasonable tariff
being set by the Municipality.  And as a result
the Minister
ruled that the Municipality, the Mines and Rand Water should
negotiate a reasonable tariff on the portion of water
that the mines
are using for domestic purposes.”
[138]
[170]
Then the Court concluded:
“
As
already stated the power to impose the surcharges on fees for the
supply of water for domestic use is subject to national legislation.

The [Act] is the regulatory framework by which the Minister assumes
responsibility to regulate the exercise of the
executive municipal power
for water for
domestic use
.
”
[139]
[171]
The fundamental flaw in this conclusion
lies in the fact that the Court overlooked the principle of
separation of powers that applies
among the spheres of government.
This Court has proclaimed in a long line of cases that municipalities
enjoy exclusive powers
in relation to competencies allocated to them
by the Constitution.
[140]
In those cases this Court held that national and provincial spheres
of government may not arrogate to themselves the power
to exercise
municipal competencies, by simply passing legislation authorising the
exercise of municipal powers.
[172]
Contrary to that authority, the High Court
here concluded that it was constitutionally compliant for the
impugned provision to empower
the Minister to intrude into the
terrain of Merafong and overturn a decision taken by it in the
exercise of its municipal fiscal
power.  On the authority of the
Constitution as interpreted by this Court in the cases referred to,
this was incorrect.
Instead the constitutional challenge should
have been upheld.
[173]
The fact that this claim may not have been
pursued in the Supreme Court of Appeal does not bar this Court from
adjudicating it.
Indeed the Minister and Merafong in the
written submissions filed in response to our directions, agree that
it is competent for
this Court to consider this claim.  However,
the Minister disputes that in overturning Merafong’s tariff in
terms of
section 8(9), she exercised Merafong’s exclusive
power.  There is no merit in this argument.  Municipal
fiscal
power falls within the exclusive domain of municipalities and
may be exercised by them and by them alone, subject to conditions

listed in section 229 of the Constitution.
[174]
The first judgment holds that Merafong did
not persist with the constitutional attack before us.
[141]
This is incorrect.  In its written submissions in response to
our directions, Merafong argued:
“
[S]ince
the Minister has no jurisdictional competence to consider an appeal
against the imposition of a municipal tariff on potable
water for
domestic consumption, she is debarred from entering this terrain for
any purpose . . .
Since,
as a matter of jurisdiction, she cannot entertain the matter, she
cannot ‘confirm, vary or overturn’ the municipal

decision.  So much is rightly conceded on behalf of the Minister
too.  By parity of reasoning, it must follow that she
cannot
give a decision. . . .
We submit,
therefore, that the constitutional issue can properly be dealt with .
. .  moreover that it should be dealt with
.”
[175]
AngloGold concedes that it is competent for
this Court to determine a constitutional challenge such as the one
mounted by Merafong
but argues that in the present circumstances it
is not necessary to reach it.  The reasons advanced for this
proposition are:
that the Minister has not dealt with the attack “as
an impermissible intrusion on the powers of local government”;
Merafong’s failure to pursue the challenge in the Supreme Court
of Appeal denied this Court the benefit of having the views
of that
Court; the invalidity claim amounted to a collateral challenge which
may not be advanced by Merafong as an organ of state
and that the
constitutional challenge was nothing else but a disguised review,
instituted out of time.
[176]
The argument lacks substance.  I fail
to appreciate how an invalidity challenge directed at a statutory
provision on the ground
that it is inconsistent with the Constitution
could be both a review envisaged in PAJA and a collateral challenge.
A collateral
challenge is not subject to any time bar but a PAJA
review is.  Moreover, a constitutional attack against the
validity of
legislation does not constitute administrative action
contemplated in PAJA.  Accordingly PAJA does not apply to such
claims.
With regard to the proposition that a collateral
challenge is not available to an organ of state, I have already held
that it may
competently be raised by the state.
[177]
As it cannot be gainsaid that the section
impermissibly empowers the Minister to exercise a municipal power, it
follows that the
section is inconsistent with the Constitution.
Accordingly this Court is obliged to declare it invalid to the extent
of the
inconsistency.
[178]
I would have granted leave, upheld the
appeal and declared
section 8
of the
Water Services Act to
be
inconsistent with the Constitution and set it aside.
For the Applicant: M
S M Brassey SC, E S J Van Graan SC and J A Motepe instructed by
De Swardt Vogel Myambo Attorneys
For the Respondent: N
J Graves SC and I B Currie instructed by Knowles Husain Lindsay Inc
[1]
Water boards are established under Chapter VI
(sections 28-50) of the Water Services Act 108 of 1997 (Act).
The Act repealed
the Rand Water Board Statutes (Private) Act 17 of
1950.  Under section 29 of the Act, “[t]he primary
activity of a
water board is to provide water services to other
water services institutions within its service area”.
Rand Water
is a water board under the Act.
[2]
AngloGold Ashanti Ltd v Merafong City Local
Municipality
[2014] ZAGPPHC 85 (26
February 2014) (Kubushi J) (High Court judgment).
[3]
Section 156(1) provides, in part, that a
municipality has executive authority in respect of, and the right to
administer, the
local government matters set out in Part B of
Schedule 4 to the Constitution.  The Schedule mentions the
local government
matters listed “to the extent set out in
section 155(6)(a) and (7)”.  In terms of section 1 of the
Act, water
services authority means any municipality, including a
district or rural council as defined in the
Local Government
Transition Act 209 of 1993
, responsible for ensuring access to water
services.
[4]
Part B, Schedule 4 of the Constitution.
[5]
Section 8(9).
[6]
Merafong accepts that it invited applications for
both domestic and industrial use (section 7 applies only to
industrial use).
[7]
In terms of section 8(4).
[8]
In terms of section 8(9).
[9]
This figure is from AngloGold’s founding
affidavit in the High Court in 2011 – it is presumably much
higher now.
[10]
In terms of both sections 6 and 7.
[11]
Under section 8.
[12]
Oudekraal Estates (Pty) Ltd v City of Cape
Town
[2004] ZASCA 48
;
2004 (6) SA 222
(SCA) (
Oudekraal
).
[13]
Merafong City Local Municipality v AngloGold
Ashanti Ltd
[2015] ZASCA 85
;
2016 (2)
SA 176
(SCA) (Maya JA; Majiedt, Mbha JJA, Schoeman and Van der Merwe
AJJA concurring) (SCA judgment).
[14]
Id at para 17.
[15]
Id at para 15.
[16]
MEC for Health, Eastern Cape v Kirland
Investments (Pty) Ltd
[2014] ZACC 6
;
2014 (3) SA 481
(CC);
2014 (5) BCLR 547
(CC) (
Kirland
).
[17]
Id at para 17.
[18]
When asked during oral argument whether this
Court should consider the constitutional challenge, counsel for
Merafong replied:
“
We
did not insist that the [constitutional challenge] be heard at the
Supreme Court of Appeal and it is conditional on this Court
finding
that the Minister’s decision was lawful - that she had
jurisdiction in terms of the Act to make the decision”.
[19]
The Minister submitted that, since Merafong
concedes that it does not have exclusive competence to determine
tariffs and levy
surcharges for industrial water, there is no live
issue there.  The Minister further submits that she did not
overrule Merafong’s
tariff on domestic water, but only
directed that the parties negotiate a reasonable one.  The
Minister accepts that the
provision of domestic water falls within
the exclusive competence of municipalities and she submits that her
ruling reflects
this.  The Minister objects to the
determination of the constitutional issues on the principle of
subsidiarity.
Merafong submits that the
Minister misconceived the matter as one about remedy rather than
jurisdiction.  It further submitted
that since the Minister had
no jurisdiction to even consider the appeal, “she is debarred
from entering this terrain for
any purpose”.
[20]
SCA judgment above n 13 at para 17.
[21]
Oudekraal
above
n 12 at para 35.
[22]
National Industrial Council v Photocircuit
1993 (2) SA 245
(C) (
Photocircuit
)
at 253A-B, quoting H W R Wade
Administrative
Law
, 6 ed (Clarendon Press, New York
1988) at 331.
[23]
SCA judgment above n 13 at para 17, citing
City
of Tshwane Metropolitan Municipality v Cable City (Pty) Ltd
[2009] ZASCA 87
;
2010 (3) SA 589
(SCA) (
Cable
City
) at para 15.
[24]
SCA judgment above n 13 at para 17, citing
Kirland
above
n 16 at para 35.
[25]
Oudekraal
above
n 12 at para 35.
[26]
SCA judgment above n 13 at para 17.
[27]
It may be more descriptive to term collateral
challenges “reactive”, rather than “collateral”.
To
call them “defensive” is also inapt, since the
challenger may itself initiate proceedings, as in
Attorney-General
of Natal v Johnstone & Co Ltd
1946
AD 256
(
Johnstone
)
and also
3M South Africa (Pty) Ltd v
Commissioner of the South African Revenue Service
[2010]
ZASCA 20
;
[2010] 3 All SA 361
(SCA) (
3M
South Africa
).
[28]
Johnstone
id at
261.
[29]
Id at 262.  In
Kouga
Municipality v Bellingan
[2011] ZASCA
222
;
2012 (2) SA 95
(SCA) at para 20, Cloete JA left open the
question whether
Johnstone
should be reconsidered for those only liable to prosecution, and not
already charged, in view of the distinction between a direct
and a
collateral challenge; but, in view of the analysis in this judgment,
the doubt seems unnecessary.
[30]
Metal and Allied Workers Union of SA v
National Panasonic
1991 (2) SA 527
(C); (1991) 12 ILJ 533 (C) (
Panasonic
).
The applicant trade union sought an urgent order declaring that the
employer’s lockout, which had started some
weeks before, was
unlawful.  The challenge to the industrial council conciliation
proceedings was “collateral”
to the union’s
application for an interdict.
[31]
Id at 531F-G.
[32]
Id at 530E-F.
[33]
Id at 530G-H.  A vivid equivalent case in
the setting of post-constitutional environmental laws, is
Khabisi
NO v Aquarella Investment 83 (Pty) Ltd
[2007] ZAGPHC 116
;
2008
(4) SA 195
(T);
2007 (11) BCLR 1243
(T) (
Aquarella
Investment
).  Bosielo J, at paras
24-5, disallowed a reactive challenge to cease-construction and
environmental compliance notices
by developers because the statute
granted them ample mechanisms and internal remedies to challenge the
contested decisions, which
they had pointedly not utilised.
[34]
Photocircuit
above
n 22.
[35]
Id at 253B-C.
[36]
Id at 253E-F.  A good post-Constitution
contrast with
Photocircuit
is
V&A Waterfront Properties (Pty)
Ltd v Helicopter and Marine Services (Pty) Ltd
[2005]
ZASCA 87
;
[2006] 3 All SA 523
(SCA).  There, a helicopter
service, against whom civil aviation authorities had issued a
grounding order, which put it
in breach of its lease, tried to
attack the order in proceedings by the landlord to stop it operating
from the leased premises.
No, said the Supreme Court of
Appeal.  So long as the grounding order existed, the landlord
was entitled to interdict the
breach of the lease.  The
proceedings were not well designed to interrogate the validity of
the order, which therefore had
to be accepted as valid (at paras
14-5).  Collateral challenges could be raised in proceedings
where a public authority
seeks to coerce a subject into compliance
with an unlawful administrative act.  Since the proceedings are
not of that nature,
the grounding order had legal effect until set
aside by a reviewing court (at para 10).
[37]
Collateral challenge was also advanced by counsel
in the reported heads of argument, but did not form the basis of the
decision,
in
Salandia (Pty) Ltd v
Vredenburg-Saldanha Municipality
[1987]
ZASCA 108
;
1988 (1) SA 523
(A).
[38]
Some of the English cases and authorities appear
to imply that collateral challenge is available only to an accused
at risk of
conviction.  See
Boddington
v British Transport Police
[1998] UKHL
13
;
[1999] 2 AC 143
at 153G-H and 154A, where the subject faced a
criminal prosecution.  Lord Irvine said that it would be—
“
a
fundamental departure from the rule of law if an individual were
liable to conviction for contravention of some rule which is
itself
liable to be set aside by a court as unlawful.  Suppose an
individual is charged before one court with breach of
a by-law and
the next day another court quashes that by-law for example, because
it was promulgated by a public body which did
not take account of a
relevant consideration.  Any system of law under which the
individual was convicted and made subject
to a criminal penalty for
breach of an unlawful by law would be inconsistent with the
rule of law.”
But elsewhere it appears
that the availability of the challenge is not so limited.  For
example, see at 160C, per Lord Irvine:
“
However,
in every case it will be necessary to examine the particular
statutory context to determine whether a court hearing a
criminal
or
civil case
has jurisdiction to rule on
a defence based upon arguments of invalidity of subordinate
legislation or an administrative act
under it. There are situations
in which Parliament may legislate to preclude such challenges being
made, in the interest, for
example, of promoting certainty about the
legitimacy of administrative acts on which the public may have to
rely.”
And at 175C, per Lord
Steyn:
“
Moreover,
the ruling of the Divisional Court is contrary to principle and
precedent which permits in
civil and
criminal cases a collateral or defensive challenge to subordinate
legislation and administrative decisions.”
See also at 156E-H where
Lord Irvine refers to
Wandsworth London BC v Winder
[1984] UKHL 2
;
[1984] 3
All ER 976
;
[1985] AC 461
, in which the House of Lords held that in
proceedings brought by a local-authority landlord against a tenant
to claim rent, the
tenant was entitled as of right to challenge the
lawfulness of the local authority’s decision to increase the
rent.
[39]
Panasonic
above
n 30 at 530C-D and 531F-G;
Photocircuit
above n 22 at 251D-E and 252H.
[40]
Photocircuit
id
at 253B-C.
[41]
Panasonic
above
n 30 at 531G the Court found that—
“
the
Court can control the time within which the attack on the
proceedings or decision may be launched by implementing the
time-honoured
rule that an applicant for review who fails to present
his case within a reasonable time . . . loses his right to complain
of
the irregularity.”
[42]
Kirland
above n
16 at para 97.
[43]
Ouderkraal
above
n 12 at para 36.
[44]
As in
S v Smit
[2006] ZAGPHC 65
;
2008 (1) SA 135
(T) at 178A-181J.  Where an
accused was permitted to raise unlawfulness of a declaration of a
toll road to prosecution for
failing to pay tolls.
[45]
Oudekraal
above
n 12 at para 36.
[46]
Section 2 of the Constitution provides:
“
This
Constitution is the supreme law of the Republic; law or conduct
inconsistent with it is invalid, and the obligations imposed
by it
must be fulfilled.”
[47]
Section 172(1)(a).
[48]
Section 172(1)(b).  In full, section 172(1)
reads:
“
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.”
[49]
Bengwenyama Minerals (Pty) Ltd v Genorah
Resources (Pty) Ltd
[2010] ZACC 26
;
2011 (4) SA 113
(CC);
2011 (3) BCLR 229
(CC) (
Bengwenyama
).
[50]
Id at para 85.
[51]
AllPay Consolidated Investment Holdings (Pty)
Ltd v Chief Executive Officer of the South African Social Security
Agency
[2013] ZACC 42
;
2014 (1) SA 604
(CC);
2014 (1) BCLR 1
(CC) (
AllPay
).
[52]
Id at para 26.
[53]
Id at para 98.
[54]
Oudekraal
above
n 12 at para 27.
[55]
Panasonic
above
n 30;
Photocircuit
above n 22 at 253E-F, where Scott J quotes Wade above n 24 at 331;
and
Oudekraal
above n 12 at para 35.
[56]
As Forsyth puts it, “some ‘functional
voidability’ of invalid administrative action is thus implied
by section 172:
an invalid administrative act will be effective
until any judicial-set period of suspension has come to an end”.
Forsyth
“The Theory of the Second Actor Revisited”
(2006)
Acta Juridica
209
at 228.
[57]
Giant Concerts CC v Rinaldo Investments (Pty)
Ltd
[2012] ZACC 28
;
2013 (3) BCLR 251
(CC).
[58]
Id at para 34.
[59]
The Supreme Court of Appeal, at para 46, said
that, despite the long decades for which the approval had existed
unchallenged—
“
[i]t
is not open to us to stifle the right that any person might have to
bring such proceedings, or to pre-empt the decision that
a court
might make if it is called upon to exercise its discretion in that
regard”.
The Court pointed out that
the long time that had passed would not necessarily be decisive –
the fact that Oudekraal had
done nothing with the approval for so
long might itself count against it.  The approval was in fact
later set aside in separate
proceedings:
City of Cape Town v
Oudekraal Estates (Pty) Limited
[2007] ZAWCHC 53
(9 October
2007);
Oudekraal Estates (Pty) Ltd v The City of Cape Town
[2009]
ZASCA 85; 2010 (1) SA 333 (SCA).
[60]
Kirland
above n
16 at para 68.
[61]
Id at paras 71-2.
[62]
The narrow ratio of
Kirland
,
as well as its broad principle, were both applied in
Manok
Family Trust v Blue Horizon Investments 10 (Pty) Ltd
[2014]
ZASCA 92
;
2014 (5) SA 503
(SCA) at para 17, where the Court did not
permit an official to reverse a decision already made under
statutory power without
recourse to judicial sanction.
[63]
Where
Kirland
above n 16 at para 106 says that a decision not properly set aside
“remains
valid
”,
it means that it remains
legally
effective
.  Absence of challenge
by the right litigant in the right forum at the right time doesn’t
magically heal the administrative
law flaws in the decision.
It means that the decision continues to have
effect
in law
until properly set aside.
[64]
Economic Freedom Fighters v Speaker of the
National Assembly; Democratic Alliance v Speaker of the National
Assembly
[2016] ZACC 11
;
2016 (3) SA
580
(CC);
2016 (5) BCLR 618
(CC) (
Economic Freedom Fighters
).
[65]
Id at para 74, citing
Kirland
above n 16 at paras 89 and 103.
[66]
In
City of Cape Town
v Helderberg Park Development (Pty) Ltd
[2008] ZASCA 79
;
2008 (6) SA 12
(SCA) (
Helderberg
Park Development
) at para 50, the
Supreme Court of Appeal stated it was settled law that the target of
compulsion “is entitled to await
events and resist only when
the unlawful condition is invoked to coerce it into compliance”.
A good instance is
Cable
City
above n 23 at paras 13-5, where the Supreme Court of Appeal
allowed a reactive challenge to Tshwane’s attempt to impose

regional services levies on a company because the ministerial
authorisation for Tshwane’s estimate of the levies was
invalidly
issued.  The corporation did not have to join the
Minister in challenging the levies because it was not seeking an
order
of constitutional invalidity against the Minister – it
was merely resisting an unlawful attempt to exact moneys from it.

The Court had no discretion to disbar it from raising the challenge.
[67]
In
Kouga
Municipality
above n 29, the Supreme
Court of Appeal recognised a reactive challenge to a by-law
regulating liquor trading hours which, though
in form a direct
challenge, was in substance a collateral or reactive challenge to
the by-law (at para 12).  The Court had
no discretion to
disallow what was in substance a collateral challenge (at para 18).
The order of the High Court, which
had suspended its declaration
that the by-law was invalid, thus depriving the liquor traders of
effective relief, was set aside.
Cloete JA said that it would
be “inexplicable to a layman were the [liquor traders] to fail
in civil proceedings the avowed
purpose of which was to avoid their
prosecution under the by-law, but succeed in defending criminal
proceedings on the same facts”
(at para 16).
In
3M South Africa
above n 27 the Supreme Court of Appeal likewise upheld a
reactive challenge to the imposition of customs duty which the
taxpayer
itself initiated.  The substance was that the tax
authorities were “seeking to coerce the [taxpayer] into
compliance
with its demands for payment of import duty”.
Hence disqualification based on delay – whether under the
common
law or PAJA – was “simply not available”
(at para 33).
[68]
While in
Oudekraal
above n 12 at para 37, it was stated that “a public authority
cannot justify a refusal on its part to perform a public
duty by
relying, without more, on the invalidity of the originating
administrative act: it is required to take action to have
it set
aside and not simply to ignore it”, this did not imply, as has
been suggested, “a general rule of thumb to
the effect that
all public authorities must accept as valid the decisions of other
authorities – or launch a challenge
to their validity in
court”; Forsyth above n 56 at 224.  The reason is that in
the sentence immediately preceding
that quoted, the
Oudekraal
Court expressly noted that “[w]hile the legislature might
often, in the interests of certainty, provide for consequences
to
follow merely from the fact of an administrative act, the rule of
law dictates that the coercive power of the state cannot
generally
be used against the subject
unless the
initiating act is legally valid
”
(at para 37).
[69]
Invoking
Kirland
above n 16 at para 105, which stated that “a decision taken by
the incumbent of the office empowered to take it”
could not be
ignored.
[70]
3 of 2000.
[71]
Section 6(2)(a)(i).
[72]
Section 6(2)(f)(i).
[73]
Section 1(v).
[74]
Section 1(vi).  See
Kirland
above n 16 at paras 90-9.
[75]
Bengwenyama
above n 49 at para 85; see also
Photocircuit
above n 22.
[76]
Lesapo v North West Agricultural Bank
[1999] ZACC 16
;
2000 (1) SA 409
(CC);
1999 (12) BCLR 1420
(CC) at
para 17.
[77]
Khumalo v Member of the Executive Council for
Education: KwaZulu Natal
[2013] ZACC
49; 2014 (5) SA 579 (CC); 2014 (3) BCLR 333 (CC).
[78]
Id at para 45.
[79]
Id at para 29.
[80]
Id at para 36.
[81]
Kirland
above n
16 at para 89.
[82]
Pharmaceutical Manufacturers Association of
South Africa: In re Ex Parte President of the Republic of South
Africa
[2000] ZACC 1
;
2000 (2) SA 674
(CC);
2000 (3) BCLR 241
(CC) (
Pharmaceutical
Manufacturers
), applied in
Kruger
v President of the Republic of South
Africa
[2008] ZACC 17
;
2009 (1) SA 417
(CC);
2009 (3) BCLR 268
(CC) and
Minister
for Environmental Affairs v Aquarius Platinum (SA) (Pty) Ltd
[2016]
ZACC 4; 2016 (5) BCLR 673 (CC).
[83]
13 of 2005.
[84]
Kirland
above n
16.
[85]
See the discussion above at [27] to [32] of
Photocircuit
,
National Panasonic
and
Oudekraal
.
[86]
A vivid instance is the decision in
Aquarella
Investment
above n 33 at paras 24 5,
where, because the National Environmental Management Act 107 of 1998
(NEMA) provided an appeal
process, which the objector did not
utilise, the objector was held precluded from raising a collateral
challenge (“since
NEMA made elaborate provisions for effective
internal remedies, the respondents are not entitled, to launch a
collateral attack
against the compliance notices by raising their
invalidity as a defence in these proceedings.  In my view the
conduct of
the respondents is both inimical to and seriously
subversive of a sound and efficient system of public
administration”).
To the same effect is
R
v Wicks
[1997] UKHL 21
;
[1998] AC 92
;
[1997] 2 All ER 801
;
[1997] 2 WLR 876
(“. . . over the years
there has been a consistent policy of progressively restricting the
kind of issues which a person
served with an [environmental]
enforcement notice can raise when he is prosecuted for failing to
comply.  The reasons for
this policy of restriction are clear:
they relate, first, to the unsuitability of the subject matter
for decision by the
criminal court; secondly, to the need for the
validity of the notice to be conclusively determined quickly enough
to enable planning
control to be effective and to allow the
timetable for service of such notices in the Act to be
operated; and thirdly,
to the fact that the criminal proceedings are
part of the mechanism for securing the enforcement of planning
control in the public
interest”, per Lord Hoffmann at 818B).
See also
Boddington
above n 38, at 161G-H, where Lord Irvine distinguishes two cases,
R
v Wicks
and
Plymouth City Council v Quietlynn Ltd
[1987]
2 All ER 1040
,
[1988] QB 114
, on the basis that it was an important
feature of both that they were concerned with administrative acts—
“
specifically
directed at the defendants, where there had been clear and ample
opportunity provided by the scheme of the relevant
legislation for
those defendants to challenge the legality of those acts, before
being charged with an offence.”
By contrast, Lord Irvine
noted, where statutory instruments or by-laws are of a general
character – directed to the world
at large – the first
time an individual may be affected is when he or she is charged.
[87]
Khumalo
above n
77.
[88]
Section 7(1)(b) of PAJA requires review not later
than 180 days after the challenger becomes aware of the decision.
[89]
Section 9(2) of PAJA empowers a court to grant an
extension “where the interests of justice so require”.
[90]
Khumalo
above n
77 at paras 39-73.  Skweyiya J, at para 44, observed, on behalf
of the Court that, even when time periods are not
expressly
legislated—
“
it
is a long-standing rule that a legality review must be initiated
without undue delay and that courts have the power (as part
of their
inherent jurisdiction to regulate their own proceedings) to refuse a
review application in the face of an undue delay
in initiating
proceedings or to overlook the delay.  This discretion is not
open-ended and must be informed by the values
of the Constitution.
However, because there are no express, legislated time periods
in which the MEC was required to bring
her application, there is no
requirement that a formal application for condonation needs to have
been brought.”
[91]
Endorsing
Gqwetha v
Transkei Development Corporation Ltd
[2005] ZASCA 51
;
2006 (2) SA 603
(SCA) at paras 24 and 31.
[92]
See [16].
[93]
Biowatch Trust v Registrar, Genetic Resources
[2009] ZACC 14; 2009 (6) SA 232 (CC);
2009 (10) BCLR 1014 (CC).
[94]
Oudekraal
above
n 12.
[95]
Kirland
above n
16
.
[96]
First judgment at [43].
[97]
Helderberg Park Development
above n 66 at para 50.
[98]
Oudekraal
above
n 12 at para 36.
[99]
Section 33(1) of the Constitution provides:
“
Everyone
has the right to administrative action that is lawful, reasonable
and procedurally fair.”
[100]
Women’s Legal Trust v President of the
Republic of South Africa
[2009] ZACC
20
;
2009 (6) SA 94
(CC) at para 15; and
Pharmaceutical
Manufacturers
above n 82 at para 55.
[101]
Cable City
above
n 23 at para 15.
[102]
SCA judgment above n 13 at para 17.
[103]
Kirland
above n
16 at para 2.
[104]
Section 173 of the Constitution provides:
“
The
Constitutional Court, the Supreme Court of Appeal and the High Court
of South Africa each has the inherent power to protect
and regulate
their own process, and to develop the common law, taking into
account the interests of justice.”
[105]
PFE International Inc (BVI) v Industrial
Development Corporation of South Africa Ltd
[2012] ZACC 21
;
2013 (1) SA 1
(CC);
2013 (1) BCLR 55
(CC) (
PFE
International
) at para 30.
[106]
Affordable Medicines Trust v Minister of
Health
[2005] ZACC 3
;
2006 (3) SA 247
(CC);
2005 (6) BCLR 529
(CC) at paras 48-9.
[107]
Id at para 50.
[108]
High Court judgment above n 2 at para 73.
[109]
First judgment at [58].
[110]
Section 172(1)(a) provides:
“
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.”
[111]
Bengwenyama
above n 49.
[112]
Id at para 84.
[113]
Id at para 85.
[114]
Oudekraal
above
n 12 at para 31.
[115]
Id at para 29.
[116]
Id.
[117]
Walele v City of Cape Town
[2008]
ZACC 11
;
2008 (6) SA 129
(CC);
2008 (11) BCLR 1067
(CC) and
Bakgatla-Ba-Kgafela Communal Property
Association v Bakgatla-Ba-Kgafela Tribal Authority
[2015]
ZACC 25
;
2015 (6) SA 32
(CC);
2015 (10) BCLR 1139
(CC) (
Bakgatla
)
at paras 23 and 53.
[118]
Kirland
above n
16 at para 101.
[119]
Id at para 106.
[120]
Ferreira v Levin NO; Vryenhoek v Powell NO
[1995] ZACC 13; 1996 (1) SA 984 (CC);
1996 (1) BCLR 1 (CC).
[121]
Id at para 27.
[122]
Oudekraal
above
n 12 at para 29.
[123]
Commissioner for Customs and Excise v
Container Logistics (Pty) Ltd, Commissioner for Customs and Excise v
Rennies Group Limited
t/a Renfreight
[1999]
ZASCA 35
(
Container Logistics
)
at para 20.
[124]
Pharmaceutical Manufacturers
above n 82 at para 44.
[125]
Id at para 50.
[126]
Kirland
above n
16 at para 103.
[127]
Tasima (Pty) Ltd v Department of Transport
[2015] ZASCA 200
;
[2016] 1 All SA 465
(SCA) (
Tasima
).
[128]
SCA judgment above n 13 at paras 14-5.
[129]
Minister of Transport NO v Prodiba (Pty) Ltd
[2015] ZASCA 38
;
[2015] 2 All SA 387
(SCA) (
Prodiba
)
at para 40.
[130]
Economic Freedom Fighters
above
n 64 at paras 73-5.
[131]
Id at para 75.
[132]
Section 182 of the Constitution provides:
“
(1)
The Public Protector has the power, as regulated by national
legislation—
(a)
to investigate any conduct in state
affairs, or in the public administration in any sphere of
government, that is alleged or suspected
to be improper or to result
in any impropriety or prejudice;
(b)
to report on that conduct; and
(c)
to take appropriate remedial action.
(2)
The Public Protector has the additional powers and functions
prescribed
by national legislation.
(3)
The Public Protector may not investigate court decisions.
(4)
The Public Protector must be accessible to all persons and
communities.
(5)
Any report issued by the Public Protector must be open to the public

unless exceptional circumstances, to be determined in terms of
national legislation, require that a report be kept confidential.”
[133]
108 of 1997.
[134]
Part B of Schedule 4 lists “water and
sanitation services limited to potable water supply systems and
domestic waste-water
and sewage disposal systems as matters falling
within the ambit of section 155 of the Constitution”.
[135]
Section 7(1) of the Act provides:
“
Subject to subsection (3), no person may
obtain water for industrial use from any source other than the
distribution system of
a water services provider nominated by the
water services authority having jurisdiction in the area in
question, without the
approval of that water services authority.”
[136]
Section 8(1) provides:
“
A water services authority whose approval
is required in terms of section 6 or 7—
(a)
may not unreasonably withhold the
approval; and
(b)
may give the approval subject to
reasonable conditions.
”
[137]
In relevant part section 8 provides:
“
(4)
A person who has made an application in terms of section 6 or 7 may
appeal
to the Minister against any decision, including any condition
imposed, by that water services authority in respect of the
application.
(5)
An appellant, under subsection (4), must note an appeal by lodging
a
written notice of appeal with—
(a)
the Minister; and
(b)
the person against whose decision the appeal is
made,
within 21 days of the
appellant becoming aware of the decision.
(6)           A
person who has made an application in terms of section 6 or
7 may
appeal to the Minister if the water services authority in question
fails to take a decision on the application within a
reasonable
time.
(7)           An
appeal under subsection (6)—
(a)
must be conducted as if the application had been refused; and
(b)
must be noted by lodging a written notice of appeal with the
Minister
and the water services authority in question.
(8)           A
relevant Province may intervene as a party in an appeal under

subsection (4) or (6).
(9)           The
Minister may on appeal confirm, vary or overturn any decision
of the
water services authority concerned.
(10)         The Minister
may prescribe the procedure for conducting an appeal under
this
section.”
[138]
High Court judgment above n 2 at paras 58-9.
[139]
Id at para 60.
[140]
Tronox KZN Sands (Pty) Ltd v KwaZulu-Natal
Planning and Development Appeal Tribunal
[2016]
ZACC 2
;
2016 (3) SA 160
(CC);
2016 (4) BCLR 469
(CC);
Minister
of Local Government, Environmental Affairs and Development Planning,
Western Cape v Habitat Council
[2014]
ZACC 9
;
2014 (4) SA 437
(CC);
2014 (5) BCLR 591
(CC);
Minister
of Local Government, Environmental Affairs and Development Planning
of the Western Cape v Lagoonbay Lifestyle Estate
(Pty) Ltd
[2013]
ZACC 39
;
2014 (1) SA 521
(CC);
2014 (2) BCLR 182
(CC); and
City
of Johannesburg Metropolitan Municipality v Gauteng Development
Tribunal
[2010] ZACC 11; 2010 (6) SA
182 (CC); 2010 (9) BCLR 859 (CC).
[141]
First judgment at [16].