CONSTITUTIONAL COURT OF SOUTH AFRICA
Case CCT 91/17
In the matter between:
BUFFALO CITY METROPOLITAN MUNICIPALITY Applicant
and
ASLA CONSTRUCTION (PTY) LIMITED Respondent
Neutral citation: Buffalo City Metropolitan Municipality v Asla Construction (Pty)
Ltd [2019] ZACC 15
Coram: Basson AJ, Cameron J, Dlodlo AJ, Froneman J, Goliath AJ,
Khampepe J, Mhlantla J, Petse AJ and Theron J
Judgments: Theron J (majority): [1] to [107]
Cameron J and Froneman J (dissenting): [108] to [154]
Heard on: 4 September 2018
Decided on: 16 April 2019
Summary: Legality review — unreasonable delay — overlooking delay —
section 172 of the Constitution — Gijima
ORDER
THERON J
On appeal from the Supreme Court of Appeal (hearing an appeal from the High Court
of South Africa, Eastern Cape Division, Grahamstown):
1. Leave to appeal is granted.
2. The appeal is upheld.
3. The order of the Supreme Court of Appeal is set aside, and replaced
with the following:
“The applicant’s decision to award contract number
BCC/DES/PIU/HOUS/1122/2010 for Reeston Phase 3, Stage 2 (953
erven) to the respondent is declared constitutionally invalid.”
4. There is no order as to costs.
JUDGMENT
THERON J (Basson AJ, Dlodlo AJ, Goliath AJ, Mhlantla J and Petse AJ concurring):
Introduction
The applicant, Buffalo City Metropolitan Municipality (Municipality), seeks [1]
the review and setting aside of its own decision. It seeks leave to appeal against a
decision of the Supreme Court of Appeal that held that the Municipality had not made
out a case for condonation in terms of section 9 of the Promotion of Administrative
Justice Act1 (PAJA) and, as a result, the review application could not be entertained. 2
In this Court, the Municipality originally relied on a review in terms of PAJA, but
following this Court’s decision in Gijima, the review must be dealt with in terms of
the principle of legality.3
1 3 of 2000.
2 Asla Construction (Pty) Limited v Buffalo City Metropolitan Municipality [2017] ZASCA 23; 2017 (6) SA 360
(SCA) (Supreme Court of Appeal judgment).
3 State Information Technology Agency SOC Limited v Gijima Holdings (Pty) Limited [2017] ZACC 40; 2018
(2) SA 23 (CC); 2018 (2) BCLR 240 (CC) (Gijima).
2
THERON J
Background
The applicant is a municipality established in terms of the Local Government: [2]
Municipal Structures Act,
4 which manages, among others, the area of East London.
The respondent is Asla Construction (Pty) L imited, a company with limited liability
duly registered and incorporated as such according to the laws of the Republic of
South Africa.
The Greater Duncan Village area in East London is home to between 70 000 to [3]
100 000 people. Most of the residents reside in approximately 18 000 shacks. The
residential density in the area ranges from 55 to 193 dwellings per hectare. Since
2003, the Greater Duncan Village area has been targeted for housing upgrading and
development through the Duncan Village Redevelopm ent Initiative of 2003 – Local
Spatial Development Framework (Redevelopment Initiative). After numerous drafts
and public consultations the Redevelopment Initiative was approved by the Municipal
Council in 2009.
The key legislative instrument for implementing state-funded housing projects [4]
is the National Housing Code (Code), which was promulgated by the Minister of
Human Settlements in terms of section 4 of the Housing Act.
5 Section 4(6) of the
Code provides that it is binding on provincial and local spheres of government. One
of the contracting strategies that the Code authorises is turnkey contracting, which
involves appointing a contractor through a public tender for all work related to the
completion of a project.
6 The Municipality used a turnkey contract for the Greater
Duncan Village development. It decided to appoint an implementing agent that would
be responsible for the design processes, construction and handling of services and top
structures for the development.
4 117 of 1998.
5 107 of 1997.
6 This includes the planning of the approved land, the township establishment process and the design and
installation of internal reticulation services to the construction of houses.
3
THERON J
The Municipality issued a public invitation for tenders for the turnkey contract [5]
on 5 November 2013. The respondent tendered for the contract and the Municipality
awarded this contract to it. On 2 May 2014, the City Manager advised the respondent
that the Municipality had accepted its tender. On 30 May 2014, the Municipality and
the respondent concluded an agreement (Turnkey contract). Thereafter the Minister
acknowledged the appointment of the respondent.
In terms of the Turnkey contract the respondent was to provide between 3 000 [6]
and 5 000 housing units for the Greater Duncan Village development. Under this
contract, the respondent was appointed as an implementation agent for the
development. The consideration for the contract was not a defined amount but instead
consisted of the approved housing subsidy amount, grants and funds allocated to this
project and bridge funding. The scope of the work was described in the contract as—
“3 000 to 5 000 housing units with services subject to land availability and other
factors in the fully subsidised, social and affordable bonded market, on portions of
land in and around Duncan Village in the . . . Municipality.”
The Redevelopment Initiative was intended to permit a broader framework by [7]
extending geographically into areas located north and north- west of Duncan Village
itself, including the new township of Reeston East. Reeston East comprised an area
earmarked to provide 2 500 erven for housing development. During the period
between 2011 and 2014, the Municipality went out on tender three times for initial
engineering services and the subsequent construction of housing top structures within
the area identified for development of 2 500 erven in Reeston East. Each of these
tenders ultimately failed, either for budgetary reasons or poor work performance. The
matter was ultimately referred back to the Municipality’s Department of Housing.
On 7 August 2014, Mr Andile Fani, the then City Manager, wrote to the [8]
respondent indicating that the implementation of certain services, the 953 units
originally encompassed under the Reeston contract, were now considered to be part of
4
THERON J
the Turnkey contract’s scope of work. In terms of a letter dated 7 September 2014,
Mr Vincent Pillay, the Municipality’s Chief Financial Officer, “awarded” the
Reeston contract to the respondent:
“Subsequent to an abortive procurement process due to budget challenges for this
project the metro has cancelled the tender and in this regard would advise ASLA to
continue with the implementation of 550 top structures on their appointment of 953
erven, of upgrading from level B services to level A services. Also to take over the
management of Brayelen Extension 10 under their turnkey approach.”
On 4 August 2015, Mr Pillay (then Acting City Manager) alleged that the [9]
Reeston contract was unlawful as it had been concluded without a lawful tender
process. The Municipality then appointed an independent investigator, Ms York, to
conduct an enquiry about the validity of the Reeston contract.
In the interim, the respondent carried out its obligations in terms of the [10]
Reeston contract. The Municipality’s engineers issued a number of certificates
certifying that the respondent had performed in terms of the contract and stating the
value of the work performed. A payment dispute arose when the Municipality refused
to make payment on the certificates.
The respondent instituted provisional sentence proceedings in the High Court [11]
of South Africa, Eastern Cape Division, Grahamstown (High Court) based upon
payment certificates issued by the Municipality’s agents. The Municipality opposed
the provisional sentence proceedings on the ground, among others, that the Reeston
contract was unlawful for not complying with the constitutional and statutory
prescripts applicable to the procurement of goods and services. It launched review
proceedings, in terms of PAJA, in which it sought to set aside the Reeston contract. It
was common cause that these review proceedings were initiated out of time. The
High Court held that a proper case for condonation had been made out.
7 In doing so,
7 See Buffalo City Metropolitan Municipality v Asla Construction (Pty) Ltd [2016] ZAECGHC 55; [2016] 4 All
SA 60 (ECG) (High Court judgment) at para 74.
5
THERON J
the High Court had regard not only to the explanation given for the delay, but also to
the extent of the deviation from the required constitutional and statutory prescripts. 8
The High Court found that the Rees ton contract was patently unlawful. 9 The
High Court declared the award of the Reeston contract invalid and dismissed the
contractual claims which formed the basis of the provisional sentence proceedings. 10
The respondent was successful in its approach to the Supreme Court of Appeal. [12]
That Court held that a proper case for condonation in terms of section 9 of PAJA had
not been made out. 11 It deliberately declined to make any definitive findings with
regard to the underlying legality or illegality of the contracts. 12 It held that the
approach of the High Court, in having regard to the merits, in its consideration of
whether or not to condone the delay, was incorrect.13
The Municipality approached this Court on 11 March 2017 with an application [13]
for leave to appeal against the Supreme Court of Appeal’s judgment. That application
was brought in terms of PAJA. On 14 November 2017, this Court handed down
judgment in Gijima, which held that where an organ of state seeks to review its own
decision, the review must be brought under the principle of legality. The Chief Justice
issued directions on 15 November 2017 inviting the parties to file written submissions
in light of the Gijima decision.14
8 Id.
9 Id at paras 62-3.
10 Id at para 77.
11 Supreme Court of Appeal judgment above n 2 at para 24.
12 Id at para 25.
13 Id at para 13.
14 The directions read:
“The parties are inv ited to file written submissions of no more than ten pages on the
following, in the light of this Court’s recent decision in S tate Information Technology Agency
SOC Limited v Gijima Holdings (Pty) Limited [2017] ZACC 40 (14 November 2017):
(a) Was provisional sentence the appropriate procedure, and should the Supreme Court
of Appeal have granted it?
(b) Does this Court have jurisdiction, and is it in the interests of justice for this Court to
hear the matter?”
6
THERON J
The Municipality submitted that the approach to undue delay must be [14]
reconsidered as a result of Gijima, more specifically that the 180-day PAJA time limit
within which to initiate a review must be revisited in the context of a legality review.
The Municipality submitted that the delay was not undue because it had acted
expeditiously once it became aware of the unlawfulness of the procurement process
and requested that the delay be overlooked.
As for the merits of its review, t he Municipality submitted that the [15]
Reeston contract was invalid by reason of non-compliance with the provisions of
section 217 of the Constitution because no competitive procurement processes were
followed.
The respondent supported the reasoning and conclusion of the Supreme Court [16]
of Appeal. It submitted that the Municipality ’s review should not be entertained
because it brought the review application in terms of PAJA rather than as a legality
review. It further submitted that the review must fail because the Municipality
unreasonably delayed in bringing the application and had not proffered an explanation
for the delay. The respondent submitted that even if the delay is condoned, the
application for leave to appeal must fail because the review application is without
merit. This is because the Reeston contract was concluded on the basis of an earlier,
valid contract between the parties – the Turnkey contract. The respondent thus
submitted that there is nothing in our law that prevents the state and the successful
tenderer from entering into sub -contracts that fall within the scope of an overarching
and valid framework contract.
In the event that the review is upheld, the respondent submitted that a just and [17]
equitable remedy is to order that the invalidity of the contract will not have the effect
of divesting the respondent of rights which, but for the declaration of invalidity, it is
entitled to.
7
THERON J
Application for withdrawal
On 16 November 2018, after the matter was heard on 4 September 2018, the [18]
Municipality filed an application in which it sought to have its application for leave to
appeal withdrawn and a settlement agreement entered into between the parties made
an order of this Court. The procedure for withdrawal is governed by rule 27 of the
Rules of this Court, which states:
“Whenever all parties, at any stage of the proceedings, lodge with the Registrar an
agreement in writing that a case be withdrawn, specifying the terms relating to the
payment of costs and payment to the Registrar of any fees that may be due, the
Registrar shall, if the Chief Justice so directs, enter such wit hdrawal, whereupon the
Court shall no longer be seized of the matter.”
On occasion, litigants in this Court have withdrawn matters, even after the [19]
matter has been set down for hearing. In the past 10 years, there have been no
applications for withdrawal following the hearing of a matter. This does not mean
that such an application will not be granted, only that it is highly unusual. Though
there was no tender of costs contained in the Municipality’s application, this is not
fatal and could have been rectified following directions from this Court. Were this
solely an application for withdrawal, I may have been inclined to allow the matter to
be withdrawn.
The Municipality, in its withdrawal application, seeks not merely to have the [20]
matter withdrawn, but asks this Court to make the settlement agreement an order of
this Court. It is clear from the terms of the settlement agreement as well as the relief
sought in the withdrawal application that the application and the settlement agreement
are integrally linked. The Municipality’s founding affidavit in the withdrawal
application states:
“That settlement agreement has been approved by the a pplicant (through its
Municipal Manager) and by the r espondent (being represented by an authorised
official) and is subject to it being made an order of the Constitutional Court and to the
8
THERON J
leave of the Honourable Chief Justice that the r espondent withdraws its application
for leave to appeal to the Constitutional Court.” (Emphasis added.)
Of relevance is paragraph (K) of the preamble to the settlement agreement, [21]
which reads:
“[The settlement agreement] is subject to:
(i) leave being granted to [the Municipality] by the Chief Justice for the
withdrawal of [the Municipality’s] application for leave to appeal in
the Constitutional Court under case number CCT 91/17; and
(ii) the Constitutional Court issuing an order that the agreement
incorporated herein being made an order of the Constitutional Court.”
The request for withdrawal of the application for leave to appeal is contingent [22]
upon the settlement agreement being made an order of this Court. I must first
consider the terms of the settlement agreement. The effect of a settlement order is to
vest the terms of the settlement agreement with the status of an order of court.
15
This Court, in Eke, cautioned that a court should not be mechanical in its [23]
approach to making a settlement agreement an order of court. A court can only make
an order that is “competent and proper” and in accordance with the Constitution and
the law.
16 Madlanga J, writing for the majority, stated:
“This in no way means that anything agreed to by the parties should be accepted by a
court and made an order of court. The order can only be one that is competent and
proper. A court must thus not be mechanical in its adoption of the terms of a
settlement agreement. For an order to be competent and proper, it must, in the first
place ‘relate directly or indirectly to an issue or lis between the parties’.
. . .
15 The practice of making settlement agreements orders of court is well established. See Eke v Parsons [2015]
ZACC 30; 2016 (3) SA 37 (CC) ; 2015 (11) BCLR 1319 (CC ) at para 8. Madlanga J referred with approval to
Van Schalkwyk v Van Schalkwyk 1947 (4) SA 86 (O) at 95, where the Court said that “[t]he tradition of such
orders is very strong in our legal system”.
16 Eke id at para 25.
9
THERON J
Secondly, ‘the agreement must not be objectionable, that is, its terms must be
capable, both from a legal and a practical point of view, of being included in a court
order’. That means, its terms must accord with both the Constitution and the law.”17
Froneman J, on behalf of the majority in ACSA, confirmed the principles [24]
emanating from Eke, and in particular that “a settlement agreement between litigating
parties can only be made an order of court if it conforms to the Constitution and the
law”.
18
There are sound reasons why a court should carefully scrutinis e a settlement [25]
agreement before making it an order of court. Once a settlement agreement is made
an order of court, it is interpreted in the same way as any judgment or order and
affects parties’ rights in the same way.
19 Madlanga J in Eke put the matter thus:
“The effect of a settlement order is to change the status of the rights and obligations
between the parties. Save for litigation that may be consequent upon the nature of the
particular order, the order brings finality to the lis between the parties; the lis
becomes res judicata (literally, ‘a matter judged ’). It changes the terms of a
settlement agreement to an enforceable court order.”20
In addition, an order from this Court is not appealable to any other court, so this
Court’s pronouncement truly becomes final on the issue.
The settlement agreement purports to regulate the provision of 5 000 housing [26]
units in Greater Duncan Village and the surrounding areas. Significantly, the
settlement agreement imposes additional duties and obligations on the respondent in
respect of the units and contemplates construction of additional units. This goes
beyond the 953 erven contemplated in the Reeston contract.
17 Id at paras 25-6.
18 Airports Company South Africa v Big Five Duty Free (Pty) Ltd [2018] ZACC 33; 2019 (2) BCLR 165 (CC)
(ACSA) at para 13.
19 Eke above n 15 at paras 29-30.
20 Id at para 31.
10
THERON J
The settlement agreement further seeks to settle not only the litigation between [27]
the parties in this Court, but two other matters before the High Court under case
numbers 1158/2017 and 313/2018. This Court is not privy to the details of these
cases, save for the fact that they were stayed pending the outcome of this matter and
emanate from the Turnkey contract. The settlement agreement traverses litigation
unrelated to the proceedings in this Court. In the settlement agreement, the parties are
contracting on matters outside the context of the litigation in this Court. They seek to
have their agreement, which in part relates to matters to which this Court has no
knowledge, made an order of court. This the Court cannot do. Eke explains why:
“For an order to be competent and proper, it must, in the first place ‘relate directly or
indirectly to an issue or lis between the parties ’. Parties contracting outside of the
context of litigation may not approach a court and ask that their agreement be made
an order of court. On this Hodd says:
‘[I]f two merchants were to make an ordinary commercial agreement
in writing, and then were to j oin an application to Court to have that
agreement made an order, merely on the ground that they preferred
the agreement to be in the form of a judgment or order because in
that form it provided more expeditious or effective remedies against
possible breaches, it seems clear that the Court would not grant the
application.’
That is so because the agreement would be unrelated to litigation.”
21 (Footnotes
omitted.)
This Court is not in a position to consider whether the order in respect of cases [28]
1158/2017 and 313/2018 would be competent and in accordance with the Constitution
and the law.
The basis for the Municipality’s application for leave to appeal in this Court [29]
concerned the legality of two agreements, the Reeston contract and the
21 Id at para 25.
11
THERON J
Turnkey contract. In respect of the Reeston contract, the Municipality contended that
it was concluded without a competitive bidding process and thus fell afoul of
section 217 of the Constitution. The Municipality’s explanation as to why this
contention may be resolved by the settlement agreement is scant. In the affidavit filed
in support of the withdrawal application, it states briefly:
“8.2 [The respondent] indicated its willingness to continue to perform in terms of
the disputed contract or contracts.
8.3 The Municipality was however concerned as to the legality of the underlying
contract or contracts.
. . .
8.5 Without wishing to re -enter the merits of the written and oral arguments
which have been submitted before the Constitutional Court, I respectfully
submit that the settlement agreement enclosed herewith now adequately deals
with the concerns of the Municipality.”
There is no explanation in the withdrawal application as to how this settlement [30]
agreement cures the alleged defects in the Reeston contract. For reasons that will be
detailed in this judgment, the Reeston contract was awarded to the respondent in
breach of section 217 of the Constitution and is unlawful. This inconsistency with the
Constitution cannot be cured by a settlement agreement. For this reason alone, the
settlement agreement does not meet the Eke requirements for making it an order of
court and is unlikely to be a lawful agreement that accords with the Constitution. The
resultant order, if made by this Court, will be inconsistent with the Constitution.
The parties have not explained why the settlement agreement is in accordance [31]
with the law and the Constitution. In addition, the scope of the agreement goes
beyond the subject matter of this case and asks this Court to settle litigation and
sanction the lawfulness of agreements of which it has little to no knowledge. The
Court is being asked to sanction an agreement without being in a position to
pronounce on its legality.
12
THERON J
I ma ke a final point on this aspect that may be an additional indication of [32]
underlying maladministration within the Municipality. Para graph 3 of a resolution
adopted by the Municipality (attached to the withdrawal application) reads:
“That, in addition to implementing the option of entering into a Settlement
Agreement with ASLA Construction (Pty) Ltd . . . the matter of the implication(s)
thereof to the Council insofar as Messrs A. Fani and T. Matiwane, the then City
Manager and Acting Chief Operating Officer, are concerned, also be addressed.”
It will be recalled that it was Mr Fani who, on 7 August 2014, penned a letter to [33]
the respondent indicating that the implementation of an additional 953 units was now
part of the Turnkey contract’s scope of work. 22 Paragraph 3 of the resolution appears
to be reflective of knowledge on the part of the Municipality that the two named
senior officials were involved in the improper and invalid award of the tender.
Despite this knowledge, the Municipality still concludes a settlement agreement that
seeks to endorse this invalidity. This is inexplicable behaviour which is contrary to its
public accountability duty. Even more surprising is its attempt to persuade this Court
to endorse this settlement agreement and issue an incompetent order.
For these reasons, I cannot make the settlement agreement an order of court nor [34]
accede to the parties’ request to withdraw the application for leave to appeal. I now
deal with the main application.
Jurisdiction and leave to appeal
There is a clear basis for jurisdiction as the matter concerns section 217 of the [35]
Constitution. It deals with procurement by an organ of state, judicial review of a
decision by an organ of state and the question of a just and equitable remedy in terms
of section 172(1)(b) of the Constitution. Lawful procurement is patently a
constitutional issue.
23
22 See [8] above.
23 Steenkamp N.O. v Provincial Tender Board of the Eastern Cape [2006] ZACC 16; 2007 (3) SA 121 (CC);
2007 (3) BCLR 300 (CC) (Steenkamp) at para 20.
13
THERON J
In this Court, the Municipality relies on a legality review. By its nature, [36]
legality review raises a constitutional question. It is founded upon the rule of law,
which is a founding value of our Constitution.
The issues raised in this matter have a broader impact beyond the immediate [37]
parties. This is so given the current political context where many municipalities are
changing administrations and undertaking to “clean house”. This case not only raises
legal questions of import, but also affords this Court the opportunity to provide
guidance to organs of state who may wish to bring similar applications in the future
and to lower courts dealing with these cases.
The terrain of “self -review”, where a body seeks to review its own decision, [38]
has been dealt with in the decisions of this Court in Tasima I,
24 Khumalo,25 Kirland,26
Aurecon27 and Gijima.28 However, because these cases – save for Khumalo and
Gijima – dealt with PAJA reviews, it is necessary that we consider the principles
emerging from these decisions and the extent of their application, if any, to legality
reviews.
There is a further basis for interfering with the Supreme Court of Appeal [39]
judgment, one that would ordinarily be sufficient to demonstrate that it is in the
interests of justice for this Court to entertain the appeal. The Supreme Court of
Appeal interfered with the High Court’s finding, among others , on the ground that it
24 Department of Transport v Tasima (Pty) Limited [2016] ZACC 39; 2017 (2) SA 622 (CC); 2017 (1) BCLR 1
(CC) (Tasima I).
25 Khumalo v Member of the Executive Council for Education, KwaZulu Natal [2013] ZACC 49; 2014 (5) SA
579 (CC); 2014 (3) BCLR 333 (CC).
26 Member of the Executive Council for Health, Eastern Cape v Kirland Investments (Pty) Limited t/a Eye and
Lazer Institute [2014] ZACC 6; 2014 (3) SA 481 (CC); 2014 (5) BCLR 547 (CC) (Kirland).
27 City of Cape Town v Aurecon South Africa (Pty) Limited [2017] ZACC 5; 2017 (4) SA 223 (CC); 2017 (6)
BCLR 730 (CC) (Aurecon).
28 Gijima above n 3.
14
THERON J
was improper for the High Court to have had regard to the merits before determining
whether the delay ought to be condoned.
The judgment of the Supreme Court of Appeal predated, by a matter of some [40]
months, the judgment of this Court in Gijima. However, it w as made clear in
Tasima I (a PAJA review where this Court found that the explanation for the delay
was not satisfactory) that regard must still be had to the merits in deciding whether the
delay should be condoned. 29 The Supreme Court of Appeal’s decision in this matter
does not align with the jurisprudence of this Court on this aspect and warrants
interference.
Prospects of success are not determinative, albeit important. 30 The prospects of [41]
success in this matter have been enhanced by the judgment in Gijima. For these
reasons, it is in the interests of justice to grant leave to appeal.
Issues
The issues that arise are: [42]
(a) Did the Municipality unreasonably delay in bringing the review
application?
(b) Has the Municipality provided a satisfactory explanation for the delay?
If not, should the delay be overlooked?
(c) If the delay is unreasonable, and should not be overlooked, does Gijima
and section 172 impel this Court nonetheless to declare that the Turnkey
contract is unlawful and grant a just and equitable remedy?
It is necessary, before addressing these issues directly, to consider the [43]
assessment of delay in a legality review vis-à -vis a PAJA review and offer guidance
29 Tasima I above n 24 at paras 163-4.
30 Albutt v Centre for the Study of Violence and Reconciliation [2010] ZACC 4; 2010 (3) SA 293 (CC); 2010 (5)
BCLR 391 (CC) at para 29.
15
THERON J
on the factors to be considered by a court in determining whether to exercise its
discretion to overlook a delay.
Assessing delay under PAJA and legality
For a considerable time, it was accepted that organs of state that seek to set [44]
aside their own decisions were entitled, and indeed obliged, to do so under PAJA.
31
This inevitably involved a consideration and application of section 9 of PAJA with
regard to any contentions of unreasonable delay.
Following this Court’s decision in Gijima, it is now settled that an organ of [45]
state seeking to review its own decision must do so under the principle of legality and
cannot rely on PAJA. What implications, if any, does this have for assessing the
delay?
There are four principles that answer this question. First, assessing delay under [46]
PAJA and legality differs in two respects, even though both hinge on reasonableness.
The first difference is the role of the 180-day bar in section 7(1) of PAJA.
Section 7(1) of PAJA stipulates:
“Any proceedings for judicial review in terms of section 6(1) must be instit uted
without unreasonable delay and not later than 180 days after the date—
(a) subject to subsection (2)(c), on which any proceedings instituted in terms of
internal remedies as contemplated in subsection (2)(a) have been concluded ;
or
(b) where no such r emedies exist, on which the person concerned was informed
of the administrative action, became aware of the action and the reasons for it
or might reasonably have been expected to have become aware of the action
and the reasons.”
However, this time period is not absolute. Section 9 of PAJA provides a [47]
mechanism for extensions:
31 Kirland above n 26 at para 82.
16
THERON J
“(1) The period of—
(a) 90 days referred to in section 5 may be reduced; or
(b) 90 days or 180 days referred to in sections 5 and 7 may be extended
for a fixed period, by agreement between the parties or, failing such
agreement, by a court or tribunal on application by the person or
administrator concerned.
(2) The court or tribunal may grant an application in terms of subsection (1)
where the interests of justice so require.”
When the delay is longer than 180 days, a court is required to consider whether it is in
the interests of justice for the time period to be extended.32
Legality review, on the other hand, has no similar fixed period. This Court in [48]
Khumalo endorsed the test enunciated by the Supreme Court of Appeal in Gqwetha
for assessing undue delay in bringing a legality review application (Khumalo test).
33
Firstly, it must be determined whether the delay is unreasonable or undue. This is a
factual enquiry upon which a value judgment is made, having regard to the
circumstances of the matter. Secondly , if the delay is unreasonable, the question
becomes whether the Court’s discretion should nevertheless be exercised to overlook
the delay to entertain the application.
34
The standard to be applied in assessing delay under both PAJA and legality is [49]
thus whether the delay was unreasonable.
35 Moreover, in both assessments the
proverbial clock starts running from the date that the applicant became aware or
reasonably ought to have become aware of the action taken. 36 However, it is
important to note that the assessment is not the same. A distinction between the
32 Section 9(2) of PAJA.
33 Khumalo above n 25 at para 49 referring to Gqwetha v Transkei Development Corporation Ltd [2005]
ZASCA 51; 2006 (2) SA 603 at para 33. Gqwetha was also cited with approval in Tasima I above n 24.
34 Khumalo id.
35 Aurecon above n 27 at para 37.
36 Aurecon above n 27 at para 41, which relates to PAJA. There is no reason why this rule should not apply to
legality reviews.
17
THERON J
assessments of the delay under PAJA versus the principle of legality turns on the
prescribed time period of 180 days. This distinction was succinctly described by the
Supreme Court of Appeal in Opposition to Urban Tolling Alliance, 37 which found that
section 7 creates a presumption that a delay of longer than 180 days is “per se
unreasonable”:
“At common law application of the undue delay rule required a two stage enquiry.
First, whether there was an unreasonable delay and, second, if so, whether the delay
should in all the circumstances be condoned. . . . Up to a point, I think, s ection 7(1)
of PAJA requires the same two stage approach. The difference lies, as I see it, in the
legislature’s determination of a delay exceeding 180 days as per se unreasonable.
Before the effluxion of 180 days, the first enquiry in applying s ection 7(1) is still
whether the delay (if any) was unreasonable. But after the 180 day period the issue of
unreasonableness is pre -determined by the legislature; it is unreasonable per se . It
follows that the court is only empowered to entertain the review application if t he
interest of justice dictates an extension in terms of section 9. Absent such extension
the court has no authority to entertain the review application at all. Whether or not
the decision was unlawful no longer matters. The decision has been ‘validated ’ by
the delay.”
38
The approach to undue delay within the context of a legality challenge [50]
necessarily involves the exercise of a broader discretion than that traditionally applied
to section 7 of PAJA. The 180 -day bar in PAJA does not play a pronounced role in
the context of legality. Rather, the question is first one of reasonableness, and then (if
the delay is found to be unreasonable) whether the interests of justice require an
overlooking of that unreasonable delay.
The second difference between PAJA and legality review for the purposes of [51]
delay is that when assessing the delay under the principle of legality no explicit
condonation application is required.
39 A court can simply consider the delay, and then
37 Opposition to Urban Tolling Alliance v South African National Roads Agency Ltd [2013] ZASCA 148; [2013]
4 All SA 639 (SCA).
38 Id at para 26.
39 Khumalo above n 25 at para 44.
18
THERON J
apply the two- step Khumalo test to ascertain whether the delay is undue and, if so,
whether it should be overlooked.
The second principle relating to delay under legality is that the first step in the [52]
Khumalo test, the reasonableness of the delay, must be assessed on, among others, the
explanation offered for the delay. 40 Where the delay can be explained and justified,
then it is reasonable, and the merits of the review can be considered. If there is an
explanation for the delay, the explanation must cover the entirety of the delay. 41 But,
as was held in Gijima, where there is no explanation for the delay, the delay will
necessarily be unreasonable.42
Even if the unreasonableness of the delay has been established, it cannot be [53]
“evaluated in a vacuum” and the next leg of the test is whether the delay ought to be
overlooked.
43 This is the third principle applicable to assessing delay under legality.
Courts have the power in a legality review to refuse an application where there is an
undue delay in initiating proceedings or discretion to overlook the delay.
44 There
must however be a basis for a court to exercise its discretion to overlook the delay. 45
That basis must be gleaned from the facts made available or objectively available
factors.46
40 Id at paras 49-51. This applies equally to assessing the delay of PAJA reviews.
41 Tasima I above n 24 at para 153.
42 Id, where it was noted that for the purposes of condoning delay under section 9 of PAJA, “a full explanation
that covers the ‘entire period’ must be provided” and the Court absorbed this requirement into the first leg of the
Khumalo test, stating that “[t]he first part of the Khumalo inquiry must follow these guidelines”. See further
Gijima above n 3 at para 45.
43 Khumalo above n 25 at para 49. See also Tasima I above n 24 at paras 158-9 where the obligatory nature of
dealing with both legs is outlined as follows:
“In respect of the delay itself, I am therefore persuaded that the approach taken by the
Supreme Court of Appeal was correct. The explanation provided by the Department was both
porous and lacked the markings of good constitutional citizenship. But this is not the end of
the inquiry. The delay cannot be ‘evaluated in a vacuum’. It must now be determined
whether there are sound reasons for overlooking the delay.”
44 Khumalo above n 25 at para 44.
45 Gijima above n 3 at para 52.
46 Id.
19
THERON J
The approach to overlooking a delay in a legality review is flexible. In [54]
Tasima I, Khampepe J made reference to the “factual, multi-factor, context-sensitive
framework” expounded in Khumalo.47 This entails a legal evaluation taking into
account a number of factors. The first of these factors is potential prejudice to
affected parties as well as the possible consequences of setting aside the impugned
decision.48 The potential prejudice to affected parties and the consequences of
declaring conduct unlawful may in certain circumstances be ameliorated by this
Court’s power to grant a just and equitable remedy and this ought to be taken into
account.49 The interrelationship between prejudice and delay was explained by
Khampepe J in Tasima I:
“But what is the prejudice suffered by Tasima in overlooking the delay? Condoning
the delay does not prevent them from enforcing the court orders that have been
granted in their favour. In addition, the contract extension itself has already expired.
Setting aside the ex tension at this point should not, therefore, impact negatively on
Tasima going forward. It is also a factor that this Court may rely on its
section 172(1)(b) powers to ameliorate the prejudice suffered. It bears repeating that
Tasima has, in addition, be nefitted greatly from the extension. In my view, the
prejudice suffered is minimal, particularly in comparison to the prejudice to be
suffered by the Department and the Corporation if the counter -application is not
condoned. This is consonant with the di cta in Khumalo that, ‘consequences and
potential prejudice . . . ought not in general, favour the Court non-suiting an applicant
in the face of the delay’.”
50
47 Tasima I above n 24 at para 144.
48 Id at para 52.
49 Khumalo above n 25 at paras 53 and 56, which read:
“Under the Constitution, however, the requirement to consider the consequences of declaring
the decision unlawful is mediated by a court’s remedial powers to grant a ‘just and equitable’
order in terms of section 172(1)(b) of the Constitution. A court has greater powers under the
Constitution to regulate any possible unjust consequences by granting an appropriate order.
While a court must declare conduct that it finds to be unconstitutional invalid, it need not set
the conduct aside.
. . .
The application of this aspect of the test set in Gqwetha must be contextualised in the courts’
discretion to grant a just and equitable remedy.” (Footnotes omitted.)
50 Tasima I above n 24 at para 170.
20
THERON J
A second factor relevant to overlooking delay is the nature of the impugned [55]
decision. This, in essence, requires a consideration of the merits of the legal challenge
against that decision. 51 In considering whether there had been an undue delay , albeit
within the context of PAJA, the Supreme Court of Appeal, expressly, did not consider
the merits. It held that a “full and proper determination of the merits of the review
application was accordingly dependent upon a finding that the respondent’s failure
had to be condoned”. 52 In reaching this conclusion, it relied on
Christelik-Volskeie Onderwys, which rejected the proposition that a court is required
to consider the merits before deciding whether to condone an undue delay in bringing
a review application.53 It also relied on Opposition to Urban Tolling Alliance where it
was decided that a court is compelled to deal with the question of condonation before
examining the merits of the review application, because , in the absence of an
extension, the Court had no authority to entertain the review application. 54 It was on
this basis that the Supreme Court of Appeal concluded that “[i]t was thus
impermissible for the [High Court] to have entered into and decided the merits of the
review application without having first decided the merits of the condonation
application”.
55 This conclusion is not in accordance wit h the jurisprudence of this
Court.
This Court has made plain that even within the context of PAJA, the extent and [56]
nature of the deviation from constitutional prescripts directly impacts upon an
application for condonation in terms of section 7 of PAJA.
56 In the context of a
legality review, in Khumalo, Skweyiya J writing for the majority explained that “an
51 Khumalo above n 25 at para 57, which states:
“An additional consideration in overlooking an unreasonable delay lies in the nature of the
impugned decision. In my view, this requires analysing the impugned decision within the
legal challenge made against it and considering the merits of that challenge.”
52 Supreme Court of Appeal judgment above n 2 at para 13.
53 Beweging vir Christelik-Volkseie Onderwys v Minister of Education [2012] ZASCA 45; [2012] 2 All SA 462
(SCA) (Christelik-Volkseie Onderwys) at paras 42-4.
54 Opposition to Urban Tolling Alliance above n 37 at paras 22, 26 and 43.
55 Supreme Court of Appeal judgment above n 2 at para 13.
56 Khumalo above n 25 at para 57; South African National Roads Agency v Cape Town City [2016] ZASCA 122;
2017 (1) SA 468 (SCA) (SANRAL) at para 81; Aurecon above n 27 at para 49.
21
THERON J
additional consideration in overlooking an unreasonable delay lies in the nature of the
impugned decision”. 57 Skweyiya J added that this entails analysi ng the impugned
decision and considering the merits of the legal challenge made against that
decision.58 In SANRAL, Navsa JA rejected a suggestion that the question of delay
must be dealt with before the merits of the review can be entertained:
“It is true that in [the Supreme Court of Appeal’s judgment in Opposition to Urban
Tolling Alliance] this Court considered it important to settle the court’s jurisdiction to
entertain the merits of the matter by first having regard to the question of delay.
However, it cannot be read to signal a clinical excision of the merits of the impugned
decision, which must be a critical factor when a court embarks on a consideration of
all the circumstances of a case in order to determine whether the interests of justice
dictate that the delay should be condoned. It would have to include a consideration of
whether the non-compliance with statutory prescripts was egregious.”
59
This approach was confirmed by this Court in Aurecon where the explanation [57]
for the delay was found to be unsatisfactory:
“Nonetheless, due regard must also be given to the importance of the issue that is
raised and the prospects of success. In this case that means considering the
significance of the alleg ed procedural irregularities that were raised in the Ernst &
Young report. It should be borne in mind that, when carrying out a legal evaluation a
court must, where appropriate, ‘take into account the materiality of any deviance from
legal requirements, b y linking the question of compliance to the purpose of the
provision’.”
60
Furthermore, it is implicit from this Court’s judgment in Gijima that the extent [58]
and nature of the illegality may be a crucial factor in determining the relief to be
granted when faced with a delayed review. 61 Therefore, this Court may consider, as
57 Khumalo id.
58 Id.
59 SANRAL above n 56 at para 81.
60 Aurecon above n 27 at para 49.
61 Gijima above n 3 at para 52.
22
THERON J
part of assessing the delay, the lawfulness of the contract under the principle of
legality.
A third factor to consider when deciding to overlook delay is the conduct of an [59]
applicant. This is particularly true for state litigants seeking to review their own
decisions for the simple reason that often they are best placed to explain the delay.
This was recognised by Skweyiya J in Khumalo:
“The fact that the MEC has elected not to account f or the delay, despite having had
the opportunity to do so at multiple stages in the litigation, can only lead one to infer
that she either had no reason at all or that she was not able to be honest as to her real
reasons. Had the matter been brought by a private litigant, this aspect of the test
might weigh less heavily. However, given that the MEC is responsible for the
decision, that she is obliged to act expeditiously in fulfilling her constitutional
obligations, and that she should have within her con trol the relevant resources to
establish the unlawfulness of the decision she impugns, the unreasonableness of the
unexplained delay is serious.”
62 (Emphasis added.)
This Court has repeatedly stated that the state or an organ of state is subject to a [60]
higher duty to respect the law. As Cameron J put it in Kirland:
“[T]here is a higher duty on the state to respect the law, to fulfil procedural
requirements and to tread respectfully when dealing with rights. Government is not
an indigent or bewildered litigant, adrift on a sea of litigious uncertainty, to whom the
courts must extend a procedure -circumventing lifeline. It is the Constitution’s
primary agent. It must do right, and it must do it properly.”
63
In Khumalo, it was explained that the standard against which a state litigant’s [61]
conduct is measured is high and ought to accord with the prescripts of the law. 64 In
62 Khumalo above n 25 at para 51.
63 Kirland above n 26 at para 82.
64 Khumalo above n 25 at para 45.
23
THERON J
Merafong, Skweyiya J stated that it is the duty of state litigants to rectify unlawful
decisions:
“This Court has affirmed as a fundament al principle that the state ‘should be
exemplary in its compliance with the fundamental constitutional principle that
proscribes self -help’. What is more, in Khumalo, 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. 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. Public
functionaries ‘must, where faced with an irregularity in the public administration, in
the context of employment or otherwise, seek to redress it’.”
65
Even where the functionary has not acted as a model litigant or “constitutional [62]
citizen”,66 there may be a basis to overlook the delay if the functionary acted in good
faith or with the intent to ensure clean governance. In Tasima I, Khampepe J affirmed
this principle:
“Merafong also holds that whether the failure to challenge the decision timeously was
made in good faith may be a reason for overlooking the delay. The Department in
this case, by its own admission, is plagued by poor management. The director -
general who deposed to the counter-application admits that it was brought as a means
to get the Department ’s house in order. Nevertheless, the Department has not acted
in bad faith in respect of the administrative decision. Its behaviour has been
muddled, but not malicious.
This is borne out by the Department ’s vigorous attempt to have the extension
reviewed before the High Court. Not only is the decision- maker who made the
decision now opposed to its enforcement, but this also forms part of a conscious
effort by the Department to break with its dilatory past.”
67
65 Merafong City Local Municipality v Anglogold Ashanti Limited [2016] ZACC 35; 2016 JDR 1943 (CC); 2017
(2) BCLR 182 (CC) at para 61.
66 Tasima I above n 24 at para 159.
67 Id at paras 168-9.
24
THERON J
The fourth principle stems directly from Gijima. Even where there is no basis [63]
for a court to overlook an unreasonable delay, the Court may nevertheless be
constitutionally compelled to declare the state’s conduct unlawful. This is so because
“[s]ection 172(1)(a) of the Constitution enjoins a court to declare invalid any law or
conduct that it finds to be inconsistent with the Constitution”.68
This principle is dealt with tersely in the judgment of my colleagues Cameron J [64]
and Froneman J (second judgment), which I have had the pleasure of reading. 69 They
agree with me that the delay was unreasonable and that it should not be overlooked.
Yet they do not address the Gijima principle. They note that Gijima has not attracted
universal favour among commentators.
70 But the correctness or otherwise of Gijima
was not at issue before us. It was not raised on the papers or ventilated at the hearing.
This Court has on numerous occasions cautioned that it is undesirable to consider
important legal questions without the benefit of legal argument from the litigants.
71
The second judgment goes on to hold that this is not the case to consider [65]
overruling Gijima.
72 This Court is bound by its own decisions by virtue of the
doctrine of precedent. 73 Not following previous decisions would undermine the rule
of law 74 and “invite legal chaos”. 75 Departing from established precedent of this
68 Gijima above n 3 at para 52. See also section 172 of the Constitution which states:
“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.”
69 Second judgment at [150].
70 Id at [113].
71 Aurecon above n 27 at para 35; Albutt above n 30 at para 82.
72 See second judgment at [113].
73 Turnbull-Jackson v Hibiscus Court Municipality [2014] ZACC 24; 2014 (6) SA 592 (CC); 2014 (11) BCLR
1310 (CC) at para 58.
74 As Moseneke J (as he then was) explained in D aniels v Campbell [2004] ZACC 14; 2004 (5) SA 331 (CC);
2004 (7) BCLR 735 (CC) at para 94:
25
THERON J
Court should not be done lightly, but only after due and careful consideration.
Consequently, and this is where our judgments diverge, we are bound to apply the rule
in Gijima, should it be applicable.
When would the Gijima rule apply? Gijima dictates that where the [66]
unlawfulness of the impugned decision is clear and not disputed, 76 then this Court
must declare it as unlawful. 77 This is notwithstanding an unreasonable delay in
bringing the application for review for which there is no basis for overlooking.
Whether an impugned decision is so clearly and indisputably unlawful will depend on
the circumstances of each case.
As the second judgment aptly remarks, this creates a certain tension in our [67]
law.
78 On the one hand, there is a long line of cases explaining that the state must
adhere to the procedural requirements of review, including timeous approaches to
courts.79 On the other hand, Gijima implies that these procedural hurdles, while
important, can sometimes yield to the injunction under section 172(1)(a) to declare
invalid that which is inconsistent with the Constitution.
The precise contours of this tension need not be drawn here. All that needs to [68]
be said is that interpreting and applying the Gijima principle, and the initial three
principles detailed in this judgment, must be done with their purpose in mind. That is,
to balance the objectives of the rules on delay with those objectives of declaring
“The doctrine of precedent is an incident of the rule of law. Its primary purpose is to advance
justice by ensuring certainty of the law, equality and equal treatment and fairness before it. To
that end, the doctrine imposes a general obligation on a court to follow legal rulings in
previous judicial decisions.”
This was said in a minority judgment, although the majority did not disagree on this point of the nature and role
of stare decisis.
75 True Motives 84 (Pty) Ltd v Mahdi [2009] ZASCA 4; 2009 (4) SA 153 (SCA) ( True Motives) at para 100,
cited with approval in Turnbull-Jackson above n 73 at para 55.
76 Gijima above n 3 at para 41.
77 Id at para 52.
78 Second judgment at [126] to [127].
79 These all stem from the seminal judgment in Oudekraal Estates (Pty) Ltd v City of Cape Town [2004]
ZASCA 48; 2004 (6) SA 222 (SCA).
26
THERON J
unlawful conduct as such. In Khumalo, this Court cautioned against allowing
procedural obstacles from preventing a court from looking into a challenge to the
lawfulness of an exercise of public power. Skweyiya J stated:
“In the previous section it was explained that the rule of law is a founding value of
the Constitution, and that state functionaries are enjoined to uphold and protect it,
inter alia, by seeking the redress of their departments’ unlawful decisions. Because of
these fundamental commitments, a court should be slow to allow procedural obstacles
to prevent it from looking into a challenge to the lawfulness of an exercise of public
power.”
80
However, the Court went on to note that the procedural requirement to bring [69]
review applications without undue delay serves a substantive purpose. It is based on
sound judicial policy and in the public interest that there be finality and certainty in
matters.
81
In Tasima I, this Court reaffirmed the principle that a court should be slow to [70]
allow procedural obstacles to prevent scrutiny of a challenge to the exercise of public
power,82 but went on to emphasise that it is a feature of the rule of law that undue
delay should not be tolerated:
“Delay can prejudice the respondent, weaken the ability of a court to consider the
merits of a review, and undermine the public interest in bringing certainty and finality
80 Khumalo above n 25 at para 45.
81 Id at paras 47-8, which read:
“This requirement is based on sound judicial policy that includes an understanding of the
strong public interest in both certainty and finality. People may base their actions on the
assumption of the lawfulness of a particular decision, and the undoing of the decision
threatens a myriad of consequent actions.
In addition, it is important to understand that the passage of a considerable length of time may
weaken the ability of a co urt to assess an instance of unlawfulness on the facts. The clarity
and accuracy of decision -makers’ memories are bound to decline with time. Documents and
evidence may be lost, or destroyed when no longer required to be kept in archives. Thus the
very purpose of a court undertaking the review is potentially undermined where, at the cause
of a lengthy delay, its ability to evaluate fully an allegation of illegality is impaired.”
(Footnotes omitted.)
82 Tasima I above n 24 at para 160.
27
THERON J
to administrative action. A court should therefore exhibit vigilance, consideration and
propriety before overlooking a late review, reactive or otherwise.”83
The Gijima principle should thus be interpreted narrowly and restrictively so [71]
that the valuable rationale behind the rules on delay are not undermined. At the same
time, this is not a matter in which the Gijima principle can be ignored and thus
impliedly overruled. So the injunction it creates – to declare invalid that which is
indisputably and clearly inconsistent with the Constitution – must be followed where
applicable.
I now apply these established principles to the facts of this matter. In turn, I [72]
consider the reasonableness of the delay, whether it should be overlooked and the
applicability of the Gijima principle to this case.
Was the delay unreasonable?
In this matter, the clock started running on 4 September 2014 when the [73]
decision to award the Reeston contract to the respondent was made. The review
application, brought in November 2015, was initiated 14 months after the decision
was taken. The Municipality’s explanation is that it only became aware of the
unlawful administrative action during October 2015. The Municipality immediately
appointed Ms York to conduct a forensic investigation and her report became
available on 21 October 2015. What followed on the part of the Municipality was the
suspension of certain senior officials, including Mr Fani, and Mr Matiwane, who had
been directly involved in the award and conclusion of the contract with the
respondent.
According to the Municipality it is quite clear that prior to August 2015, whilst [74]
it was aware of the award of the contract to the respondent in the general sense, it was
not aware that the award had occurred unlawfully and without compliance with
relevant constitutional and statutory prescripts. It further alleges that once it became
83 Id.
28
THERON J
aware of the underlying unlawfulness and irregularities, it became obliged to institute
proceedings to set aside the relevant contracts. The Municipality maintains that it
acted with appropriate expedition in doing so.
A central actor on behalf of the Municipality in these events was Mr Pillay, [75]
who was the Municipality’s Chief Financial Officer, at the time the Reeston contract
was awarded to the respondent and later became the Acting City Manager. On
4 September 2014, in his capacity as Acting City Manager, he instructed the
respondent to undertake the work in respect of Reeston East as a result of failed
procurement processes. Eleven months later, on 4 August 2015, having reverted to his
position as Chief Financial Officer, Mr Pillay reported alleged irregularities on the
part of the Municipal Manager to the Executive Mayor. He alleged that Mr Fani had
signed an offer and acceptance form in respect of the Reeston contract when that
contract was invalid.
That remarkable and belated about-turn plainly required an explanation in order [76]
to be condoned under section 9 of PAJA, as found by the Supreme Court of Appeal.
84
This explanation never came from the Municipality. 85 As the Supreme Court of
Appeal put it:
“[Mr Pillay] would have been able to explain why the contract was awarded to the
[respondent], why the contract was signed and why the [respondent] was thereafter
instructed to proceed with the work. In addition , he would have been able to explain
why the first payment was made, how he discovered that the award of the contract
was irregular and why it took twelve months from the time the contract was awarded
to discover this.”86
84 Supreme Court of Appeal judgment above n 2 at para 17.
85 Its founding affidavit at para 41 states:
“Of course Mr Pillay was a party to the extension of the Turnkey contract. Precisely why he
subsequently changed his mind with regard to the legality of the underlying contract or
contracts is not clear. Frankly however, whatever his explanation, it is difficult to understand
how such an affidavit could have provided any direct assistance with regard to, the essential
issue to be determined i.e. whether it was in the i nterests of justice for the time period
provided for in section 7 of PAJA to be extended.”
86 Supreme Court of Appeal judgment above n 2 at para 17.
29
THERON J
In addition, Mr Pillay’s silence is not explained by the Municipality. The result [77]
is that although the Court is given an explanation as to what transpired from August to
November 2015, there is no explanation whatsoever for the delay of a year between
the time of the award, in August 2014, and when Mr Pillay reported the alleged
irregularities in August 2015.
Where there is no explanation for the delay, the delay will be undue. 87 In this [78]
matter, the Municipality’s explanation is that it was unaware of the irregularity until
Mr Pillay came forward – in the fashion of a whistle-blower – and disclosed the
irregularity. The Municipality has not provided a sufficient explanation for the delay.
At the very least, it should have explained why it was not possible for Mr Pillay to
disclose the facts within his knowledge. In Tasima I it was confirmed that the onus
lies squarely on the Municipality to explain why the delay was not undue.
88 This
requires that the Municipality put forward all facts at its disposal.
Though the threshold for such an explanation would not require proving the [79]
allegation, the Municipality ought to be held to a rigorous standard. As an organ of
state, it bears constitutional obligations and thus, where an explanation may be
obtained or is available the Municipality should provide it or take the Court into its
confidence and explain its failure to provide an explanation. It is trite that the
Municipality, as an organ of state, is subject to a higher duty to respect the law. 89
A party applying for condonation must give a full and honest explanation for [80]
the whole period of the delay.
90 The only explanation offered by the Municipality for
the delay from August 2014 to August 2015 is that it was not aware at an earlier stage
of the alleged unlawfulness of its conduct. The Supreme Court of Appeal correctly
87 Khumalo above n 25 at paras 49-51.
88 Tasima I above n 24 at para 153.
89 Kirland above n 26 at para 82.
90 Camps Bay Ratepayers’ and Residents’ Association v Harrison [2010] ZASCA 3; [2010] 2 All SA 519 (SCA)
at para 54.
30
THERON J
found that the Municipality had failed to furnish a full and reasonable explanation for
the delay.
I agree with the High Court that the Municipality “ought to have become aware [81]
much sooner than it did, (even prior to, and without the benefit of an independent
investigation), that its employees awarded the Reeston contract without going through
a procurement process”. 91 Municipalities must have effective structures and
mechanisms in place to ensure proper oversight for its service delivery projects. This
is one of its core responsibilities. It must detect and prevent the abuse of taxpayer’s
monies. A lack of effective oversight leads to dysfunctionality within municipalities
by creating loopholes for fraud and corruption.
92
Should the delay be overlooked?
In deciding whether to overlook the Municipality’s unreasonable delay, I first [82]
consider the nature of the impugned decision and then the conduct of the Municipality
in approaching this Court. The latter alone is sufficient to refuse to overlook the
delay.
Regarding the nature of the impugned decision, the Municipality’s attack on [83]
the validity of the payment certificates upon which the provisional sentence claim was
based was two-fold. First, that the Reeston contract was an unlawful extension of the
Turnkey contract and awarded to th e respondent without proper procurement
procedures being complied with and thus invalid. Second, that the Turnkey contract
was inchoate as it was subject to a funding agreement being concluded. I leave the
question of the validity of the Turnkey contract explicitly open as the High Court
did.
93 It is not necessary for this Court to pronounce on that issue.
91 High Court judgment above n 7 at para 72.
92 Department of Cooperative Governance and Traditional Affairs State of Local Government in South Africa:
Overview Report (October 2009).
93 High Court judgment above n 7 at para 56 states:
31
THERON J
Reeston East did not form part of the bidding specifications under the [84]
Turnkey contract. Specifically, the scope of work for the Turnkey contract is stated as
“[the applicant] intends to develop roughly 3 000 to 5 000 housing units with services
subject to land availability and other factors in the fully subsidised and affordable
bonded market on portions of land in and around Greater Duncan Village in the
Municipality”. The locality map attached to the Turnkey contract did not include
Reeston East as part of the housing project area. In fact, it appears that Reeston East
never formed part of the bidding process in relation to the Turnkey contract.
The applicant advertised a tender for the appointment of an Implementing [85]
Agent on a turnkey basis for an urban housing project to address the housing needs of
Greater Duncan Village in October 2013. In particular, it is worth noting that the
Municipality advertised the tender for the Reeston contract both before and after the
conclusion of the Turnkey contract.
On 7 August 2014, Mr Fani wrote to the respondent indicating that the [86]
implementation of certain services
94 were now considered to be part of the Turnkey
contract’s scope of work. Specifically, the letter stated that “[t he Municipality]
recognise[s] that the layouts for this project were done some time ago and would
therefore prefer the layout of this stage to be revisited. This is to ensure that an
optimal number of opportunities are created”. As mentioned, on 4 September 2014,
Mr Pillay wrote to the respondent explicitly advising it to take over the
Reeston contract due to “an abortive procurement process”.
These letters demonstrate that both parties were aware of two significant [87]
factors. First, that the Turnkey contract’s layouts did not originally encompass
“I do not believe that it is necessary for present purposes and in these proceedings to make any
determination whether the Turnkey contract was invalid or not. More evidence would be
required to make a proper decision in that regard.”
94 These services related to the 953 units originally encompassed under the Reeston contract.
32
THERON J
Reeston East. Second, that the Reeston contract’s scope of work had previously been
the subject of failed tender processes.
The respondent placed great emphasis on the fact that the wording of the [88]
Turnkey contract was broad enough to encompass the scope of work of the
Reeston contract. The High Court neatly put paid to this assertion:
“If the Y urnkey contract made provision for the work covered by the Reeston
contract to be executed by the respondent in no uncertain terms, as the respondent
would have it, the question arises why the second Reeston contract was formally
concluded at all. Also why th e same bid number of the first Reeston contract was
allocated to it.”95
However, even if we were to assume that the respondent was correct, it is [89]
clearly not sufficient to bring the award of the Reeston contract within the prescripts
of section 217 of the Constitution. Section 217 of the Constitution lays down the
threshold requirements for a valid procurement process as one which is “fair,
equitable, transparent, competitive and cost effective”. The Supreme Court of Appeal
elaborated on these requirements in Firechem:
“One of the requirements of such a procedure is that the body adjudging tenders be
presented with comparable offers in order that its members should be able to
compare. Another is that a tender should speak for itself. Its real import may not be
tucked away, apart from its terms. Yet another requirement is that competitors should
be treated equally, in the sense that they should all be entitled to tender for the same
thing. Competiveness is not served by only one or some of the tenderers knowing
what is the true subject of tender.”
96
Given that the Reeston contract had been put to tender both before the [90]
Turnkey contract tender was advertised and after the Turnkey contract was concluded,
95 High Court judgment above n 7 at para 58.
96 Premier of the Free State Provincial Governmen t v Firechem Free State (Pty) Ltd [2000] ZASCA 28; 2000
(4) SA 413 (SCA) (Firechem) at para 30.
33
THERON J
and that bid specifications did not encompass Reeston East, it is curious how the
respondent, or anyone else, could envision that the Turnkey contract would
encompass the area covered by the Reeston contract as part of Duncan Village and its
surrounds.97 It is also apparent that none of the parties originally envisioned the
Turnkey contract to encompass the Reeston contract. The letter “awarding” the
Reeston contract to the respondent acknowledges that the contract was only being
“awarded” to the respondent as a result of failed tender processes.
This is at odds with the most fundamental requirement of a constitutional [91]
procurement process: that the bidding process be open and transparent. 98 The fact that
97 The High Court judgment above n 7 noted the particular difficulties that would arise if the respondent’s
interpretation of the Turnkey contract were to be accepted as according with section 217 of the Constitution and
at paras 62-3 stated:
“The procurement in respect of the Reeston contract was not ‘ legal and regular ’ as the
respondent submits, nor was the award of the Reeston contract a legitimate consequence of the
respondent’s appointment as turnkey implementing agent for the housing needs of Duncan
Village. The ‘turnkey contracting strategy’ cannot mean that an entire procurement process
for different work projects can be dealt with in one contract, excludi ng all competition from
other contractors. The argument that the provision for ‘ emerging needs ’ in the turnkey
contract would encompass work (550 and 452 top structures) in Reeston previously procured
(under contracts 1122 and 1337) is with respect, unsustainable.
The aforesaid considerations, compel me to conclude that the award of the Reeston contract
was invalid and falls to be set aside.”
98 See Firechem above n 96 at para 30 which states:
“One of the results of the adoption of a procedure such as Mr McNaught argues was followed
is that one simply cannot say what tenders may or may not have been submitted, if it had been
known generally that a fixed quantities contract for ten years for the original list of products,
and some more, was on offer. That would deprive the public of the benefit of an open
competitive process.”
See also the discussion in Municipal Manager: Qaukeni Local Municipality v F V General Trading CC [2009]
ZASCA 66; 2010 (1) SA 356 (SCA) (Qaukeni) which speaks to the impact of not fo llowing a transparent
procurement process at para 21:
“The refuse collection service the respondent undertook to provide was clearly a municipal
service as envisaged by the Systems Act and the Financial Management Act, and the second
appellant was therefor e obliged to follow the procurement processes they prescribed. It did
not do so in awarding the contract to the respondent. Instead the appellants decided on the
terms of the contract, including payment of the amount the respondent had quoted to provide
the required services, and then made an offer to the respondent to contract with it on those
terms. All this was done without any transparent, competitive, cost -effective or bidding
process taking place and without any programme involving community consul tation or
information dissemination being followed. Clearly as this infringed the prescribed procedures
I have mentioned, the contract was invalid: with the concomitant result that it could not be
validly extended and the second appellant was not bound th ereby beyond the end of June
2007.”
See furthermore 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) at para 43 and
34
THERON J
the Reeston contract was awarded to the respondent without any competitive bidding
process also violates the requirement that procurement processes be competitive. 99
To hold otherwise would overlook overwhelming evidence on record reflecting [92]
the violation of section 217 of the Constitution and other statutory prescripts 100 and
endorse the view that the work in contracts like the Reeston agreement, which were
previously concluded in pursuance of a proper procurement process, could simply be
“awarded” to a different contractor purportedly on the basis of a previously concluded
open-ended Turnkey contract. All this leads to one conclusion : there were blatant
irregularities in the award of the Reeston contract to the respondent that render that
contract unlawful and invalid.
I reach this conclusion without rel ying on the controversial York Report and [93]
pronouncing on its admissibility. A careful reading of its judgment reveals that the
High Court did not solely rely on the report, but also had regard to the documentary
evidence attached to report, like meeting minutes, project plans, maps and tender
documents. The validity and authenticity of these documents were not disputed by the
parties and they now form part of the record in this matter. In addition, the timeline of
the procurement processes in respect of the Reeston contract is common cause
between the parties and this alone, as explained above, is a sufficient basis upon which
to conclude that the Reeston contract failed to comply with section 217 of the
Constitution.
In the High Court, Revelas J found t hat the documents “speak for [94]
themselves”.
101 This is clearly correct. There is no dispute with regard to the
authenticity of the documents. To a large extent, both parties relied on these
Moseme Road Construction CC v King Civil Engineering Contractors (Pty) Ltd [2010] ZASCA 13; 2010 (4) SA
359 (SCA).
99 Firechem above n 96 at para 30.
100 For municipal supply chain management, these include the Municipal Finance Management Act 56 of 2003,
the Preferential Procurement Policy Framework Act 5 of 2000 and the Municipal Supply Chain Management
Regulations, GN 868 GG 40553, 30 May 2005.
101 High Court judgment above n 7 at para 12.
35
THERON J
documents. The circumstances under which both the Turnkey and other contracts
were concluded were common cause and not disputed.
In my view, it is clear and undisputed that the Reeston contract was unlawful [95]
and based on admissible evidence and on documents accepted and relied upon by both
parties. This finding is supported by the common cause and undisputed facts of this
case.
In awarding the Reeston contract to the respondent, the Municipality violated [96]
the provisions of section 217 of the Constitution. This section obliges every organ of
state, regardless of the sphere under which it falls, to procure goods or services “in
accordance with a system which is fair, equitable, transparent, competitive and cost
effective”. Corruption and maladministration are inconsistent with the rule of law and
are the “antithesis of the open, accountable, democratic government required by the
Constitution”.
102 In Steenkamp it was stated that the purpose of section 217(1) is to
eliminate fraud and corruption in the public tender process and enable the state to
secure goods and services at competitive prices.
103
On the other hand, the conduct of the Municipality in bringing this application [97]
proscribes this Court from overlooking the delay. The goodwill emanating from this
application being brought is undone by the Municipality’s about-turn in filing the
withdrawal application.
Suddenly, the Municipality’s concerns about compliance with section 217, the [98]
prescripts of the law and the Constitution more generally, are disposed of by way of
private negotiations behind closed doors with the respondent. The Municipality’s
case, its odd silence in respect of Mr Pillay and its flippant attitude toward its
obligations under the Constitution reek of impropriety. While a c ourt may be lenient
102 South African Association of Personal Injury Lawyers v Heath [2000] ZACC 22; 2001 (1) SA 883 (CC);
2001 (1) BCLR 77 (CC) at para 4.
103 Steenkamp above n 23 at paras 33-5.
36
THERON J
in overlooking a delay where an organ of state attempts to put its house in order, the
opposite is true where that organ seeks to perpetuate constitutionally invalid conduct
by way of an unlawful settlement agreement.
At no point did the Municipality take the Court into its confidence and explain [99]
its conduct. It simply presented the Court with whatever view it felt suited to at the
time, vacillating between positions when convenient to it. This is outrageous
behaviour from a state litigant, which must be robust in upholding its const itutional
duties and is to be held publicly accountable. The Municipality’s conduct in this
matter, particularly following the hearing, verges on bad faith. Had the Municipality
acted in a manner that indicated a sincere effort to clean house and rectify past wrongs
and unlawfulness, this Court may have had a basis to overlook the delay. The
important principle at play in this matter is how this Court manages complex
institutional settings of corruption and maladministration, particularly at local
government level and where the organ of state has not taken the Court into its
confidence.
In conclusion, this matter is on the same footing as Gijima where the [100]
decision maker had failed to provide a satisfactory explanation for the delay and, for
the reasons outlined, I am unable to find any basis upon which this delay may be
overlooked.
Does the Gijima principle apply?
However, this is not the end of the enquiry. On the authority of Gijima, this [101]
Court must, having established that the Reeston contract was clearly unlawful on
undisputed facts, declare it invalid in terms of the provisions of section 172(1)(a) and
set it aside. The unlawfulness of the Reeston contract cannot be ignored and this
Court is obliged, as it did in Gijima, to set aside a contract it knows to be unlawful.
Even on a restrictive interpretation of the Gijima principle, bearing in mind the need
to hold the state to the procedural requirements of review, as explained above, I can
see no reason to depart from it in this matter.
37
THERON J
Relief
I would adopt the same approach as that of the Supreme Court of Appeal in [102]
respect of the provisional sentence claim:
“The enquiry was rendered moot because we were informed by both Counsel that the
respondent had in the interim made a without prejudice payment to the appellant in
respect of the Reeston contract, in an amount in excess of R40 million. This payment
was based upon the extent to which the respondent calculated that it had been unduly
enriched by the appellant ’s performance. It was agreed between Counsel that it
would no longer be permissible to grant provisional sentence against the respondent,
as the payment excused these earlier claims.”
104
At the hearing there was some debate between the parties as to whether the [103]
amounts owed under the payment certificates had been fully paid. As it is unclear
whether there are still amounts owing under the existing payment certificates, the
parties’ previous concessions in respect of the provisional sentence claim stand. It is
open to the parties to determine the further course regarding any outstanding disputes.
When the Municipality took the view that the Reeston contract was invalid, the [104]
implementation of the contract had commenced and was continuing. The
Municipality was content for the respondent to complete the contract (building low-
cost houses) to the benefit of the Municipality and residents of Reeston. It was
common cause that the work has been practically completed.
In these circumstances, justice and equity dictate that the Municipality should [105]
not benefit from its own undue delay and in allowing the respondent to proceed to
perform in terms of the contract. I therefore make an order declaring the
Reeston contract invalid, but not setti ng it aside so as to preserve the rights to that the
respondent might have been entitled. It should be noted that such an award preserves
104 Supreme Court of Appeal judgment above n 2 at para 27.
38
THERON J / CAMERON J AND FRONEMAN J
rights which have already accrued but does not permit a party to obtain further rights
under the invalid agreement.
Costs
Ordinarily in a commercial matter like this, even though there are broad issues [106]
of public interest at stake, costs would follow the result. Both parties have been
partially successful in that the Reeston contract was declared unlawful but the
payment obligations have been preserved. For this reason, there should be no order as
to costs.
The following order is made: [107]
1. Leave to appeal is granted.
2. The appeal is upheld.
3. The order of the Supreme Court of Appeal is set aside and replaced with
the following:
“The applicant’s decision to award contract number
BCC/DES/PIU/HOUS/1122/2010 for Reeston Phase 3, Stage 2 (953
erven) to the respondent is declared constitutionally invalid.”
4. There is no order as to costs.
CAMERON J AND FRONEMAN J (Khampepe J concurring):
We have read the deft and comprehensive judgment by Theron J (first [108]
judgment). Although our reasoning reaches the same eventual practical outcome
(namely that the respondent is entitled to the money it claims under the Reeston [109]
contract), our reasoning takes us along a different route.
The contours of our divergent lines of reasoning are significant for this Court’s [110]
developing legality jurisprudence on judicial review applications brought by organs of
state. We disagree with the first judgment that in delay cases the interests of justice
39
CAMERON J AND FRONEMAN J
require this Court to make a final and definitive finding on the lawfulness of the
Municipality’s actions in concluding that contract. We agree that the issue of
lawfulness plays a part in weighing up whether the review should be entertained, but it
is not the sole determining factor. Here there are no compelling reasons to entertain
the review given the Municipality’s unreasonable delay in bringing its application.
Accordingly, it is our view that leave to appeal should be refused.
In coming to this conclusion, we show that this Court’s jurisprudence, and the [111]
deep constitutional imperatives that underlie it, provide for instances where a public
authority’s delay in bringing “self-review”
105 – legal proceedings to set aside its own
decision – is so prodigiously and lamentably inexcusable that there is no public
interest or constitutional necessity for pronouncing on its legality. Those cases will be
rare, for, as this Court’s decisions show, there is a constitutional imperative to locate
and declare unconstitutional conduct invalid under the Constitution. However, our
precedents envisage those cases; and this is one of them.
Self-review under the principle of legality
The Municipality seeks judicial review of its own decision in concluding the [112]
Reeston contract with the respondent. State self -review is a novel, but burgeoning,
species of judic ial review that has claimed the attention of this Court in a number of
recent decisions.
106 In Gijima, this Court, over a split decision in the Supreme Court
of Appeal, opted for legality review – rather than PAJA review – as the pathway for
dealing with a narrowly construed category of self -review applications. 107 The first
judgment correctly notes that this matter falls within this category of state self -review
identified in Gijima and should accordingly be dealt with under the principle of
105 We gratefully adopt the first judgment’s pithy term. See [38].
106 Gijima above n 3; Aurecon above n 27; Tasima I above n 24; Kirland above n 26 and Khumalo above n 25.
107 In carving out the scope of their decision in Gijima, Madlanga J and Pretorius AJ specified that the judgment
was not concerned with either (1) the scenario where an organ of state seeks to review the decision of another
organ of state; or (2) the scenario of state self -review where the organ of state purpo rts to act in the public
interest under section 38 of the Constitution. See Gijima above n 3 at para 2.
40
CAMERON J AND FRONEMAN J
legality.108 In doing so, Gijima, understood in the light of the preceding decisions of
this Court in Khumalo, Kirland and Tasima I, governs.
The reasoning this Court advanced in Gijima for choosing legality as the [113]
appropriate pathway for state institutions’ self -review has not found universal
favour.109 While its treatment of standing and delay has been the immediate target of
this criticism, Gijima is also accused of aggravating the bifurcation or “parallelism” in
our administrative law between PAJA review as opposed to legality review. This has
been a persisting source of academic concern. 110 It may in due course become
necessary to reconsider whether the legality review pathway chosen in Gijima
withstands the test of time. Now is not that time. This is because the issue was not
argued before us and also because this case may help show that the adverse
consequences predicted of Gijima – which would be necessary to justify any
fundamental change of course – may not necessarily eventuate.
This judgment converges with the first judgment in seeking approaches that [114]
best promote open, responsive and accountable government. This is the lodestar
guiding the development of legality jurisprudence in respect of state self -review. We
acknowledge that there may be reasonable disagreement on how best to achieve this
108 See [1].
109 See, for example, Boonzaier “A Decision to Undo” 135 (2018) SALJ 642 at 677 in which the author points to
Gijima as evidence that this Court “not only reasons badly, but no longer cares to reason well”. The author’s
substantive analysis of Gijima has much force, though whether the general remarks about the quality of this
Court’s current membership (see, for exampl e, at 675) were either apposite or warranted may be a matter for
history to determine. The Court and its critics have a shared interest in reasoned debate on the substance of its
errors and its victories.
110 See academic discussions on this issue, among ot hers, Hoexter “The Future of Judicial Review in So uth
African Administrative Law ” (2000) 117 SALJ 484; Kohn “The Burgeoning Constitutional Requirement of
Rationality and the Separation of Powers: Has Rationality R eview Gone Too F ar?” (2013) 130 SALJ 810; Du
Plessis and Scott “ The Variable Standard of Rationality Review: Suggestions for Improved L egality
Jurisprudence” (2013) 130 SALJ 597; Freund and Price “On the Legal Effects of Unlawful Administrative
Action” (2017) 134 SALJ 184; Boonzaier “Good Reviews, Bad Actors: The Constitutional Court’s Procedural
Drama” (2015) 7 Constitutional Court Review 1; Konstant “Administrative Action, the Principle of Legality and
Deference – The Case of Minister of Defence and Military Veterans v Motau ” (2015) 7 Constitutional Court
Review 68; Henrico “Subverting the Promotion of Administrative Justice Act in Judicial Review: The Cause of
Much Uncertainty in South African Administrative L aw” (2018) TSAR 288; Woolman “Language, Power and
the Margin: Eliot’s Philosophy of Language, Wittgenstein on Following a Rule, and Statutory C onstruction in
Mankayi v Anglogold Ashanti Ltd” (2012) 129 SALJ 434; and Quinot and Maree “The Puzzle of Pronouncing on
the Validity of Administrative Action on Review” (2015) 7 Constitutional Court Review 27.
41
CAMERON J AND FRONEMAN J
goal. Both the first judgment and ours seek to achieve the same goal, although we
differ, in this instance, on how to get there. That is to be expected, debated and
celebrated in a developing democracy like ours. There is no permanent harm in
acknowledging that we are still feeling our way to a better future, rather than relying
on the so-called, but ephemeral, certainties of the past.
Common law judicial review – the predecessor and part-ancestor of [115]
constitutional legality review – did not provide for self-review by state organs.
111 The
constitutional era claims that capacity for state organs. This is because its
commitment to open, responsive and accountable government not only permits state
self-review but places a duty on state officials to rectify unlawful decisions.
112
Constitutional legality review also finds rich grounding in sections 1(c), [116]
41(1)(b), 195 and, as far as public procurement is concerned, section 217 of the
Constitution.
113 In its objective, state self -review should therefore promote open,
responsive and accountable government. In this, its underlying concern is consonant
with that of the fundamental right to lawful, reasonable and procedurally fair
administrative action that the Constitution affords to everyone.
114 What legality
review does, in sketching out a distinctive path, is to recognise the distinctive roles of
those entitled to exact constitutional rights and the organs of government whose duty
it is to obey and fulfil those rights. It is far from the only reasonable and logical
conclusion that PAJA, which seeks to give legislative content to the right to just
administrative action, must necessarily afford the exclusive or indeed the most
appropriate pathway for state self-review.
111 The common law doctrine of functus officio, as developed in our courts during the nineteenth century, did not
allow public officials to review their own prior decisions, with the premise being that the administrative power s
conferred on them by statute are exhausted by their initial exercise. The rationale for this doctrine rested on the
importance of finality and certainty as desiderata of the rule of law. See Pretorius “The Origins of the Functus
Officio Doctrine, With Specific Reference to its Application in Administrative Law” (2005) 122 SALJ 832.
112 This principle was first developed in a series of decisions by the Supreme Court of Appeal: Pepcor
Retirement Fund v Financial Services Board [2003] ZASCA 56; 2003 (6) SA 38 (SCA) ; Qaukeni above n 98;
and Ntshangase v MEC for Finance: KwaZulu-Natal [2009] ZASCA 123; 2010 (3) SA 201 (SCA).
113 See Pharmaceutical Manufacturers Association of SA: In re ex parte President of the Republic of South
Africa [2000] ZACC 1; 2000 (2) SA 674 (CC); 2000 (3) BCLR 241 (CC) at paras 45 and 51.
114 Section 33 of the Constitution.
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CAMERON J AND FRONEMAN J
Purpose-driven procedure: the delay enquiry
It is with this imperative objective of legality review in mind that we deal with [117]
the procedural obstacles this case presents to the Municipality’s self -review
application.
It is important, at the outset, to clarify that we are dealing with a review where [118]
delay is a central feature. The law is clear where delay is not a feature. On that, we
are on the same page as the first judgment.
Where there has been no delay by an organ of state in seeking to review its own [119]
prior decision, a declaration of unlawfulness should invariably be made.
115 In
AllPay II, we affirmed that this “default position” reflects the most basic imperative of
the principle of legality in “requir[ing] the consequences of invalidity to be corrected
or reversed where they can no longer be prevented”. 116 In bringing an application for
self-review promptly, the state is also complying with its duty to correct suspected
unlawful decisions expeditiously and diligently. 117 In short, timely self -review
generally results in a win-win for the rule of law.
Where there is non-negligible delay by an organ of state in bringing a [120]
self-review application, the court must determine whether the delay is reasonable and
should accordingly be condoned. In Khumalo, this Court rightly cautioned that “a
court should be slow to allow procedural obstacles to prevent it from looking into a
challenge to the lawfulness of an exercise of public power”.
118 Skweyiya J was quick
115 See AllPay Consolidated Investment Holdings (Pty) Ltd v Chief Executive Officer, South African Social
Security Agency [2014] ZACC 12; 2014 (4) SA 179 (CC); 2014 (6) BCLR 641 (CC) ( AllPay II) at paras 29-30;
Bengwenyama Minerals (Pty) Ltd v Genorah Resources (Pty) Ltd [2010] ZACC 26; 2011 (4) SA 113 (CC);
2011 (3) BCLR 229 (CC) (Bengwenyama) at paras 84-5.
116 AllPay II id at para 30.
117 Khumalo above n 25 at para 36; section 7(2) read with section 237 of the Constitution. See also
Bengwenyama above n 115 at paras 84-7.
118 Khumalo id at para 45. This was affirmed in Tasima I above n 24 at para 160.
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CAMERON J AND FRONEMAN J
to add, however, that this does not make the procedural requirement regarding delay
superfluous.119
On the contrary , the delay bar serves an important rule of law function: it [121]
promotes the public interest in the certainty and finality of decision-making.120 This is
an imperative focus whenever a court undertakes a case-specific enquiry as to the
reasonableness of the delay. The explanation proffered is a key consideration in
assessing its reasonableness, particularly in state self -review.121 It is an opportunity
for the state to demonstrate that its self -review seeks to promote open, responsive and
accountable government rather than the self-interest of state officials seeking to evade
the consequences of their prior decisions. This is the key in deciding whether the
Municipality’s behaviour passes the interests of justice test for granting leave to
appeal.
Even where a delay is found to be unreasonable, however, our precedents [122]
establish that a court retains a discretion to overlook the delay provided it is in the
interests of justice to do so.
122 This stage of the procedural enquiry should not take
place in a “vacuum”. It must instead involve weighing (a) the effect of the delay on
the parties123 and (b) the nature of the impugned decision.124
It is only at this stage that we differ from the first judgment in our application [123]
of this Court’s guidelines, including those in Gijima, for addressing an unreasonable
delay when a state organ seeks to have its own decision set aside.
119 Khumalo id.
120 Id at para 47.
121 Gqwetha 33 at para 24.
122 Khumalo above n 25 at para 49, affirming Gqwetha id at para 31.
123 Khumalo id at para 52, affirming Gqwetha id at paras 33-4.
124 Khumalo id at para 57, affirming Gqwetha id at para 33.
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CAMERON J AND FRONEMAN J
The first judgment requires “a full and honest explanation for the whole period [124]
of the delay”125 and seeks to hold it, as a constitutional organ bearing higher duties in
relation to accountability, “to a rigorous standard”.126 It finds no basis to overlook the
Municipality’s unreasonable delay, but nevertheless concludes that the interests of
justice favour pronouncing on the unlawfulness of the conduct while also affording
ASLA a just and equitable remedy.127
In this, the first judgment reflects the ambivalence that emerges from this [125]
Court’s own previous decisions. These have insisted that where delay is unreasonable
and unexplained, the nature of the application and its merits would not favour
overlooking it (Khumalo),
128 and indeed that undue delay should not be overlooked
(Tasima I).129 These decisions have also asserted that a government actor must afford
a court a basis for overlooking inordinate delay (Gijima), 130 in the absence of which
there can be no possible basis for exercising the court’s discretion to assist the actor
by affording it the relief it seeks.
125 See the first judgment at [80].
126 Id at [79].
127 Id at [102] to [105].
128 Khumalo above n 25 at paras 67-9:
“[W]e are left with no means accurately to verify whether the absence of reasons to motivate
the departure from the requirements reflects that there truly were no reasons or if those
reasons are merely not discoverable at this lat e stage. A full picture of the promotion’s
legality is thus not reliably ascertainable on the evidence before the Court, nine years after the
fact. While the MEC might not be responsible for the entire period of the delay that affects
the Court’s assessment of the decision’s lawfulness, objectively the passage of the extended
period of time since the decision was made stands in the way of this Court making a clear
determination of the promotion’s unlawfulness. This is a consideration rather peculiar to these
facts and the particular basis of the challenge.
The nature of the application and the strength of the merits do not favour overlooking the
delay. The delay was unreasonable and unexplained and , although we might ameliorate the
consequences of a possible finding of unlawfulness in remedy, the nature of the claim does not
warrant condoning the delay.
The Labour Court erred in overlooking the delay.”
129 Tasima I above n 24 at paras 142-4.
130 Gijima above n 3 at para 49:
“[N]o discretion can be exercised in the air. If we are to exercise a discretion to overlook the
inordinate delay in this matter, there must be a basis for us to do so. That basis may be
gleaned from facts placed before us by the parties or objectively av ailable factors. We see no
possible basis for the exercise of the discretion here. That should be the end of the matter”.
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CAMERON J AND FRONEMAN J
At the same time, in tension with these enunciations, our precedents have [126]
sought to impose a square on the circle they create by nonetheless inquiring into the
legality of the state conduct at issue, and thence to afford deserving subjects dealing
with the errant state body a just and equitable remedy ( Tasima I,131 Gijima132) in
exercise of the wide remedial powers the Constitution grants a court faced with
invalid conduct.133
131 In Tasima I above n 24, the Court ordered as follows:
“1. The application to lead new evidence is refused.
2. Leave to appeal is granted.
3. The appeal is upheld insofar as the counter application succeeds.
4. The order of the Supreme Court of Appeal is set aside and replaced with the
following:
i. Within 30 days of this order, Tasima is to hand over the services and the
electronic National Traffic Information Syste m to the Road Traffic
Management Corporation.
ii. Unless an alternative transfer management plan is agreed to by the parties
within 10 days of this order, the hand-over is to be conducted in terms of the
Migration Plan set out in schedule 18 of the Turnkey Agreement.
5. The finding of contempt in part 1 of the order made by the Supreme Court of Appeal
is upheld for the period before the counter application succeeded, but lapses
thereafter.
6. Each party is to pay its own costs.”
132 In Gijima above n 3, the Court made the following order:
“1. Leave to appeal is granted.
2. The appeal is upheld in part.
3. The order of the High Court of South Africa, Gauteng Division, Pretoria is set aside,
and replaced with the following:
(a) The applicant’s decision to appoin t the respondent as a DSS service
provider under a contract which was to be effective from 1 April 2012 to
31 July 2012 and all decisions in terms of which the contract was extended
from time to time are declared constitutionally invalid.
(b) The order of constitutional invalidity in paragraph 3(a) does not have the
effect of divesting the respondent of any rights it would have been entitled
to under the contract, but for the declaration of invalidity.
4. The applicant must pay the respondent’s costs, including costs of two counsel, in the
High Court, the Supreme Court of Appeal and in this Court.”
133 Section 172 provides:
“(1) 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—
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CAMERON J AND FRONEMAN J
The first judgment follows this approach by affording a deserving subject – the [127]
respondent here – a just and equitable remedy, but only after inquiring into and
pronouncing upon the government action in issue, in defiance of the unexplained and
unreasonable delay in coming to court. 134 We appreciate the judicial pragmatism in
this approach, and recognise its forebears in our own jurisprudence. But equally
present in that jurisprudence is the clear insistence that delay must be explained, that
the court has to be fully informed, that unexplained delay impedes just adjudication
and that in the absence of explanation no indulgence can be afforded.
We suggest an alternative route. This is that, in the absence of adequate [128]
explanation for unreasonable delay, courts should not intervene to inquire into a final
and determinative holding into unlawfulness, unless the seriousness of the
unlawfulness at issue warrants overlooking the manifest deficiencies in the state
actor’s case.
The facts here offer a good example. Yes, the Municipality complained about [129]
the Reeston contract’s non-compliance with constitutional procurement requisites, but
none of the deficiencies it instanced, and none of the external factors surrounding the
performance of the contract, imperatively warrant the court’s overlooking the public
body’s egregious lapse in failing to explain the delay.
None of the values underlying self -review afford any virtue in pronouncing on [130]
the lawfulness of the conduct at issue here. No evidence suggests any manifest
deficiency in lawfulness that may outweigh the importance of insisting on the state’s
(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.”
134 The first judgment engages extensively in the merits ( [83] to [96]) in order to conclude unlawfulness,
whereas the self -evident unlawfulness in Gijima meant there was no need for a detailed consideration of the
merits, hence the jump from the delay enquiry to relief. This departure from Gijima in undertaking a
fully-fledged merits enquiry demonstrates that, unlike Gijima, there is no manifest unlawfulness here.
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scrupulous adherence to legal requirements in complying with its constitutional duties.
All we have is a public body that seeks to evade the consequences of its prior decision
without offering any explanation at all for its delay in coming to court. And – as the
first judgment rightly notes – the Municipality only adds to the topsy -turviness of all
this by now seeking an order pronouncing the conduct sought to be impugned as
valid.
135
All this points inexorably to one pragmatic, just conclusion: that it is not in the [131]
interests of justice for this Court to entertain the Municipality’s application, and that
leave to appeal must be refused.
Refusing to overlook the Municipality’s unreasonable and unexplained delay, [132]
and refusing to countenance its illogical somersault in now seeking court sanction for
the impugned conduct, does not denote slavish adherence t o procedure. Rather, it
recognises that the procedural rules regarding delay should be applied in pursuance of
the overarching objective of legality review. The delay rule should not be viewed
solely through the ancestor lens of common law review, but through our constitutional
lens in which legality review serves to promote open, responsive and accountable
government.
This purpose-driven approach to procedure is very different to the formalistic [133]
notion that the delay rule must necessarily be assessed as a point in limine
(preliminary point) that precludes any consideration of the merits of the review.
Rather, a careful weighing up of two different aspects of the rule of law is required
when considering whether it is in the interests of justice to condone or overlook a
delay: the importance of declaring (and correcting) unlawful decisions, and the
importance of expeditious and diligent compliance with constitutional duties so as to
ensure certainty and finality for the parties relying on such decisions.
135 See [97] to [99].
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CAMERON J AND FRONEMAN J
In Khumalo, this Court held that the effects of the delay on the parties should [134]
not generally cause an applicant to be non-suited because the court’s remedial powers
can be exercised to mediate any potential prejudice to the parties in overlooking the
delay and control the possible consequences of setting aside the impugned decision. 136
The nature of the impugned decision concerns the seriousness of the illegality, and
therefore has a direct bearing on the importance that is attached to declaring the
decision unlawful. The weight that should be afforded to this factor is not yet settled
in our legality jurisprudence. It is therefore unsurprising that we part ways on this
very point with the first judgment.
The nature of the impugned decision
Khumalo offers an instructive point of departure for considering when the [135]
nature of the impugned decision might justify overlooking an unreasonable delay.
The Court held that the enquiry “requires analysing the impugned decision within the
legal challenge made a gainst it and considering the merits of that challenge”.
137 The
pivotal question was whether it was in the interests of justice to pronounce on the
unlawfulness of the decision.
Since there was scant detail to explain the Member of the Executive Council’s [136]
impugned decision, the Khumalo Court did not pronounce on the lawfulness or
constitutional validity of the decision at all. The lack of an explanation was an
impediment, even though the Court had observed that the decision was apparently
unfair and there were reasons to suspect it was unlawful.
138 The public warrant in
inquiring into the decision at issue stopped exactly there. So the Court made no
finding on the unlawfulness of the decision.
136 Khumalo above n 25 at para 53.
137 Khumalo id at para 57. See also Aurecon above n 27 at para 49; SANRAL above n 56 at para 81; and
Gqwetha above n 33 at para 24.
138 Khumalo id at paras 59-69.
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CAMERON J AND FRONEMAN J
Just so here. There is no compelling reason for this Court to entertain the [137]
Municipality’s application for leave to appeal. That was so before its settlement was
placed before us with such conspicuous and contradictory illogicality . The first
judgment, even though it refuses to condone the lateness of the Municipality’s review
application, nevertheless proceeds to consider the lawfulness of the decision.
139 We
cannot go that route, and our precedents do not oblige it.
The important principle here is how this Court manages complex institutional [138]
settings of corruption and maladministration, particularly at the local government
level. If this Court were to allow collateral review challenges in the face of utterly
unreasonable delays, without even minimal explanations, the important protections
our judgments have elaborated would provide leaky cover.
140
In exercising its discretion whether to hear a review despite unreasonable delay [139]
it is not necessary that a final and definitive pronouncement always be made on the
unlawfulness of an exercise of public power or an administrative action. This is
especially so when the public body approaches the Court with questionably smudged
hands and the possible unlawfulness is not of an obviously serious nature.
The objective served by legality review must therefore be borne in mind when [140]
evaluating the importance to be attached to the seriousness of the illegality. A court
should be vigilant in ensuring that state self -review is not brought by state officials
with a personal interest in evading the consequences of their prior decisions. It should
scrutinize the conduct of the public body and its candour in explaining that conduct to
ensure, in the public interest, open, responsive and accountable government. Where
there is glaring arbitrariness and opportunism – that is, where the government actor’s
efforts to correct the suspected unlawful decision serve the antithesis of the rule of law
– the interests of justice weigh against giving it a free pass by overlooking an
unreasonable delay.
139 See first judgment at [82] to [100] and [101] to [105].
140 See Khumalo above n 25; Kirland above n 26; Aurecon above n 27; and Merafong above n 65.
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CAMERON J AND FRONEMAN J
This case typifies these instances. We spell out our reasons below in our [141]
assessment of the facts. Although the first judgment has dutifully set out the
background to this case, the facts depict such flagrant opportunism and a bald-faced
dereliction of constitutional commitment that they bear repeating.
Absent explanation and inadequate evidence
In August 2014, the Municipality indicated that the Reeston contract would be [142]
part of the Turnkey contract and, in a letter from Mr Pillay, dated 4 September 2014,
“awarded” the contract to the respondent. There was a change in the office of the city
manager. Mr Pillay acted in that office from September 2014 until August 2015. He
realised that there was something off about the award of the contract to the
respondent. He suspected that the award was unlawful because the Municipality did
not adhere to the precepts in section 217 of the Constitution nor did it carry out a
procurement process in accordance with the Local Government: Municipal Finance
Management Act 56 of 2003 (MFMA). In a letter to the municipal council dated
4 August 2015, Mr Pillay mentioned irregularities in the process. Although no
evidence has been offered as to what the response to his letter was (if indeed there was
one), Mr Pillay did not make much of his suspicions in the following year. No further
explanation as to the events or reasons for the lack of any further action during this
period has been offered.
Twelve months later, Mr Pillay’s concerns resurfaced when he reported alleged [143]
irregularities on the part of the municipal manager to the Executive Mayor. This time
the municipal council commissioned an investigation into the lawfulness of the
Reeston contract. The investigator, Ms York, confirmed Mr Pillay’s suspicions: the
contract was unlawful. She found that Mr Pillay’s award of the Reeston contract to
the respondent contravened the MFMA. Ms York reported this to the Municipality on
21 October 2015.
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CAMERON J AND FRONEMAN J
But even with this report, the Municipality seems to have done nothing. It [144]
neither initiated legal proceedings to challenge the lawfulness of the Reeston contract
nor informed the respondent that the contract was found to be unlawful and thus
should not be implemented. Instead, the Municipality allowed the respondent to
continue performing in accordance with the terms of the contract. The only
suggestion that the Municipality did not regard the contract as enforceable was its
refusal to pay when the respondent submitted invoices for the work it had completed.
This was, at best, a weak indication from which to expect the respondent to realise the
unlawfulness at issue. The respondent approached the High Court on 15
October 2015. The Municipality had last paid the respondent on 20 May 2015,
following a payment certificate issued by the respondent on 28 April 2015. Further
payment certificates issued on 3 June 2015, 7 July 2015 and 4 August 2015 remained
unpaid. The Municipality raised the unlawfulness of the contract (a collateral
challenge of its decision to award the contract) only after the respondent dragged it to
court for payment in November 2015. This was a month after Ms York’s report
confirming that the contract was unlawful had been considered by the Municipality .
This does not suggest good faith in undoing Mr Pillay’s conduct.
The Municipality’s hands are thoroughly smudged and grimy. It wanted the [145]
High Court and this Court to uphold its defence to a private actor’s claim for moneys
due on the premise that the claim sprang from an unlawful contract. Yet it did not tell
the Court what it knew or knows now, or ought to have known, about precisely that
unlawfulness. More specifically, there are significant remaining questions relating to
Mr Fani and Mr Pillay’s knowledge and roles and we are left wondering why neither
of them testified, when at all crucial points in this litigation these persons were still the
Municipality’s employees. This is a distinctive factual difference from Gijima. In
that case, the entire governance and management teams had been replaced since the
conclusion of the impugned contract. For the Municipality to seek to invoke judicial
sanction for unexplained shenanigans while shielding persons from the duty to testify
was to treat the duty of full explanation this Court propounded in Khumalo, Kirland
and Tasima with near insolence.
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CAMERON J AND FRONEMAN J
In these circumstances, for the Municipality to ask the courts to be party to its [146]
assertion of a defence of unlawfulness is untenable. As the first judgment notes, its
play, now, to have its resolution of its dispute with the respondent clothed with
judicial authority in a settlement agreement is even more conspicuously gross. It
expressly concedes that the respondent imple mented the Reeston contract in good
faith. Nothing here remotely warrants our busying ourselves with the Municipality’s
claim that the contract is unlawful. The public interest in open and accountable
government is not furthered by overlooking the Municipality’s failure to comply with
its constitutional duties to act swiftly and proactively.
In the absence of explanation, it is opportunistic and arbitrary for the very [147]
person who made the decision to shrink back when the review of the decision pans
out. And in these proceedings, all this falls right into the Municipality’s lap. The
Municipality claims to assert legality yet its actions are antithetical to it. To overlook
the unreasonable delay in this context is to give the Municipality a free pass. To do so
would be counter to the purpose of legality review. Thus we do not consider a
definitive pronouncement on the lawfulness of the action under review essential to the
determination of the matter.
Conclusion
We agree with the first judgment that the Supreme Court of Appeal erred in not [148]
considering, at all, whether the Reeston contract was lawfully awarded. When
determining the unreasonableness of the delay and exercising its discretion whether to
allow consideration of the review, the cour t must balance the seriousness of the
possible illegality with the extent and unreasonableness of the delay. In the
circumstances of this case, the delay is sufficiently more inexcusable than the possible
illegality is egregious, and the balance tips against this Court’s intervention. The
possible breach of legality in this case, while relevant, does not outweigh a delay
which, by way of its length and lack of explanation, is among the most serious of its
kind. It is instead more than enough to note that the respon dent acted in the
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CAMERON J AND FRONEMAN J
reasonable and good faith belief that the contract was regularly and properly awarded.
Nothing in the Municipality’s case suggests the opposite. So there is no manifestly
serious irregularity or illegality demanding intervention.
On the contrary, public interest factors indicate that it would be grossly unjust [149]
to deprive the respondent of its contractual bargain and to leave it to the enrichment
claim that the Municipality says must suffice for it.
141 In exercising a court’s
discretion to decide, notwithstanding unreasonable delay, whether the review should
be heard, we hold that in these particular circumstances, there is little if any ground
for exercising that discretion in favour of the Municipalit y. There is no need for us to
find that equitable refuge in our remedial powers under section 172 as the first
judgment does – the procedural obstacles to overlooking the Municipality’s
unreasonable delay reach the same just and equitable outcome.
The im portant point is that there is no reason to intervene to vindicate any [150]
public principle of contract or section 217 transparency or fairness. There is no public
purpose that would be served here by getting to the Municipality’s antecedent
challenge at all. In Gijima, this Court correctly pronounced the principle founded in
section 172(1)(a) of the Constitution that this Court is mandated “to declare invalid
any law or conduct that it finds inconsistent with the Constitution”.
142 However in
this instance we find that there was no proper ground for exercising a discretion in
favour of the Municipality to hear the review. Resorting to section 172(1)(a) is not
necessary to arrive at a just outcome.
For these reasons, which are quite distinct from the Supreme Court of Appeal’s [151]
pre-Gijima, PAJA approach, there was sufficient further justification for not
exercising the discretion to allow the review to be considered, despite unreasonable
141 See SANRAL above n 56 at para 79.
142 Gijima above n 3 at para 52. 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.”
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CAMERON J AND FRONEMAN J
delay. As stated earlier, the point is not the formal one of common law review, that
delay necessarily precludes consideration of the merits, but one of weighing up
different aspects of the rule of law: on the one hand upholding the rule of law by a
formal declaration of invalidity, as against another vital component of it, the
expeditious and diligent compliance with constitutional duties.
What remains is to deal with the effect of the proposed settlement agreement [152]
and the application to make it an order of court. For the reasons given in the first
judgment we agree that the agreement cannot be made an order of court. Because of
that condition in the agreement, an ordinary withdrawal is also not open for us to
confirm. But the fact of the agreement, even without court sanction, appears to us to
strengthen our conclusion that it is not appropriate for this Court to make a final
pronouncement on legality at this late stage.
The mere fact of the proposed settlement agreement supports the conclusion [153]
that we have come to: that there was good faith in the Reeston contract, no manifestly
illegal conduct involved, and no necessity in these particular circumstances for setting
it aside. This is an additional reason why leave to appeal against the Supreme Court
of Appeal judgment must be refused. The issue of whether it is in the interests of
justice to grant leave to appeal extends beyond the legal requirements for condonation
of delay in state self -review legality reviews. Even if we had agreed with the first
judgment that determination of the lawfulness of the Reeston contract would
ordinarily have been called for, the Municipality’s conduct in entering into a
settlement agreement that fundamentally undermines that contention, shows that it is
in the interests of justice not to go that route.
We would thus refuse leave to appeal, with costs. [154]
55
For the Applicant:
For the Respondent:
R G Buchanan SC instructed by
Matthew Moodley & Associates Inc
G M Budlender SC and H C Schreuder
instructed by Vos Maree Inc