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[2013] ZAWCHC 74
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City of Cape Town v South African National Roads Agency Ltd and Others (6165/2012) [2013] ZAWCHC 74 (21 May 2013)
REPORTABLE
Republic of South Africa
IN THE HIGH COURT OF SOUTH AFRICA
(WESTERN CAPEHIGH COURT, CAPE TOWN)
Case No:
6165/2012
Before: The Hon. Mr Justice Binns-Ward
In the
matter between:
CITY
OF CAPE TOWN
..........................................................................................................
Applicant
and
SOUTH
AFRICAN NATIONAL ROADS AGENCY LIMITED
..........................
First
Respondent
MINISTER
OF TRANSPORT
.......................................................................
Second
Respondent
MINISTER
OF WATER AND ENVIRONMENTAL AFFAIRS
...........................
Third
Respondent
MINISTER
OF TRANSPORT AND PUBLIC WORKS (W.C.)
................
Fourth
Respondent
MINISTER
OF FINANCE, ECONOMIC DEVELOPMENT
AND
TOURISM (W.C.)
..............................................................................................
Fifth
Respondent
PROTEA
PARKWAYS CONSORTIUM
................................................................
Sixth
Respondent
N2/N1
CRISIS COMMITTEE
.......................................................................
Seventh
Respondent
THEEWATERKLOOF
MUNICIPALITY
...................................................
Eighth
Respondent
BREEDE
VALLEY LOCAL MUNICIPALITY
......................................................
Ninth
Respondent
JUDGMENT DELIVERED: 21 MAY 2013
BINNS-WARD J:
There are three applications before the court for adjudication at
this stage. Each of them bears on or is related to a pending
application in which the City of Cape Town (‘the City’)
seeks the judicial review and setting aside of a series of
decisions
by the South African National Roads Agency Limited(‘SANRAL’
or ‘the Agency’) and the Ministers
of Environmental
Affairs and of Transport, respectively, directed at achieving the
maintenance, upgrading and operation of certain
sections of the
national road system in the Western Cape Province by means of a road
tolling operation. The papers in the review
application are far from
complete. The review application will thus be determined at some as
yet undetermined future date and
the evidence before the court that
deals with the review might well give amaterially different
complexion to the case to that
which is apparent on the papers
before me at this stage. Although it has been necessary to some
extent to consider the prospects
of success that the City appears to
have in the review application, it is appropriate to emphasise that
this judgment should
not be read as in any way pre-empting the
judgment in the review application..
The first application requiring determination at this stage concerns
an application by the City to amend its notice of motion
in the
pending review application and for an order directing the
disclosure, or discovery by the first, second and third respondents
in those proceedings (SANRAL and the Ministers of Transport and of
Environmental Affairs, respectively) of additional documentation.
I
shall hereinafter refer to the first application as ‘the
interlocutory application’. In the second application
SANRAL
seeks an order directing the City to file its supplementary founding
papers, if any, in the review application within
ten days. It is
common ground that the second application will fall away
automatically if the City is granted leave in the interlocutory
application to amend its notice of motion in the review application.
The third application is for an interim interdict
pendentelite
sought by the City to prohibit the undertaking of certain measures
by the first respondent towards the implementation of a tolling
operation on the affected sections of the national roads. That
application will be referred to in this judgment as ‘the
interdict application’. It was agreed by counsel that I might
have regard to the evidence in the applications holistically
and
collectively for the purposes of deciding any of them
individually.In other words, I am permitted to have reference to the
papers in the interlocutory application for the purposes of the
interdict application and
vice versa
.
SANRAL is the only party opposing the interlocutory and interdict
applications. The Ministers, who have indicated their intention
to
oppose the review application, have given notice that they will
abide the judgment of the court in the matters to be determined
in
this judgment.
It is appropriate to begin by sketching the factual and statutory
context in which the litigation has occurred. The history is
a
somewhat lengthy one; an outline will do.
SANRAL is a juristic person incorporated as a company with a share
capital in terms of the South African National Roads Agency
Limited
and National Roads Act, 7 of 1998 (‘the SANRAL Act’). In
terms of s 25 of the SANRAL Act, the Agency
is ‘within
the framework of government policy, …responsible for, and
[has the] power to perform, all strategic planning
with regard to
the South African national roads system, as well as the planning,
design, construction, operation, management,
control, maintenance
and rehabilitation of national roads for the Republic, and is
responsible for the financing of all those
functions in accordance
with its business and financial plan, so as to ensure that
government's goals and policy objectives concerning
national roads
are achieved’.
Section 27 of the SANRAL Act
1
provides that SANRAL may, with the approval of the Minister of
Transport, declare specified national roads, or portions thereof
to
be toll roads. A toll road is one in respect of which a toll or fee
is levied on the users for availing of the utility. Section
28 of
the SANRAL Act
2
permits
SANRAL to enter into agreements with third parties to (amongst other
matters) design, construct, operate and maintain
national roads or
portions thereof which are existing toll roads, or are declared as
such. Such third parties become contractually
entitled, subject to
certain provisions of the SANRAL Act, and depending on the terms of
the applicable agreement, to levy and
collect toll either as an
agent of SANRAL, or for their own account.
In 1998, SANRAL received a proposal from a development consortium
which provided for the design, financing, construction and
operation
of certain portions of the N1 and N2 national roads in the vicinity
of Cape Town in the Western Cape Province as toll
roads. Implicit in
the consortium’s proposal, which was in the form of a ‘build,
operate and transfer’ (‘BOT’)
concept,
3
was the hope that SANRAL would ultimately conclude an agreement with
it of the nature contemplated by s 28(1) of the SANRAL
Act.
The construction and upgrade measures inherent in the project
entailed activities listed in terms of the Environment Conservation
Act 73 of 1989 (‘the ECA’) as activities which may have
a substantially detrimental effect on the environment. The
undertaking of such activities was subject to authorisation in terms
of s 22 of the ECA.
4
The functionary statutorily appointed to determine whether to grant
the required authorisation was the Minister of Environmental
Affairs, alternatively, the so-called ‘competent authority’
referred to in s 22(1) of the ECA. SANRAL was sufficiently
interested by the terms of the consortium’s proposal to make
application for the required environmental authorisation.
5
The application was submitted in May 2000. By that stage the
National Environmental Management Act 107 of 1998 (‘NEMA’)
had come into operation. Section 2 of NEMA states a set of
principles by which decisions by all organs of state which could
have a significant impact on the environment have to be guided.
Those principles thus applied to any decision determining an
application for environmental authorisation under the ECA.
The principles set out in s 2 of NEMA include the requirement
that all development must be socially, environmentally and
economically sustainable. Section 2(4) of NEMA states that
determining whether any development is sustainable requires the
consideration of all relevant factors including, amongst others, the
following:
that a risk-averse and cautious approach is applied, which takes
into account the limits of current knowledge about the consequences
of decisions and actions;
6
that the social, economic and environmental impacts of activities,
including disadvantages and benefits, must be considered,
assessed
and evaluated, and decisions must be appropriate in the light of
such consideration, evaluation and assessment;
7
and
that decisions must be taken in an open and transparent manner.
8
In terms of the then applicable regulations (‘the EIA
regulations’)
9
the determination of an application for environmental authorisation
fell to be pronounced in a document called a ‘record
of
decision’. On 30 September 2003, the competent
authority, being the Acting Deputy Director-General of the
then
existing national Department of Environmental Affairs and Tourism
(‘DEAT’),
10
published a record of decision granting SANRAL the environmental
authorisation it needed to undertake much of the construction
work
entailed in the project. The record of decision was forwarded to
SANRAL under cover of an evenly dated letter from the competent
authority, which contained the following qualification: ‘
Please
note that all decisions with regard to the tolling of the road
[are]
the responsibility of the Department of Transport. In terms
of the applicable legislation all issues related to the positioning
of the toll plazas, other than the biophysical impacts, are also the
responsibility of the Department of Transport.
’ The basis
for the qualification was to be found in a ‘working agreement’
allegedly concluded earlier between
SANRAL and DEAT concerning the
practical application of the EIA regulations to SANRAL’s
activities in respect of the construction
and upgrading of roads
generally. The agreement allegedly contained a clause providing ‘
DEAT will only be concerned with the biophysical impacts
associated with toll plaza’s
(sic).
The toll principle
is already covered by
[the SANRAL Act]’.
11
The applicable statutory framework allowed for an appeal to the
Minister of Environmental Affairs and Tourism against the competent
authority’s determination of the application for environmental
authorisation. A number of interested parties, including
the
municipality of the City of Cape Town (‘the City’),
availed of the right to appeal.
In October 2005, the Minister announced his decision in respect of
the appeals. The decision document recorded that the Minister
had
proceeded on the premise that tolling and the ‘structuring of
toll fees’ were matters falling outside the ambit
of the EIA
regulations and thus outside his remit. He stated ‘
Socio-economic
considerations associated with tolling are adequately considered in
“the intent to toll” process. Any
attempt by
[DEAT]
to address these issues through the EIA process would constitute
unnecessary and unjustified duplication of effort between government
departments
’. He also recorded that ‘…
matters
raised in terms of intergovernmental consultation related to tolling
and the implications thereof on local and provincial
government
departments’ areas of jurisdiction are also referred to the
Minister of Transport
[for consideration in the toll-road
related processes to be conducted in terms of the SANRAL Act]’.
The Minister found
certain aspects of the record of decision issued
by the competent authority to be unsatisfactory. He stipulated
certain remedial
requirements and indicated his intention to issue a
revised record of decision within 30 days of the receipt of certain
documentation
to be provided pursuant to his remedial requirements.
Thereafter nearly two and a half years went by before, on 28
February 2008, the Minister of Environmental Affairs and Tourism
issued a record of decision authorising the ‘[c]
onstruction
and upgrading of roads and associated infrastructure on certain
sections of the National Road (N1) between the R300
and Sandhills,
Western Cape and on the National Road 2 (N2) Western cape, the
construction and upgrading of portions of the road,
construction of
toll plazas between the R300 and Bot Rivier and the construction of
the new, closed “cut and cover”
tunnel alignment through
Helderzicht, extending from west of the Danie Ackerman Primary
School up to the Victoria Street interchange…
’.
12
.
At para 2.1 of the record of decision the Minister recorded
that he had taken into consideration, amongst other matters,
the
grounds of appeal which focused on ‘[i]
n principle
opposition to tolling of the N1 and N2 in the Winelands area
’
and ‘[c]
oncerns about the consequences of tolling, in
particular diversion of traffic to the R44 road to avoid paying toll
fees
’. He reiterated that matters related to the tolling
of the roads and the structuring of toll fees fell outside the ambit
of the EIA regulations, and that they fell to be decided by the
appropriate authority in terms of the SANRAL Act. (The February
2008
decision was amended in respects not material for present purposes
in April 2008.)
Six months later, on 2 September 2008, the Minister of Transport
granted approval, under s 27(1)(a) of the SANRAL Act, for
the
declaration of the roads in question as toll roads. The ensuing
declaration was published by SANRAL in the Government Gazette
on
15 September 2008.
On 16 March 2010, SANRAL issued an invitation to tender for the
design, construction, finance, operation and maintenance
of the
declared toll roads under a concession contract. The invitation was
open until 20 September 2010. Tenders from three
bidders were
submitted in response to the invitation. On 21 April 2011,
SANRAL selected two of the bidders to proceed to
a ‘best and
final offer’ stage of the tender process.
Various exchanges occurred between the City and SANRAL between April
and November 2011 in which the City requested SANRAL to
hold off
awarding the tender in order to allow for negotiations between the
parties regarding its objection to the tolling option.
These
exchanges did not give any result and SANRAL made it evident it was
proceeding with the scheme.
In July 2011, the City therefore formally declared a dispute with
SANRAL in terms of the
Intergovernmental Relations Framework Act 13
of 2005
. During the latter part of the exchanges between the City
and SANRAL, reports appeared in the press that the Minister of
Transport
had imposed a moratorium on all toll projects until the
completion of a consultative process that he intended to undertake
with
interested and affected parties. Those reports appear to have
borne some relationship to the public outcry that erupted at about
that time concerning tolling in Gauteng. The City enquired of SANRAL
as to the accuracy of the press reports. It received an
equivocal
response.
In September 2011, SANRAL announced its choice of the sixth
respondent as the preferred bidder in the tender process. In its
annual report for 2012 this decision was described by SANRAL as the
award of the tender to the sixth respondent.
On 7 October 2011, the City instituted proceedings in this court for
interim relief in which it sought a prohibitory temporary
interdict
in terms essentially similar to that sought in the interdict
application currently before the court. That application
was
postponed indefinitely by an agreement reached between the parties
in December 2011. The terms of the agreement posited that
the City
would not institute review proceedings until after the conclusion of
the intergovernmental dispute resolution process
then in train. The
postponement agreement further provided that if the contemplated
judicial review application had not been
‘finalised’ by
31 March 2012, and SANRAL thereafter intended to proceed with
the project, it would afford the
City at least 45 days notice of its
intention to do so.
On 16 March 2012, the facilitator in terms of the
intergovernmental dispute resolution process reported, in terms of
s 43(1)(b)
of Act 13 of 2005, that the dispute resolution
process had come to an end. The process did not resolve the dispute.
When the endeavours to resolve the City’s concerns in terms of
the intergovernmental dispute resolving mechanism proved
unsuccessful, the City instituted the review applicationon 28 March
2012. It seeks the judicial review and setting aside
of the
following decisions:
The decision of the competent authority to grant environmental
authorisation for the project;
The decision of the Minister of Environmental Affairs and Tourism
to effectively dismiss the appeals against the grant of
environmental authorisation by the competent authority;
The decision of the Minister of Environmental Affairs and Tourism
in February 2008 (as amended in April 2008) to grant a revised
environmental authorisation for the project;
The decision of the Minister of Transport in terms of s 27(1)
of the SANRAL Act to approve the declaration of the portions
of the
national roads in question as toll roads;
The decision of SANRAL to declare the affected roads as toll roads;
alternatively, to 1-5, above,
The decision of SANRAL to award the tender for the project to the
Protea Parkways Consortium (this aspect of the review application
is the subject of an application to amend the notice of motion,
which will be addressed later in this judgment); and
SANRAL’s failure to make a decision, as provided for in
s 27(1)(a)(ii) of the SANRAL Act, to withdraw the declaration
to toll the affected roads. (Attendant on this head of relief the
City also seeks orders directing SANRAL to consider and decide
whether to withdraw the declaration and to notify the City of its
determination in that regard and of the reasons therefor.)
The City has also applied conditionally in the review application for
a declaration that s 27 of the SANRAL Act is inconsistent
with
the Constitution of the Republic of South Africa and accordingly
invalid. The condition subject to which that declaration
is sought is
a finding by the court that determines the review application that
the provision prevents the Minister of Transport
from determining the
amount of the toll that may be levied before or simultaneously with
any related decision to approve the declaration
of a toll road.
13
To the extent necessary, the City has also applied in the review
application for an extension of the period of 180 days referred
to
in s 7(1) of the Promotion of Administrative Justice Act 3 of
2000 (‘PAJA’) to the date when the review application
was instituted, and, also to the extent necessary, condoning the
City’s delay in bringing the application.
On 19 June 2012, approximately 3 months after the review application
had been launched, SANRAL and the second and third respondents
filed
a ‘consolidated’ record of proceedings in purported
compliance with rule 53(1) of the Uniform Rules of Court.
The record
was substantial and the City’s attorneys consequently sought
an extension of time (as contemplated in terms
of rule 27) in order
to consider and deal with it for the purpose of supplementing the
City’s founding papers in the manner
contemplated in terms of
rule 53(4). There was no response to the City’s request for an
extension of time. In October 2012,
the City’s attorneys
indicated that in their opinion the record of proceedings provided
by SANRAL and the Ministers was
deficient in certain identified
respects. Theyasked for the alleged deficiencies to be addressed.
On 30 January 2013, SANRAL responded to the effect that all of the
documents which had been made available to the respondent
decision-makers had been included in the consolidated record, or
their absence had been explained in the affidavits filed in
support
of the provision of that record. Two weeks later, SANRAL urged the
City to either ‘move on’ with the review
application, or
to bring any application it might wish in respect of its complaints
about the alleged deficiencies in the rule
53 record. On 22 February
2013, the State Attorney, representing the second and third
respondents, advised that all the
documents which had been before
the respective Ministers when the impugned decisions were taken had
been listed in the consolidated
record of proceedings that had been
delivered by SANRAL and the second and third respondents.
A dispute also arose between SANRAL and the City as to whether the
decision of SANRAL in September 2011 to declare the sixth
respondent
as the preferred bidder for the award of the contract to undertake
the project fell within the terms of the relief
sought by the City
in the notice of motion in the review application. In an endeavour
to address the dispute, the City gave notice,
in terms of rule 28
of the Uniform Rules, of its intention to amend the relevant wording
of its notice of motion. SANRAL
opposed that amendment. An
application by the City in terms of rule 28(4) therefore became
necessary to effect the contemplated
amendment.
On 1 March 2013, the City instituted the interlocutory application
for an order allowing the amendment to the notice of motion
in the
review application and directing that the provisions of rule 35
relating to discovery be made applicable to the review
application
to the extent necessary, and alsorequiring the production by the
respondents of various documents described in paragraph
4 of the
notice of application. The essential problem with the record
produced was that it did not contain the documentation
pertaining to
the decision to choose the sixth respondent as the preferred bidder
for the BOT tolling contract. This was due
to SANRAL’s
understanding of the relief sought in terms of paragraph 2.1.1 of
the notice of motion in the review application.
As to be expected,
all the parties cited as respondents in the review application were
also cited as such in the interlocutory
application.
Five days after the institution of the interlocutory application, on
6 March 2013, SANRAL gave 45 days’ notice of
its
intention to proceed with the project.
On 27 March 2013, the City applied afresh for an interdict
prohibiting the undertaking of any measures to advance the
achievement of tolling the roads pending the final determination of
the review application. This application is the interdict
application for current purposes. The seven respondents cited in the
interdict application are the same parties as those cited
as the
first to seventh respondents in the review application.
14
The earlier interdict application, which had been postponed by
agreement, was still pending in March 2013, but it has since been
withdrawn.
It is convenient to deal with the interlocutory application first.
The interlocutory application
As mentioned, the City has applied in the interlocutory application
to amend its notice of motion in the review application.
The
amendments which the City wants to effect are:
To seek additional declaratory relief by means of the insertion
into the City’s notice of motion of a paragraph to be
numbered 2.1A reading as follows:
‘
The decision of SANRAL to
select the sixth respondent as the Preferred Bidder in respect of the
N1/N2 Winelands Concession Contract
and / or to award the tender for
the N1/N2 Winelands Concession Contract to the sixth respondent in or
about September 2011 is
declared to be unlawful, invalid and of no
force or effect.’
The amendment, by the insertion therein of the underlined words, of
paragraph 2.1.1 of the notice of motion to read as follows:
The decision of SANRAL
to select the sixth respondent
as the Preferred Bidder in respect of the N1/N2 Winelands Concession
Contract and/or
to award the tender for the N1/N2 Winelands
Concession Contract ('the Tender”) to the sixth respondent in
or about September
2011.
SANRAL objected to the proposed amendment. Its notice of objection
in terms of uniform rule 28(3) set out the following grounds
for the
objection:
that the City’s proposed amendment sought to introduce
additional relief not supported by the City’s founding
affidavit, which if granted would result in the City’s
founding affidavit not making out a
prima facie
case for the
relief claimed in the proposed amendment; and
that there had been no decision taken by SANRAL to ‘award the
tender’ for the project and thatthe City thus sought
by the
amendment to introduce a further ground of review, namely, that
relating to the selection of the sixth respondent as
the preferred
bidder. SANRAL contended that the selection of a preferred
bidderdoes not constitute administrative action and
is not
susceptible to review as it has no direct external legal effect as
far as the City is concerned.
Notwithstanding jurisprudence to the effect that a party is limited
to the grounds set out in its notice in terms of rule 28(3),
15
SANRAL has raised additional grounds in its affidavit opposing the
application for amendment. The additional grounds of objection
are
(i) that the City does not have legal standing to seek the
amended relief; (ii) prejudice related to the costs
associated
with producing an expanded record of the administrative decision and
(iii) the City’s failure to ask for
an extension of the
180 day outer time limit in terms of s 7 of PAJA to the date of
the effecting of the amendment. I have
not found it necessary to
decide whether SANRAL is indeed precluded on a proper application of
rule 28 from raising additional
grounds of objection in its opposing
affidavit because, even if it were not, I can find no merit in any
of the grounds of opposition
which it has raised.
The general approach to applications for amendment is well
established. It is comprehensively discussed in Van Loggerenberg and
Farlam (ed),
Erasmus, Superior Court Practice
at B1-178A –
B1-184A. Suffice it to say that, certainly at an early stage of
proceedings, such as in the current matter
where answering papers in
the review application have not yet been delivered, ‘…
the
practical rule adopted
[is]
that amendments will always be
allowed unless the application to amend is mala fide or unless such
amendment would cause an injustice
to the other side which cannot be
compensated by costs, or in other words unless the parties cannot be
put back for the purposes
of justice in the same position as they
were when the pleading which it is sought to amend was filed
’;
(per Watermeyer J in
Moolman v Estate Moolman
1927 CPD
27
, at 29). There is no suggestion that the amendments are being
sought
mala fide
.
The decision to choose the sixth respondent as the preferred bidder
is clearly the decision that has from the outset been the
subject to
the challenge mounted in the City’s founding papers in the
review application. The amendments are sought really
to address the
distinction between the choice of a preferred bidder and the actual
award of a tender contract. It is not in dispute
that the tender
contract has not been concluded. It is SANRAL that has attached
importance to the distinction. Drawing on the
distinction it has
failed to produce an administrative record in respect of the
decision to appoint the sixth respondent consortium
as the preferred
bidder.
SANRAL sought to contend that the distinction was
of a substantive and material
character. It advanced that
contention in order to argue against the amendment on the basis that
the City lacked standing to
challenge on review the choice of a
preferred bidder as opposed to the conclusion of a tender contract
with the bidder. SANRAL
sought support for its argument in the
Supreme Court of Appeal’s judgment in
Greys Marine Hout Bay
(Pty) Ltd and Others v Minister of Public Works and Others
2005 (6)
SA 313 (SCA). I shall address the argument based on lack of standing
presently. Suffice it to say that in the context
of the founding
papers in the review application I am satisfied the distinction is a
nice one, really nothing more than semantic
in character. (As
mentioned, there is evidence that SANRAL itself was inclined to
describe the choice of the preferred bidder
using language that
suggested the award of the tender contract. In the directors’
report included in SANRAL’s annual
report in respect of the
financial year ended 31 March 2012, it was stated, under the
subheading ‘
Principal Activities
’, that ‘
The
long awaited N1/N2 Winelands concession was awarded to
[the
sixth respondent consortium]
during the year, but has also been
suspended pending a court application
’.)The amendment
sought by the City is directed at obtaining clarity and avoiding any
ground for further confusion. Allowing
it will not occasion the
respondents in the review application any prejudice that cannot be
addressed by an appropriate costs
order. Certainly, if the evidence
does not support the amended claim, that will not occasion SANRAL or
any other respondent prejudice.
The issue of the City’s legal standing to claim the amended
relief is not one which is appropriately gone into to determine
whether its notice of motion should be amended or not. In this
respect, because one is dealing with an application, the
considerations
that might lead to the refusal of an amendment to a
pleading, if granting it would produce an excipiable summons or
plea, do
not arise. In any event, without deciding the question,
which is for the review court to do, I am certainly not persuaded
that
SANRAL’s contention, premised, as I have mentioned, on
the Supreme Court of Appeal’s judgment in
Greys Marine
,
about the City’s lack of standing is unarguably a good one.
Standing is always a sensitively facts-peculiar issue (cf.
Jacobs
en ‘n Ander v Waks en Andere
[1991] ZASCA 152
;
1992 (1) SA 521
(A), at
533J-534E). The facts in
Greys Marine
differed
totocaelo
from those in the review case. Therefore, as the Appellate Division
noted in
Jacobs
, although previous judgments on standing can
afford useful general guidance in certain respects, it is generally
of little use
to compare the facts of one case with those of another
for the purpose of determining whether a party has standing. It is
not
appropriate, certainly at a stage when the founding papers in
the review are not yet complete, to refuse the amendment on the
basis of determining that the City has no standing to impugn the
choice of preferred bidder decision. The respondent suffers no
irremediable prejudice on this approach. The lack of standing
defence remains available to it before the court that will determine
the review application. It is a defence that falls to be raised in
the answering papers in the review application.
The possibility that the administrative record may have to be
supplemented consequentially upon the amendment of the City’s
notice of motion does not afford good reason to refuse the
amendment. Any cognisable prejudice caused by the need to supplement
the record can be addressed by an appropriate costs order by the
review court. It seems to me in any event that SANRAL should
have
been able to compose the record with reference to the decision to
appoint the sixth respondent as the preferred bidder because
the
founding papers in the review application suggested clearly enough
that that is the decision (irrespective of the correctness
of its
characterisation) that the City regarded as the award of the tender.
There is no reference in the founding papers to the
executed
conclusion of a contract between SANRAL and the sixth respondent.
It is also not necessary to decide at this stage whether a decision
to choose a tenderer as a preferred bidder constitutes
‘administrative action’ as defined in PAJA. SANRAL’s
argument that it does not (which is a separate contention
from that
which it advanced on standing) falls to be determined by the court
seized of the review application. It is well established
that
decisions awarding public tenders constitute administrative action.
The City contends that
the selection of the sixth
respondent as the preferred bidder as a result of the tender process
plainly conferred rights on sixth
respondent, to the exclusion of
the other tenderers. It contends that the choice effectively
determined the cost of the project
and the tolling strategy (BOT)
and therefore clearly had an external legal effect. I need not say
more than that the City’s
contention is certainly arguable. I
can imagine that the strength or weakness of the argument will be
affected by the content
of the tender documentation, of which the
City has not yet obtained insight.
Allowing the amendment will require SANRAL to provide the
administrative record in respect of its decision to appoint the
sixth
respondent consortium as the preferred bidder.
The City has also sought orders directing the first, second and
third respondents in the review to provide additional documents.
The
Ministers have agreed to provide the documentation that the City has
sought. The application is opposed only by SANRAL.
The documentation sought in terms of paragraph 4.1 ofthe notice
of application in the interlocutory application all pertains
to the
selection by SANRAL of the preferred bidder in the tender process
undertaken for the purpose of concluding the contemplated
BOT
contract. The effect of granting the City’s application to
amend its notice of motion in the review application is
to require
SANRAL to make the administrative record pertaining to the selection
of the preferred bidder available. As mentioned,
it has undertaken
to do so. I do not consider that it is appropriate to prescribe to
SANRAL what the record should contain. If
the record that is
produced is identifiably deficient in any respect, the City can
avail of appropriate remedies to address that
at a later stage.
In paragraphs 4.2 to 4.13 of its notice of application the City
seeks an order directing SANRAL to provide the following
documentation:
4.2 agendas, board packs, minutes, reports,
documentation, recommendations, resolutions/decisions and reasons for
such decisions
of the [SANRAL] Board concerning or relating to the
declaration of the N1/N2 Winelands Toll Highway as a toll road in
terms of
s 27 of the SANRAL Act (Government Notice 978,
Government
Gazette
31422, 15 September 2008) (“the declaration”);
4.3 documentation showing any delegation or other
authorisation by the Board in regard to the declaration;
4.4 the Toll Feasibility and Toll Strategy Report and
the brief, instructions, documentation and reports provided to the
compilers
of the report;
4.5 the Financial Analysis Report prepared in August
2007 and the brief, instructions, documentation and reports provided
to the
compilers of the report (Rule 53 record v 18 p 5941 para 1);
4.6 the documentation reflecting the capital and
operating cost projections for the Project provided by the Consortium
(Rule 53
record v 18 p 5820 para 1.2);
4.7 the documentation detailing the Project design and
cost details provided by the Project Engineers, Hawkins Hawkins and
Osborne
and VKE (Rule 53 record v 18 p 5820 para 1.2);
4.8 the updated traffic flow modelling data provided by
ITS in Cape Town (Rule 53 record v 18 p 5820 para 1.3);
4.9 the data and results from the intensive traffic
modelling (Rule 53 record v 13 p 4443 para 3);
4.10 the documentation reflecting the information used
to calculate the financial viability of the Projects including the
capital
and operating costs of the project and the traffic
projections (Rule 53 record v 6 p 2289 column 2 para 1);
4.11 the documentation detailing the Net Present Value
of the Project, the internal rate of return and the year when
cumulative
cash flows become positive, details which were removed
from the draft EIR at SANRAL’s request (Rule 53 record v 6 p
2289
column 2 para 2);
4.12 the brief, instructions, documentation and reports
provided to the Graduate School of Business, University of Cape Town
and/or
Professor Barry Standish and/or Strategic Economic Solutions
CC and/or Antony Boting and/or Hugo van Zyl and/or Independent
Economic
Researchers for purposes of the compilation of the Economics
Report relating to the Project and/or the Analysis of Local Toll
tariffs
Discounts for three local user groups for the Winelands Toll
Road Projects in the Western Cape;
4.13 reports or other documentation containing SANRAL’s
evaluation of the Project.
In their heads of argument the City’s counsel founded the
City’s entitlement to the relief in rule 53, rule 35 and
the
court’s inherent jurisdiction to regulate its own process. It
seems to me that it is appropriate and logical to deal
with the
application having regard to the bases upon which it is sought in the
order that they have been described in the City’s
heads. Before
embarking on that exercise, however, it might beuseful, so as to
explain my approach to this part of the application,
to discuss
briefly the City’s broadly expressed basis for the assertion of
its alleged rights in this regard.
The City’s point of departure is the right of access to
information in terms of s 32 of the Bill of Rights. The City
accepts that, applying the subsidiarity principle, the ambit and
basis for the availment of that right is defined by the provisions
of the Promotion of Access to Information Act 2 of 2000 (‘PAIA’).
Section 11 of PAIA affords everyone a very wide
right of access to
recorded information held by any public body. SANRAL plainly falls
within the defined meaning of ‘public
body’. However,
s 7 of PAIA excludes the operation of the Act if the record is
(a) requested for the purpose
of criminal or civil
proceedings;(b) so requested after the commencement of such
criminal or civil proceedings, as the case
may be; and(c) the
production of or access to that record for the purpose referred to
in (a) is provided for in any other
law. The decisions of the
Supreme Court of Appeal and the Constitutional Court in
Industrial
Development Corporation of SA Ltd v PFE International Inc (BVI)
2012 (2) SA 269
(SCA) and
PFE International and Others v
Industrial Development Corporation of South Africa Ltd
2013 (1)
SA 1
(CC) have confirmed that the rules of court concerning access
to documentation constitute provisions of other law within the
meaning of s 7 of PAIA.
The City accepts that the effect of s 7 of PAIA is to exclude
its ability in the circumstances to rely on s 11 of the
statute. It contends, however, that ‘[n]otwithstanding the
fact that the City is unable to rely on the provisions of PAIA
to
access the records, on a proper approach to the relevant Rules, the
result should be no different’.
16
Accepting that the rules of court fall, like all other legislation,
to be construed and applied in the manner enjoined by s 39(2)
of the Constitution, I do not accept that it inevitably follows that
the ‘other law’ referred to in s 7 of PAIA
falls to
be construed to give the same extent of access to information as
that provided in terms of PAIA. It all depends on the
‘other
law’. The ‘other law’ might well contain
limitations on the access of information that are not
contained in
PAIA. There can be no objection to such greater limitations if they
are reasonable and justifiable in the sense
contemplated by s 36(1)
of the Constitution. The anomaly to which this can give rise was
recognised by Ngcobo J in
Ingledew v Financial Services
Board: In re Financial Services Board v Van der Merwe and Another
[2003] ZACC 8
;
2003 (4) SA 584
(CC) at para 29, where the learned judge
contrasted the extent of a litigant’s right to access to
information on the
day before litigation commenced with that
obtaining immediately thereafter because of the effect of s 7
of PAIA. In
Industrial Development Corporation
, at para 10,
the Supreme Court of Appeal referred to this ‘anomaly’
as follows: ‘
This anomaly, that an applicant may be
entitled to information the day before the commencement of
proceedings but not the day
thereafter, must be seen as a necessary
consequence of the intention, on the part of the legislature, to
protect the process
of the court. Once proceedings are instituted
then the parties should be governed by the applicable rules of
court
’.
The purpose of the rules of the court as being to facilitate the
cost-effective, efficient and expeditious prosecution and
determination of litigation has been authoritatively confirmed; see
e.g.
PFE International
(CC) supra, atpara 27 and 30-31,
approving the
dicta
of Corbett J in
Bladen and
Another v Weston and Another
1967 (4) SA 429
(C) at 431, that in
matters bearing on the regulation oflitigious proceedingsit is not
only the rights of individuals that are
involved ‘but also
..the convenient and expeditious disposal of actions before th[e]
Court’. Thus whereas s 11
of PAIA might afford a
sustainable basis for a so-called ‘fishing expedition’,
the courts discourage such conduct
in their application of the rules
of procedure. The rules of court fall to be construed to assist a
party to properly present
its case; their purpose is not primarily
to provide a party with the means to find a basis for a case. A
party commencing litigation
is generally expected to know and define
its case in its founding documents. What may thereafter be accessed
by way of documentation
from other parties or witnesses is confined
to what is relevant to the case that is being prosecuted. This is
necessary if the
aforementioned objects of the rules are to be
achieved.
Bearing the aforementioned general considerations in mind it is time
to move onto the address the bases on which the City makes
its
application for relief in terms of para 4.2 -4.13 of the notice
of motion.
Rule 53, of course, is the provision that regulates the forms and
procedures pertaining to applications for judicial review.
Rule
53(1)(b) provides that the person or body whose decision is impugned
on review is called on in terms of the notice of motion
instituting
the review to dispatch to the registrar a copy of the ‘record
of …proceedings’. What is comprehended
by the term
‘record of proceedings’ is not amenable to finitely
bounded definition; cf. e.g.
Johannesburg City Council v The
Administrator, Transvaal, and Another
1970 (2) SA 89 (T), at
91G-92C,
Pieters v Administrateur, Suidwes-Afrika, en 'n Ander
1972 (2) SA 220
(SWA), at 226G-227C and
Afrisun Mpumalanga (Pty)
Ltd v Kunene NO and Others
1999 (2) SA 599
(T), at 613B-614C. In
Johannesburg City Council
loccit, Marais J expressed the
position thus:
The words ‘record of proceedings’ cannot be otherwise
construed, in my view, than as a loose description of the documents,
evidence, arguments and other information before the tribunal
relating to the matter under review, at the time of the making of
the
decision in question. It may be a formal record and dossier of what
has happened before the tribunal, but it may also be a
disjointed
indication of the material that was at the tribunal's disposal. In
the latter case it would, I venture to think, include
every scrap of
paper throwing light, however indirectly, on what the proceedings
were, both procedurally and evidentially. A record
of proceedings is
analogous to the record of proceedings in a court of law which quite
clearly does not include a record of the
deliberations subsequent to
the receiving of the evidence and preceding the announcement of the
court's decision. Thus the deliberations
of the Executive Committee
are as little part of the record of proceedings as the private
deliberations of the jury or of the Court
in a case before it. It
does, however, include all the documents before the Executive
Committee as well as all documents which
are by reference
incorporated in the file before it.
That the rule enjoins a generous rather than a restrictive
construction as to what falls within a ‘record of proceedings’
follows, I think, from the provision that after the record has been
made available it is for the applicant for review to make copies
of
those parts of it which it considers to be relevant for the purposes
of its review application. Thus while relevance, to be
determined
with reference to the basis for the review made out in the founding
papers, is one of the touchstones for deciding what
must be included
in a record of proceedings, the proper approach by a respondent
decision-maker to the compilation of a record
must be to adopt a
generous approach to the ambit of relevance.
I am unable, with respect, to associate myself completely with the
remarks of Marais J in
Johannesburg City Council
. It
seems to me that any record of the deliberations by the
decision-maker would be relevant and susceptible to inclusion in
the
record. The fact that the deliberations may in a given case occur
privately does not detract from their relevance as evidence
of the
matters considered in arriving at the impugned decision. The content
of such deliberations can often be the clearest indication
of what
the decision-maker took into account and what it left out of
account. I cannot conceive of anything more relevant than
the
content of a written record of such deliberations, if it exists, in
a review predicated on the provisions of s 6(2)(e)(iii)
of
PAJA, that is that impugned decision was taken because irrelevant
considerations were taken into account or relevant considerations
were not considered.
The provision of a record of proceedings by the decision-maker is in
essence,and for all practical purposes, the equivalent of
discovery
in terms of rule 35(1) by a litigant in action proceedings. The
decision-maker is, on the basis discussed earlier,
required to
include everything that is relevant in the record. The first enquiry
therefore in determining whether the documentation
sought by the
City is to be produced in terms of rule 53 is its relevance. Once it
is determined to be relevant it does not seem
to me important
whether its production is directed by way of a ruling directing
proper compliance with the duty on a respondent
in terms of rule
53(1)(b), or one in terms of rule 35(11); the substance of the
direction would be the same whichever means wereto
be selected.
The documentation referred to in paragraph 4.2 of the notice of
application is very broadly and loosely described. SANRAL has
stated
on oath that all the documents before it have been included in the
record that has been produced. The position is comparable
with that
which obtains when a litigant in action proceedings responds to a
notice in terms of rule 35(3). A litigant’s
response to such a
notice is ordinarily regarded as conclusive, and the courts are
reluctant to go behind it. I am not persuaded,
whether in terms of
rule 53 or rule 35, to go behind SANRAL’s claim in this
respect that the record produced contains all
the documentation that
was before it as the decision maker or body responsible for seeking
the Minister’s approval for
the declaration. I do, however,
consider that SANRAL is bound to produce the minutes of the
proceedings of its board of directors
at which any decisions to seek
approval for the declaration of the toll roads or to make the
declaration were discussed or decided.
Those minutes may not have
been before the board of directors when the impugned decision was
made, but they are nevertheless
germane to the decision and
relevant. The minutes may be suitably redacted to exclude material
not bearing on those decisions.
SANRAL’s counsel sought to
make something of the fact that the Agency’s decision to seek
the Minister’s approval
is not being impugned in the review
application. In my view the distinction between SANRAL’s
decision to seek the approval
and its subsequent declaration is
contrived. The two decisions are integral parts of a single course
of administrative action.
It is not appropriate in my view to seek
to distinguish them for the purposes of determining what should go
into the record of
proceedings, or what should fairly be disclosed
by the Agency on grounds of relevance in the review proceedings.
On the approach enunciated in the passage from
Johannesburg City
Council
, quoted above, documentation showing the authorisation
of a decision by SANRAL’s Board would fall to be regarded as
the
decision rather than that of the proceedings leading to the
decision, and thus arguably not properly part of the record.
However,
inasmuch as it is clear from the provisions of s 18(5)(d)
of the SANRAL Act that a declaration in terms of s 27(1) of
the
Act is a non-delegable function of the Board, and inasmuch as s 17
of the Act requires the Board to keep a record of
its proceedings,
amongst other reasons, for use as evidence in any proceedings before
a court of law, it seems axiomatic that
any pertinent record of the
board’s proceedings in relation to the impugned declaration is
relevant and should have been
produced as part of the record of
proceedings on the indicated generous approach to an interpretation
of the term in rule 53.
Rule 35(11) affords a convenient and
effective means of achieving the required supplementation of the
documentary record and
I propose to make a suitable order in this
regard with reference to that sub-rule. I do not propose to include
any reference
to documentation showing any delegation. Delegation of
the function in terms of s 27(1) of the SANRAL Act is precluded
by
the statute and there is nothing in the evidence to suggest the
existence of such documentation. If an incompetent delegation had
in
fact been made by the board, its existence should in any event
appear from the documentation that will be ordered to be produced.
The document sought in terms of paragraph 4.4 of the notice of
application was a document that was referred to in the report
submitted by SANRAL to the Minister for the purposes of obtaining
approval for the intended declaration. The index to the report
and
the content of paragraph 6 thereof indicated that the document was
an annexure to the report. It is evident, however, that
a different
document had in fact been annexed to the report. The fact that it
was incorrectly annexed would have been discernible
upon a
comparison of the content of paragraph 6 of the report with that of
the document that had been erroneously attached. In
my view it is
plain that the document that was not annexed, but should have been,
should be disclosed for the purposes of the
review. The
documentation that SANRAL intended to put before the Minister, and
presumably assumed at the time that it had placed
before him for
approval purposes, obviously must have been something of which it
took account, not only in seeking the Minster’s
approval, but
also, at least implicitly, in acting on that approval by making the
declaration. It should have been included in
the record. Even if I
am wrong in this regard, it is a document in respect of which a
direction for its production in terms of
rule 39(11) would be
indicated because of its obvious relevance. An order will be issued
accordingly.
In my view the Financial Analysis Report produced in respect of the
project in August 2007 and referred to in the introduction
to the
document produced at p. 5939 of the administrative record
obviously should have formed part of the record. Any reader
of the
document produced as part of the record is expressly enjoined by the
terms thereof to construe it with regard to the August
2007 report.
It follows that it was relevant in the sense that SANRAL and the
Minister were intended to have regard to it in
making their
respective decisions. An order will issue for its production. No
case has been made out, however, for the disclosure
of ‘the
brief, instructions, documentation and reports provided to the
compilers of the report’.
The documents sought in terms of paragraphs 4.6 to 4.8 of the record
are documents that were listed as ‘information sources’
in a section of the Economic Report prepared by Barry Standish of
the Graduate School of Business at the University of Cape Town.
The
Economic Report is part of the record and did form part of the
material to be considered by SANRAL and the Minister for the
purpose
of making the impugned decisions. There is no indication in the
evidence, however, that SANRAL or the Minister did, or
should have
had regard to the ‘information sources’ in their
consideration of the Economics Report, or that it was
at their, as
distinct from Mr Standish’s,disposal. I therefore do not
consider that the documents are sufficiently relevant
to require
production in terms of the rule 53 or rule 35(11). Frankly, if
regard is had to the ‘Study Limitations’
described
(immediately below the ‘Information sources’) in the
Economic Report, which bear centrally on the City’s
factual
basis for attack in the review, one has to ask why the City would in
any event consider the information source documentation
might assist
it in the review. The request for it bears all the hallmarks of a
misdirected fishing expedition. Relief in terms
of these paragraphs
will therefore be refused.
The ‘intensive traffic modelling’ referred to in
paragraph 4.9 of the notice of application is referred to in a
report by SANRAL to the Minister submitted for the purpose of
obtaining the latter’s approval for the toll road declaration.
It is dealt with in a section of the report treating of the
development of the toll roads on the parallel or supporting road
network. The City’s concern that no or inadequate regard was
had to the impact of tolling on the road network under its
jurisdiction forms an important part of its challenge to the
legality of the environmental and declaration-related decisions.
The
report suggests that the ‘intensive traffic modelling’
was something to which SANRAL had regard in seeking the
Minister’s
approval, and thus presumably also in its decision to avail of the
approval and make the declaration. In my
view it is plainly relevant
material in the context of the review and thus should have been
included in the rule 53 record. An
order for its production will be
made.
There is no indication that the documentation reflecting the
financial viability of the project, including the capital and
operating costs referred to in Crowther Campbell &
Associates’response to comments on the environmental impact
studies,was
before the environmental authorisation decision-maker.
On the contrary, the indications are that the information before
decision-maker
was confessedly of the limited nature apparent in
Section 4.1 of the Study. In the circumstances I am not persuaded
that the
documentation fell to be produced as part of the record, or
that it is sufficiently relevant to warrant an order for its
production
in terms of rule 35(11). Relief in terms of paragraph
4.10 of the notice of application will be refused.
Similarly, it is evident that the information sought in terms of
paragraph 4.11 of the notice of application was not before the
environmental decision-maker, having been withdrawn at the instance
of the ‘project proponents’. There is thus no
basis made
out for its production, either in terms of rule 53 or rule 35. Even
were discovery to be ordered in terms of rule
35(13), it would
seem,
ex facie
the comment at para 2 in column 2 at
p. 2289, that the documentation is not, and never was, in the
possession of SANRAL,
or indeed, the third respondent, or the
competent authority in terms of the ECA. Relief in terms of
paragraph 4.11 of the notice
of application will therefore be
refused.
The relief sought in terms of paragraph 4.12 of the notice of
application will be refused for the same reasons as those given
in
respect of the partial refusal of that sought in terms of paragraph
4.5. There is no reason to believe that the decision-makers
had
regard to,or were enjoined by the Report to have regard to, anything
but the content of the Economic Report in making the
declaration-related decisions. That SANRAL commissioned the report
does not make the brief it provided to Mr Standish relevant
material
for the purposes of the review. I do not consider that the material
properly fell to be included in the record of proceedings.
I am also
not persuaded that any proper basis has been laid for the court to
exercise the discretion invested in it by rule 35(11)
in favour of
the City.
Having regard to the information before me in respect of the record
of proceedings produced by SANRAL in terms of rule 53, the
relief
sought in terms of paragraph 4.13 is too vaguely framed to merit the
order sought. Relief in terms of that paragraph will
be refused.
The City’s counsel indicated at the hearing that they did not
persist in seeking relief in terms of paragraph 5 of the
notice of
motion. Costs of the interlocutory application were sought only
against SANRAL, and not against the Ministers.
For completeness I should perhaps mention that I was not persuaded
to make the provisions of rule 35 apply generally in the review
proceedings, as sought in terms of paragraph 3 of the notice of
application.Notionally, such a ruling would be possible
in terms of
rule 35(13). Resort to rule 35(13) has been held on repeated
occasions to be justified only in exceptional circumstances.
Mr
Paschke
, who argued this part of the application for the
City, emphasised that the sub-rule did not itself expressly import
the requirement
of ‘special circumstances’ and contended
that the indications that discovery in motion proceedings should be
exceptional
was reflective of a pre-constitutional mindset that did
not take into account sufficientlyeveryone’s right of access
to
information in terms of s 32 of the Constitution. I have not
found it necessary to pronounce on these arguments. I have been
able
to dispose of the City’s disclosure requirements applying
rules 53 and 35(11)using the touchstone of relevance. It
is clear
that a court may exercise its power in terms of rule 35(11) in
motion proceedings without the need to invoke rule 35(13).
SANRAL’s
counsel, quite correctly, did not argue to the contrary. In the
context of the approach to the application that
I was able to adopt,
it was also unnecessary to reach the question of use of the court’s
inherent discretion to regulate
its own procedure. (It does seem to
me, however, that if a court were to be driven that far, the
application of s 7 of PAIA
might be questionable because a
regulation of procedure devised by the court in the exercise of its
inherent powers does not
obviously qualify as ‘other law’.)
The interdict application
Turning now to the interdict application; the requirements that an
applicant for interim interdictory relief must satisfy are
well
established. They are (a) the existence of a
prima facie
right,
even if it is open to some doubt; (b) a reasonable apprehension by
the applicant of irreparable and imminent harm to the
right if an
interdict is not granted; (c) the balance of convenience must favour
the granting of the interdict and (d) the applicant
must have no
other effective remedy.
17
Moreover, the remedy is discretionary. Thus even if an applicant
satisfies all the requirements, it remains within the discretion
of
the court (obviously to be exercised judicially) to grant or decline
an interim interdict.
18
The
court assesses the evidence holistically to determine whether the
requirements have been satisfied and, if they have, how
to exercise
its discretion.
The aforementioned well-established requirements for an interim
interdict were described recentlyby the Constitutional Court
in
National Treasury and Others v Opposition to Urban Tolling
Alliance and Others
2012 (6) SA 223
(CC) (‘
OUTA
’)as
‘
initially fashioned for and .., ideally suited to
interdicts between private parties
’. They were nonetheless
endorsed in the majority judgment of the Court as sufficient to
determine applications to restrain
the exercise of statutory power
pendentelite
, provided that any court disposed to do so takes
appropriate cognisance of the trenching effect the grant of such
restraining
order can have on the exclusive domain of another branch
of government, and therefore proceeds sensitive to the
constitutional
role of the doctrine of the separation of powers in
respect of any decision to make the order.
There was some debate between the parties in argument as to the
impact of the judgment in
OUTA
on the current application. In
their written heads of argument counsel for SANRAL appeared to treat
the effect of the judgment
as having introduced something new. Mr
Budlender
SC who, together with Ms
Bawa
and Mr
Paschke
, appeared for the City, submitted that the judgment
did no more than restate existing principle, including that courts
must always
be conscious of the limiting effect of the
constitutional framework within which they exist and function. He
pointed out that
one had to have regard in interpreting the judgment
in
OUTA
to the context in which it was given.
The matter in issue in
OUTA
was an appeal against the
granting of an interim interdict prohibiting the tolling of roads in
Gauteng Province pending the determination
of a pending review of
the decisions to declare the roads as toll roads. Both the interdict
and review applications in that matter
were instituted at a stage
when the roads in question had already been constructed, at a cost
of over R20 billion. The consequences
of interdicting the
tolling of the roads would be enormous; so much so that even the
country’s sovereign credit rating
would be susceptible to
adverse effect. The monthly loss to SANRAL in having to cover the
operation of the roads during the period
that any interdict remained
in force would be R670 million and special appropriations of
funds by the National Treasury
would be required to address the
consequences. The extent of the trenching effect of an interim
interdict on the domain of the
executive was manifest and,in the
circumstances,was a matter that the court of first instance should
have weighed seriously in
the exercise of its discretion. The
trenchant terms in which the Constitutional Court expressed itself
in the majority judgment
were no doubt inspired by the fact that the
court of first instance, in what, with respect, might be regarded as
a rather readily
idenitifiable misdirection, appeared to have had no
regard whatsoever on the impact of the order it made in the face of
very
starkly apparent separation of powers considerations.
In
OUTA
, the Constitutional Court held,at para 45, ‘
The
Setlogelo
test, as adapted by case law,
continues to be a handy and ready guide to the bench and
practitioners alike in the grant of interdicts
in busy Magistrates’
Courts and High Courts. However, now the test must be applied
cognisant of the normative scheme and
democratic principles that
underpin our Constitution. This means that when a court considers
whether to grant an interim interdict
it must do so in a way that
promotes the objects, spirit and purport of the Constitution.
’
The Deputy Chief Justice, who wrote the majority judgment,
proceeded, at para 47, ‘
The balance of convenience
enquiry must now carefully probe whether and to which extent the
restraining order will probably intrude
into the exclusive terrain
of another branch of Government. The enquiry must, alongside other
relevant harm, have proper regard
to what may be called separation
of powers harm. A court must keep in mind that a temporary restraint
against the exercise of
statutory power well ahead of the final
adjudication of a claimant’s case may be granted only in the
clearest of cases
and after a careful consideration of separation of
powers harm. It is neither prudent nor necessary to define “clearest
of cases”. However one important consideration would be
whether the harm apprehended by the claimant amounts to a breach
of
one or more fundamental rights warranted by the Bill of Rights
’
and further, at para 65, ‘
When it evaluates where the
balance of convenience rests, a court must recognise that it is
invited to restrain the exercise of
statutory power within the
exclusive terrain of the Executive or Legislative branches of
Government. It must assess carefully
how and to what extent its
interdict will disrupt executive or legislative functions conferred
by the law and thus whether its
restraining order will implicate the
tenet of division of powers. Whilst a court has the power to grant a
restraining order of
that kind, it does not readily do so except
when a proper and strong case has been made out for the relief and,
even so, only
in the clearest of cases
’.
Those statements were illustrated with reference to earlier
jurisprudence. It is useful to have regard to the examples given
to
properly understand what the Constitutional Court found necessary to
reiterate in
OUTA
. The references to three earlier cases in
particular are salient in the reasoning of the majority judgment.
They are
Gool v Minister of Justice and Another
1955 (2) SA
682
(C),
Molteno Bros. & Others v South African Railways and
Harbours
1936 AD 321
and
International Trade Administration
Commission v SCAW SA (Pty) Ltd
2012 (4) SA 618
(CC) (‘ITAC’).
The three aforementioned judgments which the Constitutional Court
used to illustrate its judgment each afforded quite discrete
examples of circumstances in which a court had properly declined, or
should have declined, to make orders restraining the exercise
by
organs of the executive branch of the state of their functions. In
each case it did, or should have done, so having due regard
to the
exclusive terrain of another branch of government and the effect in
that context of granting the interim interdictal relief
sought by
the applicant
In
Gool
the applicant sought an interim interdict prohibiting
the exercise by the relevant Minister of a power afforded in terms
of s 5
of the Suppression of Communism Act 44 of 1950 to
require her to resign as a city councillor consequent upon her
listing,
under another provision of the statute, as a member or
supporter of the Communist Party. The right in issue was that to the
removal
of her name from the listof proscribed persons and the
attendant protection of her elected position as a city councillor,
and
which she sought to assert in pending review proceedings
19
against the decision that had put it there. A very important
consideration causing the full court to hold in
Gool
that a
‘strong’ case’ had to be made out for interim
relief, and that the court would exercise its discretion
in favour
of the applicant for such relief only ‘in exceptional
circumstances’, was the effect of s 8
bis
(1) of
the Act, which provided:
It shall in any prosecution under this Act or in any
civil proceedings arising from the application of the provisions of
this Act,
be presumed, until the contrary is proved, that the name of
any person appearing on any list compiled under sub-sec. 10 of sec.
4
or sub-section 2 of sec. 7 has been correctly included in that list.
Furthermore, there was no contention that the Minister would have
been acting unlawfully under the Act or with
mala fides
if,
while Mrs Gool’s name remained on the list, he required her to
resign her seat on the council. The interim interdict
sought would
thus have prohibited the Minister from doing what it was common
ground he might lawfully do on the facts of the case.
It was thus
clear that the interdict would trench on the Minister’s ability
to
lawfully
discharge one his functions.
It was in that context that Ogilvie Thompson J, writing for the
court, stated (at p. 688F- 689C):
The present is however not an ordinary application for
an interdict, In the first place, we are in the present case
concerned with
an application for an interdict restraining the
exercise of statutory powers. In the absence of any allegation of
mala fides
, the Court does not readily grant such an
interdict: that, I think, is clear from the judgments in
Molteno
Bros. & Others v South African Railways and Harbours
,
1936 AD
321
, relied upon by Mr.Rosenow. Furthermore, the governing statute in
the present case contains provisions which strongly militate against
the granting of the interdict sought. As has been pointed out earlier
in this judgment, while a person's name remains on the list,
the
Minister's powers under sec. 5 of the Act continue in relation to
that person. In terms of sec. 8
bis
(3), proceedings for
removal of such person's name from the list must be instituted by
action: and, not only in such action, but
also in 'any civil
proceedings arising from the application of the provisions of this
Act', it is in terms of sec. 8
bis
(1) of the Act to be
presumed, until the contrary is proved, that his name is correctly on
the list. The presence of this presumption
remains a constant and
well-nigh insuperable obstacle in the path of an applicant for an
interdict; for in any but the most exceptional
type of case it will,
in the very nature of things, be extremely difficult for an
applicant, by means of affidavit, to displace
this presumption to a
degree sufficient to warrant the granting of an interdict restraining
the Minister from exercising the statutory
powers vested in him. The
practical effect of granting an interdict restraining the Minister
from exercising his powers under sec.
5 of the Act in relation to a
person whose name is on the list is, virtually, to remove that name
from the list on motion contrary
both to the statutory presumption
that the name is correctly on the list and to the provisions of sec.
8
bis
(3) which require proceedings for removal to be by
action.
The various considerations which I have mentioned lead,
in my opinion, irresistibly to the conclusion that the Court should
only
grant an interdict such as that sought by the applicant in the
present instance upon a strong case being made out for that relief.
I
have already held that the Court has jurisdiction to entertain an
application such as the present, but in my judgment that jurisdiction
will, for the reasons I have indicated, only be exercised in
exceptional circumstances and when a strong case is made out for
relief.
The
dicta
of Ogilvie Thompson J cited in the
Constitutional Court judgment were thus uttered in a narrow
context-and-case specific context.
They were not intended to have a
generally constraining effect.
The relevance of the judgment in
Gool
to the
ratio
of
the Constitutional Court’s judgment in
OUTA
was that it
provided a factual example of a case where the grant of an interim
interdict would prohibit the Minister from lawfully
fulfilling a
function that statutory law had invested in him. In other words, the
facts demonstrated that a court order would
trench materially upon
the executive exclusive domain. It would have the effect of
prohibiting the Minister from doing that which
on the facts, as they
were, he was lawfully permitted to do. Furthermore it would do so in
the face of a statutory presumption
against the possibility that Mrs
Gool’s name had been wrongly placed on the list of proscribed
persons. The judgment in
Gool
exemplified an appreciation by
the court that it is not permissible for a court to do that unless
rule of law considerations
are sufficiently powerful factors in the
peculiar circumstances of the given case to warrant the exceptional
measure of interim
prohibitoryinterdictal relief. Such could only
happen in the strongest of cases and in exceptional circumstances
such as, for
example, a strong indication of the tainting presence
of fraud or
mala fides
.
In
Molteno Bros.
, the Appellate Division dismissed an appeal
against a judgment by this court refusing the appellant a
mandamus
and an interdict against a statutory body. The
mandamus
that
had been sought would have directed the statutory body how to reduce
the temperature at which the appellant’s deciduous
fruit was
to be stored during export procedures to a prescribed level. The
appellant had not been able to prove a failure by
the statutory body
to comply with the applicable regulations, which vested a
discretionary power in the body how to achieve the
prescribed
reduction of temperature in the storage chambers. The Appellate
Division held that in the circumstances it was not
for the court to
prescribe to the statutory body how to exercise its function and,
that in the absence of any indication of
mala fides
by the
body in the exercise of its discretion, the court had no power to
intervene in its functioning. The part of the judgment
that referred
to the court’s refusal to intervene save where there was proof
of
mala fides
was thus in the section dealing with the
mandamus
, not that dealing with the application for an
interdict. The interdict sought in
Molteno Bros.
was moreover
a mandatory interdict of an expressly final character, not an
interim prohibitory interdict
pendentelite
. The
dicta
in
Molteno
do, however, illustrate that it is not permissible
for courts to trench on the domain of the other branches of
government in
the absence of a proper legal basis for doing so, and
thus do afford an indication of what the Constitutional Court meant
by
‘proper’ in the expression ‘strong and proper
case’.
In the review case the City will contend that the disjunctive
approach to the provisions of s 27(1) and (3) of the SANRAL
Act
by SANRAL and the Minister of Transport rendered the decision to
declare the roads as toll roads unlawful and will have a
vitiating
effect on any forthcoming decision in terms of s 27(3) to
determine the tolls. Implicit in the City’s approach
is that
the Minister is therefore currently not lawfully empowered to make a
determination of the toll rates in terms of s 27(3)
and that
SANRAL is not lawfully entitled to implement measures to give effect
to the declaration of the roads as toll roads.
The City’s
argument postulates a position quite distinguishable from that which
obtained in
Molteno
. The City contends that, properly
construed and rationally applied, s 27 prescribes a process for
the declaration of toll
roads, which was not followed by the SANRAL
and the Minister, thus rendering as unlawful both what those parties
have done in
respect of making the declaration, and what they intend
to do to give it effect.
ITAC
concerned a matter in which the court of first instance,
by failing to take into account separation of powers considerations,
led itself into granting an ostensibly interim interdict that had
the effect of finally deciding an issue exclusively reserved
by
legislation to the relevant member of the Cabinet – something
which, especially having regard to the po
licy-laden
and polycentric
nature of the decision entailed, it should
not have done, save in appropriate circumstances. As in
Gool
’s
case, the circumstances in which such an intervention by the court
into the exclusive of domain of another branch of
the state could
notionally have been appropriate would be exceptional in the context
of the statutory dispensation and its attendant
polycentric and
heavily policy-laden decision-making regime.
I have concluded that the intention in the reasoning of the majority
judgment in
OUTA
was to reiterate, as a matter of established
constitutional principle, that courts seized of applications for
interim interdictory
relief
pendentelite
in matters where the
functions and powers of the executive or the legislature are
susceptible to being restrainedmust be consciously
sensitive to the
impact on the constitutionally ordained separation of powers of any
order they might be inclined to consider
making restraining the use
of executive or legislative power. Where, on such an assessment, the
impact of the restraining order
(what the Constitutional Court
labelled for convenience as ‘balance of power harm’)
looks to be significant, a court
will incline against making the
order unless a strong case for the relief has been made out, and
only in the clearest of cases.
A strong case would be one in which
the right at issue although established only
prima facie
and
open to a measure of doubt, nevertheless appears to enjoy good
prospects of being established in the main proceedings
20
and
also one in which the need for the intervention of an interim
interdict is clearly shown if irreparable harm to the applicant
is
to be averted – in other words, a case in which the balance of
convenience clearly militates in favour of the granting
of the
remedy. Such a construction would give effect, in my view, to the
evident intention in the Constitutional Court judgment
(i) to
confirm the application of the well-established requirements of the
interim interdict remedy in such cases and (ii) to
explain how
they should be applied in a manner consistent with respect by the
courts for the constitutional scheme of a separation
of powers where
the remedy would restrain the exercise of executive or legislative
power. The greater the impact of the impinging
effect of the
postulated restraining order on the domain of the executive or the
legislative branches the more circumspect, and
demanding of the
applicant’s case, the court will be before deciding that it is
appropriate to grant it. The principle
that a court does not lightly
grant an interim interdict pending the review of executive action
even if all the requirements
for an interdict have been established
is nothing new.
21
The Constitutional Court judgment in
OUTA
has fleshed out the
articulation of the principle.
I certainly do not discern anything in
OUTA
that would imply
a reversion to the approach exemplified in
Coalcor (Cape) (Pty)
Ltd and Others v Boiler Efficiency Services CC and Others
1990
(4) SA 349
(C).
22
It is also clear that the judgment in
OUTA
does not enjoin a
culture of undiscriminating deference by the courts in general, or
when seized of applications for interim
interdictalrelief in
particular, to executive conduct. The judgment does not abjure the
courts’ constitutional duty to
uphold the rule of law and to
ensure, as far as possible, the achievement of effective remedies
for breaches of fundamental rights,
including the right to lawful,
reasonable and procedurally fair administrative action.
In a matter like the current case, in which the interim relief is
sought
pendentelite
, the right in question is bound up in the
substantive remedy sought in the principal proceedings, which, as
counsel were agreed,
is not to be confused with the mere right to
approach the court for substantive relief in the principal
proceedings. Thus the
existence of the
prima facie
right, and
the extent to which its certainty is open to doubt, fall to be
determined with reference to the applicant’s
prospects of
success in the principal proceedings - as far as it is possible at
this stage to assess them.
23
The
mere existence of the right falls to be determined by considering
the facts as set out by the applicant together with any
facts set
out by the respondent which the applicant cannot dispute, and
deciding whether, with regard to the inherent probabilities,
the
applicant should on those facts obtain final relief in the main
case.
24
The
degree to which the existence of the right is open to doubt falls to
be weighed by the court with the considerations affecting
the
balance of convenience in exercising its discretion whether to grant
or refuse interim relief; the more certain the prospects
of success
(i.e. the stronger the case), the more inclined the court will be to
grant the interim remedy; the less certain, the
greater the weight
that will be attached to the balance of convenience – an
approach that has as its logical conclusion
that if the right is
certain the balance of convenience becomes irrelevant and an
entitlement to final relief is established.
Correctly identifying the right in issue as something distinct from
the right to approach a court to vindicate it on judicial
review is
not to say that the right to an effective review remedy is not a
relevant consideration. On the contrary, the Constitution
contemplates that effective remedies should be available for
breaches of constitutional rights, including, of course, the
fundamental
right to lawful, reasonable and procedurally fair
administrative action. It is trite that the implementation of
unlawful administrative
decisions can sometimes lead to practical
results that can render the remedy of judicial review so ineffectual
that a court will
decline to grant it; cf
Chairperson, Standing
Tender Committee and Others v JFE Sapela Electronics (Pty) Ltd and
Others
2008 (2) SA 638
(SCA). Thus evidence that the obtaining
of an effective remedy will be thwarted if interim relief is not
forthcoming is a relevant
consideration under the concepts of
irreparable harm and the balance of convenience.
Having established the basis in principle upon which I consider that
the determination of the interim interdict application must
be
undertaken, it is time to look at the content of the application. In
paragraphs 2 and 3 of its notice of motion in the interdict
application the City sought orders formulated as follows:
2. Pending the final determination of the review
application instituted on 28 March 2012 by the City under vase no
6165/2012 (‘the
pending review application’),
interdicting the first respondent (‘SANRAL’) from taking
or permitting any steps
to be taken to implement or advance the N1-N2
Winelands Toll Highway Project (‘the Project’), including
but not limited
to (i) the conclusion of any contract, (ii) the
commencement or undertaking of any construction activity in
furtherance of the
Project, or (iii) any other acting such as will
give rise to a claim that the decisions impugned ought not to be set
aside because
of such action.
3. Declaring that notwithstanding the order in paragraph
2 above, SANRAL shall be entitled to carry out directly or through
its
agents, work to preserve and/or extend the life of the pavement
of the portions of the N1 and N2 intended to form part of the
Project,
including storm water drainage, and to take all steps as may
be necessary to secure the safety of the public, and to keep the road
in safe condition, in accordance with its statutory mandate, provided
that such maintenance work will not amount to the advancement
of
implementation of the Project and will not be held against the City
in the pending review application.
SANRAL argued that it is apparent on the evidence that theCity’s
objection is to the method of funding the work to be carried
out on
the roads, and not to the workitself. It also arguedthat the relief
sought in paragraphs 2 and 3 of the City’s notice
of motion in
the interdict application is impracticable and in material respects
unintelligible. With reference to paragraph
2 of the notice of
motion, SANRAL argued that the City seeks to interdict it from
taking any steps to ‘
implement or advance’
the
project, including any action ‘
such as will give rise to a
claim that the decisions impugned ought not to be set aside because
of such action’
. It complained that what might constitute
an action ‘
such as will give rise
’ to such a
claim is not explained by the City. It asked rhetorically how it was
to be expected to know whether any particular
activity will give
rise to a claim that the impugned decisions ought not to be set
aside. It raised similar complaints against
the proviso in the third
paragraph of the notice of motion.
I agree that the wording of paragraphs 2 and 3 of the notice of
motion in the interdict application is problematic. Nonetheless
the
nature of the protection that the City seeks by way of interim
interdict is clear enough on the papers. It wants to avoid
steps
being taken to facilitate the introduction of a tolling scheme
before its review challenge is decided. It seemed to me
that the
City’s apparent object in seeking interim relief could be
achieved simply by an order prohibiting the conclusion
of a BOT
tender contract pending the determination of the review application.
I put this proposition to Mr
Budlender
, and after taking time
to ponder on it, he agreed that an order in those terms would
suffice if the court were inclined to grant
an interdict.
Mr
Loxton
SC, who together with Mr
Chohan
and Mr
Smith,
appeared for SANRAL argued that that there is ‘is a
complete misalignment between the relief sought [in the interdict
application],
the harm alleged, and the subject of the review
proceedings’. This argument faithfully echoed the wording used
at para 51
of the Constitutional Court’s judgment in
OUTA
to point out a misalignment between the relief sought in that case,
which was an order prohibiting tolling, and the administrative
decision the applicants sought to impugn, which was not one which,
directly at least,allowed for tolling. There is, however,
a relevant
difference between the applicant’s case on review in
OUTA
and that in the current case. In the review application in the
current case there is a contention that on a proper interpretation
of s 27 of the SANRAL Act the decisions to declare a toll road
and (at least the initial) decision to determine toll fees
are
integral, in the sense that a decision to declare a toll road cannot
rationally be taken if the decision-maker has no or
insufficient
idea what the financial and socio-economic impacts of tolling are
likely to be. According to the City’s construction
of s 27,
a decision cannot lawfully be made in terms of s 27(1) to
approve or declare a national road as a toll road
without the
decision-maker first having formed an informed idea of what the
tolls to be imposed in terms of s 27(3) are
likely to be.
Inherent in the City’s case therefore is the contention that
it is not competent for an initial decision
in terms of s 27(3)
to be made in the circumstances of this case because of the of the
vitiating ignorance that attended
the decision made in terms of
s 27(1). No such case would appear to have been advanced by the
applicant in the
OUTA
case.
25
Furthermore, and even more to the point, in the current case the
declaration of the roads as toll roads, which is the decision
the
City seeks to impugn in the review application, is a necessary
antecedent to the conclusion and execution of the imminently
anticipated BOT contract, which the City identifies as the
apprehended harmful future conduct that will impinge adversely on
its ability to achieve an effective remedy on review.
While on the subject of the alleged ‘misalignment’ of
the relief sought by the City with the decisions it seeks to
impugn
on review, I also disagree with Mr
Loxton
’s endeavour
to construe s 28(1)(b) of the SANRAL Act to the effect that a
declaration of a road as a toll road is
not a necessary precursor to
the conclusion of a BOT agreement with a third party to construct
and operate a toll road. The construction
was contended for not only
to show a misalignment of relief, but also to seek to demonstrate
that the conclusion of such an agreement
in the circumstances was
not a necessary indicator that the road would in fact be tolled, or
that that the declaration of the
roads as toll roads was bound up in
an acceptance or predisposition by the decision-maker that the costs
of the development to
be undertaken in terms of the contract would
be recouped primarily by tolling. The latter aspect to the argument
was advanced
to seek to highlight what SANRAL contended was the
wholly discrete nature of a decision in terms of s 27(3) of the
Act from
any decision in terms of s 27(1). This was an argument
advanced with some success before the Constitutional Court in the
very different context of the
OUTA
case. It is quite clear in
my view, however, that the words ‘
such
a
national road
’ in paragraph (b) of s 28(1) relate to
the words ‘
national road or portion thereof which is a toll
road in terms of section 27
’ in paragraph (a) of the
subsection.
On the basis of the City’s contentions, I do not find any
misalignment in the current matter between the relief sought
in the
review case to set aside the decision made in terms of s 27(1)
of the SANRAL Act and its apprehension of harm if
the tolling
project is advanced in a manner that will make it a
fait accompli
of such proportions or effect that a court determining the review
application somewhere down the road into the future would be
reluctant, because of the practical implications of the decision, to
afford the City an order reviewing and setting aside the
decision to
declare the roads as toll roads. Accepting that a setting aside of
the decision in terms of s 27(1) would negate
any
contemporaneous or subsequent determination in terms of s 27(3)
of toll fees and the legality of the collection of tolls,
the City
is concerned that once the works, which it is common ground will
require to be undertaken before tolling can commence,
have been
completed or significantly advanced, its right to substantive relief
on judicial review concerning its application
to impugn the decision
taken in terms of s 27(1) will have been undermined or negated.
For the purposes of determining the interdict application I have
found it convenient to restrict my consideration of the nature
and
strength of the right asserted by the City with reference to its
challenge in the review application to the decisions concerning
the
declaration of the affected portions of the N1 and N2 national roads
as toll roads. I have found it unnecessary to consider
the
challenges to the environmental authorisation decisions. Whatever
the merits of the challenges in that respect might be,
they do not
bear centrally on the tolling question, which is the real issue in
the litigation. The environmental decisions were
directed at
confirming the environmental sustainability of the contemplated
construction and upgrading of the roads. The City
supports the
concept of upgrading the roads and providing for an increase in
their capacity. It does not raise any serious concerns
about the
environmental impact. It is debatable whether or not socio-economic
impacts of the undertaking of a listed activity
that are not related
to the biophysical environmental impacts, as distinct from a
situation in which the value of socio-economic
benefits falls to be
weighed against the cost of adverse biophysical impacts (as for
example manifested on the facts in
Fuel Retailers Association of
Southern Africa v Director-General: Environmental Management,
Department of Agriculture, Conservation
and Environment, Mpumalanga
Province, and Others
2007 (6) SA 4
(CC)), are within the scope of
environmental impact assessment in terms of the applicable
legislation.
The actual concern of the City appears to go the socio-economic
impact of the method of financing the undertaking of the activity,
rather than a concern whether the activity should be undertaken
because of its adverse impact on the environment within the meaning
of s 24 of the Constitution, or as defined in NEMA. The extent
to which socio-economic considerations were investigated
and
considered in the EIA process and whether such investigation as was
undertaken fell short of the statutory requirements is
also unclear.
In its founding papers in the review application the City does
allege that the environmental impact assessment
that informed the
environmental authorisations did not deal sufficiently or at all
with the effect of ‘diversionary traffic’
resulting from
the polling of the roads. This attack touches on issues such as
cumulative impact and integrated and informed
decision-making and
could well conceivably give rise to a valid basis to impugn the
environmental decisions. However, they are
also environmental issues
that might arise only in the context of the tolling of the roads,
rather than if their upgrading and
capacity improvements were
financed by other means. The interlinkage between the City’s
complaints about the environmental
decisions and those which pertain
directly to the declaration of the toll roads, making the former
stepping stones in a sense
towards the latter, is no doubt something
that the review court will have to consider when considering whether
the delay in instituting
review proceedings in respect of the
environmental decisions should be condoned.
It is not necessary, in my view, for the court to grapple with those
questions in the current proceedings. Suffice it to say
that I am
satisfied that the applicant has made out a
prima facie
right
in the relevant sense. However, it does not appear that the City
would be opposed to the physical undertaking of the roadworks,
its
concern in the interdict application appears more to protect its
position in respect of an effective remedy against the decision
declaring the roads as toll roads. In the context of the nature of
the City’s concern I consider it appropriate to concentrate
on
its challenge to the declaration of the toll road for the purposes
of assessing whether interim relief should be granted.
That that is
indicated is confirmed by the reformulated terms
26
in which Mr
Budlender
informed me during argument that the
City was content to accept interim relief.
The legality of the declaration of the roads as toll roads is (or
will be) challenged by the City on a number of grounds in the
review
application. I shall describe them in the order in which they are
described in the City’s heads of argument. They
are (i) that
the decision by SANRAL was taken by an unauthorised functionary
without the required prior approval of the
Agency’s board of
directors; (ii) that ‘an inevitable consequence’ of
the decision is that a substantial
part of the poorest and most
vulnerable residents of the municipality will be disproportionately
adversely affected, in breach
of their fundamental constitutional
right to equality; and (iii) that the manner in which SANRAL
and the Minister of Transport
made the impugned decisions was
inconsistent with the pertinent decision-making scheme of the SANRAL
Act and thus rendered the
declaration unlawful.
The absence of any record of a decision by SANRAL’s board that
the roads should be declared to be toll roads is not yet
a ground
advanced in the City’s application in the review papers. The
first of the aforementioned grounds relied on by
the City has been
taken after its consideration of the administrative record made
available in terms of uniform rule 53, and
apparently will be added
to the review grounds in the supplementary founding papers
contemplated in terms of rule 53(4). Assuming
in favour of the City
that its point is a good one, I am nonetheless not persuaded that it
affords a proper basis for the interim
interdict it seeks. The
Agency is statutorily incorporated in terms of the SANRAL Act as a
public company with a share capital.
To all intents and purposes its
manner of operation is indistinguishable from that of any other
company. As noted, the exercise
of the powers, functions and duties
of SANRAL in connection with the declaration of a national road as a
toll road in terms of
s 27(1) of the SANRAL Act is
non-delegable by its board of directors; see s 18(5)(d) of the
Act. However, I do not
consider it to be self-evident that
s 18(5)(d) of the SANRAL Act precludes effective ratification
by the board of an unauthorised
act or decision, purportedly in
terms of s 27(1), by its chief executive officer or other
employee. The fact that the review
and interim interdict
applications are being opposed by SANRAL - and there is no
suggestion that the opposition has not been
authorised –
indicates that it is probable that, if not already ratified by
conduct, express ratification by SANRAL’s
board would be
forthcoming if required. There is nothing in the papers to suggest
that in the circumstances of a subsequent ratification
by SANRAL’s
board, an approval by the Minister of the decision, unwitting that
it had been unauthorised at the time, would
be regarded, without
more, as sufficiently material to justify a setting aside of the
declaration on review.
Mr
Budlender
advanced a number of arguments why ratification
was not a viable option in the particular circumstances. I do not
find it necessary
to canvas these for present purposes. I agree with
Mr
Loxton
that, assuming ratification becomes an issue in the
review, its determination is not something that can be anticipated
with any
confidence or certainty on the evidence currently before
me. I thus find myself unable to hold on the inherent
probabilities,as
far as they can be assessed at this stage,that the
City should (as distinct from could) succeed on this ground in the
review
application.
I am also not persuaded that interim relief is justified on the
grounds of the City’s reliance on the alleged impact of
the
impugned decision to declare the roads as toll roads on the
fundamental right to equality on the members of the poor,
predominantly
black, communities who currently use or require access
to the routes. Whatever cogency the point might or might not have,
there
is nothing in the evidence to show what the effect of tolling
on the communities identified by the Cityactually would be. No
decision has been taken on the structure of the toll, or the extent
to which the financing of the project might require to be
supplemented by monies appropriated for the purpose by Parliament.
Whether this situation of uncertainty should obtain after the
declaration of a toll road, and whether it is indicative of
decision-making inconsistent with the scheme of the SANRAL Act are
separate questions, which will be considered later in the judgment
under the appropriate head of the City’s challenges.
For the
purposes of rejecting this ground of attack in the review
application as a basis for interim interdictal relief it is
sufficient to record that s 27 of the SANRAL Act allows for
differential tolling.
27
So, for example, public transport vehicles and minibus taxis might
be exempted from tolling altogether. One just does not know.
There
is therefore not a sound enough basis for the City to say that if
the project construction work is proceeded with pursuant
to the
impugned declaration in the interim the apprehended harm based on
the infringement of the constitutional right to equality
of a
section of the City’s population will probably or necessarily
occur. There is furthermore no indication that tolling
is imminent
in the sense that there is a probability that it might be introduced
before the determination of the review proceedings.
I am not
satisfied in the circumstances that the applicant has succeeded on
this ground of its application in establishing the
requirement of a
reasonable apprehension of real and imminent harm if interim relief
is not established.
Turning then to the review ground premised on the allegation that
the manner in which SANRAL and the Minister of Transport made
the
impugned decisions was inconsistent with the pertinent
decision-making scheme of the SANRAL Act. The City contends that the
manner in which the impugned decisions was made evinces a
misconception by the decision makers of the scheme of s 27 of
the Act and resulted in an irrationality of process with a
likelihood of an irrationality of outcome.
The factual bases for the contentions are that the Minister of
Transport approved the declaration of the affected portions of
the
N1 and N2 as toll roads under s 27 of the SANRAL Act in
September 2008 without knowing the cost of the project or what
the
toll fees would be, and without considering whether the toll fees
would be affordable, or whether tolling would afford a
financially
or socio-economically appropriate or sustainable means of achieving
the work needed on the road routes in issue.
SANRAL has admitted in
its answering affidavit in the interdict application that ‘
the
affordability of the toll tariffs was not the subject of any of the
decisions which are the subject of the review’
. It also
points out (at para 81 of its answering affidavit in the
interdict application) that it currently has no means
of
recommending a toll fee in respect of the use of the roads until the
conclusion of a concession contract and the settling
of the
arrangements regarding the funding of the project. SANRAL
nonetheless has indicated that it intends proceeding to endeavour
to
achieve the conclusion of a contract of the nature contemplated by
s 28 of the SANRAL Act with the preferred bidder identified
in
terms of the tender process, alternatively, with the identified
reserve bidder, within a matter of weeks of 20 April 2013.
The
contemplated contract will ‘
will provide that the
concessionaire is entitled to levy and collect tolls as contemplated
by section 28 of the SANRAL Act
’.
28
Furthermore, the costs of the execution of the necessary
worksentailed in project, which as far as may be gauged appear to
exceed R10 billion, have not been budgeted for by Government;
it apparently being considered that they will be funded externally
and recouped through tolling. SANRAL in fact avers that subsequent
to the declaration of the roads as toll roads the Agency has
not
been entitled to call on Government to fund even the maintenance
work on the roads that has been necessary in the period
since 2008.
The City also contends that the Minister approved the declaration of
the toll roads on the basis of a report submitted by SANRAL
in
purported compliance with s 27(4)(c) of the SANRAL Act, which
failed to accurately or fairly reflect the comments and
representations made by interested and affected person in response
to the invitation to comment issued by SANRAL in terms of
s 27(4)(a)
and (b) of the Act. The evidence in support of this leg of the
challenge on the papers as the currently stand
in the review
application is premised on the assessment of the relevant
documentation by an attorney acting for the City undertaken
in what
seem to be less than ideal circumstances. I have not been able to
form an opinion of the strength or otherwise of the
City’s
case on review in this connection.
The City furthermore complains that SANRAL had improperly excluded
from its report to the Minister correspondence received from
the
then executive mayor of the City a short time after the closure of
the notice period contemplated in terms of s 27(4)(b)(ii)
of
the SANRAL Act. There is, however, no application to impugn SANRAL’s
failure or refusal to extend the minimum 60 day
period afforded to
the City in which to make its representations and comments; see
s 56(1) of the Act.
The City contends therefore that should the implementation of the
project not be interdicted, as it seeks, costs will be incurred
and
expenditure contractually committed to which will leave the Minister
of Transport no option but to set the toll fees which
he is to be
asked to determine so as to cover those costs reactively, and
without appropriate account of their socio-economic
impact.
Moreover, the work having been completed, the ability of interested
parties to make effective representations about the
financial and
socio-economic unsustainability of the tolling option would have
been rendered nugatory. This would give rise to
a process and a
result that would be irrational, and also at odds with the
requirements of lawful, reasonable and procedurally
fair
administrative action in terms of s 33 of the Constitution.
The City also contends that the process followed by the Minister of
Transport and SANRAL is irrational and liable to produce
an
irrational result. In order to grasp the import of the City’s
argument in this respect it is necessary to understand
that it is
common ground that the construction, upgrading, maintenance and
operation of roads by means of a tolling system is
materially more
expensive than by direct government funding. There is admittedly a
rational basis for choosing to use tolling.
The advantages that the
more expensive option can bring include the freeing up of government
funds for other more pressing demands
and the acceleration of the
provision of transport benefits by allowing for the building of such
road facilities by concessionaires
earlier in time than would have
been the case had the projects been required to wait in the queue
for direct funding. The SANRAL
Act moreover expressly affords a
lawful basis for the power to address road maintenance and related
issues by tolling. Determining
on tolling rather than the cheaper
option of direct funding entails a policy decision. It is not
suggested by the City that a
bona fide
policy decision by
SANRAL and national government to address the maintenance and
upgrading of the N1 and N2 by means of tolling
would be susceptible
to impugnment on grounds that a different policy might be considered
preferable or more sensible. Although
the City clearly nurtures a
policy preference for direct funding, its challenge is founded in
law; not only on what it contends
is a proper construction of s 27
of the SANRAL Act, but also, assuming its statutory construction is
wrong, on allegations
of irrationality.
The exercise of any public power – and the approval and
declaration of a national road as a toll road in terms of s 27
of the SANRAL Act is undisputedly the exercise of public power –
must be rational in order to be lawful.In
Pharmaceutical
Manufacturers Association of South Africa and Another: In re Ex
Parte President of the Republic of South Africa
and Others
[2000] ZACC 1
;
2000
(2) SA 674
(CC)
29
the
Constitutional Court held that‘
[r]
ationality
… is a minimum threshold requirement applicable to the
exercise of all public power by members of the executive
and other
functionaries. Action that fails to pass this threshold is
inconsistent with the requirements of our Constitution,
and
therefore unlawful.
’
The
Constitutional Court’s judgments in
Albutt v Centre
for the Study of Violence and Reconciliation and Others
[2005] ZACC 3
;
2006 (3)
SA 247
(CC) and
Democratic Alliance v President of the Republic
of South Africa
2013 (1) SA 248
(CC) afford well-known examples
of matters in which executive action by the President of the
Republic has been impugned on the
grounds of irrationality.
Rationality review is, in essence, the evaluation of the
relationship between means and ends. Addressing
an argument on
whether just the end decision needs to be rational, or whether the
process resulting in it should also have been
rational, for an
executive decision to standup to constitutional scrutiny,Yacoob ADCJ
observed, in para 36 of his judgment
in the latter case, that
‘
The conclusion that the process must also be rational in
that it must be rationally related to the achievement of the purpose
for which the power is conferred, is inescapable and an inevitable
consequence of the understanding that rationality review is
an
evaluation of the relationship between means and ends. The means for
achieving the purpose for which the power was conferred
must include
everything that is done to achieve the purpose. Not only the
decision employed to achieve the purpose, but also
everything done
in the process of taking that decision, constitutes means towards
the attainment of the purpose for which the
power was conferred.
’
It is not in contention in the current matter that the Minister of
Transport and SANRAL adopted the following decision-making
scheme in
respect of the declaration of the roads as toll roads:
The Minister approved the declaration without knowing the cost of
the project or what the range of the toll fees would likely
be, and
without considering whether the tollwould be affordable or whether
the project would be financially viable. SANRAL
made the
declaration under a similar disability.(An economic assessment that
was included in the information placed before
the Minister by
SANRAL for the purposes of obtaining his approval for the proposed
declaration of the toll roads dealt with
the tolls using figures
arrived at on the basis of averaging tolls recovered on existing
toll roads for illustrative purposes.
It was not argued by SANRAL’s
counsel, correctly so in my view, that this afforded any reliable
means of estimating the
tolls that would probably have to be levied
to recoup the cost of the anticipated BOT contract in the current
matter. Mr
Budlender
handed in a Traffic and Toll
Feasibility Study report that apparently preceded the decision to
declare the roads that were subject
of the OUTA case as toll roads.
I have not studied its content in any detail, but it does show that
in that case there had
been some investigation into and assessment
of the affordability of the toll and the extent to which tolling
would fund the
required expenditure. Thus, for example, it is
evident from the report that what was labelled in the report as
‘the original
open toll strategy’ would ‘not be
able to support the magnitude of the funding now required’.)
SANRAL has proceeded on the basis of the declaration made in the
aforementioned circumstances to put the BOT contract out to
tender
and to select a preferred bidder with which it intends imminently
to conclude a contract.
SANRAL intendsto ask the Minister to determine the toll fees for
the roads only once construction has been completed.
The affordability of the tolls to be levied for the use of the roads
seems to me to be a self-evidently material consideration
if the
tolling concept is to be viable. Affordability bears centrally on
the tolling option justifying the added expense it admittedly
entails. If the tolls cannot viably be fixed in a range that will
result in the costs of the execution of the anticipated BOT
contract
being recouped some other form of funding will be required to
subsidise the project. That would only add to the expense.It
is thus
no surprise to find the following statement in a government policy
document devised in terms of s 21 of the National
Land
Transport Transition Act 22 of 2000 (subsequently repealed and
replaced by the
National Land Transport Act 5 of 2009
): ‘‘
The
network may include toll roads
where they are financially
and socially viable
and
where the tolls can
contribute significantly to funding these roads
’
(emphasis supplied). The statement was made in the context of
indicating government’s intention to identify a strategic
countrywide road network policy. This was to be done in consultation
with all three spheres of government, and with a ‘a
view to
providing effective mobility and access’. The declared object
of the policy document was to embody ‘the overarching
national
five-year (2006 to 2011) land transport strategy, which gives
guidance on transport planning and land transport delivery
by
national government, provinces and municipalities for this five year
period’.
30
It
follows inexorably that the announced government policy is that toll
roads will form part of the countrywide road network ‘where
they are financially and socially viable’ and ‘where
tolls can contribute significantly to funding these roads’.
These then, on this basis too, are considerations which it would
appear should inform any decision to declare a national road,
or
part thereof as a toll road. The legislatively intended purpose of
an act of declaration in terms of s 27(1) of the SANRAL
Act
appears to me to indicate a commitment to tolling, not an intention
to allow for a consideration by SANRAL and the Ministerat
some later
stage, when measures such as the conclusion and execution of
contract in terms of s 28(1) may have intervened,
whether
tolling is financially and socially viable.
It is evident in the current case that the intention of both SANRAL
and the Minister as representative of national government
is that
tolling should, by and large, fund the works that need to be
undertaken to implement the project. The City’s argument
is
that the facts summarised above show that the process whereby the
Minister and SANRAL have committed themselves to the tolling
of the
roads leaves it entirely uncertain that they will achieve the
intended outcome and that, in the result, there is a distinct
possibility that in an
ex post facto
consideration of how to
deal with meeting costs already incurred the Minister will find
himself under pressure to impose undesirably
high tolls when the
time comes for him to make a decision in terms of s 27(3), with
adverse socio-economic consequences
for the City and its population.
The process and the potential result of the course taken by the
Minister and SANRAL are argued
by the City to be irrational because
of the apparent disconnect between the means and the acceptable
achievement of the intended
end.
It was in part to meet that argument that Mr
Loxton
advanced the construction of s 27 of the SANRAL Act referred to
earlier that would give a completely discrete (or ‘hermetically
sealed’, as Mr
Budlender
described it) nature to the
three salient decisions involved in the process, namely, the
declaration of the road in terms of
s 27(1), the conclusion of
a contract as envisaged in s 28(1)(b) and the determination of
tolls by the Minister in
terms of s 27(3). I have already
identified what I consider to be a fatal flaw in Mr
Loxton
’sconstruction of the provisions. The City
contends that the provisions of s 27 fall to be construed in a
manner that
would produce a rational process conducive to a rational
result. That requires an integrated reading and application of the
provisions
of subsections 27(1) and (3) and s 28(1)(b).
Such a construction, they argue, is obviously to be preferred
because
the construction contended for by SANRAL would give rise to
unconstitutionality.
The City appears to me to make out a cogent argument for the proper
construction of the provision for which it contends. It is
an
argument which, on the facts, would give rise to a viable basis for
the review challenge to the declaration decisions in terms
of PAJA.
It also makes out what I consider, without so finding, to be an
equally cogent argument that the process in terms of
which the
decision to declare the roads was taken was irrational in a
vitiating sense. I thus find that the City has, insofar
as the right
it seeks to assert is concerned, made out a strong case for the
purposes of obtaining interim relief.
But SANRAL contends that in the current matter, even if the City’s
prospects of success are rated as strong on the merits,
any
advantage the City may derive from that has been negated by the
delay in the institution of the review application.The implication
in this argument is that the review court will find itself barred by
the provisions of s 7(1) of PAJA from entertaining
the review.
Mr
Loxton
contended that the question of delay and its effect
was something that should be addressed four square in the
determination of
the City’s application for interim relief and
was not one that should just be deferred for the attention of the
review
court.
I agree that the issue of delay, while it is something to be decided
determinatively only by the review court, is nevertheless
one to be
weighed in the balance in the interdict application. If I were to be
of the view that the delay was such that it was
improbable that the
review court would entertain the main application that would be a
consideration weighing heavily against
the appropriateness of
interim relief. This would be so because necessarily inherent in
such a view would be a finding that the
City was unlikely to succeed
on review – its prospects of success would accordingly fall to
be rated poorly.
As mentioned, the City will apply in the review proceedings, to the
extent necessary, for an extension of the 180 period referred
to in
s 7 of PAJA. In terms of s 9(2) of PAJA the review court
may grant such an application if it considers that the
interests of
justice so require. The issues to be weighed in determining what the
interests of justice require within the meaning
of s 9 of PAJA
are essentially the same as those which would have fallen to be
weighed in the second leg of the common law
delay rule test. That
entails that the court exercises a broad discretion in the light of
all the relevant facts in deciding
whether or not to condone an
unreasonable delay (see
Oudekraal Estates (Pty) Ltd v The City of
Cape Town and Others
2010 (1) SA 333
(SCA), at para. 57).
In my judgment it is axiomatic that the commitment by the state to
an undertaking that will entail the expenditure of more than
R10
billion is a matter of significant public interest. In a situation
where the applicant is assessed to enjoy good prospects
of success
in establishing that an undertaking of that significance is being
proceeded with on an unlawful basis I considerthat
a court would not
lightly exercise its discretion against dealing with the review
because of the delay, especially if nothing
effective had by then
been done to implement the decision. I venture that the public
interest in the finality of decisions, which
is the underpinning
rationale of the delay rule, would weigh less in the scales in the
peculiar context than the public interest
against the unlawful
commitment to a large scale construction contract that might impact
significantly and adversely on the public
purse and, according to
the City, on the socio-economic environment of the City of Cape
Town. I therefore consider that that
there is a reasonable prospect
that the review court would be inclined in the circumstances to
regard it as being in the interests
of justice to grant relief in
terms of s 9(2) of PAJA.
SANRAL has indicated that it would like to conclude the BOT contract
with the preferred bidder, or failing that, with the reserve
bidder
by the beginning of June, or as soon as possible thereafter. There
will thereafter be a process to raise funding for the
undertaking of
the works. It is not altogether clear at this stage what the fund
raising process will entail, but a mixture of
what is called debt
(i.e. borrowings) and equity (i.e. the raising of capital by the
sale of shares in the consortium) is envisaged.
Thereafter the works
will commence. SANRAL says that some of the work on the roads is
urgently needed, and thus one may reasonably
expect that the works
might be expected to commence quite expeditiously after the
conclusion of the contract. It is not clear
at this stage when the
review application is likely to be heard. The result of the
amendment application is that an additional
record must be produced.
When I suggested to counsel that they might agree on a timetable to
facilitate the expeditious hearing
of the review I was subsequently
informed that having considered my request both sides agreed that
the way forward was not that
easy. SANRAL says that it will need
much longer than the period afforded in terms of the rules to
produce the additional record.
The record, so I am advised by
counsel, will contain material in respect of which various parties,
including the bidders, will
probably wish to assert the right to
confidentiality. Directions from the court will foreseeably be
required to address these
and other issues,; so much so that counsel
suggested that it might be appropriate for the review application to
be allocated
to a judicial case manager. Thus whereas I would have
hoped that a timetable could have been put in place to achieve the
hearing
of the review in the last term of this year, the reality is
that this would seem overly ambitious.
In the result, if the contract were to be concluded at the beginning
of June, or soon thereafter, much might happen towards the
implementation of the project between now and the initial
determination of the review, and much more between now and the
determination
of any appeal from that judgment.Mr
Loxton
argued that the City has failed to provide evidence as to what is
likely to happen in respect of the implementation of the project
between now and the determination of the review. He suggested that
this was a fatal flaw because a situation had not been demonstrated
where the contract work would be so far advanced when the review is
determined as to afford a reasonable foundation for the City’s
apprehension that if interim interdictal relief is not afforded it
will be denied an effective remedy on review. The argument
is not
convincing in my view. Having regard to the respective protagonists’
ability to adduce evidence on this sort of
detail, I would have
expected SANRAL to show that little effective would be done between
now and the likely determination of
the review application. SANRAL
is possessed of the evidential material to be able to have provided
particulars in this respect
to negate the City’s apprehension
of irreparable harm. It did not employ it. All it did was to give an
undertaking not
rely to on the implementation of the BOT contract as
a ground to contend that the City was entitled to relief on review.
I agree with the contention of the City’s counsel that
SANRAL’s undertaking offers little comfort in the
circumstances.
There are other respondent parties to the review
(including the Minister of transport and the preferred bidder and
anticipated
party to the BOT contract) who have not given any such
undertaking and might well adopt a contrary position to that of
SANRAL
in respect of the effect of the implementation of the
declaration. The National Treasury, which is currently not a party
to the
proceedings, could conceivably apply for leave to intervene,
as it did in
OUTA
.
31
The reason that National Treasury intervened before the court of
first instance in
OUTA
was because the consequences of
expenditure already incurred in respect of the construction of the
toll at the time of the proceedings
impacted on the
fiscus
.
It is not far-fetched, having regard to the basis upon which SANRAL
intends to proceed with the award of the BOT contract before
the
sustainability of toll funding has been established, that National
Treasury could assert an interest after construction has
commenced
that they have no reason to assert now. SANRAL has notably
refrainedfrom indicating where the funding for the work
to which it
will be contractually committed will come from in the event that the
review court sets aside the declaration of the
roads as toll roads.
The City’s apprehension that it might then find itself in an
OUTA
situation, with an attendant adverse effect on its being
able to obtain an effective remedy on review regardless of the
strength
of its case on legality, is by no means unreasonable.
SANRAL contends that work is urgently needed on portions of the
roads. Its contentions in this respect are contradicted by expert
opinion evidence adduced by the City and also by the content of some
of its own road-condition reporting documentation. It is
evident in
any event that SANRAL has not been prevented by the absence of a BOT
contract from attending to some work on sections
of the road
subsequent to their declaration as toll roads. It would appear that
this work has been funded from the funds that
SANRAL is required to
maintain separately in terms of s 34(3) of the SANRAL Act.
32
There appears to be an apprehension by SANRAL that consequent upon
the declaration of the roads as toll roads it is limited to
funding
work on the roads by using monies collected from tolling or raised
in the manner contemplated in terms of s 28(1)
of the SANRAL
Act. As Mr
Budlender
pointed out, correctly, such
apprehension rests on an incorrect interpretation of the relevant
provisions of the SANRAL Act.
There is no limitation of SANRAL using
any funds at its disposal for the allegedly necessary work. Should
any adjustments to
the Agency’s financial plan be required by
an interim interdict it is within SANRAL’s powers and
functions under
the Act to achieve them. An interim interdict will
not have the effect of preventing SANRAL from performing essential
functions
in respect of the maintenance of the roads. The evidence
is that SANRAL currently has R9,2 billion in funds in call
accounts
at its disposal.(The allegedly urgent work will apparently
cost less than R1 billion.) I cannot conceive of any reason why
any funds applied now could not eventually be recouped under the
intended tolling scheme should the declaration of the toll roads
survive judicial review and appropriate provisions are included in
any subsequently concluded agreement with a third party in
terms of
s 28(1) of the SANRAL Act.
I am therefore satisfied that the ‘separation of powers harm’
to which this court must have regard in exercising
its discretion
with regard to the balance of convenience in the case is not of a
nature that enjoins a refusal of an interdict
in the face of the
apparent strength of the City’s case on review and the solid
basis of its apprehension that if it does
not obtain interim relief
its ability to obtain the enforcement of its right to lawful
administrative action will be irremediably
harmed. Framing the
character of the interdictal relief so as to prohibit only the
conclusion of any contract as contemplated
in s 28 of the
SANRAL Act for the financing, planning, design, construction,
maintenance, or rehabilitationof the declared
toll roadsor providing
for their operation, management and control as a toll road will
allow SANRAL to continue with all steps
necessary to bring about a
situation in which, immediately upon the determination of the review
proceedings favourably to it,
it will be able to conclude and
implement the contemplated contract. Framing interim relief for the
City in that manner will
also leave SANRAL’s powers to manage
the relevant sections of the national roads in the interim otherwise
unfettered.
I have therefore concluded for all the aforegoing reasons to
exercise my discretion in favour of granting interim interdictal
relief.
Costs
The usual approach to costs in respect of application for amendments
is that as the applicant seeks an indulgence it should pay
the costs
of such an application and that an unsuccessful opponent to the
application should be mulcted in costs only if its
opposition is
unreasonable. I find no reason to depart from that approach in the
current matter. The City has enjoyed sufficiently
substantial
success in the disclosure part of the interlocutory application to
warrant a costs order against SANRAL in its favour.
For the benefit
of the taxing master I estimate that about one and a half hours of
the combined proceedings was given over by
each of protagonists to
the argument of the interlocutory application, with that time being
equally divided between the amendment
and disclosure sections of the
application. It was agreed that the costs of three counsel were
justified. In view of the interlinked
nature of all the
applications, the urgency with which the work had to be undertaken
and the volume of material involved, I have
been persuaded to give
that agreement my
imprimatur
. The parties were agreed that in
the event of the City succeeding in the interdict application the
costs of that application
should be determined in the review
application.
Orders
The following orders are made in the interlocutory application:
To the extent that remains necessary, the City’s
non-compliance with the ordinary forms, rules of service,
requirements
for notice and time periods is condoned in terms of
rule 6(12) of the Uniform Rules.
The City of Cape Town is granted leave to amend its notice of
motion in the pending review application in case no. 6165/12
in the respects set forth in paragraph 2 of the Applicant’s
Notice of Application for Leave to Amend and to Compel Disclosure,
dated 1 March 2013.
The City is directed to pay the first respondent’s costs of
suit in respect of the application for amendment on the basis
of an
unopposed application. The City and the first respondent shall bear
their own costs in respect of the costs occasioned
by and in the
opposition to the application for amendment.
An order is made in terms of rule 35(11) of the Uniform Rules
directing the first respondent to produce all such documents
in its
possession evidencing any deliberations or decisions by its board
of directors pertaining to the decisions to seek the
Minister’s
approval for the declaration of portions of the N1 and N2 national
roads as toll roads and to declare the
roads as toll roads. Save as
aforesaid, the relief sought in terms of paragraphs 4.2 and 4.3 of
the Notice of Application is
refused.
The first respondent is similarly directed to produce the Toll
Feasibility and Toll Strategy Report referred to in paragraph
4.4
of the Notice of Application and the Financial Analysis Report
produced in August 2007 referred to in paragraph 4.5 of
the Notice
of Application, as well as the documentation comprising the
‘intensive traffic modelling’ referred to
in paragraph
4.9 of the Notice of Application.
Save as provided in paragraphs 4 and 5, above, the relief sought in
terms of paragraph 4 of the Notice of Application is refused.
The first respondent is directed to pay the City’s costs of
suit in the disclosure section of the interlocutory application;
such costs to include the costs of three counsel where such were
employed.
The following orders are made in the interdict application:
To the extent that remains necessary, the City’s
non-compliance with the ordinary forms, rules of service,
requirements
for notice and time periods is condoned in terms of
rule 6(12) of the Uniform Rules.
Pending the final determination of the pending review in case
no. 6165/12, the first respondent is prohibited from
concluding any agreement of the nature contemplated by s 28(1)
of the South African National Roads Agency Limited and National
Roads Act, 7 of 1998, pursuant to the declaration of portions of
the N1 and N2 national roads as toll roads in terms of the
notice
published in Government Notice 978, dated 15 September 2008.
The costs of the application shall stand over for determination in
the review application.
A.G. BINNS-WARD
Judge of the High Court
JUDGMENT : The Honourable Justice A.G. Binns-Ward
FOR THE APPLICANT : Adv. G. BUDLENDER SC
Adv. N. BAWA
Adv. R. PASCHKE
INSTRUCTED BY : Cullinan& Associates
FOR THE 1
st
RESPONDENT : Adv. C. LOXTON SC
Adv. M.A. CHOHAN
INSTRUCTED BY : Fasken Martineau
FOR THE 5
TH
RESPONDENTS : STATE ATTORNEY
(JOHANN BENKENSTEIN)
INSTRUCTED BY : State Attorney
FOR THE 2
nd
& 3
rd
RESPONDENTS :
Adv. J.C. HEUNIS SC
Adv. E. VAN HUYSSTEEN
INSTRUCTED BY : STATE ATTORNEY
FOR THE 6
th
RESPONDENT : NO APPEARANCE
FOR THE 7
th
RESPONDENT : Adv. N.M. ARENDSE SC
INSTRUCTED BY : A J Tappenden& Co
DATE OF HEARING : 16 & 17 May 2013
DATE OF JUDGMENT : 21 May 2013
1
Section
27 provides (insofar as currently relevant):
‘
Levying of toll by Agency
(1)
Subject to the provisions of this section, the Agency-
(a)
with the Minister's approval-
(i) may declare any specified national road or any
specified portion thereof, including any bridge or tunnel on a
national road,
to be a toll road for the purposes of this Act; and
(ii) may amend or withdraw any declaration so made;
(b) for the driving or use of any vehicle on a toll
road, may levy and collect a toll the amount of which has been
determined
and made known in terms of subsection (3), which will be
payable at a toll plaza by the person so driving or using the
vehicle,
or at any other place subject to the conditions that the
Agency may determine and so make known;
(c)
may grant exemption from the payment of toll on a particular toll
road-
(i) in respect of all vehicles of a category
determined by the Agency and specified in a notice in terms of
subsection (2), or
in respect of the vehicles of a category so
determined and specified which are driven or used on the toll road
at a time so determined
and specified;
(ii) to all users of the road of a category
determined by the Agency and specified in such a notice,
irrespective of the vehicles
driven or used by them on the toll
road, or to users of the road of a category so determined and
specified when driving or using
any vehicles on the toll road at a
time so determined and specified;
(d) may restrict the levying of toll on a particular
toll road to the hours or other times determined by the Agency and
specified
in such a notice;
(e) may suspend the levying of toll on a particular
toll road for any specified or unspecified period, whether in
respect of all
vehicles generally, or in respect of all vehicles of
a category determined by the Agency and specified in such a notice,
and
resume the levying of toll after the suspension;
(f)
may withdraw the following, namely-
(i) any exemption under paragraph (c);
(ii) any restriction under paragraph (d);
(iii) any suspension under paragraph (e).
(2)
A declaration, amendment, withdrawal, exemption, restriction or
suspension under subsection (1), will become effective only
14 days
after a notice to that effect by the Agency has been published in
the Gazette.
(3)
The amount of toll that may be levied under subsection (1), any
rebate thereon and any increase or reduction thereof-
(a)
is determined by the Minister on the recommendation of the Agency;
(b)
may differ in respect of-
(i) different toll roads;
(ii) different vehicles or different categories of
vehicles driven or used on a toll road;
(iii) different times at which any vehicle or any
vehicle of a particular category is driven or used on a toll road;
(iv) different categories of road users,
irrespective of the vehicles driven or used by them;
(c)
must be made known by the head of the Department by notice in the
Gazette;
(d) will be payable from a date and time determined
by the Minister on the recommendation of the Agency, and must be
specified
in that notice. However, that date may not be earlier than
14 days after the date on which that notice was published in the
Gazette.
(4)
The Minister will not give approval for the declaration of a toll
road under subsection (1) (a), unless-
(a) the Agency, in the prescribed manner, has given
notice, generally, of the proposed declaration, and in the notice-
(i) has given an indication of the approximate
position of the toll plaza contemplated for the proposed toll road;
(ii) has invited interested persons to comment and
make representations on the proposed declaration and the position of
the toll
plaza, and has directed them to furnish their written
comments and representations to the Agency not later than the date
mentioned
in the notice. However, a period of at least 30 days must
be allowed for that purpose;
(b)
the Agency in writing-
(i) has requested the Premier in whose province the
road proposed as a toll road is situated, to comment on the proposed
declaration
and any other matter with regard to the toll road (and
particularly, as to the position of the toll plaza) within a
specified
period (which may not be shorter than 60 days); and
(ii) has given every municipality in whose area of
jurisdiction that road is situated the same opportunity to so
comment;
(c) the Agency, in applying for the Minister's
approval for the declaration, has forwarded its proposals in that
regard to the
Minister together with a report on the comments and
representations that have been received (if any). In that report the
Agency
must indicate the extent to which any of the matters raised
in those comments and representations have been accommodated in
those
proposals; and
(d)
the Minister is satisfied that the Agency has considered those
comments and representations.
Where
the Agency has failed to comply with paragraph (a), (b) or (c), or
if the Minister is not satisfied as required by paragraph
(d), the
Minister must refer the Agency's application and proposals back to
it and order its proper compliance with the relevant
paragraph or
(as the case may be) its proper consideration of the comments and
representations, before the application and the
Agency's proposals
will be considered for approval.
(5)
…..
(6)
…..
’
2
Section
28 provides:
‘
Operation
of toll roads and levying of toll by authorised persons
(1)
Despite section 27, the Agency may enter into an agreement with any
person in terms of which that person, for the period and
in
accordance with the terms and conditions of the agreement, is
authorised-
(a) to operate, manage, control and maintain a
national road or portion thereof which is a toll road in terms of
section 27 or
to operate, manage and control a toll plaza at any
toll road; or
(b) to finance, plan, design, construct, maintain or
rehabilitate such a national road or such a portion of a national
road and
to operate, manage and control it as a toll road.
(2)
That person (in this section called the authorised person) will be
entitled, subject to subsections (3) and (4)-
(a) to levy and collect toll on behalf of the Agency
or for own account (as may be provided for in the agreement)-
(i) on the toll road specified in the agreement;
(ii) during the period so specified; and
(iii)
in accordance with the provisions of the agreement only; and
(b) in the circumstances mentioned in subsection (1)
(b), to construct or erect, at own cost, a toll plaza and any
facilities
connected therewith for the purpose of levying and
collecting toll.
(3)
Where the agreement provides for any of the matters mentioned in
section 27 (1) (b), (c), (d), (e) and (f) (ii), the authorised
person will be subject to the duties imposed on the Agency by that
section in all respects as if the authorised person were the
Agency.
(4)
The amount of the toll that may be levied by an authorised person as
well as any rebate on that amount or any increase or
reduction
thereof, will be determined in the manner provided for in section 27
(3), which section will apply, reading in the
changes necessary in
the context, and, if applicable, the changes necessitated by virtue
of the agreement between the Agency
and the authorised person.
’
3
The
‘build, operate and transfer’ concept entails that the
third party contractor will construct the toll road and
operate it
for a period to recoup its expenditure and generate a profit, and
then transfer the toll road as a going business
to SANRAL at the end
of the concessionary period.
4
Environmental
authorization of a like nature now falls to be
dealt with in terms of s 24 of Act 107 of 1998 (‘NEMA’).
5
The
application for environmental authorization was originally submitted
by SANRAL and the consortium parties jointly, but the
consortium
parties withdrew from the application, presumably because the
applicants realized, having regard to procurement legislation,
that,
even if the project went ahead, any agreement of the nature
contemplated by s 28 of the SANRAL Act, might well not
be with
the consortium parties.
6
Section
2(4)(a)(vii) of NEMA.
7
Section
2(4)(i) of NEMA.
8
Section
2(4)(k) of NEMA.
9
The
regulations were published in GNR 1183, dated 5 September 1997.
10
The
departments of environmental affairs and tourism, respectively,
currently fall under separate Cabinet portfolios.
11
The
current chief executive officer of SANRAL states that ‘to the
best of [his] knowledge’ no such agreement was concluded
by
SANRAL and denies that the independent consultant responsible for
undertaking the EIA assessment in respect of the project
excluded
any relevant or mandated investigations from the scope of the
assessment. The aforegoing quotations from the record
of decision do
suggest, however, that the competent authority was influenced by the
considerations reflected in the alleged working
agreement, whether
such agreement was ever concluded or not. (The legal consequencesof
that approach, if any, are questions that
the court seized of the
judicial review application will have to determine.)
12
Interestingly,
the authorization in respect of the erection of toll plazas appears
to have limited to the N1 on the portion of
that national road
between the R300 and Bot River.
13
While
it is not for me to purport to pre-empt any such possible finding,
it would nonetheless turn only on a question of statutory
interpretation; and of a provision with which I have had to engage
closely in the determination of the matters before me. I am
thus
able to say that I should be surprised if the court seized of the
review application were to make a finding that would satisfy
the
stated condition for the constitutional challenge to arise.
14
The
municipalities of Theewaterskloof and Breede Valley, which are the
eighth and ninth respondents, respectively, in the review
application, but are not taking an active role in those proceedings,
were omitted from the parties joined in the interdict application.
15
See
Squid Packers (Pty) Ltd v Robberg Trawlers (Pty) Ltd
1999 (1)
SA 1153
, at 1157-8.
16
Para 298
of the City’s heads of argument.
17
Cf.
National Treasury and Others v Opposition to Urban Tolling
Alliance and Others
2012 (6) SA 223
(CC),
at
para 41, where Moseneke DCJ restated the requirements with reference
to the
locusclassicus
decisions on point in
Setlogelo v
Setlogelo
1914 AD 221
and
Webster v Mitchell
1948 (1) SA
1186
(W). (The latter judgment should, of course, be read with
Gool
v Minister of Justice and Another
1955 (2) SA 682
(C) at 688 -
cf. e.g.
Simon NO v Air Operations of Europe AB
[1998] ZASCA 79
;
1999 (1) SA
217
(SCA),at 228G-H.)
18
Cf. Joubert
et al (eds)
The Law of South Africa
(LAWSA) Second Edition at
para 408.
19
The
peculiar provisions of the Suppression of Communism Act required
proceedings directed at obtaining the removal of a person’s
name from the statutory list of proscribed persons to be instituted
by way of action, but that did not detract from the essential
nature
of the remedy sought in the proceedings as being premised on the
exercise of judicial review powers.
20
Cf.
Van Loggerenberg (ed)
Erasmus, Superior
Court Practice
[Service 39, 2012]
E8-9, distinguishing the approach adopted by the House of Lords in
American Cynamid Co v Ethicon Co
[1975] UKHL 1
;
[1975] 1 All ER 504
(HL), in which the relevance
of the ‘strength of case’ test generally favoured in
South African jurisprudence (
sed
contra
Ferreira v Levin NO and Others; Vryenhoek and
Others v Powell NO and Others
1995 (2) SA 813
(W)
at
825A-B) was deprecated in favour of the balance of convenience being
the core element in determining whether interim injunctive
relief is
indicated or not.
21
See
e.g.
Transnet Bpk h/a Coach Express en ‘n Ander v
Voorsitter, NasionaleVervoerkommissie en Andere
1995 (3) SA 844
(T) at 848B, where De Villiers J remarked ‘
n
Tussentydsegebiedendeinterdik, hangendehersiening van 'n
administratiewehandeling, behoortnatuurliknieligteliktoegestaante
word nie. Selfs al is die vereistesvir die verlening van 'n
tussentydseinterdikaanvoldoen, behou die Hof steeds 'n
diskresieomtussentydseregshulpteweier.
’
22
Cf.
e.g. the discussion on
Coalcor
, and why the approach
articulated in that judgment should not be followed, by Davis J
in
Van der Westhuizen v Butler
2009 (6) SA 174
(C) at 181E -
184E.
23
Cf.
e.g.
Ferreira v
Levin NO and Others; Vryenhoek and Others v Powell NO and
Others
supra, at
832I-833B;
Ladychin
Investments (Pty) Ltd v South African National Roads Agency Ltd and
Others
, 2001(3) SA
344 (N) at 357C-E;
Van
der Westhuizen and Others v Butler and Others
supra,
at 182C-E;
Camps
Bay Residents Ratepayers Association and Others v Augoustides and
Others
2009
(6) SA 190
(WCC) at para 10 and
Capstone
556 (Pty) Ltd v Commissioner, South African Revenue Services and
Another, Kluh Investments (Pty) Ltd v Commissioner,
South African
Revenue Services and Another
2011
(6) SA 65
(WCC) at para 53.
24
Joubert
et al (eds)
LAWSA
Second Edition at para 404.
25
It
is apparent from the grounds of review described at para 7 of
the judgment determining the judicial review application
in the
OUTA
case (
Opposition to Urban Tolling Alliance
and Others v The South African National Roads Agency Limited and
Others
[2012] ZAGPPHC 323 (13 December
2012), which is accessible on the SAFLII website)
, that they
did not include an attack based on an alleged non-compliance with
the decision-making scheme of s 27 as is advanced
by the City
in the current case. The City’s review challenge in the
current case raises the question whether the declaration
of the
roads as toll roads gave effect to valid law or was a manifestation
of its misapplication. It attacks SANRAL and the Minister
of
Transport’s decisions on the basis of an allegation that they
are inconsistent with the applicable law. To paraphrase
Froneman J,
at para 93 of his minority judgment in
OUTA
in the
Constitutional Court, the playing field for the contestation of the
decision-making scheme of s 27 of the SANRAL Act ground
of review in
the current case is statutory compliance, not government policy; the
question falls to be answered judicially, not
politically. That does
not avoid the duty of the court to consider the effect of interim
relief on the executive’s wish
to exercise the functions that
the statute vests in it before the contested construction of the
statute is determined by the
court that will be seized of the review
application.
26
See
para above.
27
See
ss 27(1)(c) and 27(3)(b).
28
The
quotation is from para 96.2 of SANRAL’s answering
affidavit in the interdict application.
29
At
para 78.
30
Section
39(1) of the SANRAL Act requires the Minister of Transport to make
known government's policy with regard to national roads
in the
Government Gazette. No such notice in terms of s 39(1) was made
available to me. It appears uncertain if one has
ever been
published. Nevertheless,
it is inherently improbable that the
policy published under Act 22 of 2000 would be inconsistent with any
published government
policy on nation roads contemplated by the
SANRAL Act. The prescribed object of the policy document under Act
22 of 20000 was
intended to reflect an overarching land transport
policy. It would therefore be expected to be embracive of, rather
than in conflict
with, more detailed policy components such as
government policy on national roads.
31
See
the judgment of the court of first instance in the interim interdict
application in
OUTA
(
Opposition to Urban Tolling Alliance
and Others v The South African National Roads Agency Limited and
Others
[2012] ZAGPPHC 63 (28 April 2012)), which is
accessible on the SAFLII website.
32
Section
34(3) of the SANRAL Act provides:
The
Agency must keep separate accounts of all moneys received as toll or
otherwise in connection with toll roads and of the interest
earned
on the investment of those moneys. Those moneys may be used only
for-
(a) meeting expenditure connected with the
acquisition of land for toll roads, any investigations and surveys
with regard to toll
roads and the planning, designing and
construction of, and any other work in connection with, toll roads,
including the erection
of toll plazas and any facilities in
connection therewith;
(b) the maintenance and operation of toll roads and
toll plazas and any facilities connected with toll roads and toll
plazas;
(c)
paying off any loan mentioned in section 61 (5) (a) or raised in
terms of section 33 to finance toll roads, and the payment
of
interest on such a loan.