City of Cape Town v South African National Roads Agency Ltd and Others (6165/2012) [2015] ZAWCHC 135; 2016 (1) BCLR 49 (WCC); [2016] 1 All SA 99 (WCC); 2015 (6) SA 535 (WCC) (30 September 2015)

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[2015] ZAWCHC 135
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City of Cape Town v South African National Roads Agency Ltd and Others (6165/2012) [2015] ZAWCHC 135; 2016 (1) BCLR 49 (WCC); [2016] 1 All SA 99 (WCC); 2015 (6) SA 535 (WCC) (30 September 2015)

REPUBLIC
OF SOUTH AFRICA
IN
THE HIGH COURT OF SOUTH AFRICA
(WESTERN
CAPE DIVISION, CAPE TOWN)
Case
number: 6165/2012
DATE:
30 SEPTEMBER 2015
In
the matter between:
CITY
OF CAPE
TOWN
...........................................................................................................
Applicant
And
SOUTH
AFRICAN NATIONAL ROADS AGENCY
LTD
.......................................
First
Respondent
MINISTER
OF
TRANSPORT
................................................................................
Second
Respondent
MINISTER
OF WATER & ENVIRONMENTAL
AFFAIRS
.................................
Third
Respondent
AND
SEVEN
OTHERS
...........................................................................
Fourth
to Tenth Respondents
JUDGMENT
Before:
The Hon. Mr Justice Binns-Ward
The
Hon Ms Justice Boqwana
Hearing
dates: 11-14, 17-18 August 2015
Judgment
delivered: 30 September 2015
BINNS-WARD J
et
BOQWANA J:
[1]
The City of Cape Town (‘the City’)
seeks the judicial review and setting aside of a number of decisions
that were made
by the first, second and third respondents in the
exercise of public powers.  The decisions concerned the intended
construction
and upgrading of sections of the N1 and N2 national
roads and their declaration as toll roads. The City has also applied
for related
declaratory and interdictal relief, which will be
described later.  The first respondent is the South African
National Roads
Agency (‘SANRAL’).  The second
respondent is the Minister of Transport. The third respondent is the
Minister of
Water and Environmental Affairs, who has been cited in
her capacity as the successor in law of the former Minister of
Environmental
Affairs and Tourism.  A number of other parties
were joined as respondents, but they played no active part in the
proceedings.
[2]
In
some respects this case hardly needs introduction because of the wide
extent of the publicity it has received.
For
the past few months, on an almost daily basis the news media have
carried reports and commentaries– even by the litigants

themselves – using parts of the content of the papers.
[1]
Urban road tolling has for some years been a highly controversial
issue in this country and, predictably in the circumstances,
the case
has been the subject of much political tub-thumping using selective
extracts from the court papers; on occasion even before
they were
filed of record.  This came to our notice because judges follow
the news like everyone else.
[3]
Public argumentation on the content of the
papers before a matter comes to hearing, particularly in a matter of
heated political
controversy, can engender misconceived expectations
of what the court can and should deliver.  It tends to generate
the sort
of publicity that beclouds the drier and less emotive legal
questions on which this type of case usually turns.  It also has

the potential, because of the political fanfare it attaches to what,
objectively, should be recognised as purely forensic proceedings,
to
leave the public disaffected if the judgment fails to meet the
engendered expectations.
[4]
We
are concerned that the nature and extent of the pre-hearing publicity
that the case has received, both before and after the hearing,
might
have given rise to a popular misconception that it is the function of
the court to be the ultimate decider whether the roads
should be
tolled, or to the unfounded expectation that a successful challenge
by the City would legally finally put paid to any
plan by SANRAL and
the national government to toll the roads.  The widely
publicised debate between the City and SANRAL after
judgment had been
reserved in which any decision that might be given upholding the
review was reportedly characterised by SANRAL
as handing the City ‘a
political victory’ added to the concern.
[2]
It is thus important at the outset of this judgment to emphasise that
it is
not
the function of the courts to determine one way or the other whether
the roads should be tolled.
[5]
We think it might be useful in the
circumstances to commence with a brief explanation of the legal
context of the City’s application
for judicial review and the
constitutional nature of the court’s power in adjudicating it.
The legal context
of the City’s application for the judicial review and setting
aside of decisions directed at the tolling
of sections of the N1 and
N2 highways
[6]
The
Constitution provides a governmental framework based on a separation
of powers between the legislative, executive and judicial
arms of
government.  Each arm of government, as well as the various
independent institutions established in terms of the Constitution,

has its own constitutionally defined role.  The separation is
not hermetic because in discharging their respective functions
in
terms of the Constitution the actions of the different arms of
government inevitably impact to a greater or lesser degree on
the
others.
[3]
Inherent in the
separation of powers is a system of checks and balances.
[4]
The Constitution enjoins each arm of government to respect the powers
of the others and not to overreach its own.
[5]
Indeed, it was in another tolling-related case,
National
Treasury and Others v Opposition to Urban Tolling Alliance and Others
2012 (6) SA 223
(CC);
2012 (11) BCLR 1148
, that the Constitutional
Court quite recently reiterated how careful the judiciary must be not
to make orders that would trench
inappropriately on the domains that
the Constitution has allocated to other organs of state.  That
judgment was given in the
context of proceedings for interdictal
relief, but the relevant principles also have application in respect
of the power of judicial
review; both in respect of the ambit of the
power and the determination of appropriate remedies in the exercise
of the power.
[7]
The position and role of the courts in the
state’s governmental framework were described in admirably
crisp terms by the Constitutional
Court in
International
Trade Administration Commission v SCAW South Africa (Pty) Ltd
2012 (4) SA 618
(CC),
2010 (5) BCLR 457
, as follows:
Where
the Constitution or valid legislation has entrusted specific powers
and functions to a particular branch of government, courts
may not
usurp that power or function by making a decision of their
preference. That would frustrate the balance of power implied
in the
principle of separation of powers. The primary responsibility of a
court is not to make decisions reserved for or within
the domain of
other branches of government, but rather to ensure that the concerned
branches of government exercise their authority
within the bounds of
the Constitution. This would especially be so where the decision in
issue is policy-laden as well as polycentric.
[6]
[8]
The
decisions that the City seeks to impugn in these proceedings resort
exclusively within the functional domain of the executive
arm of
government.  Whether the roads should be tolled or not is a
matter to be decided within the relevant statutory framework
by
SANRAL and the Minister of Transport, not by the courts.  It is
not the function of the judicial arm of government in the
exercise of
its powers of judicial review to second-guess the executive by
imposing the judges’ views in the place of decisions
lawfully
made by the other arms of government, however unpopular or
ill-advised they might be regarded in some quarters.
Therein
lies the difference between appeal and review remedies.  The
courts are generally, save when otherwise exceptionally
provided by
statute,
[7]
not invested with
appellate authority over executive decisions.  Appeals entail
reconsidering the merits of an impugned decision
(a rehearing in
effect), with the appellate tribunal being empowered to substitute
its decision for that of the first instance
decision-maker.
Reviews, on the other hand, are not concerned, other than sometimes
incidentally, with the merits (i.e. in
this case whether the roads
should be tolled or not); they do not involve a rehearing, and only
exceptionally will they give rise
to a substitutive decision.
[9]
It
is a fundamental constitutional principle that public powers exist
only to the extent that is provided by law, and they are competently

exercised only in accordance with such law.
[8]
Judicial review is concerned with determining whether the impugned
acts were made within the ambit of a power provided by
law, and in
accordance with the precepts of such law, in particular, and the
Constitution, in general.  This court is thus
concerned in the
City’s review application (to the extent that we may entertain
it in the face of the City’s inordinate
delay in instituting
it), not with whether or not to endorse the national government’s
indicated preference (i.e. policy
decision) to fund the construction
and maintenance of certain national roads by tolling, but only with
whether the decisions that
the executive needed to make in order to
toll the major arterial road routes linking Cape Town to the rest of
the country were
made within the powers conferred on the
decision-makers by the applicable statutes, and after proper
compliance with the requirements
stipulated in the legislation, and
consistently with the Constitution.
[10]
It
is important in the context of the current matter to be acutely
conscious of the distinction between executive-government policy
and
executive-government decision-making in terms of legislation that has
been enacted to enable the implementation of government
policy.
At a high level, decisions to toll national roads are taken in terms
of national government policy.
[9]
‘
The
playing field for the contestation of executive-government policy is
the political process, not the judicial one
’.
[10]
Judicial review, certainly in terms of the Promotion of
Administrative Justice Act 3 of 2000 (‘PAJA’), finds
a
basis for application in respect of decisions of an administrative
nature made under laws enacted for the implementation of such
policy.
[11]
The
government is able to lawfully exercise the power to construct and
upgrade the roads and toll them only if it has duly complied
with the
requirements of the Environment Conservation Act 73 of 1989 (‘the
ECA’) - read with the National Environmental
Management Act 107
of 1998 (‘NEMA’) – and
the
South African National Roads Agency Limited and National Roads Act
No. 7 of 1998 (‘the SANRAL Act’)
.
Decisions professedly made in terms of that legislation that qualify
as ‘administrative decisions’, as defined
in s 1 of
PAJA,
[11]
can be impugned on
any of the grounds set forth in s 6(2) of PAJA.
[12]
Beyond what is provided in PAJA, any exercise of public power may
also be challenged if it does not comply with the overreaching

constitutional requirement of legality; for example, judicial review
may be applied for on the grounds of the alleged irrationality
or
unlawfully discriminatory effect of a decision or other exercise of
power.
The effect of
unreasonable delay on the feasibility of challenges by means of
judicial review to the exercise of public power
[12]
Most of the decisions that the City seeks
to impugn in these proceedings were made by the first, second and
third respondents in
purported compliance with the requirements of
the ECA and the SANRAL Act.  It is a principle of law that -
subject to the
effect of permissible collateral challenges, something
that does not require discussion in the context of this case -
administrative
decisions stand to be recognised as valid unless and
until they are set aside on judicial review; see
Oudekraal
Estates (Pty) Ltd v City of Cape Town and Others
2004
(6) SA 222
(SCA), especially at para 26-27.
[13]
Any
person who wants to have an administrative decision set aside on
judicial review must institute proceedings within a reasonable
time.
This is because there is a public interest in the certainty and
finality of administrative decisions.  It would
ordinarily be
inimical to good governance and the positions of third parties who
might have ordered their affairs with reference
to the decisions of
public bodies if the courts entertained applications for the judicial
review of such decisions in proceedings
instituted after an
unreasonable delay.
[13]
Under
the common law the courts entertained applications for judicial
review that had been instituted after an unreasonable
delay only
exceptionally.  And only when they considered the interests of
justice required them to condone or overlook the
delay.  The
principle that informs these considerations at common law is
colloquially referred to as ‘the delay rule’.
[14]
The rule has been described as a manifestation of ‘sound
judicial policy’.
[15]
Thus, if a challenge is not mounted timeously, an unlawful decision
may in a practical sense be validated by delay; cf.
Harnaker
v Minister of the Interior
1965 (1) SA 372
(C) at 381C.
[14]
PAJA was enacted in fulfilment of the
obligation on the State in terms of s 33(3) of the Constitution
to provide legislation
to give effect to the rights to just
administrative action provided in s 33(1) and (2) of the Bill of
Rights.  Section
7(1) of PAJA provides:
Any
proceedings for judicial review in terms of section 6 (1) must be
instituted without unreasonable delay and not later than 180
days
after the date-
(a)
…
on which any proceedings instituted in
terms of internal remedies as contemplated in subsection (2) (a) have
been concluded; or
(b)
where no such remedies exist, on which the
person concerned was informed of the administrative action, became
aware of the action
and the reasons for it or might reasonably have
been expected to have become aware of the action and the reasons.
Section 9 of the Act
permits the parties to an application for review in terms of s 6,
by agreement, to extend the period of
180 days to a fixed date, or
failing that, the court to do so, on application, ‘
where the
interests of justice so require
’.
[15]
The
effect of s 7(1) read with s 9 of PAJA is thus largely to
restate and codify the common law delay rule.
[16]
Because PAJA is the legislation contemplated in terms of s 33(3)
of the Constitution, the provisions of s 7(1)
read with s 9
confirm the delay rule as a legal principle pertaining to the
exercise and enforcement of the fundamental right
that everyone has
to administrative action that is lawful, reasonable and procedurally
fair.  The ambit of the right of access
to court in terms of
s 34 of the Constitution thus falls to be defined consistently
with the limiting and controlling effect
of ss 7(1) and 9 of
PAJA.
[16]
In
Opposition
to Urban Tolling Alliance and Others v The South African National
Roads Agency Ltd and Others
[2013] 4 All SA 639
(SCA) (hereafter cited as ‘
OUTA
(SCA)’), it was held that if an application for review under
PAJA is brought outside the 180 day period stipulated in s 7(1)

a ‘
court
is only empowered to entertain
[it]
if
the interest of justice dictates an extension in terms of s 9
’.
[17]
This
highlights the legal character of the effect of s 7(1) read with
s 9, as distinct from the judicial policy nature
of the delay
rule under the common law.
The
common law delay rule continues to apply in the traditional way, as a
matter of judicial policy, in respect of review challenges
to the
exercise of public power that do not fall within the purview of PAJA.
[17]
The current application was instituted on
28 March 2012.  Amongst other matters, the City seeks the
judicial review and setting
aside of the following decisions:
1.
The decision of the ‘competent
authority’ on 30 September 2003 to grant environmental
authorisation, in terms of s 22(1)
of the ECA, for the
construction or upgrading of the roads (para 1.1 of the notice
of motion);
2.
The decision of the Minister of
Environmental Affairs and Tourism on 10 October 2005, in terms of
s 35(4) of the ECA, to effectively
dismiss the appeals against
the grant of environmental authorisation by the competent authority
(para 1.2 of the notice of
motion);
3.
The decision of the Minister of
Environmental Affairs and Tourism on 28 February 2008 (as amended in
April 2008), also in terms
of s 35(4) of the ECA, to grant a
revised environmental authorisation for the project (para 1.3 of
the notice of motion);
4.
The decision of the Minister of Transport
on 2 September 2008, in terms of s 27(1) read with s 27(4)
of the SANRAL Act,
to approve the declaration of the roads as toll
roads (para 1.4 of the notice of motion); and
5.
The decision of SANRAL, which was published
in the
Gazette
on 15 September 2008, also in terms of the SANRAL Act, to
declare the affected roads as toll roads (para 1.5 of the notice

of motion).
(The
other relief sought by the City will be described later in the
judgment.
[18]
)
[18]
The application for the review and setting
aside of the aforementioned decisions has thus been brought well
outside the 180 day
limit provided in terms of s 7(1) of PAJA.
There is no agreement between the parties affording an extension of
the period
within which the Act required the application to be
instituted.  On the contrary, SANRAL contends that the review
application
should not be entertained because of the unreasonable and
inadequately explained delay.  It is necessary in the
circumstances
to consider the City’s application in terms of
s 9 of PAJA for condonation of the delay.
The relevant
principles concerning any condonation of the City’s
unreasonable delay in instituting review proceedings
[19]
SANRAL’s
counsel contended that condonation of a delay in the institution of
judicial review proceedings under PAJA should
be determined first,
before the review itself is considered, and submitted that ‘unless
the reasons for the delay are sufficiently
compelling the court will
not entertain the review application at all’.
[19]
This argument was broadly supported by counsel for the second and
third respondents.  SANRAL’s heads of argument
cited
OUTA
(SCA)
supra, at para 22 and 43, and
Beweging
vir Christelik-Volkseie Onderwys and others v Minister of Education
and others
[2012] 2 All SA 462
(SCA), at para 44, in support of the submission.
To the extent that the argument might be understood to suggest that
there
should be something akin to a separation of issues - with delay
being considered first, and separately from the other aspects of
the
case - we do not think those judgments support such a proposition.
[20]
The dicta in
OUTA
(SCA) were uttered in the context of
the court of first instance in that matter having determined the
review adversely to the applicant,
and having held on that basis that
it had been unnecessary for it to deal with application for
condonation of the unreasonable
delay in the institution of the
proceedings, thus leaving it undetermined.  The point that
Brand JA articulated in the
passages of the judgment relied upon
by SANRAL’s counsel was that the court a quo had erred in the
approach it had adopted
by failing to appreciate that, in terms of
s 7(1) of PAJA, it had been empowered to entertain the review
only
if it
had granted condonation for the delay.  It was in that context
that the learned judge of appeal referred to the earlier
judgment
given by Plasket AJA in
Beweging vir
Christelik-Volkseie Onderwys
, which, in
the relevant part, rejected an argument advanced to the court that a
determination of the merits was a mandatory precursor
to any
consideration of whether to condone an unreasonable delay.
[21]
The
outcome of an application for condonation in terms of s 9 of
PAJA falls, according to the tenor of the provision, to be
determined
in the court’s assessment of whether, notwithstanding an
unreasonable delay by the applicant in commencing proceedings,
the
interests of justice nevertheless require it to entertain the
review.  The exercise involved in adjudicating an application

for condonation under the statute is essentially the same as that
undertaken by the court in what has been characterised as the
second
leg of enquiry in terms of the delay rule under the common law.
[20]
It entails the exercise by the court of a judicial discretion.
The discretion falls to be exercised with regard to
all the relevant
circumstances; cf. e.g.
Wolgroeiers
Afslaers (Edms) Bpk v Munisipaliteit van Kaapstad
1978 (1) SA 13
(A) at 39;
Gqwetha
v Transkei Development Corporation  Ltd and Others
2006 (2) SA 603
(SCA);
[2006] 3 All SA 245
at para 33-34 and
Khumalo
and Another v MEC for Education, KwaZulu-Natal
2014 (5) SA 579
(CC), at para 52.  It follows that what requires
to be considered and the extent of and order in which the necessary
consideration
occurs will depend on the nature of the case.
[22]
The
broad nature of the exercise enjoins the court to have regard,
amongst other matters, to what the review application is about,
its
prospects of success and the broader consequences, in the context of
the delay, of it being upheld or turned away.  The
peculiarly
case-specific nature of any assessment of what the interests of
justice require excludes the feasibility of any attempt
at defining a
numerus
clausus
of relevant considerations for use in all such condonation
applications.  Thus, despite the fact that a court can entertain

an unreasonably delayed application for judicial review only if it
condones the delay, it will in most cases, for practical reasons,

have to hear the matter as if it were entertaining the review, even
if only - if condonation were to be refused - to definitively

determine nothing other than the antecedent question.
[21]
[23]
It was shown during the course of the
argument that an analysis of the reported judgments on the issue
since the turn of the century
turns up apparent inconsistencies in
the approach to condonation.  The differences seem to us to be a
matter of nuance. They
appear to have arisen because of the different
characteristics of the individual cases involved.
[24]
So, Nugent JA’s majority judgment in
Gqwetha
,
at para 34, might be understood to indicate that the consequences of
upholding an unreasonably delayed review application, and
not its
prospects of success
per se
,
are the relevant considerations in exercising the discretion whether
to condone the delay.  (PAJA was not implicated in
Gqwetha
because the decision in issue in that matter had been made in 1995.)
The Constitutional Court, on the other hand, might be
taken to have
expressed a different view in
Khumalo
.
At para 57 of the majority judgment in
Khumalo
(which was a legality review, and thus also not subject to PAJA),
Skweyiya J stated ‘
An
additional consideration in overlooking an unreasonable delay lies in
the nature of the impugned decision.  In my view this
requires
analysing the impugned decision within the legal challenge made
against it and considering the merits of that challenge
’.
It seems to us, however, that Nugent JA’s remarks in
Gqwetha
were very much directed at the peculiar
facts of that case.  The point that the learned judge was making
was that the prospects
of success in that matter were not a weighty
consideration in the context of it being unlikely, even were the
unreasonable delay
in that case condoned, and the ensuing review
successful, that the result would be of any practical effect.
The absence of
any substantive inconsistency between the two
judgments is supported by the fact that the judgment
in
Khumalo
cites references to para 34 of the judgment in
Gqwetha
without any indication of an intention to distinguish what was said
there.
[25]
So also is Nugent JA’s observation at
para 34 of
Gqwetha
,
that ‘
Different considerations
arise in relation to applications to condone delay in the conduct of
litigation - for example to condone
the late filing of pleadings or
to condone a late appeal - and the test that is applied in those
cases is not necessarily transposable
to unduly delayed proceedings
for review
’ difficult to
reconcile with the approach propounded by the Supreme Court of Appeal
in
Price Waterhouse Coopers Inc and
Others v Van Vollenhoven NO and Another
[2010] 2 All SA 256
(SCA), at para 6.  There, treating of the
determination of the ‘interests of justice’ in the
context of s 9
of PAJA, the appeal court (without reference to
the dicta in
Gqwetha
)
indiscriminately adopted the following passage from
Van
Wyk v Unitas Hospital & Another
(Open Democratic Advice Centre as Amicus
Curiae)
[2007] ZACC 24
;
2008 (2) SA 472
(CC), at para
20:
This
court has held that the standard for considering an application for
condonation is the interests of justice. Whether it is
in the
interests of justice to grant condonation depends on the facts and
circumstances of each case. Factors that are relevant
to this enquiry
include but are not limited to the nature of the relief sought, the
extent and cause of the delay, the effect of
the delay on the
administration of justice and other litigants, the reasonableness of
the explanation for the delay, the importance
of the issue to be
raised in the intended appeal and the prospects of success
.
Van
Wyk
concerned an application for the
condonation of the late filing of an application for leave to appeal.
It was therefore an
application of the very sort that Nugent JA
sought to distinguish from ones involving the condonation of delay in
the context
of judicial review applications.  The essential
import of the passage from para 20 of
Van
Wyk
, however, is that a wide range of
considerations is relevant.  It identifies those that will be
pertinent in almost every
case, but is in no way prescriptive –
either as to what must be taken into account, or the manner in which
it should be done.
[26]
Khumalo
was
decided before the Constitutional Court became the sole apex court,
but the interpretation and application of s 7(1) and
s 9 of
PAJA, in particular, and the condonation of unreasonable delay in
judicial review, in general, are constitutional questions,
and
therefore, to the extent that there is scope for uncertainty arising
out of the arguably conflicting
dicta
in the judgments of the appeal court, this court is bound to follow
Khumalo
.
This means that the merits of the review challenge are indeed,
by themselves, an aspect validly to be taken into consideration
in
deciding whether to condone the unreasonably delayed institution of
the application.  The extent to which a favourable
assessment of
the prospects of success will affect the decision whether or not to
condone an unreasonable delay will depend on
the other features of
the case.
[27]
This is borne out by the principle that we
understand to have been expressed in
Gqwetha
at paras 33-34 that the strength of the
prospects of a case in an unreasonably delayed review application has
to be weighed in the
balance in the peculiar context with the policy
considerations that inform the delay rule.  The principle
enunciated by Nugent JA
amounts to a recognition that a good
case on the merits cannot, by itself, negate the effect of s 7(1)
of the Act and be sufficient
cause, without more, to grant
condonation in terms of s 9.
[28]
A
proper assessment of the interests of justice under s 9(2) of
PAJA requires a court to be mindful that the incidence of the
delay
rule, with its implied recognition of the importance for efficient
and effective government of the finality and certainty
of government
decision-making, has been institutionalised by constitutional
legislation as part of the principle of legality.
[22]
The inherent tension to which this will give rise in an apparently
good case on the merits in an unreasonably delayed application
for
judicial review is self-evident.  The law in the post
constitutional era remains the same as it was when Corbett J

gave his judgment in
Harnaker
supra, half a century ago: delay can effectively ‘validate’
an unlawful administrative decision or government action.

Indeed, an unreasonable delayed review challenge will inevitably run
up against the validating effect of delay, unless the interests
of
justice otherwise require.
[29]
Actually
adjudicating a review on its merits entails a different undertaking
from merely considering the merits of a review for
the purposes of
assessing its prospects of success for another purpose, such as
whether to condone delay, or grant interim relief.
The former
exercise is determinative and thus final, while the latter involves
arriving at an essentially provisional conclusion.
However,
even if the court is inclined to pronounce conclusively on the
illegality of an impugned decision, its finding in that
regard will
not, without more, displace the effect of the delay rule on its
ability or preparedness to exercise its power of judicial
review; cf.
the
Oudekraal
decisions.
[23]
[30]
With
the aforementioned principles in mind, we therefore reject the
argument advanced to us on the basis of a detailed analysis
by
counsel for the respondents of the higher courts’ jurisprudence
on delay from
Associated
Institutions Pension Fund v Van Zyl and Others
2005 (2) SA 302
(SCA),
[2004] 4 All SA 133
to
Khumalo
supra,
and with special reference to
Van
Wyk
supra
,
at para 22, that absent (i) a full explanation for the delay,
(ii) covering the entire period of delay and (iii) the

explanation given being reasonable (what counsel called ‘the
three elements’), condonation could not be granted.
We
are not persuaded that a proper reading of the judgments through
which the respondents’ counsel took us
[24]
sustains the contention.  On the contrary, we consider that the
judgments confirm that whether it is in the interests of justice
to
grant condonation depends on the facts and circumstances of each
case.
[25]
This is indeed
what we would have expected.
[31]
The
determinant criteria in any application in terms of s 9(2) of PAJA
are the requirements of the interests of justice.  The
criteria
are assessed in the context of an acceptance that there has been an
unreasonable delay.  The applicant’s explanation
for the
delay is undoubtedly a material consideration, but it seems to us
that in principle an enquiry into the requirements of
the interests
of justice effectively could not occur in some cases if the absence
of an explanation for the delay that satisfied
each of ‘the
three elements’ were to be treated as an absolute bar to
further consideration of the application.
Certainly, the delay
in
Oudekraal
(2)
[26]
could not competently have been condoned by the courts if the
approach contended for by the respondents had been applied.
[32]
Oudekraal
(2)
admittedly
stands out as an exception from the other recent decisions of the
Constitutional Court and the Supreme Court of Appeal
in which
condonation for delay has been in issue because the judgment gives no
indication that any consideration was given to the
City’s
explanation for the delay in that matter whatsoever.  The court
did, however, observe that in respect of any
consideration whether to
condone an unreasonable delay ‘
a
court has a broad discretion to be exercised in the light of all
relevant facts
’.
[27]
That is wholly consistent with the iterations of the nature of the
enquiry into the condonation of unreasonable delay in
some of the
other judgments to which the respondents’ counsel referred
us.
[28]
The ‘relevant
facts’ will obviously include the extent of the delay, the
explanation given for it and its effect
in the context of the
impugned decision in issue.  These fall to be weighed together
with all the other relevant facts and
considerations to determine
what the interests of justice require.  The weight to be
accorded to each of the aspects of the
matter that need to be taken
into account will depend on the peculiar character of the case and,
as we have noted, is not something
amenable to formulaic
prescription.
[33]
The judgment in
Khumalo
demonstrates that the absence of an
acceptable explanation by the applicant for the unreasonable delay,
while it is a material consideration
to be weighed in the exercise of
the court’s discretion, is not necessarily determinative, by
itself, of whether condonation
should be granted; a broader
consideration is still necessary.
General
background
[34]
As the impugned decisions were made
separately in terms of two sets of legislation - the ECA and the
SANRAL Act - it is convenient
to consider them compartmentally, with
regard to their respective statutory contexts.  We shall also
deal with the nature
and extent of the City’s delay, and its
explanation therefor in relation to each compartment.  The ECA
decisions preceded
those made under the SANRAL Act and so they will
be addressed first.  The factual background to the decisions was
summarised
in the court’s judgment in the City’s
application for interim interdictal relief pending the determination
of the current
proceedings (
City of Cape
Town v South African National Roads Agency Ltd and Others
[2013] ZAWCHC 74
(21 May 2013).  It has been convenient for
present purposes to draw on the narrative in the earlier judgment.
[35]
The
decision to declare the affected portions of the N1 and N2 as toll
roads had its genesis in an unsolicited proposal submitted
to SANRAL
in March 1998 by the Protea Parkways Consortium (‘PPC’)
[29]
for the design, financing, construction, upgrading and operation of
the sections of the roads concerned as toll roads.  The
ultimate
object of the proposal was the conclusion of an agreement with SANRAL
of the nature contemplated in s 28 of the SANRAL
Act,
[30]
in terms of which the consortium would operate the tolls on the
sections of road it had upgraded or constructed for a period
[31]
that would enable it to recoup its capital investment and make a
profit, whereafter it would transfer the tolling operation as
a going
concern to SANRAL, with the roads restored to be as good as new when
they are handed back.  This type of contract
is referred to in
the business as a ‘BOT’ contract, the acronym deriving
from the expression ‘build, operate
and transfer’.
The impugned
decisions in terms of the Environment Conservation Act
[36]
The
construction and upgrade measures involved in the consortium’s
proposal entailed certain activities listed in terms of
the ECA as
activities that may have ‘a substantial detrimental effect on
the environment’.
[32]
The undertaking of such activities was subject to authorisation in
terms of s 22 of the ECA. The functionary responsible
for
determining whether to grant the required authorisation was the
Minister of Environmental Affairs, alternatively, his delegate,
the
so-called ‘competent authority’ referred to in s 22(1)
of the Act.
[37]
Consequent
upon SANRAL’s consideration of the consortium’s proposal,
an application in terms of s 21 of the ECA
(the so-called ‘EIA
application’
[33]
) was
submitted to the competent authority in May 2000.  The competent
authority, in the person of a deputy director-general
in the
Department of Environmental Affairs, issued a ‘record of
decision’, dated 30 September 2003, in terms of the
General EIA
Regulations,
[34]
whereby the
required authorisation was granted.  (This was the decision
described in paragraph [17].1, above.)
[38]
The
record of decision was accompanied by a letter from the competent
authority that stated ‘
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.
’
This is relevant because, in a letter to the Department of
Environmental Affairs, dated 21 October 2002, the City
had raised a
concern about what it regarded as the unlawful circumscription of the
ambit of the environmental impact assessment,
more particularly, the
exclusion of a consideration of the socio-economic impacts of tolling
the roads.  The Director-General
of the Department of
Environmental Affairs had replied, in November 2002, explaining that
the EIA process would focus on the biophysical
impacts associated
with the location and positioning of the tollgates including, amongst
other things, ‘lighting, noise and
vibration, air pollution,
water pollution, storm water management, destruction of vegetation
and red data species…’.
The Director-General
advised, however, that the ‘intention to toll’ was ‘a
separate process’ falling under
the aegis of the Minister of
Transport.  He advised that the investigation of ‘the
socio-economic aspects of tolling,
toll structuring and toll fees’
fell to be addressed in the intent to toll process.
[35]
This
was consistent with the import of a ‘working agreement’
entered into between the Department and SANRAL in October
1999, which
was referred to in the final environmental impact report (‘EIR’)
[36]
[39]
Section 35(3) of the ECA provided for the
right of any person aggrieved by a decision by a competent authority
in terms of the EIA
regulations to appeal to the Minister of
Environmental Affairs.  A large number of interested parties,
including the City,
lodged appeals.
[40]
The City’s principal complaint in its
appeal in terms of s 35 of the ECA was that no or insufficient
attention had been given
to investigating and considering the
socio-economic impacts of the contemplated tolling of the roads.
The City maintains
that position in the current proceedings.
Salient amongst the City’s concerns is the adverse impact that
tolling might
have on the poor and mainly black communities who live
in areas from which the arterial roads in question serve as the
primary
feeder routes into the City and other places of work.
Another of its material concerns is the knock-on effects on roads
maintained
by the City of increased traffic that it anticipates will
be caused by drivers seeking to avoid the tolled roads and using
alternative
routes.  The postulated effects include increased
demands on the City’s budget through greater road maintenance
and
upgrade requirements, suburban traffic congestion and noise and
pollution in affected residential areas.  The City submitted

that the abovementioned ‘working agreement’ between the
Department and SANRAL had subverted the requirements of NEMA,
and
should be ‘regarded as null and void’ because ‘no
party can contract contrary to the provisions of a statute’.

Its appeal document stated five ‘concerns and issues’ as
the basis for the appeal.  The first three, and apparently
most
pertinent, of these were (i) that socio-economic issues and
impacts had not been taken into account in the record of
decision and
conditions of approval, (ii) the impacts of diversionary traffic
had not been determined and (iii) ‘[a]lternative

approaches to financing road maintenance and construction’ had
not been considered.
[41]
The Minister (Mr Marthinus van Schalkwyk)
announced his decision in respect of the appeals in October 2005.
(This was the
decision mentioned in paragraph [17].2, above.)
He recorded that he 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 beyond his remit.  He
stated ‘
Socio-economic
considerations associated with tolling are
(sic)
adequately considered in “the
intent to toll” process.  Any attempt by
[the
Department of Environmental Affairs]
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 issued remedial directions
and
indicated his intention to issue a revised record of decision within
30 days of the receipt of certain documentation to be
submitted to
him pursuant to his directions.
[42]
Further
investigations were thereafter carried out and reported upon, which
meant that nearly two and a half years went by before
the Minister of
Environmental Affairs eventually issued a revised record of decision
on 28 February 2008.
[37]
(This was the decision mentioned in paragraph [17].3, above.)
The revised decision gave authority to SANRAL under
the ECA for 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…
’.
[38]
.
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 in that regard that matters related to the tolling of
the roads and the structuring of toll fees fell
outside the ambit of
the EIA regulations, and would be addressed by the appropriate
authority in terms of the SANRAL Act.
[43]
The
central object of the EIA application that was the subject of the
aforementioned three decisions had been for SANRAL to obtain

authorisation to undertake the activity listed in item 1(d) of
Schedule 1 to the ‘Regulations under Section 21 of the
Environment
Conservation Act 73 of 1989 – Identification of
Activities which may have a substantial detrimental effect on the
Environment’,
[39]
viz.
‘
The
construction, erection or upgrading of – roads, railways,
airfields and associated structures
’.
The City has reservations about the need to undertake all the
proposed construction and upgrading of the roads at
this stage, but
it does not appear to be against the upgrading in principle.
Its opposition is directed primarily at the
concept of financing the
road improvements by way of a tolling operation, and, even more so,
one in terms of a BOT agreement.
Its material concerns are
about the social and economic impacts of financing the project by
tolling, not about the ecological impact
of constructing and
upgrading the roads.
[44]
Section 2
of NEMA prescribes a set of principles (the National Environmental
Management Principles) by which decisions by all
organs of state
which could have a significant impact on the environment have to be
guided.  These principles fell to be applied
in all of the ECA
decisions that the City seeks to impugn in these proceedings.
The enactment of the principles is a manifestation
of the legislative
measures contemplated by s 24(b) of the Constitution.
[40]
The principles include the enjoinder that all development must be
socially, environmentally and economically sustainable.
Section
2(4)(i) of NEMA
[41]
states
that determining whether any development is sustainable requires the
decision-maker to consider, assess and evaluate the
social, economic
and environmental impacts of activities, including disadvantages and
benefits, and to make decisions that are
appropriate in the light of
the indicated assessment and evaluation.  The object of the
requirement is to promote the achievement
of ‘sustainable
development’; as defined in s 1(1)(xxix) of NEMA.
[42]
(Consider in this regard the remarks at para 113 of the minority
judgment 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)
[43]
-
which we do not read as inconsonant in principle with anything said
in the majority judgment.)
[45]
Socio-economic
considerations were reported on and apparently taken into account in
the EIA decision-making process,
[44]
but this did not extend to the socio-economic impact of tolling the
roads.  The City contends that the environmental decision-makers

therefore misconceived the nature of the responsibilities imposed
upon them, did not apply their minds to relevant considerations,

failed to comply with their statutory obligations and decided the EIA
application influenced by a material error of law.
The
soundness of the contentions depends on the ambit of the exercise
that the relevant functionaries were required to undertake
in terms
of the ECA and related regulations, which is to be determined upon a
proper construction of the applicable provisions.
[46]
There
is no doubting that the tolling of the major land route portals of
the country’s second largest conurbation may very
conceivably
have significant socio-economic impacts.  Whether the
socio-economic impacts of
tolling
the roads fall to be investigated in terms of the ECA, as distinct
from only the narrower considerations attendant upon the activities

of
constructing
or upgrading
them, falls to be decided upon the proper construction of item 1(d)
of Schedule 1 to the ‘Regulations under Section 21 of
the
Environment Conservation Act 73 of 1989 – Identification of
Activities which may have a substantial detrimental effect
on the
Environment’.
[45]
[47]
By the time the initial record of decision
was issued by the competent authority, a definition of the word
‘
road
’
had been inserted into the regulations by way of item 11 of Schedule
1 thereto.  It provided:
‘
In
these Regulations, unless the context indicates otherwise –
‘
road
’
means –
(a)
Any road determined to be a national road
in terms of section 40 of the South African National Roads Agency
Limited and National
Roads Act, 1998, (Act No. 7 of 1998), including
any part of such road;
(b)
Any road for which a fee is charged for the
use thereof;
(c)
Any provincial road administered by a
provincial authority;
(d)
Any arterial road or major collector street
administered by a metropolitan or local authority;
(e)
Any road or track in an area protected by
legislation for the conservation of biological diversity or
archaeological, architectural
or cultural sites or an area that has
been zoned open space or an equivalent zoning; or
(f)
Any road or track in an area regarded by
the relevant authority as a sensitive area.
[48]
The first and third respondents
contend that the listed activity that the Department of Environmental
Affairs was called upon to
consider was the construction or upgrading
of the roads, not the tolling of them.  It is their contention
that the effect
of paragraph (b) of the definition of ‘road’
in the EIA regulations is merely to identify the roads in question as
ones that can be constructed or upgraded only after authorisation in
terms of the ECA has been obtained.  They emphasise that
tolling
is not a listed activity.  Inherent in the City’s
argument, on the other hand, is that the contemplated use
of the road
to be constructed or upgraded has to be an integral part of any
environmental impact assessment and that in the current
case that
includes the tolling of the roads.
[49]
A
proper approach to statutory interpretation entails determining the
meaning of the words of a statute having appropriate regard
to their
tenor within the apparent scope and objects of the instrument.
[46]
The respondents’ contentions have a literal emphasis, whereas
those of the City are sought to be grounded on a purposive
approach.
A proper contextual analysis should give an answer that reconciles
the literal and purposive approaches; cf.
Jaga
v Dönges NO and Another; Bhana v Dönges NO and Another
1950 (4) SA 653
(A) at 662-664 (per Schreiner JA).   This
will be so, however, only if the apparent purpose of the legislation
has been
correctly identified; something that also entails contextual
analysis.
[50]
One
can readily appreciate why the construction or upgrading of the types
of road identified in paragraphs (a) and (c) to (f) of
the definition
quoted above
[47]
should have
been listed as having the potential to have a substantial detrimental
effect on the environment.  National, provincial
and arterial
roads or major collector streets are all roads which by their
characterisation or nature are likely to carry relatively
high
volumes of traffic and be of comparatively larger spatial
dimensions.  They are likely to have a greater impact than

lesser roads on the land on which they are constructed and its
environs.  It also does not require much imagination to
understand
that the construction of roads in protected environments
or ‘sensitive areas’ might have a substantial detrimental
effect in the sense contemplated in Part V of the ECA.  It is
not so clear, however, why the construction or upgrading of a
road
for the use of which a fee is to be charged should be included as a
separate category.  It may be that the potentially
diversionary
effect on road traffic that charging a fee might bring about was the
reason for the category provided in para (b)
of the definition.
The roads currently in issue qualify under one or more of the other
categories of road identified in the
definition in any event.
Indeed, it is only roads that are national roads that may be tolled
in terms of the SANRAL Act.
[51]
If
regard is had to the NEMA integrated environmental management
principles, the intended use of a road the construction or upgrading

of which has made it the subject of an EIA application seems to be an
obvious matter for consideration.  The question is to
what end?
In the context of the intended construction of a toll road, the
extent and effects of the consequent diversion
of traffic to other
routes by reason of affordability constraints would seem to be a
manifestly relevant consideration in the indicated
investigation.
Notionally, however, tolling could be introduced on existing roads
without upgrading them.
[48]
In such a case, notwithstanding that the foreseeable knock-on
consequences might be the same as in the case of a road that
required
construction or upgrading for the purpose, the matter would not fall
within the ambit of the ECA.  This consideration
lends support
to the argument that the listed activity concerns the action of
construction or upgrading the road and that the consequent
physical
use to which the road would be put would be a relevant consideration,
but not the non-physical act of raising a fee for
its use; for
otherwise, the provision has to be seen to potentially give rise to
anomalous results at odds with the apparent objects
of the
legislation.  If charging a fee for the use of a road were
considered an activity that might have a significantly adverse

environmental impact, one would have expected that to have been
listed as an activity in itself because it can occur quite
independently
of construction or upgrade activities.
[52]
More
significantly, the narrower interpretation contended for by the
respondents would also be consistent with the effect of the

definition of ‘
environment
’
in NEMA,
[49]
which,
conformably with the wording of s 24(a) of the Constitution,
focuses on the concern of the use of the environment with
regard to
the effect thereof on ‘human health and well-being’; in
other words on physical well-being, rather than economic
well-being.
It is s 24 of the Constitution that this court must have in mind
when considering the proper construction
of the legislation in
accordance with the enjoinder in s 39(2) of the Constitution.
In that context, the investigation
of the socio-economic activities
of the activity required in terms of the NEMA principles would be one
directed at weighing any
adverse biophysical impacts (matters that
would tend to be inimical to human health and well-being) against the
socio-economic
benefits with a view to realising the fundamental
constitutional right that everyone has to have the environment
protected in ways
that ‘
secure
ecologically
sustainable development and use of natural resources while promoting
justifiable economic and social development
’.
[50]
That incidence of the operation of the principles was manifested, for
example, on the facts in
Fuel
Retailers
supra, in which the relevant environmental concern required a
weighing by the environmental decision-maker of the commercial
viability
of the construction of an additional filling station in an
area already well served by such amenities in circumstances in which

the operation and decommissioning of such facilities had negative
ecological implications because of the potential threats that
would
be occasioned thereby to an environmentally significant aquifer.  The
socio-economic factors related to the contemplated
opening of an
additional filling station fell to be considered in order to
determine whether risking the associated additional
potentially
adverse biophysical impacts was justifiable in the sense of
s 24(b)(iii) of the Constitution.  A weighing
of the
commercial viability of an additional filling station in the context
of the cumulative impact on the environment of an increased
number of
filling stations was entailed in determining whether the proposed
development would qualify as sustainable development
within the
meaning of NEMA.
[53]
A
further consideration arises in the context of s 24 of NEMA as
it read at the relevant time.
[51]
It is plain that the Department of Environmental Affairs was
responsible for authorising the construction or upgrading of
the
roads, but equally clear, we think, that the Department of Transport
was responsible for authorising their tolling.  Section
24 of
NEMA, as it read at the relevant time, provided that the prescribed
investigation for environmental authorisation purposes
had to include
the potential impact on socio-economic conditions of the listed
activity; in this case of the construction and upgrading
of the
roads.  It also provided in subsection (1) for the investigation
of any activity - even if had not been listed –
that required
authorisation by law if it might significantly affect the
environment.  Accepting, as we do, that the tolling
of the
roads, even though it is not an activity listed under the ECA, may
have a significant impact on the environment, the responsibility
for
considering the socio-economic consequences thereof appears, in terms
of s 24(1) of NEMA, as it read when the environmental

authorisation in terms of the ECA was granted, to have been the
responsibility of SANRAL and the Department of Transport.

Section 2(1)(a) of NEMA supports the notion that that remains the
case, notwithstanding the subsequent substitution of s 24.
[52]
[54]
The
City’s counsel contended that the EIA process involves an
assessment of different factors to those which require to be

considered in the ‘intent to toll process’ under s 27
of the SANRAL Act.  That contention seems to hold up
only
insofar as the assessment of bio-physical or ecological impacts that
is central to any assessment under the former process
will not
ordinarily be the focus under the latter process.  But insofar
as the City’s concern is not about the environmental
impact of
the construction and upgrading of the roads, but rather the failure
of the decision-makers to properly consider the financial
and social
viability of funding the construction and upgrading by means of
tolling, it seems to us something more appropriately
addressed in the
intent to toll process.  This is especially so if, as we shall
discuss presently, the decision to toll the
roads has to be made
consistently with government policy to use tolling as a road building
and maintenance funding mechanism if
it is financially and socially
appropriate in the circumstances.
[53]
A purposive construction of the relevant legislation in a wider
contextual evaluation than that employed for the purposes
of the
City’s argument would support understanding the legislative
framework in a way that would avoid the duplication of
work by
government departments.  That, indeed, is an object which NEMA
itself expressly acknowledges; cf. the long title to
the Act
[54]
and Chapter 3 thereof, entitled ‘
Procedures
for Co-Operative Governance
’.
The Department of Transport is listed in Schedule 1 to the Act as one
of the national departments ‘exercising
functions which may
affect the environment’.
[55]
It is in any event difficult to conceive
how the Department of Environmental Affairs could meaningfully have
undertaken an assessment
of the socio-economic impact of the tolls to
be imposed when it had no means of assessing what those were likely
to be.  This
was not only because a contract for the design,
construction operation and maintenance of the roads had not yet been
negotiated.
It was also because the roads had not yet been
declared as toll roads (which could happen only after a separately
provided for
public participation process under s 27(4) of the
SANRAL Act had occurred) and the Minister of Transport, under whose
aegis
SANRAL’s activities, in general, and the determination of
toll fees, in particular, fell, had no meaningful idea, at the time

the EIA process was undertaken, of the financing arrangements within
which the determination of the tolls would have to be made.
[56]
It
seems to us that in matters of this nature (the relevant
considerations in
Fuel
Retailers
afford another example) in which the intended activity or development
of a nature that may significantly affect the environment
involves
authorisation being obtained from more than one government authority,
proper use should be made of the principles of integrated

environmental management provided in terms of chapter 5 of NEMA.  In
such a situation the relevant authorities should instigate
a process,
through mutual co-operation as contemplated in terms of s 24(4)(a)
of NEMA, to achieve co-ordinated (or ‘integrated’)

decision-making.
[55]
The
abovementioned working agreement between the Department of
Environmental Affairs and SANRAL appears to have been inspired
by
these principles, even if it was not implemented in a manner that
would actually achieve the object of integrated environmental

management.
[57]
In our judgment, the amendment to the
regulations that introduced the definition of ‘road’ was
directed not at altering
the import of the originally listed
activity, but rather at limiting the types of road the construction
or upgrading of which required
environmental authorisation to those
listed in the definition.  The definition of ‘road’
in the regulations does
not define the listed activity.  It
merely narrows the ordinary import of the word by rendering the term
applicable only to
the given categories or types of road.
[58]
For these reasons, we are inclined to
prefer the interpretation contended for by the respondents.
Upholding that interpretation
would be fatal to the City’s
application for the review and setting aside of the environmental
authorisation.  But even
if we are wrong in our interpretation
of the EIA regulations, there are other features of the matter, to
which we shall now turn,
which weigh against holding that the
interests of justice require the condonation of the City’s
unreasonable delay in applying
for a judicial review of the
environmental decisions.
[59]
The grounds upon which the City seeks to
impugn the environmental authorisation decisions on review are
pre-eminently ones that
could have been pursued by it in terms of
s 36 of the ECA when the first of three decisions in issue was
made known at the
end of September 2003.  Section 36 of the ECA
provides:
Review
by court
(1)
Notwithstanding the provisions of section 35, any person whose
interests are affected by a decision of an administrative body
[56]
under this Act, may within 30 days after having become aware of such
decision, request such body in writing to furnish reasons
for the
decision within 30 days after receiving the request.
(2)
Within 30 days after having been furnished with reasons in terms of
subsection (1), or after the expiration of the period within
which
reasons had to be so furnished by the administrative body, the person
in question may apply to a division of the Supreme
Court having
jurisdiction, to review the decision.
[60]
The essential nature of the dispute that
the City had with the Department of Environmental Affairs was whether
the latter was required
to consider the socio-economic effects of
tolling.  As we have described, the nub of the argument was
whether the socio-economic
impacts of tolling, as distinct from the
bio-physical impacts of constructing and upgrading the roads, were
matters to be dealt
with in the context of an environmental
authorisation in terms of the ECA, or something to be considered
within the ambit of the
powers to declare roads as toll roads and fix
tolls under the SANRAL Act.  The issue involved was purely legal
in character
and, as such, plainly more suitable to determination by
means of judicial review than administrative appeal; particularly
when
the City had no reason to believe that the Minister of
Environmental Affairs would hold an opinion different from that
already
articulated by his department as to the ambit of the
legislation.
[61]
Two things follow clearly from s 36 of
the ECA.  Firstly, that a person aggrieved about a record of
decision on grounds
that would support an application for judicial
review of the decision is not obliged first to exhaust the internal
remedy of an
appeal in terms of s 35(3) of the ECA; cf.
Earthlife Africa (Cape Town) v
Director-General: Department of Environmental Affairs and Tourism And
Another
[2005] ZAWCHC 7
;
2005 (3) SA 156
(C) at paras 32
and 38-41.  Secondly, the 30 day time limits provided in terms
of sub-sections (1) and (2) highlight the promptitude
the legislature
considered it appropriate to require of persons seeking to institute
judicial review proceedings in respect of
decisions made under the
ECA.  Section 36(2) specially defines the relevant time within
which review proceedings in respect
of ECA decisions must be
instituted in a stricter and narrower sense than the more general
provisions of s 7(1) of PAJA.
[62]
The comparatively short period provided in
terms of s 36 of the ECA appears to have been prescribed
recognising that it is
not in the interest of the administration of
the legislation, which imposes fetters on land use and development
involving any of
the listed activities, to allow for undue further
delay beyond that already imposed by the processes required under the
Act.
It is readily conceivable that such delay would be
inimical to economic development and upliftment, and costly, not only
to the
parties immediately involved, but society in general.
That, no doubt, is why an alternative judicial review remedy was
expressly
provided to be used in appropriate cases instead of the
appeal remedy in terms of s 35 of the Act.  It is therefore
relevant
that in the peculiar context of the City’s principal
complaint and the knowledge that it had of an inter-departmental
understanding
between the Departments of Environmental Affairs and of
Transport, in terms of which matters that the City contended fell
within
the statutory remit of the former had been ‘abdicated’
(to use the term employed by the City) to the latter, judicial
review
was the more appropriate remedy in the circumstances than appeal.
[63]
The
fact that the scheme of ss 35 and 36 of the ECA permitted a
choice of remedy
[57]
does not
afford any justification for taking the more time consuming and
cumbersome route when the shorter and more direct route
would be more
appropriate;
a
fortiori
,
when the aggrieved party is an organ of state.  The City’s
failure to have taken the more appropriate route at a much
earlier
opportunity has undoubtedly contributed to the delay in resolving the
critical issue and is a factor to be weighed adversely
to it in
deciding whether to grant condonation for the institution of the
current proceedings only ten years later.
[64]
SANRAL
and the Minister of Environmental Affairs did not take the point that
the City should have availed of s 36 of the ECA,
but it is an
objectively discernible factor to which the court is entitled to have
regard
mero
motu
when considering the nature and extent of the delay.  It must
follow that if a court is entitled to raise delay of its own

accord,
[58]
it can also raise
questions pertinent to delay that are apparent on the record, even if
the parties have overlooked, or failed
to address them.  The
City’s counsel did not contend otherwise.
[65]
They did argue, however, that a resort by
the City to judicial review in terms of s 36 of the ECA, instead
of pursuing the
appeal procedure in terms of s 35 of the Act,
would have been to have acted inconsistently with the obligation, in
terms of
s 41(1) of the Constitution, on all spheres of
government and all organs of state within each sphere to co-operate
with one
another in mutual trust and good faith by avoiding legal
proceedings against one another.  There is no merit in that
submission.
The dispute resolution processes provided in terms
of the legislation contemplated by s 41(2) of the Constitution
had not
yet been created at that stage.  The City had repeatedly
stated its concerns to the Department of Environmental Affairs about

the legality of an EIA process that did not take into account the
socio-economic impact of tolling.  In the circumstances
the City
should have recognised that, if it availed of the more appropriate
and expeditious remedy in terms of s 36 of the
ECA, any
suggestion by the Department of Environmental Affairs that it had not
done enough in a spirit of mutual trust and good
faith to avoid
litigation would be rejected as baseless; cf.
City
of Cape Town v Premier, Western Cape and Others
2008 (6) SA 345
(C), at paras 15-24.
[66]
From 2005, the provisions of the
Intergovernmental Relations Framework Act 13 of 2005
were available.
Having failed to avail of the judicial remedy within the time limits
in
s 36
of the ECA, the City was again remiss in failing to use
the statutory dispute mechanism introduced by Act 13 of 2005 after
its
appeal under the ECA had been effectively dismissed in terms of
the 2005 decision.  It should have appreciated that the matters

reserved by the Minister of Environmental Affairs for later
determination did not bear on its grounds of objection to the
environmental
authorisation.  It also did not matter that the
time limit provided in terms of s 7(1) of PAJA arguably would
commence
to run only after the Minister issued the revised record of
decision, which, as it happened, was two and a half years later.

It is in the public interest that material disputes or disagreements
between organs of state in matters of this nature are determined

expeditiously.  The City’s failure to take effective steps
towards obtaining resolution of the dispute expeditiously
after the
2005 decision was just a further indication of the inexcusable
lassitude, certainly between 2005 and 2011, that characterised
its
manner of dealing with its dissatisfaction with the series of
tolling-directed decisions.  It is not in the interests
of
justice for courts to encourage this sort of remissness by too
readily condoning unreasonable delay in the institution of judicial

review proceedings.
[67]
We accept that in the peculiar factual
context of the current matter, the lengthy period of three years
between the date of the
record of decision at first instance and the
essential determination of the appeal, which was followed by a
further period of over
two years before a revised record of decision
was issued by the appellate functionary, detracts somewhat from the
application of
the principle of promptitude inherent in s 36.
The City’s ability to derive favourable consideration from this

has, however, been undermined by its further inordinate delay after
the 2008 decision.
[68]
A further factor that has weighed with us
in our consideration of the City’s application for the
condonation of its delay
in seeking to have the environmental
authorisation decisions judicially reviewed is the indications that
the City - notwithstanding
its protestations about the failure of the
environmental authorities to investigate the impacts of the tolling
of the roads - acquiesced
in the idea that the relevant
socio-economic impacts would be considered in the intent to toll
process.  Thus, in a letter
from the City’s Directorate:
Transport, Roads and Stormwater to SANRAL, dated 17 March 2007, it
was stated that
The
City remains of the view that the implications of diversionary
traffic have not been fully assessed in the environmental impact

assessment and that further study and negotiation are required prior
to any declaration of “intent to toll” portions
of the N1
and N2.  It is therefore requested that the relevant road
authorities within the metropolitan area commence negotiations
to
seek agreement on the impact of diversionary traffic and mechanisms
to address any associated costs thereof.
Your
favourable response to the above request would be appreciated.
The City alleges
that SANRAL did not reply to the letter, but there was subsequent
correspondence in the same vein.  So, on
30 May 2008, three
months after the s 35 appeal process under the ECA had run its
course and three years after the appeals
had effectively been
dismissed in 2005, the City’s Executive Director: Transport,
Roads and Stormwater wrote to SANRAL, in
respect of the proposal to
declare the roads as toll roads that had been advertised in terms of
s 27 of the SANRAL Act, asserting,
amongst other matters, that –
The
City does not support this proposal to declare the abovementioned
portion of N1 and N2 toll roads as it does not align with
the City’s
Integrated Development Plan – 2007 to 2011 or its policy on the
provision of road tolls.
Furthermore,
the City requests that the Road Agency consider the socio-economic
impacts of the tolling since they were not considered
by the
Department of Environmental Affairs and the Tourism (DEAT).
If
the Road Agency was to subsequently approve this proposal and either
ignores or overlooks the socio-economic impact outcome,
then the
City’s reserves it right to implement a legal challenge to
either or both the Road Agency and DEAT processes.
[69]
The correspondence shows that the City was
cognisant of its right to challenge the environmental decisions, but
chose to refrain
from doing so pending the outcome of the applicable
processes under the SANRAL Act.
It
thereby signalled its acceptance that its concerns could be addressed
in the intent to toll process.
[70]
The City has not given a satisfactory
explanation for the delay in challenging the decisions made under the
ECA.  This much
was properly conceded by its counsel during oral
argument.  We shall deal more fully, below, in the context of
our consideration
of the City’s challenge to the tolling
decisions, with the factual history of the delay from 2008 to the
institution of review
proceedings.  Suffice it to say that,
insofar as the environmental decisions are concerned, the explanation
for the failure
to institute a review challenge before 2012 amounted
to little more (apart from an interval related to a dispute
resolution process
under the
Intergovernmental Relations Framework
Act 13 of 2005
) than that the City had harboured a hope during that
period that SANRAL would not proceed with the toll project.
[71]
As it appears that the City acknowledges
and supports the need to upgrade the roads and takes issue not on any
ecological impact
of the undertaking, but rather essentially with the
proposed means of funding the work by means of the tolling option,
the interests
of justice do not require that its unreasonable delay
in seeking to challenge the environmental decisions should be
condoned.
The City’s concerns go more to issues of
economics and differences about government policy and the failure of
the transport
decision-makers to have proper regard thereto than to
the protection of the environment.
[72]
Not entertaining the challenge to the
environmental decisions will not, of itself, prevent the court’s
consideration of the
legality of the tolling issue, which is the
City’s principal concern and which, on the City’s case,
is the issue that
potentially will have significant impact if
condonation is not granted.  Whether the challenges to the
impugned tolling decisions
under the SANRAL Act should be entertained
in the face of the delay attendant on those challenges lends itself
to a separate enquiry.
[73]
There
is a dispute as to whether the environmental authorisation, which was
time-limited, is still effective.  That cannot
be determined on
the papers.  If the City is correct, and SANRAL has in fact not
physically commenced with the authorised
listed activities, then the
authorisation has in any event lapsed.  On the other hand, if it
has not lapsed, which is the
respondents’ contention, premised
on factual allegations which we must accept for current purposes, the
prejudice in requiring
SANRAL to go back to where it was in 2000 and
recommence the process (which would surely be required because of the
passage of
time
[59]
) is so
significant that it is not justifiable on the evidence to require the
Agency to submit to it in the face of the City’s
inordinate
delay.  A related consideration is that the environmental
authorisations, if they are still effective, could be
used for the
construction and upgrading of the roads without tolling.  This
detracts from the argument that the environmental
and tolling
decisions are inextricably interlinked.
[74]
In
the circumstances, and having regard to the principles concerning the
operation of the delay rule reviewed earlier, we have not
been
persuaded the interests of justice require us to extend the period
within the City might be permitted to institute a challenge
to the
environmental authorisations for the construction and upgrading of
the roads to the date upon which it commenced the current

proceedings.  This court is thus unable to entertain the
application for relief in terms of paragraphs 1.1 -1.3 of the

notice of motion.
[60]
The impugned
decisions in terms of the SANRAL Act
[75]
Turning now to consider the relief sought
by the City in respect of the tolling decisions described in
paragraphs [17].4 and [17].5,
above.
[76]
The statutory basis for both impugned
decisions lies in s 27 of the SANRAL Act, which currently
provides as follows in relevant
part:
27 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 ….;
(ii) to all users of
the road of a category determined by the Agency and specified in such
a notice….;
(d) …;
(e) …;
(f) ….
(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;
(v) the means by
which the passage of a vehicle beneath or through a toll plaza is
identified and the liability to pay toll is recorded;
and
[
Sub-para. (v)
added by s. 3 (a) of Act 3 of 2013 and not in effect when the
impugned decisions were made.
]
(vi) the means of
payment, including pre-payment of toll liability;
[
Sub-para. (vi)
added by s. 3 (a) of Act 3 of 2013 and not in effect when the
impugned decisions were made.
]
(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.
[77]
The provisions of s 27(4) have been
amended and supplemented in terms of
s 3(b)
and (c) of the
Transport Laws and Related Matters Amendment Act 3 of 2013
.  The
Amendment Act came into operation generally on 9 October 2013, but
the provisions of s 3(b) and (c) will only come
into effect on a
date yet to be announced.  The pertinent amending provisions
read as follows in relevant part:
Section
27 of
The South African National Roads Agency Limited and National
Roads Act, 1998
, is hereby amended –
(a)
…
(b)
by the insertion in subsection (4) of the
following paragraphs after paragraph
(b):
“
(b
A
)
the Agency, in co-operation with the municipality contemplated in
subsection (4)
(b)
(ii)
and the province in which the proposed toll road is situated, has
performed a socio-economic and traffic impact assessment
pertaining
to the proposed toll road which must be submitted to the Minister and
made available to the province and every municipality
contemplated in
subsection (4)
(b)
;
(b
B
)
a notice of the publication of the report contemplated in paragraph
(b
A
)
is published in the
Gazette
,
indicating the availability of such report;”; and
(c) by the
substitution in subsection (4) for paragraph
(c)
of the
following paragraph;
“
(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 –
(i)
the outcome of the assessment contemplated
in paragraph
(b
A
);
(ii)
the extent to which any of the matters
raised in those comments and representations have been accommodated;
and
(iii)
the steps proposed to mitigate against the
impact or likely impact on alternative roads with regard to
maintenance and traffic management
that may result from the
declaration contemplated in subsection (1); and”.
[78]
The powers invested in SANRAL in terms of
s 27 of the SANRAL Act are adumbrated in the provisions of ss 25
and 26 of the
Act, which are headed ‘Main functions of Agency’
and ‘Additional powers of Agency’, respectively.

Section 25(1) provides:
The
Agency, within the framework of government policy, is responsible
for, and is hereby given 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, subject to section 32(3).
[61]
Section 26(f)
provides:
In addition to the
Agency's main powers and functions under section 25, the Agency is
competent-
(f)
to operate any national road or part
thereof as a toll road and levy a toll on the users of such a road as
provided for in this
Chapter, and to collect the toll or have it
collected by any authorised person, and for those purposes to
provide, establish, erect,
operate and maintain toll plazas on a
national road, subject to section 27 or 28.
[79]
As to ‘
government
policy
’ referred to in s 25(1)
of the SANRAL Act, s 39 provides:
39 National
roads policy
(1)
The Government's policy with regard to national roads must be made
known from time to time by the Minister by notice in the
Gazette
.
The notice must state, amongst others-
(a) the goals with
regard to national roads which the Government wants to achieve; and
(b) the policy
objectives to be followed so that those goals may be achieved.
(2)
Whenever any proposals relevant to determining or amending the
national roads policy is to be considered and decided by the

Government, the Minister by notice published in the
Gazette
must make known those proposals and in that notice invite any
interested persons and the public to comment on the proposals and

make representations with regard thereto.
(3)
The Agency must determine its business and financial plan and
strategic plan and the standards and criteria for road design
and
construction and for road safety within the framework of the national
roads policy as determined by the Government and published
in terms
of subsection (1).
It
is common cause that, notwithstanding the passage of more than 17
years since the SANRAL Act came into operation, the Minister
of
Transport has not published the government’s policy with regard
to national roads.  In their answer to the City’s

application, both SANRAL and the Minister of Transport pointed to the
1996 White Paper on National Transport Policy and the Department
of
Transport’s National Land Transport Strategic Framework
published in the Government Gazette in October 2006 in terms of
s 29(1)
of the
National Land Transport Transition Act 22 of
2000
, and averred, with reference to s 39 of the SANRAL Act,
that those were ‘
the
relevant policies which have a bearing on SANRAL, including but not
limited to the financing of its activities
’.
[62]
The City’s counsel accepted the proposition for the purposes of
their oral argument.
[80]
The import of the following provisions of
the aforementioned policy documents was emphasised for the purposes
of the City’s
case:
1.
The statement in clause 3.3.3 of the
National Land Transport Strategic Framework that
·
In consultation with all three spheres of
government, and with a view to providing effective mobility and
access as a contribution
to the development of South Africa, a
strategic countrywide road network will be identified.
·
The network will based on:
-
a logical analysis of transport needs,
-
social and economic development
imperatives,
-
the linkage between the primary sea, air
and dry ports and public transport nodes,
-
support of spatial development initiatives,
tourism needs, commuter travel and freight movements,
-
an integrated plan so as to avoid the
unnecessary duplication of infrastructure, and
-
an integrated and co-ordinated network
within the Southern African Development Community (SADC) region.
·
The network may include toll roads where
they are financially and socially viable and where tolls can
contribute significantly to
funding these roads
.
(Underlining supplied for emphasis.)
2.
The indications in the White Paper s.v.
‘
Financing Principles
’
that tolling might be used as a funding mechanism under the ‘
the
principle of use charging or cost recovery from direct users
’
‘
where viable or appropriate
’.
(Underlining supplied for emphasis.)
[81]
The
‘business and financial plan’ of SANRAL referred to in
s 25(1) of the SANRAL Act is formally regulated in terms
of s 35
of the Act.  Section 35 requires SANRAL annually to submit a
financial and business plan to the Minister of Transport
for
approval, not later than 30 days before the end of its financial
year.  The business and financial plan has to set out
and
explain the Agency's proposed operations, projects, activities and
other objectives for the following financial year, as well
as
(a) their cost; (b) the manner in which it is proposed to
finance them; and (c) the planned performance indicators

applicable to them.  It must also provide a statement of the
Agency's estimated income and expenditure for that financial
year;
any other information and particulars that may be prescribed; and any
additional relevant information that may be requested
by the Minister
in writing.
[63]
SANRAL
is required, along with its business and financial plan, also to
submit a ‘strategic plan’ dealing with its plans
for the
forthcoming five year period including the year dealt with in the
relevant business and financial plan.
[82]
An acknowledgement of the public’s
interest in the activities of SANRAL is contained in s 35(5),
which provides that
‘
Any business
and financial plan and strategic plan must be made known by the
Agency by having it published in the
Gazette
.
However, if satisfied that in the circumstances the interests of the
public require that greater prominence be given to such a
plan, the
Minister may order the further publication of the plan, at the
expense of the State, in one or more newspapers with a
nation-wide
circulation
’.
[83]
Section 34 of the SANRAL Act provides for
the funding of SANRAL and provides, in subsections (1) and (2), as
follows:
34
Funding of Agency
(1)
The Agency is funded and provided with capital from-
(a) the capital
invested in or lent to the Agency as contemplated in section 8;
(b) the levies on
petrol and distillate fuel to be paid to the Agency in compliance
with or in terms of any law by or in terms of
which that levy is
imposed;
(c) loans granted to
or raised by the Agency in terms of section 33;
(d) interest on the
Agency's cash balances or on moneys invested by it;
(e) income earned
from the Agency's participation in joint ventures in terms of section
26 (d);
(f) income derived
from the sale of the Agency's assets;
(g) all toll payable
to the Agency in terms of Chapter 3;
(h) fines payable by
persons as penalty on their conviction of offences created by this
Act, and all civil fines or penalties payable
by persons for
contravening of this Act, whether imposed under section 27 (5) or
through the application of a points demerit system
in terms of
section 29, or otherwise;
(i) income generated
through developing, leasing out or otherwise managing its assets
within the scope of this Act;
(j) any other levies
and any fees, rentals or other moneys charged by and payable to the
Agency in terms of this Act;
(k) moneys
appropriated by Parliament from time to time to supplement the
Agency's funds; and
(l) moneys received
by way of grant, donation or inheritance from any source, whether
inside or outside the Republic.
(2)
Moneys that in terms of subsection (1) are the funds of the Agency,
will be used in accordance with the Agency's business and
financial
plan as approved by the Minister, to meet the expenditure incurred by
the Agency in connection with its functioning,
operations and work in
terms of this Act.
In
OUTA
(SCA)
supra, at para 8, Brand JA described the import of the 1996
White Paper on National Transport Policy as envisaging that

parliamentary appropriations would be applied to fund the upgrading
of transport infrastructure in the poor rural areas, with the
result
that ‘in other areas, where economically feasible, the
principle of users pay through tolling was to be regarded as
the
funding method of preference’.  Indeed, the use of the
word ‘supplement’ in s 34(1)(k) of the SANRAL
Act
tends to confirm that SANRAL is expected to generate its income
primarily from the other sources enumerated in the subsection,
with
funding from parliamentary appropriations serving only as a top-up.
[84]
Having sketched the statutory context, we
come now to the history of the impugned tolling decisions.
The history of
the impugned tolling decisions
[85]
SANRAL appointed PPC as the scheme
developer for the tolling project, which was then at a conceptual
stage, in 2000.  The application
for environmental authorisation
was submitted in the same year.
[86]
In 2004, a memorandum was submitted to the
SANRAL Board by the chief executive officer.  Its purpose was
described as being
to ‘inform the Board of particular issues
and concerns regarding the development of [the proposed N1-N2
Winelands Toll Highway]
within the terms of The Policy of the South
African National Roads Agency in Respect of Unsolicited Proposals
(May 1999)’.
It is relevant for present purposes to
interpose that the policy in question set out, amongst other matters,
what the contents
of an unsolicited proposal such as that submitted
by PPC had to contain.  These included a ‘cost estimate of
sufficient
accuracy to illustrate the financial viability of the
project’, specifically identifying ‘whether the Agency is
expected
to contribute financially’.  (Logically, one
would have expected this type of information, in the same detail, to
have
been disclosed by SANRAL in the intent to toll process in terms
of s 27(4).)
[87]
The memorandum placed before the Board in
January 2004 stated the estimated value of the initial construction
works to be ‘in
the order of R1,9 billion’, excluding the
work to be done in respect of commissioning the second bore of the
Huguenot Tunnel
It also indicated that the ‘total
estimated infrastructure investment over a 30 year concession [to be]
R5 billion’.
(Those were present values at the
time.)  It was further reported that there was an outstanding
debt of over R500 million
in respect of the existing Huguenot Tunnel
on the Agency’s books and the opinion was expressed that the
‘concessioning
(sic) of the proposed toll highways will provide
the opportunity to relieve the debt burden and to provide funding for
other projects
which have been delayed for lack thereof’.
No details were provided that would enable an assessment of the
financial
viability of the project.
[88]
The memorandum also reported the City of
Cape Town’s opposition to tolling within the metropolitan
boundaries and its preference
for alternative funding mechanisms such
as a dedicated fuel levy in the Western Cape Province.  It set
out the Agency’s
view that the stance of the City ‘ignores
all previous research and existing national and provincial
policies’.
Reference was made to the abovementioned White
Paper in this connection.  It mentioned that a meeting had been
held with provincial
and City representatives, including the then MEC
for Transport (Ms Tasneem Essop).  It recorded that it had been
agreed at
the meeting that SANRAL would provide a programme by the
end of January 2004 ‘for the process to be followed for the
implementation
of the project’.  (There is nothing in the
evidence to indicate that such a programme was ever provided.)
[89]
The memorandum concluded by recommending
that SANRAL should proceed ‘with the completion of the tender
documents and the acquisition
of the necessary land’.  It
stated that ‘[F]urther reports will be submitted [to the Board]
regarding the projects
as and when required’.  There is no
evidence, however, of any written reports on the project having been
submitted to
the Board between 2004 and the date of the declaration
of the roads as toll roads in 2008.
[90]
Two documents were attached as annexures to
the memorandum. The first was a copy of the minutes of a meeting of
the City’s
Transport, Roads and Stormwater portfolio committee
on 8 September 2003, which recorded the City’s opposition to
tolling,
setting forth its concerns and explaining its preference for
different funding mechanisms.  The minutes recorded that if a

mutually agreeable accommodation could not be achieved with SANRAL
‘
the City could challenge the
validity of the Act 7 of 1998 in the Constitutional Court and/or
object strongly to the Notice of Intent
Toll
(sic)
specific routes
’.
The second annexure was a draft notice by SANRAL of its intention ‘to
recommend to the Minister of Transport
the declaration of [the roads]
as the Winelands Toll Highway’.
[91]
The minutes of the SANRAL board meeting on
20 January 2004 record that the Board noted the contents of the
report contained in the
memorandum and the ‘advices on the way
forward’.
[92]
There
is no further documented record of any consideration by the Board of
the tolling of the roads between 2004 and 2014, when
a resolution, to
be described below,
[64]
was
adopted by a differently constituted Board to that which had
considered the matter in January 2004 and to that which was in
place
in 2008 when the roads were declared as toll roads in terms of
s 27(1)(a)(i) of the SANRAL Act.
[93]
It
will be recalled from the discussion of the environmental decisions
earlier in this judgment that the period from 2004 to 2008
coincided
with the protracted appeal process then in train in terms of s 35
of the ECA.  As mentioned,
[65]
during that time the City’s Directorate: Transport, Roads and
Stormwater wrote to SANRAL on 17 March 2007 and, pursuant to
certain
remarks in the 2005 record of decision, which stated that certain
issues related to the impacts of diversionary traffic
should be
negotiated between SANRAL and the affected road authorities, proposed
that negotiations on such impacts and ‘mechanisms
to address
any associated costs’ should commence.
[94]
SANRAL did not respond in writing to the
City’s request for negotiations, but, in the answering
affidavit, its chief executive
officer, Mr Nazir Alli, averred that a
subsequent meeting with the executive mayor on 11 May 2007 had
addressed it in part.
Mr Alli also asserted, however, that the
11 May meeting was primarily concerned with issues related to the
R300 freeway, which
is not part of the declared toll roads.
Whatever it was that was actually discussed at the meeting with the
mayor, it is
apparent that it did not resolve any of the City’s
concerns about or objections to the proposed tolling of the roads.
[95]
After
the final determination of the environmental appeal in February 2008,
SANRAL wrote to the City on 25 March 2008 giving formal
notice of the
intention to toll the roads and, in terms of s 27(4)(b)(ii) of
the SANRAL Act, inviting the City to comment
on the proposals within
60 days of receipt of the letter or by not later than 30 May
2008.  Public notice of the intention
to ‘recommend to the
Minister of Transport the declaration’ of the roads as toll
roads was also advertised in the Gazette
and in various newspapers on
28 and 30 March 2008.  The public was afforded until 30 April
2008 to comment on the proposal.
All persons who had registered
as interested and affected parties in the environmental authorisation
process were also given
notice of the proposals by email.
SANRAL’s notices about the proposed declaration of the roads as
toll roads contained
a minimum of information.  The notices gave
no information about the proposals, other than to show a map of the
relevant sections
of the roads indicating where the toll plazas would
be positioned and to state that an open road tolling system that
would dispense
with the need for toll plazas was also being
considered.
The
notice to the public was, however, formally compliant with the
requirements prescribed in the ‘Regulations regarding
Representations on Declaration of Toll Road’ published in GN R
2267, dated 30 December 1994.
[66]
[96]
On 10 May 2008, Mr Marius Fransman, then
the Western Cape MEC for Transport, wrote to SANRAL recording the
Province’s objection
to the proposals unless certain concerns
and preconditions were addressed or satisfied.  It is apparent
that the MEC’s
letter was written in response to the notice
SANRAL was required to give to the Premier in terms of s 27(4)(b)(i)
of the Act.
Amongst the concerns expressed by the MEC were
(i) a possible misalignment between the proposals and the
affected municipalities’
integrated transport plans, (ii) the
need for SANRAL or the toll roads concessionaire to accept
responsibility for the costs
of upgrading provincial and municipal
roads to deal with diverted traffic and (iii) doubt about the
necessity to undertake
all of the contemplated construction and
upgrading work at once.  The MEC was also clearly concerned
about the capacity of
‘the public and the economy of the
Western Cape to absorb the increased transport costs resulting from
the implementation
on tolls on roads’.  He questioned the
benefit the region would derive in exchange for the cost.  Mr
Fransman also
complained about SANRAL’s failure to have
responded to a letter from his office concerning the proposal, dated
30 December
2004.
[97]
SANRAL replied to the MEC’s letter on
18 July 2008.  It pointed out that the letter of December 2004
referred to in Mr
Fransman’s letter had in fact been addressed
by his predecessor, Mr Skwatsha, to the then Minister of
Transport, Mr
Radebe.  SANRAL was uncertain whether the letter
had been favoured with a reply.  SANRAL claimed that the project
had
been a standing item on the agenda of the ‘regular liaison
meetings’ between it and the provincial department of
transport.
It also claimed that ‘
a
detailed socio-economic impact study was carried out in 2002 and
updated in 2008 to deal with the socio-economic impacts and benefits

of tolling the N1-N2
’.
SANRAL stated that ‘intensive traffic modelling’
indicated that ‘an upgraded and tolled freeway
network’
would attract traffic and therefore absorb traffic growth that would
otherwise have built up on the secondary network.
It
represented that the project would be implemented ‘at no cost
to the state’ and would result in a road in good condition

being returned to the state at the end of the concession period, also
at no cost to the state.  The letter also stated that
SANRAL had
been in discussion with the City about the project since 1999 and
that therefore it ‘believe[d] that the project
should be in
line with the City’s Integrated Development Plan’.
(The latter statement, of course, suggested that,
despite the
discussions it claimed had occurred, SANRAL was, in fact, unaware of
the actual content of the City’s transportation
framework
plan.  This impression was confirmed in subsequent
correspondence between SANRAL and the Minister of Transport,
to be
described presently.)
[98]
The
2002 and 2008
[67]
‘detailed
socio-economic reports’ referred to in SANRAL’s letter to
the MEC were reports prepared by Professor
Barry Standish.
Standish has disavowed the characterisation of his reports as
socio-economic impact reports.  They were
expressly prepared as
economic impact reports.  Moreover, as will become apparent
presently, SANRAL appears to have been in
no proper position to
assert, as it did, that the implementation of the project would be at
no cost to the state.  This would
depend on whether the toll
tariff to be determined in terms of s 27(3) of the SANRAL Act
would allow the generation of revenue
based on the contemplated
contractually stipulated ‘base toll tariff’.
[68]
That was, and remains, an uncertain prospect.
[99]
By letter, dated 30 May 2008, the City
responded to the notice given by SANRAL in terms of s 27(4) of
the SANRAL Act and indicated
its opposition to the proposal on the
grounds that it did not ‘
align
with the City’s Integrated Development Plan 2007 to 2011 or its
policy on the provision of toll roads
’.
The City also requested that SANRAL consider the socio-economic
impacts of tolling, as these had not been considered
by the
Department of Environmental Affairs in the environmental
authorisation decision-making process.  The City’s letter

warned that if SANRAL were to approve the proposal without due
consideration of the socio-economic impacts, the City’s right

to ‘implement a legal challenge to either or both the Road
Agency and DEAT processes’ was reserved.  The letter

further indicated that the response from the office of the executive
mayor might be received after the closing date for comment,
as the
relevant municipal council portfolio committee would be
‘workshopping’ the proposal only on 5 June 2008.
[100]
SANRAL responded to the City’s letter
of 30 May 2008 on 9 June 2008.  It professed to find it
‘strange’ that
the City’s Integrated Development
Plan was not ‘in line’ with the proposed tolling project
in the face of discussions
that SANRAL had been having with the City
thereanent since 1999.  (The evidence apparent on the papers
does not substantiate
the claim of extensive discussions having
occurred between the two government bodies.  Most of the
meetings that were held
appear to have been at a technical, rather
than a policy level.)  SANRAL’s letter made reference to
the two Standish
reports and stated ‘
The
EIA deals with all the socio-economic impacts of the project.  A
specialist impact report prepared by the Graduate School
of Business,
University of Cape Town, dated September 2002, and again updated in
2008, quantifies the socio-economic impacts of
tolling, including the
affordability thereof.  So again we find it strange that the
City officials have not consulted this,
and by extension the EIR
’.
(It bears mention that the updated Standish report was completed only
on 26 May 2008, just four days before the deadline
stipulated for the
City’s input and some weeks after the deadline for comment from
the public had passed.  The updated
report had not been made
available for comment to either the City or the public.)
SANRAL’s reply also indicated that
the results obtained from ‘a
large number of traffic monitoring stations’ it had put in
place since 2006 indicated
that there would be a net attraction of
traffic to the tolled roads and that the impact of diversionary
traffic on the surrounding
provincial and city road network would be
‘insignificant’.
[101]
On 24 June 2008, the executive mayor wrote
to SANRAL reiterating the objections and concerns expressed in the
City’s aforementioned
letter of 30 May 2008.
The mayor requested to be informed as to how SANRAL would take the
City’s representations
regarding the need to consider the
socio-economic impact of the proposed tolling into account.  The
mayor’s letter quoted
several extracts from the judgment of the
Constitutional Court in
Fuel Retailers
supra, in support of the City’s demand that the socio-economic
impacts had to be considered, and warned that if a response
from
SANRAL were not forthcoming by the end of the month she would
consider how to proceed further ‘including approaching
the
Court to seek review of the decisions made in this regard’.
The mayor did not, however, add anything of substantive
import
regarding the City’s position to what had already been set out
in the City’s aforementioned letter of 30 May
2008.
[102]
SANRAL replied to the mayor’s letter
on 15 July 2008.  The reply expressed regret at the failure of
the City to discuss
its position on tolling with SANRAL before
finalising its own transport policies.  SANRAL referred to the
condition attached
to the environmental authorisation that it should
take the recommendations of the final environmental impact report
into account
in the toll road declaration process.  It again
referred to the 2002 and 2008 Standish reports, and described them as
a ‘specialist
socio-economic impact report’.  The
letter concluded ‘We confirm that SANRAL will take any
reasonable concerns
and comments into account when making
recommendations to the Minister of Transport’.  SANRAL did
not inform the mayor
that it would not deal with her letter in its
report to the Minister in terms of s 27(4) of the SANRAL Act
because it had
been received after the 30 May deadline.
[103]
On 2 September 2008, SANRAL applied, in
terms of s 27(1) read with s 27(4) of the SANRAL Act, for
the approval of the
Minister of Transport of its proposals to declare
the roads as toll roads.  The application, which comprised 1560
pages of
documentation, was delivered by hand to the Minister’s
office under cover of a letter from SANRAL’s chief executive

officer.  The documentation submitted to the Minister included a
63-page report by SANRAL together with copies of the comments
and
objections received in response to the invitations given and
published in terms of s 27(4)(a)(ii) and (4)(b) of the Act
and
its replies thereto.  Only responses received before the
published deadlines for comment were included in the report to
the
Minister.  The aforementioned letter from the executive mayor,
dated 24 June 2008, was not placed before the Minister.
Indeed,
the report to the Minister stated that ‘
all
representations not conforming with
(sic)
the stipulated requirements were …
disregarded
’.  The report to
the Minister did, however, accurately summarise the content of the
City’s letter of 30 May 2008
(including the concern expressed
therein that the proposal did not align with the City’s
integrated development plan) and
the import of SANRAL’s reply
thereto, dated 9 June 2008.
[104]
SANRAL’s description in the report of
its response to the City’s concerns about the alleged
non-alignment of the proposals
with its integrated development plan
went as follows: ‘
Integrated
Transport Plans
: The South
African National Roads Agency (SANRAL) has been in discussion with
the City of Cape Town about the project since 1999,
so we find the
statement strange that this large project is not in line with the
City’s Integrated Development Plan - 2007
to 2011.  As you
[i.e. the City]
should
be aware more than 90% of the project is existing national road and
the remainder is within a proclaimed national road reserve
which was
proclaimed many years ago and in line with the Provincial (sic) and
City’s Planning
’.
This should have been sufficient to alert the Minister to the fact
that SANRAL had not apprised itself of the content
of the City’s
transportation framework plan, and therefore not even attempted to
determine how it might be accommodated in
the proposals.  It
should also have placed him on guard with regard to the issues of
mutual respect and co-operation between
spheres of government and
organs of state in terms of s 41 of the Constitution.
SANRAL’s response to the City should also
have been recognised by the Minister as fundamentally inconsistent
with the extract
from the National Land Transport Strategic Framework
policy document, quoted in paragraph [80], above, which
emphasises the
importance that the published government policy
attaches to co-operative governance and integrated planning.
[105]
The
report contained a short section s.v. ‘
Social
Impact
’,
in which it was submitted that the implementation of the project
would bring a number of benefits, including improved road
safety,
pedestrian bridges and employment opportunities.  The report to
the Minister did not directly address the question
of the
socio-economic impacts of tolling the roads.  It did, however,
identify the following aspects, amongst others, as requiring
‘further
input’: (i) the need for discussions with the affected
communities of De Doorns, Bot River and Grabouw
on the mitigation of
impacts of the tolling of the roads and (ii) possible discounts on
the toll tariffs to ‘various qualifying
users’.  The
report to the Minister indicated that SANRAL’s response to the
City’s concern about the absence
of a study of the
socio-economic impacts of tolling the roads had been as follows:
‘
SOCIO-ECONOMIC
IMPACTS
The EIA deals with all the socio-economic impacts of the project.
A specialist impact report prepared by the Graduate School
of
Business, University of Cape Town, dated September 2002 and again
updated in 2008, quantifies the socio-economic impacts of
tolling
including the affordability thereof.  So again we find it
strange that the city officials have not consulted this,
and by
extension the EIR.
’
It did not point out that in terms of the agreement between SANRAL
and the Department of Environmental Affairs mentioned
earlier,
[69]
and which had been referred to in the EIR, the socio-economic impacts
of tolling were not considered as part of the environmental
impact
assessment.  It also did not disclose that the City had been
informed that these impacts would be addressed in the
intent to toll
process.  Furthermore, it did not draw to the Minister’s
attention that the updated Standish report had
been produced only
four days before the expiry of the time afforded to the City to
comment on the proposals, and that it had not
been made available to
the City.
[106]
A
copy of the updated economic impact report prepared by Professor
Standish was annexed to SANRAL’s report to the Minister.

The body of the report runs to 120 pages of densely printed
information, which in parts do not make for easy reading, certainly

for the layman.  It confirms that tolling is a more expensive
and less economically efficient means of financing the construction,

upgrading and maintenance of the roads than direct funding by the
fiscus, whether from the consolidated revenue fund or by means
of a
dedicated fuel levy.  The report makes it clear that it had been
prepared on the basis that national government policy
did not
countenance the ring fencing of government sources of revenue for
particular projects and accepting that, by reason of
other pressing
demands on the government purse - notably funding poverty
alleviation, education and health - the availability of
direct
funding for road building and maintenance fell materially below what
was required to optimally maintain and expand the national
road
system to the extent necessary for the integrity of the national
economy.  The report was thus composed on the assumption
that
the proposed tolling project was a given.  It consequently did
not evaluate alternative means to achieve the end of upgrading
and
maintaining the roads.  Plainly implicit in the economic impact
report, however, is that funding the construction and
maintenance of
roads by the less economically efficient means of tolling could be
economically rational only if the tolling revenue
substantially
covered the costs.  Tolling the roads could not make financial
or economic sense if direct government funding
were required to
substantially supplement toll-generated funding in order to cover the
cost of the project.  That, indeed,
is consistent with the
published government policy referred to earlier.
[70]
[107]
The report identified various areas in
which information relevant to the dependability of its assessments
was lacking.  These
included the lack of any indication of what
the toll tariffs were likely to be and the absence of relevant
traffic modelling data.
In the result, the authors of the
report had been required to make assumptions in this regard.
One would think that this
aspect of the report would have served as a
red flag warning to any critical reader seeking assurance as to the
social and financial
viability of the tolling project, which were
material considerations in assessing whether proceeding with the
project would be
appropriate in terms of the published government
policy.
[108]
The economic impact report contained a
section which dealt with the micro-economic impacts of tolling the
roads.  On the basis
of the assumed tolls (which were
extrapolated from the range of tolls charged on existing toll roads
under aegis of SANRAL), it
indicated that quite significant impacts
could be felt by the high proportion of low income users of the
roads.  It also speculated
that taxis and public transport
carriers might simply add the extra costs incurred in respect of
having to pay the tolls to the
fares charged without making any
provision for savings in fuel and vehicle wear that it was postulated
would be brought about by
the improved roads.  The report also
identified certain geographic areas and types of business enterprise
that were likely
to be significantly adversely affected by the
tolling of the roads.  These included the deciduous fruit
growers in the Elgin
and Hex River Valley areas.  It noted that
‘
the deciduous fruit sector is
critical to the functioning of the economies in the rural and
semi-rural area along the proposed toll
roads.  A significant
number of permanent and seasonal jobs are supported by the
industry…(which) makes an important
contribution to the
generation of foreign exchange and has the highest economic
multiplier of all agricultural sectors
’.
The report observed that the fruit producers were ‘
captive
to the toll road and would thus be forced to use it
’.
To some extent therefore the report confirms the existence of a
substantive basis for serious consideration of the
issues raised by
the City.
[109]
The Minister of Transport signified his
unqualified approval of SANRAL’s proposal to declare the roads
as toll roads on the
same day that he received the application and
voluminous supporting documents.  The Minister’s
consideration of the
application took place without the assistance of
a departmental memorandum.  There was an unmistakable note of
incredulity
in the City’s papers and heads of argument about
the Minister’s ability to have properly applied himself in a
single
day to all of the information contained in the application,
but in oral argument its counsel accepted that it could not go behind

the Minister’s averments under oath that he had been familiar
with the project by reason of his history of previous interaction

with SANRAL officials on the subject and that he had therefore been
able to get through the papers in such a short time.
There is
no evidence, however, that the Minister was alerted to the
considerations arising out of SANRAL’s failure to engage

substantively with the content of the City’s letter of
objection in the respects identified earlier in this judgment (at

para [103]), or that he was astute to the fact that the
socio-economic impacts of tolling the roads had not been included
in
the EIA process in terms of the 1999 agreement between SANRAL and the
Department of Environmental Affairs.
[110]
The declaration of the roads as toll roads
was publically announced by SANRAL in GN 978 in the Government
Gazette on 15 September
2008.
[111]
It would appear that the City must
subsequently have made enquiries about the project, because, on 19
June 2009, SANRAL’s
regional manager wrote to the City’s
executive director; Transport, Roads and Stormwater, in answer to a
letter from the
latter, dated 12 June 2009, and reported ‘that
good progress is being made on the project’.
[112]
In March 2010, SANRAL advertised for
tenders from prospective concessionaires for the proposed BOT
undertaking.  The closing
date for the submission of tenders was
1 November 2010.  In April 2010, officials from the City
met with their provincial
counterparts to discuss the tolling
project.  The meeting was also attended by SANRAL’s
regional management.  City
officials and councillors
representing the Helderberg region of the City’s metropolitan
area attended a presentation on the
project in November 2010.
[113]
The City’s municipal manager sought
in the papers to explain the City’s failure to actively
challenge the declaration
of the roads as toll roads at that stage
(the end of 2010) as having been due to a change of political
leadership of the City,
with the induction of a new executive mayor.
He averred that ‘clarity had to be obtained as to the City’s
approach’
and, without providing any detail, indicated that the
‘process took a substantial period’.  We think that
the
municipal manager’s memory must have failed him in this
connection because it is a matter of common knowledge and public
record that the new mayor (Ms De Lille) came into office only
after the municipal elections in mid-2011.  It may be, however,

that the inertia at that stage was related to an anticipated change
in the City’s leadership.  Whatever the actual position,

this is but an instance of the City’s vague and unsatisfactory
attempt to explain the inordinate delay in instituting review

proceedings.
[114]
As
appears from the report of a transport economist, annexed to the
City’s supplementary founding papers, the Minister of

Transport’s announcement, in February 2011, of the tolls
payable in respect of the use of the freeways built as part of the

Gauteng Freeway Improvement Programme (‘GFIP’) gave rise
to a public outcry.  This led, amongst other things,
to the
appointment of an inter-ministerial committee chaired by the Deputy
President.  In the result, the tolls were significantly
reduced,
but, as the report notes, ‘the reduced amount was still widely
rejected by the public’.  It is a matter
of common
knowledge, and confirmed in Ms Naude’s report, dated 13 May
2014, that the tolls were consequently further reduced
in October
2012.  The so-called OUTA (Opposition to Urban Tolling Alliance)
litigation
[71]
was
part of the manifestation of the public’s disaffection with the
tolling of the Gauteng freeways.  An extraordinary
parliamentary
appropriation of R5 billion was required to meet the effect on
SANRAL’s ability to meet its loan obligations
of the deficit in
operating revenue caused by the non-payment of toll fees and downward
adjustments to the originally announced
toll tariffs.
[115]
Clearly then, from February 2011, the issue
of tolling urban roads had become a matter of high public profile,
with attendant intense
political interest.  The City’s
papers do not contain any admission to this effect, but in oral
argument their counsel
candidly acknowledged that it is no
coincidence that the City began to take a notably more active
position in respect of the declaration
of the roads as toll roads at
the same time as the controversy concerning the tolling of the
Gauteng freeways began to make news
headlines.
[116]
Thus, on 19 April 2011, which happened also
to be the day upon which PPC and another consortium were selected at
the end of the
first phase of the BOT contract tender evaluation
process as the bidders chosen to submit best and final offers, the
City’s
Executive Director: Transport, Roads and Major Projects
wrote urgently to SANRAL requesting that it defer any award of the
concession
contract for a period of at least three months so as ‘
to
explore, in consultation with the City and other relevant
authorities, the possibility of utilising alternative funding models

to finance the upgrade
’ of the
roads.  The letter further advised that in the City’s view
any such consultation ‘
should also
be informed by a proper assessment of the socio-economic implications
of the various options
’.
The letter gives as its context the indication by the then Minister
of Transport (Mr S. Ndebele) that he would be
convening a ‘Road
Funding Summit’ ‘
to explore
the potential for using financing mechanisms other than tolling to
fund the upgrade of existing roads and development
of new roads
’.
The City’s letter called upon SANRAL to reply by 26 April 2011
and indicated that should it fail to respond
positively to the City’s
request, the City would ‘
have no
alternative but to seek legal recourse…
’.
[117]
Notwithstanding
reminders from the City that a response was outstanding, SANRAL
replied to the City’s letter only on 8 July
2011.  It
declined to suspend the tender process and advised that it had
selected two of the three parties which had submitted
bids to make
best and final offers in competition with each other for nomination
as preferred tenderer for the purpose of negotiating
and concluding a
concession contract.  SANRAL asserted that the City’s
concerns about the impact of tolling could be
addressed during the
process prescribed in terms of s 27(3) of the SANRAL Act for the
determination of the toll tariffs.
[72]
SANRAL must have appreciated that that process was likely to occur
only after the initial contract works under the contemplated
BOT
contract had been completed.  As the City has emphasised, a
challenge to the tolling decisions at that stage would face
similar
problems to that faced by the appellant in
OUTA
(SCA) supra.  The horse would have bolted by then.
[118]
Upon receipt of SANRAL’s reply, the
City declared an intergovernmental dispute between itself and SANRAL
in terms of
s 41
of the
Intergovernmental Relations Framework
Act 13 of 2005
.  That happened on 18 July 2011.  That date
effectively marked the end of the City’s unreasonable delay.
It would be subversive of the object of Act 13 of 2005 to treat any
period taken up in dispute resolution under the aegis of the
Act as
unreasonable delay within the meaning of s 7(1) of PAJA.
Any notional contradiction between that premise and
the literal
effect of s 7 of PAJA falls to be resolved having regard to the
status of both statutes as constitutional legislation
and the evident
predominating constitutional objective that litigation between organs
of state should happen as a last resort;
cf. s 41(3) of the
Constitution and s 45(1) of Act 13 of 2005.
Unsurprisingly, no party sought to argue to the
contrary.
[119]
In September 2011, after reports had
appeared in the press announcing the selection of PPC as the
preferred bidder, the City applied
for an interim interdict
prohibiting SANRAL from implementing the project pending the
conclusion of the intergovernmental dispute
resolution process.
That application was postponed indefinitely after SANRAL furnished
certain undertakings, including an
undertaking not to proceed with
the project without giving the City prior notice.
[120]
It is common ground that the
intergovernmental dispute resolution process was expanded to include
the relevant government departments.
The process came to an end
in March 2012 without success.  The City instituted the review
application 12 days later,
on 28 March 2012.
[121]
On 6 March 2013, SANRAL gave the City
notice, as agreed in terms of the arrangements made for the
postponement of the City’s
2011 interim interdict application,
that it intended to go ahead with implementing the project.
Three weeks later the City
instituted a second application for
interim interdictal relief pending the determination of its
application for the judicial review
of the environmental decisions
and the declaration of the roads as toll roads.  The interim
interdict application was heard
in May 2013 together with two
interlocutory applications in the review concerning an amendment of
the City’s notice of motion
and the failure by SANRAL to make
certain documents available as part of the administrative record in
terms of uniform rule 53.
An interim interdict prohibiting
SANRAL from concluding a BOT contract in respect of the project
pending the final determination
of the review proceedings was
granted; see
City of Cape Town v South
African National Roads Agency Ltd and Others
[2013] ZAWCHC 74
(21 May 2013).
Additional relief
claimed by the City in respect of the tolling-related decisions
[122]
The review proceedings generated an
extraordinary amount of paper (over 7400 pages, excluding heads of
argument running to nearly
650 pages) and the process of bringing it
to hearing was attended by a number of interlocutory disputes
(including that which was
the subject of the judgments in
South
African National Roads Agency Limited v City of Cape Town and Others;
In Re: Protea Parkway Consortium v City of Cape Town
and Others
[2014] 4 All SA 497
(WCC),
City of Cape
Town v South African National Roads Agency Limited
[2014] ZAWCHC 151
(8 October 2014) and
City
of Cape Town v South African National Roads Authority Limited and
Others
2015 (3) SA 386
(SCA)).
The City’s notice of motion was amended on four occasions along
the way.  As a result, in addition to
the relief described in
paragraph [17], above, orders in the following terms were also
claimed in terms of paragraphs 2-7 of the
finally amended notice of
motion, which, insofar as remains relevant, read as follows:
2.1A
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;
2.1
The following decisions are reviewed and set aside –
2.1.1
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;
2.1.2
The failure by SANRAL to make a decision to withdraw the Declaration
as provided for in
s 27(1)(a)(ii) of the SANRAL Act.
2.2
SANRAL is directed to:
2.2.1
consider and decide whether to withdraw the declaration of portions
of the N1 N2 Winelands
Highways as toll roads;
2.2.2
notify the City of its decision in this regard within ten days of
making such decision,
and if it decides not to withdraw the
declaration, of the reasons for such decisions.
3.
Conditional constitutional challenge to the validity of the SANRAL
Act
…
3A
The round robin resolution by the SANRAL board to declare as toll

roads [the roads] and the subsequent ratification thereof at the
SANRAL board meeting of 3 June 2014…is declared to be invalid

and of no force and effect.
3B
The 2014 declaration decision is reviewed and set aside.
4.
...
5.
SANRAL is interdicted from entering into an agreement
with a person
contemplated in s 28(1)(b) of the SANRAL Act in circumstances where
such agreement would place an obligation on SANRAL
or the State to
provide such person with a guarantee or benefit, the provision of
which is linked either:
5.1
to the amount of toll, any rebate thereon or any increase or
reduction
thereof which SANRAL, in terms of s 27(3) of the SANRAL
Act, must recommend to the Transport Minister; or
5.2
to the amount of toll, any rebate thereon or any increase or
reduction
thereof which the Transport Minister must determine in
terms of s 27(3) of the SANRAL Act.
6.
SANRAL is interdicted from entering into any agreement
with a person
contemplated in s 28(1)(b) of the SANRAL Act in circumstances where
such agreement:
6.1
prescribed to SANRAL or fetters SANRAL’s discretion in
deciding
the amount of toll, any rebate thereon or any increase
or reduction thereof it should recommend to the Transport Minister in
terms
of s 27(3) of the SANRAL Act;
6.2
prescribes to the Transport Minister or fetters the discretion of the
Transport Minister in determining, in terms of s 27(3) of the SANRAL
Act, the amount of a toll, any rebate thereon or any increase
or
reduction thereof;
6.3
has the effect of predetermining the amount of a toll, any rebate
thereon
or any increase or reduction thereof which must be determined
in terms of s 27(3) of the SANRAL Act before an open, transparent
and
fair public participation process has taken place.
(It was conceded by
the City’s counsel at the hearing that the matter to which
paragraph 3 of the amended notice of motion
was directed was not a
live issue before this court.  They also intimated that the City
was not pressing for relief in terms
of paragraph 4.)
[123]
The substantive amendments to the notice of
motion were inspired by three things.  Firstly, the discovery,
upon the City’s
consideration of the administrative record made
available by SANRAL in terms of rule 53 and the interlocutory
directions given
by the court, that there was no documented record of
a decision having been made by the SANRAL Board to apply to the
Minister of
Transport for approval of a proposal to declare the roads
as toll roads and, upon such approval having been obtained, to
declare
them as such.  Secondly, the endeavour by SANRAL during
the course of the legal proceedings to deal with the absence of a
minute of such decisions by means of a round robin resolution by its
directors, in terms of which the directors purported, during
April
and May 2014, to resolve to declare the roads as toll roads in terms
of s 27(1) of the SANRAL Act and to authorise the
chief
executive officer of SANRAL to cause such declaration to be published
in the Government Gazette.  (The round robin decision
was
subsequently ‘ratified’ at a Board meeting on 3 June
2014.)  And thirdly, the effect of the City’s analysis,

supported by the opinions of expert witnesses, of the effect of the
terms of the draft concession contract construed in the context
of
PPC’s ‘best and final offer’, which led it to
contend that the tolls that would have to be imposed in terms
of
s 27(3) of the SANRAL Act to achieve the base toll tariffs to be
provided in the draft contract in amounts sufficient to
cover the
costs of the project would exceed those being levied on the Gauteng
freeways by a multiple of nearly three.  This,
in the context of
a provision in the draft contract (the so-called ‘reimbursement
clause’) that would oblige SANRAL
to compensate the
concessionaire for any shortfall between the revenue that would be
generated on the basis of the contractually
stipulated base toll
tariffs and that realised in terms of the tolls actually imposed in
terms of the Act.  The City argued
that this provision would
oblige the State (effectively the National Treasury) to guarantee or
underwrite SANRAL’s obligation
in this regard.  The draft
contract only became available to the City in the context of the
judicial review procedures after
the institution of proceedings.
The scheme of
section 27(4) of the SANRAL Act
[124]
The
two decisions in terms of the SANRAL Act that the City seeks to
impugn on judicial review
[73]
are
both connected to the declaration of the roads as toll roads in terms
of s 27(1)(a)(i) read with s 27(4) of the SANRAL
Act.
[74]
Those
provisions of the Act determine a scheme in terms of which any
proposed declaration of a toll road must be advertised by SANRAL
in
the prescribed manner and interested persons must be afforded at
least 30 days within which to furnish their written comments
and
representations on the proposed declaration and the proposed position
of any toll plazas contemplated for the road.  SANRAL
is also
obliged thereby to request the Premier of the province in which the
proposed toll road is situated to comment on its proposals
and must
afford the Premier at least 60 days within which to do so.  The
same opportunity has to be given to every municipality
through which
the proposed toll road is routed.
By
virtue of the fact that the declaration of a toll road is a
non-delegable function of the Board,
[75]
notice
of the proposed declaration will be given only after the Board has
considered the proposals and decided to proceed with them.
[125]
After the expiry of the period for comments
and representations, SANRAL is required, if it wishes to proceed with
the proposed declaration,
to apply to the Minister of Transport for
approval of its proposals.  Its application is required to
consist of the proposals
themselves, to be accompanied by a report
indicating the extent to which any of the matters raised in the
comments and representations
have been accommodated in the
proposals.  In the nature of the requirements, SANRAL’s
directors would have to apply
their minds to the responses elicited
to the notices given in terms of s 27(4)(a) and (b) and consider
how they might be accommodated
in the Agency’s proposals.
It is thus apparent that if the statutory requirements had been
complied with the Board
would have considered the proposals on at
least two occasions before the application was submitted to the
Minister; firstly, for
the purpose of deciding to give notice of the
proposed declaration and secondly, to consider the representations
received in response
to the notices and decide how they might be
accommodated.
[126]
The Minister is not able to consider the
application unless SANRAL has complied with the aforementioned
procedural requirements.
If there has been any shortcoming in
compliance with the prescribed procedures, the Minister is required
to return the application
to SANRAL with directions for proper
compliance to be effected.  The Minister must also return the
application if she is not
satisfied that SANRAL has properly
considered the comments and representations elicited upon notice of
the proposals.  Section
27(4)(d) of the SANRAL Act places a
positive duty on the Minister to satisfy herself that SANRAL has
considered the comments and
representations.  The Minister is
able to fulfil this duty only by apprising herself of the content of
such comments and representations
and qualitatively evaluating the
extent of SANRAL’s engagement therewith in the report it has
forwarded in terms of s 27(4)(c)
as part of the application.
[127]
The Minister’s duty in terms of
s 27(4)(d) is complementary to an obligation on SANRAL to
conscientiously consider the
accommodation of the comments and
representations in the proposals for the toll road.  That much
is a necessary implication
in the provisions of s 27(4) read as
a whole.  It is only after SANRAL has discharged that obligation
that it will be
able to compose a report to the Minister properly
compliant with s 27(4)(c) of the Act.
[128]
The Minister may consider approving the
proposals only after SANRAL has complied with the procedural and
substantive obligations
on it in terms of s 27(4)(a)-(c) of the
Act.  The Minister’s determination whether the procedural
requirements
of s 27(4) have been satisfied predicates a factual
enquiry, while satisfying herself that the Agency has conscientiously
considered the comments and representations submitted to it in
respect of its proposals entails the exercise of a value judgment.

The Minister must act reasonably in making her value judgment.
[129]
If the Minister approves the proposal,
SANRAL may proceed to declare the road as a toll road in terms of
s 27(1)(a)(i) of the
SANRAL Act.  Any such declaration
becomes effective only 14 days after notice thereof has been
published by SANRAL in the
Government Gazette.
[130]
SANRAL
is governed and controlled by a board of directors.
[76]
It
is evident from s 18(5)(d) of the SANRAL Act that a declaration
of a road as a toll road may occur competently only upon
a decision
to that effect by SANRAL’s board of directors.  The
provision states the powers, functions and duties contemplated
in
terms of s 27(1) may not be delegated by the Board.  It
seems to us that any decision to propose the declaration of
a road as
a toll road is similarly a non-delegable power and function of the
Board.  We say this because s 18(5)(f) of
the Act provides
that the Boards powers and functions in terms of s 35 of the Act
are non-delegable ‘in so far as the
Board necessarily has to
decide on the Agency’s business plan and strategic plan’.
As we have noted above,
[77]
SANRAL
is required annually to publicly make known to the public and submit
to the Minister for approval a business plan which must,
amongst
other matters, set out and explain its proposed operations, projects,
activities and other objectives for the following
year.  It
would be inconsistent with the scheme of the Act, save in a situation
of emergency, for the Agency to embark upon
a project or take
measures to achieve an objective that had not been decided upon and
disclosed in its business plan.
The City’s
challenge to the Minister’s approval of SANRAL’s
proposals for the declaration of the roads as toll
roads
[131]
The City has challenged the Minister’s
decision to grant SANRAL’s application for the approval of its
proposals to declare
the roads as toll roads on the following
grounds:
1.
That the Minister had misconstrued the
nature of his powers and functions in terms of s 27(4) of the
SANRAL Act.
2.
That the Minister’s ability to grant
approval to SANRAL’s proposals was precluded because SANRAL had
not complied with
a procedurally fair public consultation process.
3.
That the Minister’s decision-making
was itself procedurally unfair because he should have called for
representations, if not
from the public, then at least from the
relevant road authorities, namely the Province and the affected
municipalities.
4.
That, objectively, the Minister could not
have been satisfied that the SANRAL Board had considered the comments
and representations
received; alternatively that his approval was
granted under the mistaken impression that the Board had considered
them.
5.
The Minister failed to consider the
socio-economic impact of implementing the proposals and the social
and financial viability of
the project.
6.
That the decision was irrational.
[132]
The respondents argued that the Minister’s
decision was not subject to review in terms of s 6 of PAJA
because it did
not constitute ‘
administrative
action
’ as defined in s 1 of
Act 3 of 2000.  SANRAL’s counsel submitted, moreover, that
the Minister had in any
event not misapplied himself in considering
and approving the Agency’s proposals to declare the roads as
toll roads.
They submitted that the Minister’s functions
in terms of s 27(1) of the SANRAL Act were narrowly confined to
the matters
set out in paragraphs (a) to (d) of s 27(4).
That was also the position expressed in the answering affidavit of
the
then Minister of Transport, Mr Jeffrey Radebe, and in the
second respondent’s principal answering affidavit deposed to
by
Mr C.B. Hlabisa, the deputy director-general for the roads
branch in the Department of Transport, as well as in the Ministers’

counsel’s heads of argument.
[133]
In
oral argument, however, the Ministers’ counsel, having had the
benefit of listening to the exchanges we had had with SANRAL’s

counsel on the point, conceded that the Minister had been entitled,
and indeed required, to have regard to wider considerations.

They accepted that the Minister’s role in terms of s 27(4)
of the SANRAL Act was ‘more than mechanical’.
It
was submitted that the Minister was not required to approve the
Agency’s recommendations merely because SANRAL had complied

with the procedural requirements of s 27(4).  The Ministers’
counsel argued that the Minister had to assess the proposals
for
consistency with government policy.  The Minister, however,
averred in his affidavit that the Transport Minister is required
by
s 27(4) only to determine whether SANRAL had complied with the
requirements of the Act and ‘not to make a separate
decision in
respect of the declaration of a toll road on the basis of a
consideration of any expert reports provided’.
This is
somewhat ambiguous because it is not clear from the averment, read in
isolation, whether by referring to ‘the requirements
of the
Act’, the deponent meant the statute as a whole, or only the
requirements of s 27(4).  Mr Radebe’s
averments fall
to be read contextually with the content of the affidavit of Mr
Hlabisa, who stated that the Minister ‘may
refuse the
declaration
only
when she is not satisfied that SANRAL has complied with the listed
sections’;
[78]
viz.
paragraphs (a)-(c) of s 27(4).  If it were the third
respondent’s case that Mr Radebe had acted under a different

apprehension when purporting to approve the application, his
affidavit would no doubt have been drafted to say so clearly.

It may be accepted therefore that Mr Radebe understood s 27(4)
to work in the same way that Mr Hlabisa does.
[134]
The thrust of the argument advanced by the
Ministers’ counsel remained, however, that the declaration of
roads as toll roads
was primarily the responsibility of SANRAL.
In this connection, counsel stressed the ambit of SANRAL’s
functions in
terms of s 25(1) of the Act (which we have quoted
in paragraph [78]
above) and the import of
the word ‘only’ in s 25(3), which provides ‘
Except
in so far as this Act provides otherwise, the responsibility and
capacity to perform the functions mentioned in subsection
(1) in the
Republic, are entrusted to the Agency only
’.
The Ministers’ counsel contrasted the pertinent provisions of
s 27 of the SANRAL Act with those of s 9
of the National
Roads Act, 1971, which had previously regulated the declaration of
toll roads by SANRAL’s statutory predecessor,
the National
Roads Board.  They pointed out that the principal difference
between the provisions was the introduction, in
s 27 of the
SANRAL Act, of the requirement of the Minister’s approval.
They suggested that the requirement had
been inserted in response to
the Appellate Division’s judgment in
South
African Roads Board v Johannesburg City Council
1991 (4) SA 1
(A), in which, applying ‘the
audi
principle’ in the rules of natural justice, it was held that a
decision to declare a road as a toll road in terms of s 9
of the
National Roads Act, 1971, could not lawfully be made without first
affording an opportunity to persons whose rights might
be adversely
affected thereby to make representations.  They submitted that
the historical context supported the inference
that the object sought
to be achieved by bringing the Minister into the declaration process
in terms of s 27 of the new statute
had been essentially to
provide procedural oversight in respect of the public consultation
aspect of the process.
Discussion of the
City’s challenge to the Minister of Transport’s decision
in terms of s 27(4) of the SANRAL Act
to approve SANRAL’s
proposals for the declaration of the roads as toll roads
[135]
For the purpose of deciding whether there
is merit in the City’s challenge to the Minister’s
decision it is necessary
only to consider the question whether the
Minister’s misconceived his powers and functions in terms of
s 27(1) read
with s 27(4).  We shall, however, also
treat briefly of the City’s contentions concerning the alleged
procedural
unfairness of the Minister’s decision-making.
[136]
In our judgment, the respondents’
conception of the Minister’s role in respect of the
consideration and approval of
the declaration of national roads as
toll roads is not sustained by the plain language of s 27,
either on a reading of the
section on its own, or in its context in
the statute considered as a whole.
[137]
Firstly, s 27(1) speaks of ‘
the
Minister’s approval
’ in
unqualified terms.  It makes it plain that a declaration of a
toll road by SANRAL may be made only with the Minister’s

approval.  Nothing in the wording of s 27(1)(a), read on
its own, suggests that the Minister’s power to grant or

withhold such approval is constrained in any way, or that it should
be exercised only with reference to defined or limited
considerations.
[138]
Secondly, the constraints upon the
Minister’s power to grant approval imposed in terms of
s 27(4)(a) to (d) of the SANRAL
Act are expressly directed at
prescribing prerequisites for the exercise of the power, and not at
circumscribing its ambit.
Thus, the existence of the power
having been provided for in general and undefined terms in
subsection (1), subsection (4)
stipulates three
preconditions that must be satisfied before ‘
the
application and the Agency’s proposals will be considered for
approval
’.  Subsection (4)
has been clumsily formulated, but its import is clear enough.
It posits a dichotomous exercise
by the Minister.  Firstly, she
must establish that the prescribed notice of the proposals has been
given and, with reference
to the Agency’s report on the
comments and representations elicited in response to such notice,
satisfy herself that the
comments and representations have been
properly considered and then, and only if the requirements of the
first leg of the exercise
have been met, may she secondly consider
the proposals for the purpose of deciding whether to approve them, or
not.
[139]
If the legislative object of s 27(1)
read with s 27(4) of the SANRAL Act had been merely to give the
Minister the responsibility
of procedural oversight, one would have
expected the provisions to have been worded differently.
Moreover, having regard
to the scheme of the Act as a whole, and in
particular its requirement, in a number of material respects, that
SANRAL may act only
with the Minister’s acquiescence or
approval, it would be anomalous were the Minister’s powers and
functions with regard
to the declaration of toll roads as limited as
the respondents’ contention would have them.
[140]
The facts of this case and, indeed, also
those documented in the judgments in the OUTA litigation concerning
the urban toll roads
in Gauteng, illustrate that the construction and
upgrading of national roads for use as toll roads can have
significant fiscal
implications, even, it would seem, when large
multi-billion rand projects are involved, to the extent of potential
impact on the
country’s credit rating.  Furthermore,
certain of the City’s concerns in the current matter about the
potential
effect of tolling on the road system for which it is
responsible - which echo those which moved the Johannesburg City
Council to
litigate in the
South African
Roads Board
case supra - illustrate
that the declaration of roads as toll roads can also have adverse
effects on the constitutional ideal of
a relationship of comity
between the national government and the other two spheres of
government.  That tolling urban roads
can have political, as
well as social and economic, implications is also manifest.  It
is thus unsurprising to find provision
made in the SANRAL Act for the
responsible member of the Cabinet to maintain a measure of direct
control over tolling, at least
to the extent of having the final say
over any proposals by SANRAL in that regard.  These are
objective considerations that,
irrespective of the effect of the
contextual indicators in the other provisions of the statute - to
which we shall refer presently
- make the respondents’
construction of the Minister’s powers and functions in terms of
s 27 unpersuasive.
It is unlikely that Parliament would
have restricted the role it unambiguously decided to give the
Minister to consider approving
such proposals to the limited
administrative, indeed almost clerical, function for which the
respondents (albeit in the case of
the third respondent, somewhat
equivocally) contended.
[141]
No
corroborative material was offered in support of the submission that
s 27(4) had been introduced to provide only procedural
oversight
by the Minister to ensure that the effect of the judgment in
South
African Roads Board
supra, was respected in practice.  To the extent that a
legislative response to the judgment was considered necessary, it

seems to us in any event to have been provided by the substitution,
in terms of s 7(b) of the National Roads Amendment Act
100 of
1992, of s 9(3) of the National Roads Act with a provision
expressly providing for notice and comment in terms substantially

equivalent to those required of SANRAL in terms of s 27(4) of
the current statute.
[79]
A more plausible explanation for the introduction of a requirement of
ministerial approval for tolling in the current legislation,
where it
was previously lacking, is that it was to provide, understandably,
for a greater measure of political oversight of the
tolling of
national roads.
[142]
Our
construction of the nature of the powers and functions invested in
the Minister in terms of s 27(1) and (4) is supported
not only
on the wording of those provisions, but also upon a contextual
assessment of the nature of the Minister’s relationship
of
authority over SANRAL in terms of the SANRAL Act read as a whole.
Thus, the Minister is the person in whom the State’s

rights as the only member and shareholder in SANRAL are
invested.
[80]
As
mentioned, SANRAL is required to fulfil its functions within the
framework of government policy and in accordance with
its business
and financial plan.
[81]
The Minister is responsible for making Government policy known and is
the functionary responsible for receiving any representations
on the
determination or amendment of such policy.
[82]
SANRAL’s business and financial plans, as well as its strategic
plans, require approval by the Minister annually.
[83]
The Agency is only able to use its funds in accordance with a
business and financial plan approved by the Minister,
[84]
and it may only raise loans from the State through the Minister, or
from any other source with the written permission of the
Minister.
[85]
The
Minister, on the recommendation of the Agency, determines the amount
of toll that SANRAL or a concessionaire may levy
and collect for the
driving or use of a vehicle on a toll road.  This is not an
exhaustive analysis of the Minister’s
role under the Act, but
it is sufficient to illustrate the extent to which, for reasons which
to us appear obvious, the scheme
of the statute provides for a
significant measure of operational supervision and control of the
Agency by the Minister.  The
requirement which the language of
s 27(1) read with s 27(4) appears to impose that SANRAL may
declare a road as a toll
road only after the Minister’s
approval obtained after a substantive consideration of the proposal
is wholly conformable
with the scheme of the Act.
[143]
Section 25(3), on which the Minister’s
counsel placed special reliance, goes only to the exclusive
entrustment of the ‘responsibility
and capacity to perform the
functions’ mentioned in s 25(1) of the Act, not to the
political authority required for
the exercise of the responsibility
and the employment of the capacity.  The fact that the Act makes
SANRAL the organ of state
exclusively responsible for national roads
does not imply that provisions in the statute providing a degree of
political control
over it should be narrowly construed.
[144]
It
follows that the Minister’s consideration, in terms of s 27(4),
of the substance of SANRAL’s proposal to declare
a national
road as a toll road occurs in the second leg of the dichotomous
exercise we described in paragraph [138], above.  The
Act is not
prescriptive of the considerations to which the Minister will have
regard in considering the merits of the proposal.
In the
context of the other provisions to which we have referred it might be
expected, however, that the Minister would, amongst
other matters,
consider (i) how the proposal fitted within the framework of
government policy, which, by reason of its current
formulation, would
include assessing whether the proposed tolling was socially and
financially viable and (ii) the conformity of
the proposal to the
Agency’s approved business and financial plan, including the
indications the statute requires to be given
therein concerning the
cost of the project, the manner in which it is proposed to finance it
and the planned performance indicators
applicable to it.  (In
this respect, it appears to us that the amendments to s 27(4) in
terms of s 3(b) of Act 3
of 2013
[86]
are essentially expositionary.  A socio-economic assessment is
necessary to provide the information that SANRAL and the Minister

would need to be able to conscientiously assess how the proposals
conformed to government policy that tolling be used to fund roads

when it is socially and financially viable to do so.  A traffic
impact assessment is also an integrally necessary component
of any
such assessment for a number of quite obvious reasons: its results
are necessary to inform the proper assessment of the
financial
viability of the proposals and their socio-economic impacts.
The amendments are also consistent with the nature
of the oversight
role we understand the Minister to have in terms of s 27(1) and
(4), as they read before the amendments to
s 27(4).  We do not
read the amendments as reflecting a fundamental change in the scope
and objects of the provisions in the
manner that the respondents’
counsel’s arguments on their construction would have us
accept.)
[145]
The first respondent’s counsel argued
that the declaration of a road as a toll road in terms of s 27(1)
read with s 27(4)
was merely a preparatory step to tolling –
they described it as doing no more than creating a ‘gateway’
–
and, as such, was not an exercise that required any
consideration to be given to issues such as the social and financial
viability
of financing the construction and upgrading of the roads by
tolling.  The social and financial viability of the project,
they
argued, was an issue that would be considered only when the
terms of the BOT contract had been finalised.  The argument is

untenable in our view.  Quite apart from it being inconsistent
with how SANRAL itself represented the position in 2008 when
it
assured the MEC of Transport and the City that the socio-economic
impacts were being considered in the intent to toll process,
and told
the Minister that the Standish report was a socio-economic impact
report, the argument is also irreconcilable with a number
of the
applicable statutory provisions.
[146]
If all that were entailed in declaring a
road as a toll road was a provisional ‘in principle’
decision, it is difficult
to understand why the Minister’s
approval should be required, or why making the decision should be
rated as important enough
to be a non-delegable function of the
Board.  The special provisions in s 27(4) for public
participation and for obtaining
input from the provincial and local
government spheres of government would also be anomalous if all that
were entailed in the declaration
decision was a statement of
principle.  It would be very odd indeed for the legislature to
have made elaborate provision for
consultation in respect of a
decision of virtually no practical import at all, but none at all in
respect of what the respondent’s
counsel’s argument
implies would be a subsequent decision - not expressly provided for
in the Act - with much greater practical
implications.
[147]
The notion that SANRAL and the Minister
could not establish the social and financial viability of the
undertaking before the terms
of the BOT contract had been settled is
moreover inconsistent with the requirement, in terms of s 35 of the
SANRAL Act, that SANRAL’s
planned activities be set out in a
plan showing the anticipated costs and performance indicators.
It is also, incidentally,
inconsistent with the indications in
SANRAL’s own policy that parties making unsolicited proposals
in respect of BOT projects
should be able to set out the estimated
costs involved and indicate whether SANRAL would be required to make
a financial contribution.
The scheme of the Act clearly
contemplates that when SANRAL decides, in terms of s 27(4), to
make proposals for the declaration
of a section of national road as a
toll road, it will have done its homework and have a reasonably
detailed conception of what
it is about.
[148]
We
are in no doubt that the Minister’s decision to approve
SANRAL’s proposals qualified as ‘
administrative
action
’
in the ordinary sense of the term as it was understood before the
enactment of PAJA, as well as within the definition given
in s 1
of that Act.
[87]
In
considering SANRAL’s application and giving it his approval,
the Minister was executing a statutory function.
To the extent
that the exercise by the Minister of his discretionary power in terms
of s 27(1) would include ‘overtones
of policy’
[88]
it would be in the ‘narrower sense’ referred to by
O’Regan J in
Permanent
Secretary, Department of Education and Welfare, Eastern Cape and
Another v Ed-U-College (PE) (Section 21) Inc
[2000] ZACC 23
;
2001
(2) SA 1
(CC),
2001 (2) BCLR 118
, at para 18-21
.
Granting the approval was a necessary precursor to the declaration of
the roads as toll roads, and it was given to that end,
in an exercise
of an administrative nature, in implementing the requirements of the
legislation.  The declaration was, in
turn, directed at bringing
about the actual tolling of the roads.  In the current case it
was also directed at permitting
the contemplated conclusion of an
unconditionally binding agreement in terms of s 28(1) of the
SANRAL Act.  Any contract
of the nature contemplated by s 28
entered into before the declaration of the affected road as a toll
road would necessarily
have to be conditional upon a declaration
being made in terms of s 27(1)(a)(i).
[149]
The
method of determining upon the characterisation of decisions as
administrative action has been discussed in a number of leading

authorities.
[89]
It is
an imprecise art, and can sometimes be a difficult exercise because
there will inevitably be grey areas. But taking
a decision in the
context of discharging a function in terms of a statute of a nature
that, while it might entail carrying out
policy, clearly does not
involve making it, is something that readily falls within the
established concept of ‘administrative
action’.  The
approval of SANRAL’s proposal by the Minister was, moreover,
not ‘internal thinking’
in the sense discussed in
National
Roads Board
supra, at 9-10.  It was a decision that had a direct external
legal effect in that it gave SANRAL permission to declare the
roads
as toll roads and effectively conclude a contract of the nature
contemplated by s 28 of the SANRAL Act.  It also
had the
potential to adversely affect the rights of any person.  This
much is demonstrable by the fact that the Minister was
required in
the exercise of making the decision to consider the representations
and comments of interested and affected parties.
One of the
purposes of such consideration was to determine whether SANRAL’s
proposal to toll the roads should be approved
notwithstanding the
contentions of affected parties to the contrary.  The potential
for the rights and interests of parties
such as municipalities, and
obviously also users of the road, to be adversely affected by tolling
declarations has already been
authoritatively recognised in the
Appellate Division’s judgment in
National
Roads Board
supra.
The altered statutory context has not affected the pertinence of the
considerations that led to the appeal court’s
conclusions in
that case.
[150]
That the Minister’s approval did not,
of itself, have the effect of actually declaring the roads as toll
roads does not detract
from the vital significance of the decision
towards the achievement of that end.  A valid declaration of the
roads as toll
roads was dependent upon the valid exercise by the
Minister of his power under s 27(4).  If the Minister did
not exercise
the power competently because of a failure by him to
appreciate its nature, then the resultant legal invalidity of his
purported
decision would, by virtue of a valid approval by the
Minister being a statutory prerequisite to exercise by the Agency of
its power,
pre-empt the ability of SANRAL to lawfully make a
declaration of the roads in terms of s 27(1)(a).  A setting
aside of
the Minister’s invalidly made decision would
necessarily result in the declaration by SANRAL falling with it; cf.
Seale v Van Rooyen NO and Others;
Provincial Government, North West Province v Van Rooyen NO and Others
[2008] ZASCA 28
;
2008 (4) SA 43
(SCA),
[2008] 3 All SA
245
, at para 13 (p. 50C-D (SALR)).
[151]
The Supreme Court of Appeal’s
decision in
Director: Mineral
Development, Gauteng Region and Another v Save the Vaal Environment
and Others
1999 (2) SA 709
(SCA),
1999
(8) BCLR 845
,
[1999] 2 All SA 381
, especially at para 16-17,
testifies to the fallacy of any argument in a case of this nature
that an aggrieved party should
be restricted to challenging the
ultimate decision (in this case, the decision by SANRAL to make the
declaration). The applicants
in the court of first instance in
Save
the Vaal
had successfully challenged on
review a decision by the director of mineral development to issue a
licence in circumstances in which
the director had failed to consider
objections based on environmental concerns in respect of the proposed
open cast mining operation
for which the licence had been sought.
The director contended that that the mere issue of the licence in
terms of s 9
of the Minerals Act 50 of 1991 could have no
tangible, physical effect on the environment and that, for that
reason, no environmental
rights could be infringed by the mere issue
of the licence.  He argued that a challenge based on an alleged
infringement of
environmental rights could competently be mounted
only after mining had been permitted to commence after the subsequent
approval
of an environmental management plan in terms of s 39 of
the statute.  Olivier JA disposed of the director’s
argument
as follows:
The
argument cannot be sustained. The issue of a licence in terms of s 9
enables the holder to proceed with the preparation of an

environmental management programme, which, if approved, will enable
him to commence mining operations. Without the s 9 licence
he cannot
seek such approval. The granting of the s 9 licence opens the door to
the licensee and sets in motion a chain of events
which can, and in
the ordinary course of events might well, lead to the commencement of
mining operations. It is settled law that
a mere preliminary decision
can have serious consequences in particular cases, inter alia where
it lays ‘. . . the necessary
foundation for a possible decision
. . .’ which may have grave results.
[90]
That reasoning finds
a basis for application in respect of the Minister’s decision
in the circumstances of the current case.
The Minister’s
decision in the current matter similarly ‘opened the door’
for SANRAL to declare the roads as
toll roads.
[152]
We have said enough to make it clear that
if the application for the review and setting aside of the Minister’s
decision were
to be entertained, it would be upheld.  In the
circumstances it is strictly unnecessary for us to say anything more
on the
subject of the merits of the attack on the Minister’s
decision.  In view of our ultimate decision of this aspect of
the case we consider it appropriate, however, if only for the future
guidance of the parties, to also express ourselves on the City’s

allegations about the shortcomings in the public participation
process in relation to the Minister’s decision-making in terms

of s 27(4) of the SANRAL Act.
[153]
We
do not agree with the City’s contention that the Minister’s
decision whether to approve SANRAL’s proposals
concerning the
declaration of the roads as toll roads had to be preceded by a
discrete process of public consultation to that which
SANRAL was
required to have undertaken in terms of s 27(4)(a) and (b).
As discussed earlier,
[91]
the
Minister is required to have direct regard to the comments and
representations elicited in response to the notices that SANRAL
has
given of its proposals.  She has to do this in the first leg of
what we called the required ‘dichotomous exercise’
in
order to satisfy herself that SANRAL has conscientiously considered
and accommodated them.  She is obviously also able
herself to
have regard to them, quite independently of SANRAL’s response,
in determining, in the second leg of the exercise,
whether to approve
SANRAL’s application.  It would be inimical to efficient
government in the circumstances to require
the Minister to afford
interested parties a second opportunity to make submissions.
Parties who have submitted comments in
response to the notices given
by SANRAL in terms of s 27(4)(a) and (b) must be taken to be
aware that their responses will
be put before the Minister.
[154]
We
do consider, however, that a fair procedural process in the
circumstances would have required SANRAL to furnish a copy of its

report to the persons who had responded to its notices.  It
would have to be furnished in time to afford such persons a
reasonable
period to make such further submissions to the Minister in
reaction to the report as they might wish.  It is of no moment
that the statute does not expressly make provision for this.
There is an overriding obligation in terms of ss 3 and 4
of PAJA
on ‘administrators’
[92]
to ensure that administrative decisions are made in a procedurally
fair manner.
[93]
Nothing
in s 27(4) of the SANRAL Act excludes the broader incidence of
the obligation.  What is required in order
to carry out the
obligation depends on the circumstances of the given case.
Making SANRAL’s report to the Minister
available to the persons
who had submitted comments and representations would not only be
fair, but also consistent with the founding
values of openness and
accountability and the basic values and principles governing public
administration in terms of s 195
of the Constitution.
[155]
Similarly, we consider that, in the context
of its intention to support its proposals with the economic impact
report prepared by
Prof Standish, it also was incumbent upon SANRAL
to have included reference to the report in its notices inviting
comment and representations
and to have provided for access thereto
by interested parties to enable them to formulate their comments and
representations on
a properly informed basis.  Thus, although
the notices given in the current matter complied with the formal
requirements of
the applicable regulation, they nonetheless fell
short of compliance with the fair procedure requirements in the
circumstances.
The City’s
challenge to decision by SANRAL to declare the roads as toll roads
[156]
The declaration by SANRAL of the roads as
toll roads was challenged on the following main grounds:
1.
That SANRAL’s Board had not resolved
to apply to the Minister of Transport for the approval of a proposal
to declare the roads
as toll roads, or to declare them as such upon
the Minister’s approval having been obtained.
2.
That there was, in any event, insufficient
information available for the Board to have validly made a decision
to apply to the Minister
for approval and thereafter declare the
roads as toll roads.
3.
That the public consultation process in
terms of s 27(4) was ‘a sham’.
4.
That material information that underpinned
SANRAL’s proposals was not made available to the persons whose
comments and representations
were invited.
[157]
As
noted earlier
[94]
, a setting
aside on review of the Minister’s decision would necessarily
also nullify the ensuing declaration by SANRAL.
In view of our
findings in respect of the Minister’s decision it is thus
strictly speaking unnecessary for us in considering
the City’s
prospects of success, were we to entertain the review, to deal with
the attack on SANRAL’s decision to declare
the roads as toll
roads.  We have nevertheless considered it appropriate to do so
because if it were to be found that that
too was, in itself, attended
by illegality, the nature and extent of the unlawful conduct and its
effects would fall to be weighed
with the other considerations in
determining what the interests of justice require in respect of the
determination of the City’s
application in terms of s 9(2)
of PAJA.  A finding in this regard would also affect the
determination of an appropriate
remedy if we were to set aside the
declaration of the roads.
[158]
SANRAL
alleged that its board of directors made a decision (i) to apply
to the Minister for approval of its proposal that the
roads should be
declared as toll roads and (ii) in the event of such approval
being granted, to declare the roads as toll
roads.  As explained
in our discussion of the pertinent provisions of the SANRAL Act,
[95]
these decisions had to be made by the Board as they concerned matters
that the Act prohibits being delegated to the chief executive
officer
or any other employee of SANRAL.  They had to be made by the
directors collectively.  SANRAL has been unable
to produce any
documented record of any such decisions having been taken by the
Board.  In the circumstances the City alleged
that the requisite
decisions had not been made by the Board.
[159]
SANRAL’s answer to the City’s
allegation was contained in a single paragraph (paragraph 16) in
the answering affidavit
made by its chief executive officer, Mr Alli:
Insofar
as the decision of the Board is concerned I confirm that before
SANRAL submitted its application to the Minister of Transport

requesting the approval contemplated by section 27 of SANRAL Act, the
Board took a decision (i) to apply for the Minister of Transport’s

approval and (ii) that in the event of the Minister of Transport
providing such approval, to declare the national road concerned
a
toll road.  At the time the Board was properly apprised of the
Project, including the intent to toll process and the application
to
the Minister of Transport, and the Board had regard to all relevant
considerations in this regard.  Following the Minister
of
Transport’s approval pursuant to the instructions of the Board
I accordingly arranged for the publication of Government
Notice 978.
SANRAL has been unable to find documents specifically recording this
Board decision.  Accordingly in order
to prevent any uncertainty
in this regard a resolution was passed by the Board in May 2014, a
copy of which is attached marked
“
NA1”
.
[160]
Part
of annexure NA1 to Mr Alli’s affidavit was an explanatory
memorandum circulated by him to board members in 2014 in the
context
of seeking their signatures to a round robin resolution directed at
confirming the declaration of the roads as toll roads
and curing the
absence of a documented record of the decision to make the
declaration.  The City’s counsel relied on
the content of
that memorandum to argue that it provided confirmation by Mr Alli
himself that the Board had in fact not made the
requisite decisions
before notice of the declaration was published in the Government
Gazette in 2008.  In the alternative
to that argument, counsel
submitted that Mr Alli’s averment that the Board had made
the decisions was so clearly farfetched
and untenable that it could
be rejected merely on the papers and without the need for oral
evidence, in the manner contemplated
by the rider to the rule in
Plascon-Evans
.
[96]
[161]
It is therefore necessary to consider Mr
Alli’s explanatory memorandum in some detail.  It was a
three and half page
closely typed document.  We shall quote only
the portions that are directly relevant to an understanding of the
City’s
argument.
[162]
Mr Alli described the purpose of the
memorandum in the document as follows:
The
purpose of this memorandum is to ask the Board to resolve that the
national road….be declared as toll roads.  This
element
in the procedures to declare a road as a toll road was inadvertently
omitted in the process to declare the above roads
as toll roads.
He summarised the
factual background for the 2014 Board as follows:
The
legislative process for the declaration of the roads had been
followed except for an inadvertent omission that seems to have

occurred with regard to the formal resolution of the Board to declare
the roads as toll roads.  This needs to be now corrected.
He proceeded in
paragraph 4 of the memorandum to say:
In
consequence of the City’s attack on the validity of the
Declaration, diligent efforts were made to locate the Board
resolution
expressly authorising the Declaration.  Unfortunately
no such resolution was found.  Notwithstanding that there is
sufficient
documentary evidence (see attached documents) that the
project was discussed and considered by the Board at various stages
of its
development, doubt accordingly arises as to the validity of
the Declaration.
In paragraph 5 of
the memorandum, Mr Alli stated that ‘[d]
espite the absence
of such a resolution, the Board was kept fully informed of the
various steps undertaken in connection with the
... Project, which is
evident from the following:
’.  He thereafter listed 12
salient stages of the history of the project from 2000 until the
approval by the Minister
of SANRAL’s application on 2 September
2008.  It is not necessary to go through them.  They
essentially gave a
potted history of the events that have been
described earlier in this judgment.  Suffice it to say that the
last indication
of any direct consideration of the matter by the
Board was given as having been on 20 January 2004.  That is
consistent
with what may be discerned from the minutes that SANRAL
has disclosed.  The ‘attached documents’ referred to
in
paragraph 4 of the memorandum also contained nothing to show that
the declaration of the roads as toll roads had enjoyed the Board’s

attention since January 2004.  The substantive part of the
memorandum ended, in paragraph 6, as follows:
The
Board was at all times aware of, and updated on, the status of the
…Project. There has been no material change in the

circumstances relevant to [The Minister’ approval] referred
to in paragraph 5 above since 2 September 2008.  In
the
circumstances and in order to avoid any doubt as to the legal status
of the N1-N2 Winelands Highway as a toll road the Board
is requested
to formally declare the [roads] as toll roads in terms of section
27(1)(a)(i) of the SANRAL Act and to authorise SANRAL’s
Chief
Executive Officer to cause such declaration to be published in the
Government Gazette by passing the resolution attached
to this
memorandum.
[163]
The City’s counsel contended that
these passages in the memorandum provided confirmation by Mr Alli
that the matter of
the declaration had not been placed before the
Board after January 2004, which meant that the Board had not
considered the proposals
put up to the Minister for approval, or the
representations and comments elicited in terms of s 27(4)(a) and
(b), and had
not decided to make the declaration that was published
on 15 September 2008.  Thus, so the argument proceeded, the
averments
in paragraph 16 of the answering affidavit deposed to by
Mr Alli did not give rise to a dispute of fact and the
Plascon-Evans
rule found no basis for application.
[164]
In our judgment the contention cannot be
upheld.  The memorandum is ambiguous.  It also has to be
read contextually with
the averments by Mr Alli in his affidavit.
The gravamen of his evidence in this regard, when it is considered
contextually,
is that a decision by the Board was in fact made, but
that a documentary record of it cannot be found.
[165]
The
question then arises whether Mr Alli’s evidence in this
regard raises a genuine (often called ‘
bona
fide
’)
dispute of fact, or whether it can be rejected on the papers as
clearly far-fetched and untenable.  It hardly needs
mentioning
that, in matters in which final relief is sought in motion
proceedings, courts do not resolve disputes of fact on the
basis of
the balance of probabilities as it might appear on the papers.
In the absence of oral evidence, any genuine dispute
of fact on the
papers is resolved, for the purposes of determining the case, on the
basis of an acceptance of the respondent’s
version, unless the
respondent’s evidence is so far-fetched and untenable as to
defy belief.
[97]
The
test for finding such untenability has been described as ‘a
stringent one’.
[98]
The probabilities are plainly a relevant consideration in this
regard.  While a mere balance of probabilities on the
papers is
not enough, the untenability or far-fetchedness of a version may be
established if the improbability of the evidence
is towards the
extremity of the negative end of the continuum of the measure of
probability.
[166]
Having
acknowledged that it is only when the evidence for the respondent is
blatantly implausible that it may be rejected on the
papers, the
court should not shrink from rejecting evidence on that basis when
the situation arises.  As Cameron JA observed
in
South
African Veterinary Council and Another v Szymanski
2003 (4) SA 42 (SCA), 2003 (4) BCLR 378,
[99]
‘
Provincial
Division practice may sometimes be robust (in
[his]
view,
often rightly so) in applying
[the]
category
of “far-fetched or clearly untenable
”
denials
’
as the basis for deciding matters on paper.  Qualified support
for a robust approach in appropriate circumstances is
also to be
found in the
dicta
of Heher JA in
Wightman
t/a JW Construction v Headfour (Pty) Ltd
[2008] ZASCA 6
;
2008 (3) SA 371
(SCA),
[2008] 2 All SA 512
, at para 13 (a
passage endorsed in a number of later judgments of the appeal
court
[100]
):
A
real, genuine and bona fide dispute of fact can exist only where the
court is satisfied that the party who purports to raise the
dispute
has in his affidavit seriously and unambiguously addressed the fact
said to be disputed. There will of course be instances
where a bare
denial meets the requirement because there is no other way open to
the disputing party and nothing more can therefore
be expected of
him. But even that may not be sufficient if the fact averred lies
purely within the knowledge of the averring party
and no basis is
laid for disputing the veracity or accuracy of the averment. When the
facts averred are such that the disputing
party must necessarily
possess knowledge of them and be able to provide an answer (or
countervailing evidence) if they be not true
or accurate but, instead
of doing so, rests his case on a bare or ambiguous denial the court
will generally have difficulty in
finding that the test is satisfied.
I say “generally” because factual averments seldom stand
apart from a broader matrix
of circumstances all of which needs to be
borne in in mind when arriving at a decision. A litigant may not
necessarily recognise
or understand the nuances of a bare or general
denial as against a real attempt to grapple with all relevant factual
allegations
made by the other party. But when he signs the answering
affidavit, he commits himself to its contents, inadequate as they may
be, and will only in exceptional circumstances be permitted to
disavow them. There is thus a serious duty imposed upon a legal
adviser who settles an answering affidavit to ascertain and engage
with facts which his client disputes and to reflect such disputes

fully and accurately in the answering affidavit. If that does not
happen it should come as no surprise that the court takes a robust

view of the matter.
[167]
The averments in paragraphs 15 and 16 of
SANRAL’s answering affidavit were directed at the allegation in
the City’s
supplementary founding affidavit that the
‘inescapable conclusion’ was that the Board had not
resolved (i) to
seek the Minister’s approval in terms of
s 27(1) of the Act, or (ii) that the Agency should declare
the roads as
toll roads in terms of the said provision.  The
City’s allegation was supported by a detailed analysis of the
documentation
disclosed by SANRAL in compliance with the order of
this court made in terms of uniform rule 35(11) on 21 May 2013
directing
SANRAL ‘
to produce all …
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
’.  The analysis
demonstrated that there had been no documented consideration by the
Board of a proposal to declare the
roads as toll roads between
January 2004 and 15 September 2008, when the declaration was
published in the Government Gazette.
This, in the face of a
requirement, in terms of s 17 of the SANRAL Act, that the Board
must have minutes prepared and kept
of the proceedings of their
respective meetings and must have copies of the minutes circulated to
their respective members that
are required to be confirmed and signed
at the next meeting, and which stand as
prima
facie
evidence of those proceedings in
matters before a court of law, any tribunal or a commission of
inquiry.
[168]
The
last minuted consideration of the project by the Board in January
2004 concerned has been described above, at para. [86]-[91].

It is evident from the documentation disclosed by SANRAL that the
usual practice - as to be expected - was for agendas to be drawn
up
for meetings of directors, for supporting documentation to be
provided in respect of items on the agenda, for minutes of meetings

to be kept, and for such minutes to be confirmed and approved at the
next meeting of the Board.  By virtue of s 5 of
the SANRAL
Act, the provisions of s 242 of the Companies Act 61 of 1973 would
have been applicable to the Agency.  The documentation
that was
disclosed by SANRAL in terms of rule 53 and the aforementioned
disclosure order in terms of rule 35(11) indicated that
SANRAL
routinely complied with the requirements of those provisions as to
the keeping and approval of minutes of directors’
meetings.
There is no reason to understand that the Agency would not also have
been cognisant of and compliant with the obligation
also to keep a
copy of such minutes in a bound minute book as required by s 242(2)
and (3), or that the directors would not
have been aware of the
potential consequences for them individually, by way of criminal
liability, for non-compliance with those
provisions.
[101]
[169]
If
decisions were indeed taken by the directors to apply for the
Minister’s approval of a proposal to declare the roads as
toll
roads and, assuming such approval to be forthcoming, to give notice
of the declaration, one would expect there to be a documentary

record.  It would be extraordinary for there to be no minute of
an important decision involving a multi-billion rand project.

It would be more extraordinary still, in the curious event that such
a decision had not been minuted, that none of the directors
would
have detected the omission when the minutes of the meeting at which
the decision was taken were considered for confirmation
and adoption
at the next meeting.  The improbability inherent in the absence
of any minute that a decision was taken is further
compounded by the
absence of any other documentation that might in the ordinary course
have been expected to attend such decisions,
such as a relevant item
on any agenda for a board meeting, or a copy of a pack prepared for
directors including the comments and
representations received in
response to the notices for consideration at a meeting if there were
to be compliance with the Board’s
obligations in terms of
s 27(4) before an application to the Minister could competently
be submitted.  SANRAL did not
even produce a minute of a
decision by the directors adopting a business plan in terms of s 35
including provision for the
project to be undertaken.  Moreover,
as described earlier, proper compliance with s 27(4) of the
SANRAL Act would have
required the proposals to come before the Board
for decision at least twice before the application for their approval
was submitted
to the Minister.
[102]
If the statutory requirements were complied with, there is therefore
not an absence of any record of only one set of deliberations,
but of
at least two.
[170]
While
it is correct, as pointed out by SANRAL’s counsel, that a
decision taken by the Board would not be invalid or ineffectual
by
reason of a failure to minute it,
[103]
it is extremely unlikely in the context of (i) the Board’s
statutory obligations, (ii) the nature of the exercise
that
would have been entailed in making the decisions in terms of s 27(4)
in a statutorily compliant manner and (iii) the
modus operandi
of the Board illustrated by the record of its earlier and subsequent
consideration of the project, that there would
be no documentary
corroboration whatsoever of the Board having dealt with the matter in
terms of the relevant provision.
[171]
These features, considered together,
irresistibly compel the conclusion that no decisions, as required by
s 27(4), were taken
by the Board.  Mr Alli’s
bald assertion to the contrary is insufficient to displace their
inexorable effect.
He has failed even to attempt to explain how
there could be such a complete absence of a document trail if the
decisions had been
made.  He has not even been able to
reconstruct from the Board’s calendar when the alleged
decisions would have been
made.  SANRAL has not been able to put
up the evidence of a single director as to the occasions upon which
and the circumstances
in which the alleged decisions were made, or as
to the content of any discussions that must have preceded them.
[172]
It
would not be enough - as SANRAL sought to do by applying belatedly
for the admission of some of the supplementary affidavits,
discussed
below – for the Agency to adduce evidence by some members of
the Board that they had been aware in general terms
of the
declaration of the roads as toll roads and that they had,
individually, at some unidentified time, seen some of the relevant

documentation, such as the Standish report.  The SANRAL Act
requires that the Board must act as a body in making decisions
in
terms of s 27(4).  The attendance of at least five
directors is required to make a meeting of the Board quorate.
[104]
[173]
Moreover,
it is evident from the provisions of s 12(2) of the SANRAL Act, which
regulate the composition of the Board, that the
statutory object is
that a mix of skills and interests should be brought to bear in the
Board’s decision-making.  Thus,
there is currently
provision for representation on the Board of a senior officer from
the Department of Finance, obviously because
of the impact that
decisions by SANRAL potentially can have on the exchequer, and also,
apart from the chief executive officer
[105]
and a representative of the Department of Transport, the other
members of the Board must have special qualifications, skills,
expertise or experience in matters concerning national roads,
corporate governance, financial management, business or the
operations
of the Agency.
[174]
Indeed,
with effect from 15 May 2008,
[106]
only the chairperson and the four directors appointed in terms of
s 12(2) of the Act
[107]
who are required to be specially qualified or skilled have voting
rights.
[108]
The
non-delegable character of the Board’s power to declare roads
as toll roads underscores the importance that the
legislation
attaches to the collective application of all the aforementioned
skills and interests in the making of the relevant
decisions, and, of
course, in the consideration of the comments and representations
elicited from interested parties in terms of
s 27(4).  In
the circumstances, if there had been a meeting of the Board at which
these matters were discussed and decided,
one would expect at least
some of the directors present to remember it and be able to place it
chronologically.  One would
also expect some form of cogent
explanation as to why the omission to minute the decisions had not
been detected when the minutes
of the meeting at which the decisions
were made were subsequently considered for approval.  That the
omission should have
escaped the attention of all the directors, and
on more than occasion, is highly improbable, for as the Act itself
testifies,
[109]
the
decisions concerned were amongst the more important that the
directors could be called upon to make in terms of their statutory

mandate.
[175]
The equivocal tenor of Mr Alli’s
explanatory memorandum to the directors in office in 2014 does
nothing to ameliorate the
effect of the extreme improbability in the
circumstances just discussed of his bald averment that the Board did
make the decisions.
On the contrary, much about its content
suggests an appreciation by Mr Alli that the City had uncovered
a fatal flaw in the
process and a sense of desperation on his part to
try to recover the situation.
[176]
For all these reasons we have concluded
that SANRAL’s bald denial of the City’s allegation that
the Board did not make
the necessary decisions in terms of s 27(4)
of the SANRAL Act did not give rise to a genuine dispute of fact
because, in the
absence of any of the sort of corroborating evidence
that SANRAL should have been able to adduce in the circumstances, Mr
Alli’s
bland averment that the Board did make the decisions is
untenable.
[177]
For this reason too, the declaration of the
roads as toll roads would fall to be set aside if this court were to
condone the City’s
delay and entertain the application for the
relief described in paragraph [17].5, above.
Reasons for the
dismissal of an eleventh hour application by SANRAL for the admission
of supplementary answering affidavits
[178]
It is convenient at this stage to refer to
an application that we heard in the week before the commencement of
argument in the review
application for the admission, out of time, of
certain supplementary answering affidavits by persons who were
members of the Board
at the time the declaration of the roads as toll
roads was published and by others who were directors in 2014 when the
round robin
resolution to which Mr Alli’s explanatory
memorandum was addressed was circulated.  The content of the
affidavits of
the deponents who had been directors in 2008 affirmed
the averments made by Mr Alli in paragraph 16 of the principal
answering
affidavit.  We refused to admit the supplementary
affidavits and indicated that our reasons for doing so would be
provided
in this judgment.  We also reserved the determination
of the costs of the interlocutory proceedings.  We did that in
recognition of the provisional status of our order refusing the
application, and mindful that it was open to SANRAL to renew the

application, or for us to recall our ruling should it appear
appropriate in the light of any developments that might have arisen

before judgment was delivered.
[179]
SANRAL gave notice on 17 July 2015, less
than one month before the hearing of the principal case was due to
commence, of its intention
to apply at the commencement of
proceedings on 11 August 2015 for the admission of the supplementary
affidavits.  Two of the
affidavits, those deposed to by Messrs
Donaldson and Macozoma, respectively, related to the issue of whether
the Board had resolved
to apply for the approval of the Minister of
Transport for the declaration of the roads as toll roads and
thereafter to declare
the roads as toll roads.  The content of
those affidavits added nothing of factual substance to what had
already been averred
in paragraph 16 of SANRAL’s principal
answering affidavit deposed to by Mr Alli on 22 October 2014.
[180]
The City gave notice of its opposition to
the application to introduce the additional affidavits and also of
its intention to apply
for SANRAL’s application to be heard a
week before the hearing of principal application and, contingent upon
any decision
by the court, despite its opposition, to admit the
affidavits, to seek leave to subpoena the 2008 board member deponents
(Messrs
Donaldson and Macozoma) to appear on the first day of the
hearing of the principal application to be cross-examined on the
content
of their affidavits.  The City’s contingent
application also included a prayer that an affidavit made by the
City’s
attorney of record, Mr Cullinan, concerning the content
of a telephonic conversation he had had with Mr Donaldson regarding
the
latter’s affidavit, be admitted in reply to Donaldson’s
affidavit.
[181]
We heard the interlocutory applications on
4 August 2015, pursuant to directions by the case manager judge for
them to be set down
on that date.
[182]
The
principles applicable in the determination of an application to admit
affidavits outside of the provisions of the rules governing
the
delivery of papers in the ordinary course in motion proceedings are
well-known,
[110]
and it is unnecessary to rehearse them.
[183]
In contending for the admission of the
affidavits of Donaldson and Macozoma, SANRAL’s counsel
submitted that they went to
a material issue in the review, namely
whether the Board had, as required in terms of the SANRAL Act,
considered and approved the
application to the Minister and
determined upon the declaration of the roads as toll roads in the
event of the application obtaining
the Minister’s approval.
Counsel submitted that SANRAL was concerned - in particular, by
certain submissions thereanent
in the City’s heads of argument
- that its position in the case was vulnerable by reason of the
absence of any affidavits
by other board members confirming what Mr
Alli had said in the answering affidavit.
[184]
It appeared to us that the vulnerability
arising from the evidence of Mr Alli in this regard that was already
on record in paragraph
16 of the answering affidavit lay more in the
absence of any written record of the resolutions he claimed had been
adopted by the
board of directors, or of any other documentation to
evidence that the matter had been considered by it.  For
purposes of
the determination of the issue in motion proceedings,
however, this court would be bound to treat the evidence in
accordance with
the
Plascon-Evans
principles, discussed earlier.  The City had not applied to
cross-examine Mr Alli and it had adduced no direct (or primary)

evidence in contradiction of his averments in paragraph 16 of the
answering affidavit.  SANRAL’s counsel’s submissions

as to the existence of a vulnerability in SANRAL’s case, which
in the interests of justice might fall to be addressed by
the
admission of the additional affidavits, had to be assessed in that
context.
[185]
It seemed to us that the evidence of Messrs
Donaldson and Macozoma on the point in issue was subject to
characterisation as far-fetched
and untenable on exactly the same
basis as that of Mr Alli is.  Their affidavits contained no
indication whatsoever as
to when, where, or in what circumstances,
the alleged resolutions were adopted.  Neither of them gave any
indication of any
recollection of any discussion by the Board of the
submissions received from the public or the municipalities.
Like that
of Mr Alli, their evidence also offered no explanation
of how such important decisions could not have been recorded in a
board
meeting agenda document, or minuted, or how the omission to
have minuted them could not have been detected by any of the
directors
at the next meeting of the board when it would have been
standard procedure – as evidenced in minutes that have been
produced
– to note and adopt the minutes of the previous
meeting.  Thus, if Mr Alli’s evidence on the point
were to
be determined in the principal case to be so far-fetched and
untenable as to be rejected out of hand on the papers, so would
theirs,
and for the same reason.
[186]
Indications in the affidavits that the
respective deponents were aware that an application had been
submitted for ministerial approval,
or that they had, at some
unidentified stage, seen a report or a pack of submissions did not,
by virtue of the contextual vagueness
of the averments, take the
question of whether the directors, constituted collectively as the
Board, had considered the matters
they were required to, and adopted
the relevant resolutions, any further than Mr Alli’s
affidavit already did.
In the circumstances it seemed to us
that no point would be served by the extraordinary admission of the
additional affidavits.
[187]
Any concern that SANRAL might have had
about the submission in the City’s replying affidavit and heads
of argument that the
‘most reasonable inference’ to be
drawn from the failure by SANRAL to have attached a confirmatory
affidavit by Donaldson
was that he had refused to provide one had
been addressed by its very attempt to introduce the affidavit.
It is no longer
a relevant consideration in the context of SANRAL’s
attempt to introduce an affidavit by Mr Donaldson, but it seemed

to us that there was in any event a weakness in the City’s
argument in that respect because there had been no suggestion
that
Donaldson had not been equally available to it as a witness.
[188]
We
therefore did not reach the City’s contingent application.
Lest it be material, should this matter be taken further,
we would
nevertheless make these observations.  In the absence of any
indication that the City was equipped with direct evidence
to
contradict the witnesses, it did not seem to us that the contemplated
cross-examination
[111]
would
affect the probabilities as they appeared on the papers.  We
were not persuaded that the cross-examination of Donaldson
and
Macozoma on the points that the City’s counsel had identified
for that purpose would be likely to serve any effective
purpose in
the determination of the matter if Mr Alli’s evidence were
to be left undisturbed by cross-examination.
[189]
The evidence in the affidavits by Messrs
Morar and Hlabisa, who are currently board members, also added
nothing of substance to
the evidence already before the court.
We understood (correctly, as it turned out) it not to be in dispute
that the documented
round robin resolution was adopted and
subsequently confirmed at a meeting of the board in 2014.  We
also understood, correctly,
that SANRAL would not be contending in
the principal application that the 2014 board members had revisited
the representations
in respect of the contemplated tolling of the
roads that had been submitted in 2008 during the consultation process
prescribed
in terms of s 27(4) of the SANRAL Act.  In the
circumstances we understood the issue in the main case to be whether
the
2014 resolutions could effectively have addressed the absence of
any relevant resolutions in 2008, alternatively the absence of
any
documentation of such resolutions as required in terms of 17 of the
SANRAL Act.  The additional affidavits that SANRAL
sought to
introduce would not contribute to the determination of the issue one
way or the other beyond what was already before
the court.
There was thus also no reason to admit those affidavits in evidence
out of the ordinary course.
The additional
grounds upon which SANRAL’s declaration of the roads as toll
roads were challenged
[190]
By virtue of the conclusion stated in
paragraph [177], above, it is not necessary for us to arrive at a
decision in respect of the
second and third of the three grounds of
the City’s challenge to the declaration decision described
earlier, in paragraph
[156].  We shall, however, nevertheless
express ourselves briefly on those grounds lest this matter go
further and another
court differ from us in respect of our rejection
of the averments in paragraph 16 of Mr Alli’s affidavit.
Insufficient
information available for the Board to have validly made a decision
to apply to the Minister for approval and thereafter
declare the
roads as toll roads
.
[191]
We
have already remarked on the information that was not available to
Professor Standish when he prepared his economic impact
reports.
[112]
There is
nothing in the evidence to indicate that the Board, if it had made
the decisions which Mr Alli claims it did, would
have been better
informed than Professor Standish was.  Indeed, there is nothing
to substantiate any suggestion that even
the Standish reports ever
served before the Board.  SANRAL has not disclosed any
documentation that would indicate that the
Board (or the Minister)
was apprised of any reasoned estimate of the cost of the project or
the range of tolls that would be required
to cover the costs and
generate a profit for a concessionaire.
[192]
Mr Alli averred in the answering affidavit
that SANRAL’s financial assessment of all its toll road
projects was typically
carried out using the ‘Loan Supportable
by Revenue’ (LSR) method.  As pointed out by the City’s
counsel
in their written argument, however, Alli did not assert that
such an assessment had in fact been done in respect of the project,

and no results of any such assessment were offered in evidence.  The
city manager indicated in the City’s replying affidavit
that
nothing had been disclosed in the rule 53 record that showed that the
Board had been provided with an LSR assessment.
[193]
The
documented record suggests that the most detailed information
presented to the Board was that set out in the aforementioned

memorandum submitted to the Board in January 2004.
[113]
In that memorandum the estimated value of the initial
construction works was given as being ‘in the order of
R1,9 billion’
excluding the completion of the second bore
of the Huguenot Tunnel.  It was also stated that the ‘total
estimated infrastructure
investment over a 30 year concession is
R5 billion’.  The memorandum did not provide any
particularity as to what
was comprehended by the ‘initial
contract works’ and provided no explanation of how the
aforementioned values had been
computed.
[194]
The estimated volume of traffic using the
toll roads would be a critical consideration in any such
calculations.  It is evident
that SANRAL adopted two
irreconcilable positions in this regard.  It contended on the
one hand that the toll roads would be
a net attractor of traffic,
while on the other apparently conceding that provision would have to
be made for the effect of diversionary
traffic onto provincial and
municipal roads.  The change of position would appear from the
information in Prof Standish’s
later report to have been
premised on the results of a traffic modelling exercise.  There
is no evidence to indicate that
the Board was provided with any
particularity of projected traffic volumes or traffic modelling.
[195]
The documented information placed before
the Board that is vouched on the record falls materially short in
detail of what would
be required in respect of the project had SANRAL
complied with the requirements of s 35(2) of the SANRAL Act in
regard to
the information that should have been set out in its
relevant business and financial plans.  No evidence of the
existence
of such plans was placed before us by either side in the
case, but it seems unlikely in the context of the nature of the
City’s
challenge that SANRAL would not have put the plans in
evidence if they would have served to rebut the City’s
allegations
that the Board was inadequately equipped to be able to
make an informed decision.
The allegation
that the public consultation process in terms of s 27(4) was ‘a
sham’
[196]
This ground of attack, which was predicated
on the alleged failure by the Board to have considered the
representations and comments
elicited in terms of s 27(4)(a) and
(b), overlapped with the allegation that the Board had not made the
required decisions.
Obviously, if the directors did not
collectively consider and apply their minds to the responses obtained
in terms of the intent
to toll process, they were not in a position
to competently decide to apply for the Minister’s approval, or
to authorise
the declaration.
[197]
It is significant that SANRAL adduced no
evidence whatsoever to indicate that a meeting of the Board had taken
place between 30 May
2008, when the period for the submission of
comments and representations closed, and 2 September 2008, when
SANRAL’s proposals
were submitted to the Minister for
approval.  In the context of the unsatisfactory nature of the
averments in paragraph  16
of the principal answering affidavit
that we discussed earlier at some length, the inference is compelling
that there was indeed
no consideration of the comments by the Board.
[198]
In our judgment the further grounds upon
which the City relied in support of the relief described in paragraph
[17].5 would also
afford valid reasons to uphold its challenge.
Indirect unfair
discrimination
[199]
We
find it unnecessary and, indeed, inappropriate to reach the challenge
to the tolling decisions on the basis of their allegedly
unlawfully
discriminatory effect.  We doubt whether the challenge would be
sustainable.  It was addressed only briefly
in the City’s
heads of argument, and hardly at all in the oral submissions.
Without attempting to decide the question,
it seems to us on the face
of it that a decision to toll the roads would not be discriminatory
in the relevant sense.
[114]
In any event, the nature of any discriminatory effect would, if
it were to arise, be evident only if and when the toll tariffs
were
determined.
[115]
Requirements of
the interests of justice
[200]
The City contended that the tolling of the
roads would bear heavily on the population of Cape Town and the
surrounding areas for
decades to come and that the interests of
justice required the court to entertain the review if the decisions
to declare the roads
as toll roads had been made unlawfully.
The contention was predicated on the City’s assessment of the
tolls that would
have to be recovered to provide the base toll tariff
that the draft contract documentation in respect of a contemplated
BOT contract
with PPC appeared to warrant.
[201]
Pointing to a clause in the draft contract
(discussed in detail in para [234]-[237], below) that would require
SANRAL to meet any
deficit between the tolls actually charged and the
contractually stipulated base toll tariff, the City alleged that if
the tolls
actually imposed were substantially lower than the base
toll tariff, a significant burden would be placed on the National
Treasury,
on which SANRAL’s contingent obligation would
ultimately fall, which would redound equally adversely to the public
interest.
The City estimated that the amount involved would
exceed the cost of funding the construction and upgrading of the
roads directly
from the Consolidated Revenue Fund.
[202]
It seems to us, however, that the remedies
afforded by political accountability are probably sufficient and more
appropriate responses
to the considerations urged by the City than
judicial review.  In this respect it weighs with us that further
decisions have
yet to be made before a conclusively binding contract
in the form of the draft can come into effect, containing as it does
a financial
guarantee by SANRAL and a deed of suretyship.  The
Ministers of Transport and Finance will have to apply their minds to
determine
whether the contemplated guarantee should be issued. No
doubt, the experience of the Gauteng tolling project will conduce to
the
most anxious consideration of the financial implications of the
project at that stage, if it is reached.
[203]
It also weighs with us that SANRAL and the
Minister have the power to withdraw the declaration, and the Minister
may also, unilaterally,
forbid SANRAL from proceeding with the
project if she is satisfied that it would be prejudicial to the
national interest or the
strategic or economic interests of the
Republic.  Even if SANRAL and the Minister were previously
inadequately informed of
the City’s reasons for opposing the
project, the current proceedings, including the expert witness
reports introduced by
the City in support of its case, will have
resulted in them now being fully apprised of the considerations that
the City considers
to be material.
[204]
There are, however, other considerations
that have persuaded us that the interests of justice do require the
court to entertain
the application for the judicial review of the
tolling decisions.
[205]
It
is clear from the discussion above that the provisions of the SANRAL
Act have been ignored, or misapplied in a number of material

respects.  The resultant breaches of the principle of legality
are stark, especially when they are considered cumulatively.
It
is of special concern that the nature of the unlawful conduct that
has been identified in these proceedings goes in material
part to a
failure to give proper effect to the right of public participation.
That is something that is fundamental to the
effective expression of
everyone’s right to administrative action that is lawful,
reasonable and procedurally fair.
It also a feature of the
decision-making that puts it strikingly at odds with the founding
values of accountability, responsiveness
and openness, which are
meant to underpin democratic government in this country and
critically distinguish it from the authoritarian
system that
prevailed in the pre-Constitutional era.  As remarked in
Hoexter,
Administrative
Law in South Africa
Second Edition (Juta, 2012) at 363,
[116]
in a passage quoted with approval by the Constitutional Court
[117]
:
Procedural
fairness . . . is concerned with giving people an opportunity to
participate in the decisions that will affect them,
and - crucially -
a chance of influencing the outcome of those decisions. Such
participation is a safeguard that not only signals
respect for the
dignity and worth of the participants, but is also likely to improve
the quality and rationality of administrative
decision-making and to
enhance its legitimacy.
There is a very
evident need for corrective steps to be taken, both within SANRAL and
also at the executive level of national government.
[206]
It is apparent that decisions in terms of
s 27 of the SANRAL Act are likely to arise for consideration
again, probably on numerous
occasions, in the future.  The
current proceedings render it opportune for the shortcomings in
compliance with the Act to
be squarely addressed, so that hopefully
they will not occur again.  The administration of the SANRAL Act
potentially affects
a wide range of rights and interests of a broad
cross-section of the national community.  It is obviously in the
public interest
that the Act be lawfully administered and that it be
implemented in faithful compliance with its provisions and the
Constitution.
[207]
We have not overlooked the prejudicial
effect of the City’s delay on SANRAL’s interests.
We accept that a considerable
sum of money has been expended in
taking the tender process up to a stage where the Agency is close to
being able to conclude a
BOT agreement with PPC.  As noted,
however, that process is not assured of a positive final outcome
because of the further
consideration that is likely to be required in
terms of the Public Finance Management Act 1 of 1999 (‘the
PFMA').  We
have also been mindful of the prejudice that PPC may
suffer if the effect of a successful challenge by the City puts an
end to
the project (something which is by no means certain) into
which it has no doubt invested much time and expense since the roads
were declared as toll roads.  In our judgment, however, these
considerations do not weigh heavily enough to displace the
requirements
of the interests of justice that we have identified.
The fact that the determination of the challenge to the declaration
of the roads as toll roads will require SANRAL and the Minister to
repeat the process in terms of s 27(4) of the SANRAL in
proper
compliance with the requirements of those provisions if they wish to
continue with the project does not mean that the tender
process
undertaken to date will necessarily be redundant.  The time that
would be involved in a fresh process in terms of
s 27(4), if it
were efficiently undertaken, would also not unduly delay the
desirable construction and upgrading of the roads,
if it were to be
lawfully decided at the conclusion of such a process to proceed with
the tolling project.
[208]
The
City’s application in terms of s 9(2) of PAJA will
therefore be upheld in respect of the application for the review
of
the tolling decisions.  In the result, and by virtue of what we
have said concerning the merits of the City’s challenge
to
those decisions, the relief sought by the City in terms of paragraphs
1.4 and 1.5 of the notice of motion
[118]
will also be granted.  It will be directed that if SANRAL wishes
to proceed with the tolling project, its Board must initiate
a fresh
process
ab
initio
to that end in terms of s 27(4), with due regard to the findings
in this judgment as to the import of the provisions.
Alternative
relief sought by the City in terms of paragraph 2 of the notice of
motion
[209]
It is not necessary in the circumstances
for us to determine the relief sought by the City in terms of
paragraph 2 of the notice
motion (quoted in paragraph [122], above)
in the alternative to the orders prayed in paragraph 1.  We
shall nonetheless state
what our decision would have been, to avoid
any possible need for the matter to be sent back to us if our finding
in favour of
the City’s review challenge were to be upset on
appeal.
[210]
It will be recalled that in the alternative
to the relief sought in terms of paragraph 1 of the notice of motion,
the City sought:
1.
An order declaring that SANRAL’s
decision to select PPC as a preferred bidder/tenderer and/or to award
the tender to PPC in
respect of the N1 and N2 Winelands Concession
Contract is unlawful, invalid and of no force or effect (para 2.1A
of the notice
of motion).
2.
An order reviewing and setting aside
SANRAL’s decision to select PPC as a preferred tenderer and/or
award a tender to PPC
and SANRAL’s failure to make a decision
to withdraw the 2008 Declaration in terms of s 27(1)(a)(ii) of
the SANRAL Act
(para 2.1.1 and 2.1.2 of the notice of motion).
and
3.
An order directing SANRAL to consider
and decide whether to withdraw the Declaration and to notify the City
of its decision
in this regard within ten days of making such a
decision and if it decides not to withdraw the Declaration, of the
reasons for
such decision (para 2.2. of the notice of motion).
[211]
The manner in which the relief sought by
the City in terms of paragraph 2 of the amended notice of motion has
been formulated suggests
a confused and untenable conflation of two
quite separate concepts; viz. the selection of PPC as preferred
bidder, on the one hand,
and the failure by SANRAL to withdraw the
declaration of the roads as toll roads, on the other.  In oral
argument, probably
because they had become astute to this, the City’s
counsel submitted that the applicant was not objecting to the
selection
of PPC
per se
as preferred bidder, but rather that it was challenging SANRAL’s
selection of any preferred bidder at all.  It thus
became clear
in the course of the oral argument that what the City was challenging
was the lawfulness of SANRAL proceeding with
the process of
appointing a concessionaire in the face of considerations, which,
according to the City, should have been impelling
it to withdraw the
declaration.  It appeared from the oral argument advanced to us
on behalf of the City that only the relief
set out in paragraphs
2.1.2 and 2.2 of the notice of motion remained relevant if the court
were to refuse to review and set aside
the declaration in terms of
paragraph 1 thereof.  Obviously, if SANRAL were to reconsider
and, with the Minister’s approval,
decide to withdraw the
declaration, the selection of PPC (or any other tenderer) as
preferred bidder would be rendered academic.
[212]
The City did not, however, move to amend
the notice of motion to correspond with the position articulated by
counsel in oral argument,
so it is perhaps desirable for us, as we
are dealing with this aspect contingently, to dispose of the relief
sought in terms of
paragraph 2 of the notice of motion in the
form it was pleaded.
[213]
SANRAL disputed that the selection of PPC
as preferred bidder constituted ‘administrative action’
in terms of PAJA.
It also contended that even it were, the
challenge was in any event premature because it was by no means
certain that the selection
would result in the conclusion of a
binding contract with PPC, either on the terms contemplated in the
marked up draft contract
which formed part of the tender
documentation, or on different terms.
[214]
Assuming,
without deciding, in favour of the City that the selection of PPC did
constitute administrative action, there is nothing
in the evidence to
show that the selection was unlawful.  In review proceedings in
procurement matters a court is not concerned
with the merits of the
decision to select the preferred tenderer, but rather with whether
the decision was made lawfully. The inquiry
therefore is not about
whether SANRAL’s decision to select the preferred tenderer
instead of calling for revised bids or
withdrawing from the project
was good or bad, or wise or foolish.
[119]
[215]
As observed in
South
African National Roads Agency v The Toll Collect Consortium
2013 (6) SA 356
(SCA), at para 20,
‘
the
evaluation of many tenders is a complex process involving the
consideration and weighing of a number of diverse factors. The

assessment of the relative importance of these requires skill,
expertise and the exercise of judgment on the part of the person
or
body undertaking the evaluation. That cannot be a mechanical process.
The evaluator must decide how to weigh each factor and
determine its
significance in arriving at an appropriate decision. Where that
occurs it does not mean that the evaluation is not
objective.
Provided the evaluator can identify the relevant criteria by which
the evaluation was undertaken and the judgment that
was made on the
relative importance and weight attached to each, the process is
objective and the procurement process is fair’
;
and, at para 27, ‘
The court is
only concerned with the legality of the tender process and not with
its outcome
’.
[216]
In this instance, SANRAL devised criteria
and factors that had to be taken into account in the appointment of
the preferred tenderer.
These were set out in the invitation to
tender. The decision-makers in this process were the evaluation teams
and the contracts
committee.  The evaluation teams assessed and
scored each tender according to the disciplines determined.  The
contracts
committee appointed the best tenderer based on the report
by the project manager.  The courts have emphasised repeatedly
that
the evaluation of tenders must be left to the evaluators.
It is not a function of the court, but that of the experts who over
a
period of many months assessed the tenders based on criteria
prescribed by SANRAL and on the methodologies that each evaluation

team developed, to select the successful bidder.
[217]
The bid process was structured in two
evaluation phases.
[218]
During the first phase, three consortiums,
namely, Overberg Consortium, GTIMV Consortium and PPC, submitted
tenders. Six evaluation
teams, comprised of SANRAL project team
members and expert consultants, assessed each of the respective
tenders.  Minimum
requirements for compliant tenders were stated
in the invitation to tender. All the bidders were assessed and scored
in respect
of six categories, namely, broad based black economic
empowerment and socio-economic development, engineering,
environmental, finance,
legal and traffic and toll strategy. A total
of 42 evaluation team members were involved, including experts in the
respective six
disciplines.  Base cases were developed as
benchmarks against which tenders could be assessed.  Each
evaluation committee
further developed its own evaluation methodology
prior to the receipt of tenders with the aim of ensuring that the
project could
be designed, constructed, maintained and operated
safely, to foster private sector expertise development in transport
infrastructure
and to minimise the risk borne by the public sector.
After each of the evaluation teams had assessed and scored the bids,

SANRAL’s project manager compiled a tender evaluation report
and submitted it to the contracts committee.
[219]
The contracts committee was mandated by the
Board to assess the evaluation report and select the successful
tenderers. The committee
included, amongst others, representatives of
the Board.  It assessed the tender evaluation report and
approved the selection
of Overberg Consortium and PPC, which had been
recommended as the best two tenderers. The first evaluation phase was
concluded
during April 2011.
[220]
The two best tenderers were selected for
the second phase, known as the ‘best and final offer’
(‘BAFO’)
phase. The same process followed in phase 1 was
repeated during the assessment of the BAFO. The BAFO evaluation phase
also entailed
the furnishing of further clarification on aspects of
the tenders and the submission of a best and final offer by each of
the two
tenderers still involved in the process.  This phase was
concluded in September 2011.
[221]
On the basis of the BAFO evaluation, the
contracts committee selected PPC and Overberg as the preferred
tenderer and the reserve
tenderer, respectively.  That marked
the end of the tender process, but, as presaged in the terms of the
invitation to tender,
it did not result in the award of the contract,
but rather in the commencement of negotiations between SANRAL and the
preferred
bidder towards the conclusion of a BOT agreement.  The
invitation to tender made it clear, however, that SANRAL was not
obliged
to conclude a contract and had the right to withdraw from the
process.  We agree with SANRAL’s argument that the
inchoate
nature of the procurement process makes the City’s
challenge to the selection of a preferred bidder a misdirectedly
premature
attack in the peculiar circumstances of the case.
[222]
The City’s attack on the selection of
PPC as preferred bidder has been based in large measure on events
that occurred after
the submission and the evaluation of the tenders
and on issues which bear more relevantly on the declaration of the
roads as toll
roads, rather than on the appointment of a
concessionaire to upgrade them and run the tolling operation.  No
evidence has
been adduced to support the notion that the invitation
to tender and the tender evaluation process lacked transparency, or
was
unfair or uncompetitive.  The requirements of s 217(1)
of the Constitution are directed at establishing the principles
under
which the government procurement system has to operate, not at
regulating government decisions about what goods or services
to
procure, or what projects to undertake.
[223]
The City’s complaint that the
procurement process was not cost-effective or objective because the
costings for the project
had been supplied from the outset by PPC as
the scheme developer does not bear scrutiny, as the tender process
was conducted by
evaluation teams that were entirely independent of
the scheme developer, and included expert consultants.
[224]
For these reasons, had we been obliged to
decide the matter, we would not have upheld the City’s
challenge of the selection
decision of PPC as preferred tenderer, and
would have declined to make orders in terms of paragraphs 2.1A and
2.1.1 of the notice
of motion.
[225]
We do not find it necessary to deal in any
detail with the City’s application to review SANRAL’s
failure or refusal
to withdraw the declaration of the roads as toll
roads.  The application was made on the basis of an alleged
failure by SANRAL
to take proper account of what the City alleges to
be relevant considerations.  The considerations that the City
claims SANRAL
failed to take into account are: (i) the
implications for the viability of the project to be derived from the
widely publicised
public disaffection with the GFIP; (ii) the
efficacy of the proposed measures to mitigate socio-economic impacts;
(iii) social
issues and (iv) changed circumstances.
Upon analysis it is apparent that the alternative challenge in terms
of paragraphs
2.1.2 and 2.2 of the notice of motion
is
nothing more than a surrogate for the main challenge.  The City
is essentially contending that the financial and social

considerations that it maintains should have convinced SANRAL not to
declare the roads as toll roads in the first place should
now require
it, of its own accord, to retract the declaration.  It seems
that the alternative relief may well have been formulated
as a gambit
to try to circumvent the possible adverse consequences of the delay
rule for the review relief sought in terms of paragraph
1 of the
notice of motion.
[226]
The difficulty with the second part of the
alternative relief sought by the City is that if its review challenge
to the declaration
of the roads as toll roads had failed –
which is the predicate upon which the alternative relief has been
sought - it would
follow that the declaration would have to be
accepted to have been lawfully made.  Thus the financial and
social considerations
that pertained when the declaration was made
could not afford a sound legal reason to compel the Agency to
consider revoking the
declaration.  The City would have to
demonstrate a material change in circumstances to provide a basis to
approach a court
to order SANRAL to revoke a decision that had, or
was deemed to have been, made lawfully.  It has signally failed
to do so
in any relevant respect.
[227]
If
the declaration of the roads as toll roads had been lawfully made, it
would not be for the court to intervene in the manner sought
by the
City because SANRAL was in the process of negotiating a commercially
unwise contract for the operation of the tolling system
on the
roads.  That sort of oversight is the function of the Minister
of Transport in terms of the SANRAL Act.  The implications
of
the GFIP for the current project are that, as we have described
earlier,
[120]
the experience
there has highlighted the impact that a disparity between the revenue
required to cover the cost of the project
and that which can
realistically be realised in terms of the tariffs fixed in terms of
s 27(3) of the SANRAL Act can have
on the National Treasury.
In regard to the Western Cape tolling project, the draft concession
contract which has been the
basis for negotiation between SANRAL and
PPC provides, as we shall discuss in greater detail below, for SANRAL
to reimburse PPC
for any shortfall between the so-called ‘base
toll tariff’ to be agreed between the parties as reasonable and
necessary
to afford PPC - assuming the predicted traffic volumes were
realised – the opportunity to generate sufficient revenue from

the operation to cover its costs and to provide it with a profit, and
that which would be generated by any tolls determined by
the Minister
at lower levels.  In that context, for reasons we go into in
some detail below,
[121]
the
financial viability of the project is in any event likely to be
reassessed by the Ministers of Transport and Finance before
the
project is proceeded with.
[228]
The City also complained that the scope of
the works contemplated in terms of the contract currently under
negotiation differs materially
from that evaluated by Professor
Standish in the proposals submitted to the Minister.  The
changes are alleged to impact on
the cost of proceeding with the
project, requiring a reassessment of the costs to benefits ratio of
undertaking it.  In essence
this is a financial and social
viability issue.  Whether it becomes a real issue, and if so to
what extent, will depend on
the terms of the contract that might
ultimately be concluded.  As noted, it is unlikely that any such
contract could come
into effect without further consideration by the
Ministers of Transport and Finance of the viability of the project.
Moreover,
a debt funding competition is envisaged to establish the
basis on which the party to whom the tender might be awarded will
raise
the finance to proceed with the project.  The outcome of
the competition will also afford SANRAL the opportunity to reconsider

whether the contemplated project offers value for money and should be
proceeded with.
[229]
In the circumstances, had we had to decide
the matter, we would not have been persuaded to grant the City relief
in terms of paragraphs
2.1.2 and 2.2 of the notice of motion.
The interdicts
sought by the City in terms of paragraphs 5 and 6 of the notice of
motion
[230]
Turning
to the interdictal relief sought by the City in terms of paragraphs 5
and 6 of the notice of motion.
[122]
It will be recalled that the City seeks the prohibition of
SANRAL from entering into an agreement with any person contemplated

in s 28(1)(b) of the SANRAL Act in circumstances where such agreement
-
1.
would place an obligation on SANRAL or the
State to provide such person with a guarantee or benefit, the
provision of which is linked
to either the amount of toll, any rebate
thereon or any increase or reduction thereof which SANRAL, in terms
of s 27(3) of
the SANRAL Act, must recommend to the Minister of
Transport; and which the Minister of Transport must determine;
2.
prescribes to, or fetters either or both
SANRAL’s and the Minister of Transport’s discretion in
recommending and deciding
the amount of a toll, any rebate thereon,
or any increase or reduction thereof respectively; and
3.
has the effect of predetermining the amount
of a toll, any rebate thereon, or any increase or reduction thereof
that must be determined
in terms of s 27(3) of the SANRAL Act
before an open, transparent and fair public participation process has
taken place.
[231]
SANRAL is empowered by s 28 of the SANRAL
Act to enter into an agreement with any person for the operation and
levying of tolls.
That section provides that:
‘
28.
(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 road
specified in the agreement
(ii) during the
period so specified
(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),
[123]
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
.’
(Underlining for emphasis)
[232]
The City’s challenge arises from the
perceived effect of the provisions of the proposed concession
contract, although the
nature of the relief it seeks has been framed
in the most general terms.  Its contention is that although
SANRAL and PPC have
not signed a concession contract, the scope for
negotiating the terms of the concession contract had been
progressively reduced
by the time the preferred tenderer was selected
because of the manner in which the tender process is designed.
According
to the City, virtually all of the provisions of the
contemplated concession contract have already been determined in the
course
of the tender process.
[233]
The City has proceeded on the understanding
that PPC’s entitlement to negotiate the concession contract is
limited to those
portions of the draft concession contract in the
tender documentation that it has marked up and that only such
provisions can be
amended. In this regard it relies on paragraph
5.16.2 of the Invitation to Tender, which stated that:
Changes
to the draft Concession Contract,
the
Initial D & C the Initial O & M Termsheet and/or Deed of
Suretyship (including the annexures thereto)
are
discouraged
, however, if a Tenderer is
able to materially improve the terms of their Compliant Tender by
changes to draft Concession Contract,
the Initial D &C Contract O
& M Termsheet and/or Deed of Suretyship (including the annexures
thereto) pursuant to paragraph
5.8.1 above or submits a Variant
Tender which necessitates amendments (if any) to any project
document, as contemplated in paragraph
5.9.2 above,
Tenderers
are entitled to put forward such changes by way of comprehensive
mark-up to the draft Concession Contract,  the Initial
D & C
Contract O & M Termsheet and/or Deed of Suretyship (including the
annexures thereto)
to reflect the
deletions and insertions required to support its Tender.
SANRAL
will not consider any further matters pertaining to the draft
Concession Contract,
the Initial D &
C Contract O & M Termsheet and/or Deed of Suretyship (including
the annexures thereto)
which are not
clearly marked-up in accordance with this paragraph 5.16. Documents
that have not been marked-up with tracked changes
will be considered
by SANRAL to have been accepted by the Tenderer and no further
negotiation in respect of these documents will
be entertained by
SANRAL
.  (Underlining for
emphasis)
[234]
The pertinent provisions are clause 10.4
(the so-called ‘re-imbursement clause’) and those
concerning the base toll
tariffs and the recommendations to be made
by SANRAL to the Transport Minister for the purposes of obtaining a
determination of
the toll tariffs in terms of s 27(3) of the
SANRAL Act.  The City’s contention is that because those
provisions
were not marked up they will appear unchanged in the
signed concession contract.
[235]
The draft agreement provides, in clause
10.3, that, subject to the discounts that are to be agreed for the
use of the road by certain
users, the concessionaire ‘
shall
apply the Toll Tariffs specified at the Toll Plaza for each of
standard vehicle classifications…as specified in Annexure

XV
’.  The relevant toll
tariffs and the applicable discounts fall to be set out in clause 4.2
of Annexure XV of the draft
contract.  Those are the tariffs
(and discounts) that the contracting parties will have agreed should
apply at the beginning
of the operating phase of the tolling project.
In the terminology of the draft agreement they are called the
‘base
toll tariffs’.  The draft agreement makes
provision for the periodic adjustment of the base toll tariffs in
line with
inflation according to an arithmetical formula provided in
terms of clause 5 of Annexure XV.  Clause 5.6 requires the
concessionaire
to submit its adjustment calculations to SANRAL for
confirmation at least 74 days before the applicable adjustment date.
[236]
Clause 5.7 of Annexure XV to the draft
contract provides:
5.7
Publication of Toll Tariffs
Subject
to the Concessionaire having complied with its obligations under
clause 5.6,
SANRAL shall comply with the
statutory requirements with respect to setting Toll Tariffs and shall
make representations to the Relevant
Authority for publication of the
Toll Tariffs in the relevant national circulation newspaper or
official Government Gazette, or
as may otherwise be required by law
in order to give full legal effect to the Toll Tariffs
,
at least 14 (fourteen) days prior to the relevant Adjustment Date in
the case of an adjustment made pursuant to clause 5.1 and
as soon as
reasonably possible in the case of an adjustment pursuant to clause
5.5’ (Underlining for emphasis.)
The
‘statutory requirements’ referred to in this clause are
plainly the tariff determination provisions in terms of
s 27(3)
of the SANRAL Act and the ‘Relevant Authority’ is the
Minister of Transport.
[237]
As mentioned earlier, the experts engaged
by the City have calculated that it will be necessary to set the base
toll tariffs for
the light vehicle class at 74,8c per kilometre,
which is nearly three times more than the currently applicable tariff
for that
class of vehicle on the tolled Gauteng freeways.
Simply stated, the re-imbursement clause would be triggered in the
event
that the tariff determined by the Minister in terms of s 27(3)
were lower than the base toll tariff or adjusted base toll tariff.

It stipulates as follows:
10.
4
Revisions to the Toll
Tariffs
10.4.1
The Toll Tariffs shall be adjusted in accordance with the provisions
of Annexure XV. Subject to the
Concessionaire complying with its
obligations under Annexure XV, SANRAL shall use its reasonable
endeavours to ensure that the
Toll Tariffs are published at such time
so as to enable the adjusted tolls to be charged with effect from the
requisite date under
this Concession Contract.
10.4.2
If there is any
failure
or
refusal
by the Minister of Transport
to
sanction
, or
any
delay
by the Minister of Transport in
sanctioning, the Base Toll Tariffs or any adjustment in the Toll
Tariffs required by the operation
of this Concession Contract other
than as a result of default or negligence on the part of the
Concessionaire,
SANRAL shall reimburse
the Concessionaire by an amount that will place the Concessionaire in
the same economic position that the
Concessionaire would have been
but for such failure, refusal or delay
.
(Underlining for emphasis)
[238]
PPC
submitted a marked up version of a draft concession contract as part
of its bid dated 27 July 2011 as contemplated in terms
of clause
5.16.2 of the Invitation to Tender, quoted above.
[124]
The reimbursement clause was not marked-up in PPC’s bid.
Thus, as the draft contract currently stands, if the
Minister
of Transport determines toll tariffs that are lower than the base
toll tariffs agreed in the concession contract, SANRAL
would have to
pay the concessionaire an amount sufficient to place it in the
financial position it would have been in, but for
the lower tariff
determination.
[239]
The City contends that upon a proper
construction of the express terms of the draft contract it is
apparent that it includes a tacit
term that when SANRAL makes
recommendations to the Minister of Transport as to the amount of toll
to be levied, any rebate thereon
or any increase or reduction
thereon, in terms of s 27(3) of the SANRAL Act, it will do so in line
with the base toll tariffs,
and any adjustments thereto, applicable
in terms of the concession contract.
[240]
The implications of the reimbursement
provision, according to the City, are as follows:  First, the
fact that SANRAL has never
considered or calculated the amount of its
contingent liability resulting from the reimbursement provision
demonstrates that it
has assumed that the Minister of Transport will
determine a tariff in accordance with the base toll tariff. The
wording used in
paragraph 10.4 reveals SANRAL’s attitude: the
notion of ‘failing’ or ‘refusing’ to sanction
the base
toll tariff by the Minister of Transport indicates the
premise of the outcome which the Minister of Transport is expected to
adopt.
The City submits that SANRAL does not intend to give the
Minister of Transport any real option, since it intends to ask her
to
determine the toll tariffs in terms of s 27 (3) only once the
upgrades have been completed.  Second, SANRAL will do far
more
than merely have regard to the base toll tariff when making
recommendations to the Minister.  According to the City,
the
express and tacit terms of the draft concession contract
require
SANRAL to make representations to the Minister for the publication of
the agreed toll tariffs to give full legal effect to those
tariffs as
per clause 5.7 of Annexure XV to the contract.  Given that
SANRAL would not be in a financial position to reimburse
PPC, it
would be constrained to recommend that the tariff be in accordance
with the base toll tariff.  The Minister, being
politically
accountable for SANRAL, and its budget falling under her department,
would similarly feel constrained to determine
a toll amount in
accordance with the base toll tariff.
[241]
The effect of the aforegoing, so contends
the City, is that any contract that includes the reimbursement
clause, or something essentially
equivalent thereto, will unlawfully
fetter the discretion that SANRAL and the Minister are required to
exercise in determining
toll tariffs in terms of s 27(3) of the
SANRAL Act.  It is common cause that such determination, being
‘administrative
action’ in terms of PAJA, must occur with
due consideration of the inputs received in terms of a public
participation exercise.
In other words, the statutory
provisions require SANRAL and the Minister to be able to apply an
open mind in the exercise of the
discretionary power, and not to be
inhibited by contractual considerations in their regard to
representations and comment received
from interested parties.
[242]
The City argues that it has a reasonable
apprehension of harm in that the Minister of Transport would not be
in a position in the
face of a provision such as the reimbursement
clause to freely assess SANRAL’s recommendation, or to fairly
consider representations
made to her in the public comment process,
because a toll fee less than the base toll tariff would be likely to
impose an intolerable
financial obligation on SANRAL.  In such
circumstances, so the City argued, the public consultation process
preceding the
determination of the toll would be a sham because
SANRAL, especially by virtue of clause 5.7 in Annexure XV, would have
already
bound itself to a pre-determined recommendation.
[243]
What the City seeks is an interdict
prohibiting SANRAL from doing something that would be unlawful and
liable to being set aside
in terms of PAJA; that is entering into a
concession contract that would have the effect of unlawfully
fettering the discretion
that falls to be exercised in terms of
s 27(3) of the SANRAL Act.  Subsection 27(3) provides for
the Minister of Transport
to determine the applicable toll tariff on
the recommendation of SANRAL.  In the context of a closely
comparably worded provision
in
s 22G(2)
of the
Medicines and Related
Substances Act 101 of 1965
concerning the making of regulations, the
Constitutional Court, in
Minister of
Health and Another NO v New Clicks South Africa (Pty) Ltd and Others
(TAC and Another as amici curiae)
2006
(2) SA 311
(CC), at paras 136 -142, 471 and 672, found it to be
unsound to treat the two stage process of recommending and
determining as
unrelated, separate and independent decisions, each
having to be subject to PAJA.  At paras 138 and 139,
Chaskalson CJ
held ‘
The
Minister was not obliged to act on the Pricing Committee’s
recommendations.  She had a discretion whether to do so.
But
ultimately there had to be one decision to which both the Pricing
Committee and the Minister agreed. Neither had the
power to take a
binding decision without the concurrence of the other.  It was
only if and when agreement was reached, that
regulations could be
made....In such circumstances debate between the Pricing Committee
and the Minister concerning the regulations
to be made would not be
inappropriate.  Such debate would further the purpose of the
legislation and facilitate the reaching
of agreement.  This is
recognised in the General Regulations made in terms of section 35 of
the Medicines Act (the General
Regulations), which deal with the
composition of the Pricing Committee...’
Ngcobo
J, at paras 441 and 442, also found that the processes were
interlinked and that one is incomplete without the other.  It

follows on the approach enunciated in comparable circumstances in
New
Clicks
- which all parties to the
current proceedings appeared to accept would be applicable - that the
two-stage process of recommendation
and determination provided in
s 27(3) effectively culminates in a single joint decision by the
recommending and determining
parties.  SANRAL and the Minister
must act together when deciding on the amount of toll.
[244]
In brief, SANRAL’s contentions in
response are as follows.  The invitation to tender is clear that
in terms of the draft
concession contract only the preferred tenderer
is prevented from re-opening negotiations on the paragraphs not
marked up in the
draft contract.  Thus, all the provisions
including the base toll tariffs are still open to negotiation
at
SANRAL’s instance
and could be
negotiated downwards if the proposed tolls were found to be
unaffordable.  SANRAL might also decide to withdraw
the Project.
Approvals will in any event have to be sought from the Minister
of Transport and the Minister of Finance in
terms of the PFMA after
the terms of the concession contract have been settled, but before
the contract can effectively be concluded.
SANRAL will consider
prior to the conclusion of the contract whether the concession
contract will meet the criteria of affordability
and value for money,
amongst others.  SANRAL contends that when it makes
recommendations to the Minister of Transport, it
will certainly have
regard to the provisions of the concession contract ultimately
agreed, but asserts that it will act lawfully
in accordance with the
SANRAL Act, thereby implying that due respect will be paid to the
public participation process.  SANRAL
contends in conclusion
that the City has not met the requirements of an interdict.
[245]
The argument by SANRAL is effectively that
the City’s complaint is premature as it seeks to interdict
future administrative
action in circumstances where the terms of the
final contract are not yet known and might well differ from those
contained in the
proposed concession contract.  It also argues
that clause 10.4 of the draft contract and clause 5.7 of
Annexure XV thereto
in any event do not prevent it from properly
discharging its powers and responsibilities in terms of s 27(3)
of the SANRAL
Act.
Discussion on
the interdicts sought by the City
[246]
It
is trite that in order to obtain a final interdict the City must
establish that it has a clear right, that an unlawful interference

with the right has actually taken place or is reasonably apprehended,
and that there is no other satisfactory remedy available
to it.
[125]
Even if those requirements are satisfied, the court may in the
exercise of its discretion decline to grant an interdict.
Clear right
[247]
The
right that the City seeks to protect by way of interdictal
proceedings is its right to just administrative action in terms of

s 27(3).  The City submits that although unlawful fettering
of an administrative discretion is not listed separately
as a ground
in the PAJA, it fits comfortably under s 6(2)(e)(iii), dealing with
irrelevant considerations; s 6(2)(f)(ii), which
deals with the
required rational connection between the decision and the purpose for
which it was taken; and s 6(2)(i), which deals
with action otherwise
unlawful.  Professor Hoexter remarks that ‘
fettering
does not seem to be implied by any of the grounds listed
’
in PAJA, nor does it fit easily with any of them
[126]
.
She suggests that it was probably left out inadvertently, given
it being a well-established ground of review under the common
law.
Her suggestion is that fettering can be covered under the
catch-all ground of ‘
otherwise
unconstitutional or unlawful
’
in s 6(2)(i) of PAJA.  This proposition is logical.  We are
thus willing to accept for the purpose of this part
of the case that
the City has established the existence of a right to the unfettered
exercise by SANRAL and the Minister of the
discretion conferred in
terms of s 27(3) should the project proceed.  The question
is whether the conclusion of a contract
including the provisions
described above would infringe it.  It could only do so if
SANRAL’s contracting on that basis
would be unlawful.  In
that event the offending provisions would be invalid and
unenforceable in any event.
[127]
This shows that the City is, in effect, seeking by means of
interdictal relief to protect itself against what, on its own
case,
would be a nullity.  Confirmation of such a nullity would most
appropriately be established by obtaining declaratory
relief after
the agreement had been concluded.  This is, by itself, an
inherent indicator of the inappropriateness of the
interdictal remedy
sought by the City, but we shall nevertheless proceed to give its
application further consideration, if only
to show some other reasons
why it should not succeed.
Are the relevant
terms of the concession contract still open to negotiation with PPC?
[248]
As noted, it was in dispute whether the
relevant provisions of the contract remain open to amendment in
further negotiation.
We are willing for the purposes of the
judgment to assume (without so deciding) in favour of the City’s
argument that the
provisions are not amenable to amendment.
[249]
The
evidence suggests in any event that something in the nature of a
guarantee in terms of clause 10.4 would be necessary as a standard

provision in any such contract.
[128]
Commercial common sense would also support such a notion.  It
seems to us to be improbable that any private contractor
would commit
itself to constructing and upgrading stretches of national road at
its own expense, on the basis of a contractual
entitlement against
SANRAL to recoup its outlay and make a profit over a multi-decade
concession operating period, without securing
itself against the
potential that the tolls determined in terms of s 27(3) of the
governing statute might at any stage during
the operating period be
set at levels below those necessary to realise the assumptions that
would have informed its financial calculations
when it entered into
the contract.  It also seems to us equally improbable that an
aspirant concessionaire would find it possible
to raise the funding
from third party lenders or investors that would undoubtedly be
required to undertake a multi-billion rand
project of this nature
without some form of guarantee of the sort that would be provided in
terms of a provision like clause 10.4.2
of the draft concession
contract. In our view, these considerations would have been equally
evident to the legislature when it
enacted s 28 of the SANRAL
Act.
Reimbursement
provision and the no-fettering doctrine
[250]
Phoebe
Bolton points out that common sense should tell us that the
no-fettering doctrine cannot be of wide and unlimited application.
To
say that any contract that in any way fetters administrative
discretion is invalid would mean that organs of state would to
a
large extent be unable to conclude contracts at all because all
contracts fetter discretion to some extent.
[129]
[251]
The observations of Mason J in
Ansett
Transport Industries (Operations) Pty (Ltd) v Commonwealth of
Australia and Others
[1977] HCA 71
;
(1977) 17 ALR 513
(HC), at 530, are apposite. Having noted the criticism of the remark
by Rowlatt J in
Rederiaktiebolaget ‘Amphitrite’
v. The King
(1921) 3 KB 500
, at 503,
that ‘
it
is not competent for the Government
[by commercial contract]
to
fetter its future executive action, which must necessarily be
determined by the needs of the community when the question arises.
It
cannot by contract hamper its freedom of action in matters which
concern the welfare of the State
’ as having been ‘expressed
too generally’,
the Australian judge stated
that ‘‘
Public confidence in government dealings
and contracts would be greatly disturbed if all contracts which
affect public welfare or
fetter future executive action were held not
to be binding on the government or on public authorities. And it
would be detrimental
to the public interest to deny to the government
or a public authority power to enter a valid contract merely because
the contract
affects the public welfare. Yet on the other hand the
public interest requires that neither the government nor a public
authority
can by a contract disable itself or its officer from
performing a statutory duty or from exercising a discretionary power
conferred
by or under a statute by binding itself or its officer not
to perform the duty or to exercise the discretion in a particular way

in the future.
’
[252]
The
subject of contractual fettering of discretion has received only
sparse treatment in South African jurisprudence to date, but
the
reported judgments suggest that our courts have adopted the English
approach, which applies the incompatibility test in determining
the
validity of public contracts which contain fettering provisions.
[130]
In terms of that approach a contract will only be invalid if it
is incompatible with the purpose of the power that it fetters.
[131]
In
President
of the RSA v South African Rugby Football Union
supra,
[132]
at para 198, the Constitutional Court found that although some
uncertainty existed ‘
as
to the precise ambit of the principle that a public authority cannot,
by contract, fetter the exercise of its own discretion,
there is
little doubt that a public authority cannot enter into a contract
which is wholly incompatible with the discretion conferred
upon it.’
[253]
The
purpose of a statutory power is not the only factor taken into
account when determining incompatibility.  As observed by

Bolton, the courts have tended to adopt a more ‘contextual’
approach by also taking into account other factors such
as the
interpretation of the statute in question, the nature and the
importance of the powers and the functions of the statutory
authority
that are allegedly fettered, the subject matter or nature of the
contract and the effect of the contract on the statutory
power, the
degree of the fetter and the likelihood or possibility of the
fettering occurring.
[133]
[254]
In
these circumstances, it is necessary to strike a balance between
public and private competing rights i.e. the need for public

authorities to contract, protecting those that contract with state
bodies and ensuring that contracts do not impermissibly fetter

discretion.
[134]
A court has to exercise a value judgment when determining the
validity of the contract or contractual provision in issue
by
weighing up the public and private interests at stake.
[135]
[255]
SANRAL and the Minister must exercise the
public power vested in them by statute lawfully and in accordance
with fair procedure.
Section 28(1) of the SANRAL Act
specifically makes provision for SANRAL to enter into an agreement
with any person for
the operation and levying of tolls.  Section 28
(4) of the SANRAL Act provides that the amount of the toll to be
applied
by the authorised person will be determined in the manner
provided in s 27(3), which section will apply, reading in the changes

necessary in the context and those, if applicable, necessitated by
the agreement.  The SANRAL Act thus itself allows for the

agreement to be taken into account in the exercise of determining the
tolls.  It has already been noted that provisions containing

future contingent liabilities are standard in contracts of this
nature and that it would be unlikely for an entity to agree to
assume
the kind of risk contemplated by the concession contract without the
protection afforded by the ‘reimbursement provision’.
It
is also relevant in this connection to note, as SANRAL’s
counsel were at pains to stress, that the reimbursement
clause does
not have the effect of making the concession contract a risk-free
undertaking for the concessionaire.  The concessionaire
carries
the risk of there being a shortfall in the anticipated revenue if the
forecast traffic volumes are not realised, as well
as the risks
inherent in the maintenance of the roads and the running of the
tolling operation for the duration of the concession,
and also the
scale of the cost of putting the roads in good order for return to
SANRAL at the end of the thirty year concession
period.  The
overall resulting balance seems to us entirely consistent with the
sort of contract that is expressly contemplated
in s 28.
[256]
The City’s counsel submitted,
however, that the effects of the reimbursement clause read with
clause 5.7 of annexure XV are
wholly incompatible with the statutory
power assigned to SANRAL and the Minister of Transport in s 27 (3) of
the SANRAL Act.
We do not agree.  On the contrary, the
provisions expressly acknowledge that the exercise of the statutory
power may result
in a disparity between the base toll tariff agreed
in the contract and the periodically adjusted base toll tariffs to be
calculated
in terms of clause 5 of Annexure XV to the draft
contract.  Clause 10.4.2 is there to deal with the
consequences of that
eventuality; not to prevent it from occurring.
[257]
The
City highlighted the use of the words ‘failure’,
‘refusal’ ‘to sanction’ the base toll tariff

by the Minister of Transport in clause 10.4.2 of the concession
contract and argued that they conveyed an implied commitment by
the
Minister to determine the toll tariffs consistently with the toll
tariff provisions of the contract.  They argued that
SANRAL’s
obligations in terms of clause 5.7 of Annexure XV, quoted above,
[136]
underscore this.
[258]
In our view, the City has misconstrued
clause 5.7.  Its purpose is to oblige SANRAL to set in train the
process in terms of
s 27(3) of the Act that will be necessary to
implement the periodic adjustments to the tolls at the times that
these are meant
to occur in terms of the concession contract.
The central object of the provision is to ensure that the adjustments
are implemented
timeously in accordance with the scheme of the
concession contract.  The extent of the contractually stipulated
adjustments
is a matter of arithmetical calculation, applying the
equation set out in clause 5.1, in which the critical variable
quotient is
the consumer price index.  It has nothing whatsoever
to do with the amounts in which the toll fees are actually determined

by the Minister in terms of s 27(3).  Timing is the matter
that is critical for the concessionaire; and it is to that
that
clause 5.7 is directed.  It is a timeous decision by the
Minister to make the adjustment, or to refuse to do so, that
is
material to the concessionaire.  Whether an adjustment in line
with the contract follows or not, or whether the Minister
refuses to
make an adjustment is of no monetary consequence to the
concessionaire.  All that matters is that a decision is
made.
If the toll determined by the Minister is below that calculated in
terms of the contract, or if she refuses to make
an adjustment, the
reimbursement clause is triggered.  The concessionaire has no
need for a provision requiring SANRAL to
commit itself to trying to
persuade the Minister to determine the tariff at a level consistent
with the adjusted base toll tariffs.
It is covered by the
reimbursement clause.  The effect on SANRAL’s financial
position of the determination of toll tariffs,
on the other hand, is
a factor that will feature in any determination of tolls in terms of
s 27(3).  It would be a consideration
even if there were no
reimbursement clause, or indeed no concession contract at all.
[259]
Acknowledging a connection between SANRAL’s
contingent obligation in terms of clause 10.4.2 and the exercise of
the power
in terms of s 27(3) of the SANRAL Act, does not justify the
assumption that SANRAL and the Minister of Transport will act
unlawfully
when exercising their powers and responsibilities in terms
of s 27(3).  They are enjoined to act lawfully by the
SANRAL
Act, PAJA and the Constitution.  They must have regard to
the public participation process and do so meaningfully.  The

GFIP experience has shown that the relevant authorities acted
responsively to the public’s views by reducing toll fees even

though there were other competing demands on the budget and the
original concept of that Project had enjoined the toll fees to
be set
higher.
[260]
The City seeks an order in general terms
that would prevent SANRAL from ever entering into a contract with a
reimbursement provision.
That is a drastic form of relief that
should not be granted in the absence of exceptional circumstances and
a strong case
made out on the papers.  If SANRAL and the
Transport Minister act unlawfully in terms of s 27(3), it will
be open to
the City or any other adversely affected party to
challenge their decisions at that stage on particularised grounds.
The applicability
of the
Public Finance Management Act and
the influence thereof on the
City’s application for interdictal relief
[261]
It will be recalled that the incidence of
the PFMA weighed with us when we indicated how we would have decided
the alternative relief
sought in terms of
s 2
of the notice of
motion had we not granted the principal review relief applied for in
paragraph 1.4 and 1.5.  In our view,
the incidence of the Act
also forms part of the contextual considerations bearing relevantly
on the likelihood of the reimbursement
clause unduly fettering the
exercise by SANRAL and the Minister of Transport of their powers and
responsibilities in terms of s 27(3)
of the SANRAL Act.
[262]
The relevant provisions of the PFMA are
ss 66 and 70.
[263]
Section 66(1) of the PFMA reads as follows:
66.
Restrictions on borrowing, guarantees and other commitments.
(1)
An institution to which this Act applies may not borrow money or
issue a guarantee, indemnity or
security, or enter into any other transaction that binds or may bind
that institution or the Revenue
Fund to any future financial
commitment
, unless such borrowing,
guarantee, indemnity, security or other transaction—
(a)
is authorised by this Act; and
(b)
in the case of public entities, is also
authorised by other legislation not in conflict with this Act; and
(c)
in the case of loans by a province or a
provincial government business enterprise under the ownership control
of a provincial executive,
is within the limits as set in terms of
the
Borrowing Powers of Provincial Governments Act, 1996
...
[264]
Section 66(3)(c)
of the PFMA, which
pertains to SANRAL as a ‘national public entity’,
provides that:
Public
entities may only through
the following
persons borrow money, or
issue a
guarantee, indemnity or security
, or
enter into any other transaction
that
binds or may bind that public entity to any future financial
commitmen
t:
.......
(c)
…. The Minister [of Finance] or, in the case of the issue of a
guarantee, indemnity or security, the Cabinet member who
is the
executive authority responsible for that public entity, acting with
the concurrence of the Minister in terms of
section 70.
[265]
Section 70(1)(b)
stipulates as follows:
Guarantees,
indemnities and securities by Cabinet members.
(1)
A Cabinet member, with the written concurrence of the Minister [of
Finance] (given either specifically in each case or generally
with
regard to a category of cases and subject to any conditions approved
by the Minister), may issue a guarantee, indemnity or
security which
binds –
…
(b)
a national public entity referred to in
section 66(3)(c)
in respect of a financial commitment incurred or to
be incurred by that public entity.
[266]
It is clear from the provisions quoted
above that an institution like SANRAL may only bind itself to future
financial commitments
of the nature contemplated in terms of the
reimbursement clause through the Minister Transport acting in
concurrence with the Minister
of Finance in terms of
s 70
of the
PFMA.
[267]
The City submits that the reliance by
SANRAL in its answer on the issue of ministerial approval in terms of
the PFMA is an ‘afterthought’
and opportunistic, in that
it was not raised at the stage of the urgent application for an
interim interdict brought by the City
in 2013.  According to the
City, SANRAL had indicated in the interim interdict proceedings that
it intended to conclude a
contract within 2 weeks. At that stage, it
alleged that the only processes that still needed to be undertaken
were the final negotiation
of the concession contract and the debt
funding competition.  The City alleges that the statement that
the contract would
have been concluded in two weeks suggests that
there had never been an intention on the part of SANRAL to obtain
Ministerial approval
in terms of the PFMA, considering all the
formalities that still had to take place.  That could not be
achieved in such a
short time.  The difficulty with that
submission is that the papers filed in the interim interdict
proceedings have not been
incorporated in this application.  The
context in which such statements were made by SANRAL is therefore
missing.  It
would have been appropriate for the City to make
those allegations clearly in its papers so as to afford SANRAL a fair
opportunity
to deal with them.  It was not permissible merely to
quote from the judgment in the interim interdict application in its
heads
of argument.
[268]
A further contention made by the City is
that the draft concession contract does not in fact provide that it
is subject to the consent
of the Minister of Transport and Minister
of Finance.  The City’s counsel pointed out that the
contract has a number
of resolutive conditions, none of which impose
the requirement of consent by the Ministers.  The draft contract
provides for
signature by Mr Alli on behalf of SANRAL.  The
City pointed out that it makes no provision for the Ministers to
sign.
This, the City emphasised, is in contrast with the draft
deed of suretyship, which is an annexure to the draft concession

contract.  The deed of suretyship provides for SANRAL to bind
itself to the Lenders as surety and co-principal debtor for
payment
by the concessionaire to the Lenders.  Provision is made for the
Minister of Transport to sign the deed on behalf
of SANRAL, and its
wording records that this will be done with the concurrence of the
Minister of Finance.  The draft concession
contract contains no
such provision in respect of the reimbursement clause.
[269]
The City’s further submissions on the
non-applicability of the PFMA were that the context of the word
‘guarantee’
in
s 66(1)
of the PMFA indicates that it
cannot apply to every undertaking to make payment.  If that were
the case, argued the City’s
counsel, it would mean that every
time SANRAL entered into a contract it would have to be done through
the Minister of Transport
with the concurrence of the Finance
Minister.  According to the City, the meaning in
s 66(3)
the PFMA of the words ‘[a]
ny
future financial commitment’
is
not easy to determine, but they cannot mean every transaction that
commits the entity to make payment in the future, such as
for
instance, travel and accommodation bookings, salary contracts, hiring
of premises.  The City’s counsel submitted
that there must
be something ‘fiscally exceptional’ about the financial
commitment in order to bring it within the
operation of provisions
requiring approval by the relevant Ministers, and the relevant
provisions of the draft concession contract
are certainly not
exceptional. They are simply the means of calculating the contract
price.
[270]
The concept of a ‘guarantee’,
within the meaning of
s 70
of the PFMA, was described by
Fabricius J in
Comair Ltd v Minister of
Public Enterprises and Others
[2015]
ZAGPPHC 361 (1 June 2015) at para 17.2, citing Forsyth and Pretorius,
Caney’s The Law of Suretyship
6th ed. (Juta, 2010) at p.34, as ‘
a
means by which the guarantor undertakes to pay on the happening of a
certain event but does not promise that that event will not
happen
’.
The learned judge held that it was clear that the essential
nature of a guarantee within the meaning of
s 70
of the PFMA was an
undertaking which created a direct liability by the public entity
concerned to pay upon the happening of a defined
event.  We
respectfully agree.  In our judgment, the reimbursement clause
manifests such an undertaking.
[271]
It follows that if the reimbursement clause
is to be a commercially essential and unseverable provision of the
BOT agreement, as
would appear to be the case, the contract will be
subject to the aforementioned provisions of the PFMA.  That
would be the
case even in the absence of express mention in its
wording of the need for ministerial approval in the contract.
If a contract
in terms of the draft were to be concluded without the
required approval, it would fail unless the concessionaire were
prepared
to waive the reimbursement clause.
[272]
The endorsement of the reimbursement clause
by the Minister of Finance would serve as an indication of an
acceptance by the National
Treasury of the risk that the tolls set in
terms of
s 27(3)
might be less than those to which the concessionaire
might be entitled in terms of the contract, which would imply an
appreciation
of the need to make appropriate provision to deal with
the eventuality should it arise.  As noted, the recent
experience in
connection with the GFIP will no doubt conduce to an
especially critical scrutiny of the contract before the Minister of
Finance’s
endorsement will be forthcoming.  That
experience is proof of how the weight of public opinion and objective
considerations
related to the affordability of tolls for road users
bear effectively on decision-making in terms of s 27(3) of the
SANRAL
Act.  The likelihood that the contract will not be
concluded without an acceptance by Treasury of the risks inherent in
the
reimbursement clause and appropriate provision therefor
consequently being made in the budgeting process is a further reason
why
it would be inappropriate to interdict the conclusion of a
contract including a provision like clause 10.4.2 of the draft
concession
agreement, and, even more so, to grant an interdict in the
wider terms sought in terms of paragraphs 5 and 6 of the notice of
motion
because it reduces the prospect of the clause having the
fettering effect that the City fears.
[273]
In light of all these considerations, the
City’s application for interdictal relief will be dismissed.
2014 Board
decision
[274]
We
turn, lastly, to the relief sought in terms of paragraph 3A and 3B of
the notice of motion; viz. that ‘[th]e 2014 declaration

decision is reviewed and set aside’.
We
described the circumstances in which the so-called 2014 declaration
was made earlier in this judgment, with reference to the
explanatory
memorandum by Mr Alli attached as annexure NA1.
[137]
It is not in dispute that the decision was not remotely compliant
with the requirements of s 27(4) of the SANRAL Act.

Unsurprisingly, no declaration has been gazetted pursuant to the
decision.  We are not persuaded that the board decision
constituted ‘administrative action’ within the meaning of
PAJA and are therefore not willing to exercise the court’s

powers of judicial review in relation to it.  The City’s
counsel, however, expressed anxiety that SANRAL might seek
to make
something of the decision in relation to any future determination of
the project and pressed us to make some form of order
to ward off the
danger of possible future litigation.  In our view the concern
is misplaced.  It will be clear enough
from the form of
consequential relief to be granted upon the review and setting aside
of the tolling decisions that if the roads
are to be declared as toll
roads, this may occur only after the provisions of s 27(4) have
been complied with pursuant to
a fresh process to be commenced
ab
initio
.
No order will be made in respect of the relief sought in terms of
paragraph 3B of the notice of motion.
Costs
[275]
We suggested during the course of argument
that it might be advisable, by reason of the multi-faceted character
of the City’s
application, for argument on costs to stand over
until after judgment had been pronounced on the substantive issues.
Counsel
indicated that they were amenable to this course.
Argument on costs will therefore be heard on a date to be determined,
and
the judgment will be appropriately supplemented thereafter.
Concluding
remarks
[276]
In conclusion, we should like to express
our appreciation to each of the legal teams for their well-prepared
and helpful argument
and for conscientiously co-operating to limit
the amount of reading that we had to do to just over half of the 7400
page record.
We also express our gratitude for having been
furnished with a copy of the record in electronic format on tablet
devices especially
provided to us for the purpose of the hearing and
the preparation of the judgment.  This afforded us very material
logistical
assistance and contributed markedly not only to a more
efficient hearing, but also to our ability to deliver judgment with
relative
expedition.
Orders
[277]
The following orders are made:
a)
The applicant’s application, in terms
of s 9 of the Promotion of Administrative Justice Act 3 of 2000
(‘PAJA’),
for an extension of the period of 180 days
referred to in s 7(1) of the Act in respect of the institution
of proceedings for
the relief set forth in paragraphs 1.1, 1.2 and
1.3 of the notice of motion, as finally amended, is refused.
b)
Consequent upon the order made in terms of
paragraph (a), above, the application in terms of paragraphs 1.1, 1.2
and 1.3 of the
notice of motion for the review and setting aside of –
i.
the decision of the Acting Deputy
Director-General: Environmental Quality and Protection of the then
Department of Environmental
Affairs and Tourism on 30 September 2003,
in terms of s 22 of the Environment Conservation Act 73 of 1989
(‘the ECA’),
(‘the 2003 environmental
authorisation’) to grant authorisation to the first respondent
to undertake certain listed
activities in respect of the construction
and upgrading of sections of the N1 and N2 national roads for the
N1-N2 Winelands Toll
Highway Project (‘the Project’);
ii.
the decision of the third respondent on 10
October 2005, in terms of s 35 of the ECA, to dismiss the
appeals against the 2003
environmental authorisation; and
iii.
the decision of the third respondent on 28
February 2008 (as amended on 7 April 2008), in terms of s 35
read with s 22(3)
of the ECA, to grant a revised environmental
authorisation to the first respondent to undertake the listed
activities
is
refused.
c)
The applicant’s application in terms
of s 9 of PAJA for an extension of the period of 180 days
referred to in s 7
of the Act in respect of the institution of
proceedings for the relief set forth in paragraphs 1.4 and 1.5 is
granted and the said
period is extended until the date upon which the
City’s supplementary founding affidavits were delivered.
d)
The application for the relief set forth in
paragraphs 1.4 and 1.5 of the notice of motion is granted, and the
decision made by
the second respondent, in terms of s 27(4) of
the South African National Roads Agency Limited and National Roads
Act 7 of
1998 (‘the SANRAL Act’), to approve the first
respondent’s application in respect of its proposal to declare
sections of the N1 and N2 national roads as toll roads for the
purpose of the Project, as well as the purported decision of the

first respondent, in terms of s 27(1)(a)(i) of the SANRAL Act,
to declare the said sections of the roads as toll roads are
reviewed
and set aside.
e)
The first respondent’s proposals to
declare the said sections of the roads as toll roads are remitted to
the first respondent
for further consideration in accordance with the
findings in this judgment, subject to the direction that, should it
be decided
to proceed with the Project, the process provided in terms
of s 27(4) of the SANRAL Act must be undertaken afresh,
ab
initio
, in proper compliance with the
prescripts of the provision and the requirements of just
administrative action.
f)
No order is made in respect of the relief
sought by the applicant in terms of paragraphs 3, 3A, 3B and 4 of the
notice of motion.
g)
The application for interdictal relief
against the first respondent in terms of paragraphs 5 and 6 of the
notice of motion is refused.
h)
To the extent that remains necessary, the
late delivery by the applicant of its supplementary founding papers
is condoned.
i)
The issues of costs, including those
previously stood over in related proceedings for determination in
these proceedings, shall
stand over for determination after argument
to be heard on a date to be agreed, or failing agreement within 5
days, to be determined
by the court.
A
G BINNS-WARD
Judge
of the High Court
N
P BOQWANA
Judge
of the High Court
APPEARANCES
Applicant’s
counsel: G.M. Budlender SC
N.
Bawa
R.
Paschke
Applicant’s
attorneys Cullinans Inc
Kenilworth,
Cape Town
First
Respondent’s counsel C.D.A. Loxton SC
B.E.
Leech SC
D.M.
Smith
First
Respondent’s attorneys Fasken Martineau
Johannesburg
Broekmanns
Cape
Town
Second
and Third Respondents’
Counsel
J.C. Heunis SC
E.
van Huyssteen
Second
and Third Respondents’
Attorneys
State Attorney,
Cape
Town
[1]
This is permissible in terms of the judgment in
City
of Cape Town v South African National Roads Authority Limited
(sic)
and
Others
2015 (3) SA 386
(SCA), which gave an expansive definition of the
concept of open justice under our Constitution.  The judgment
held that,
save in exceptional circumstances, to be determined on a
case by case basis, any documents filed of record in a court are
immediately
open for inspection by the press and the public and that
their content thus becomes legitimate material for public debate
before
the pleadings are closed and the case comes before court, if
it ever does.  The court distinguished the position in this
country from those which obtain in jurisdictions with a similar
civil law procedural heritage such as England, Australia and Canada,

which were described in broad terms in the decision of the court at
first instance,
South
African National Roads Agency Limited v City of Cape Town and
Others: In Re: Protea Parkway Consortium v City of Cape Town
and
Others
[2014] 4 All SA 497
(WCC), at paras 24-51.
[2]
In
the context of the allegation by SANRAL in its answering affidavit
that the City’s application is politically motivated
and that
the City has been put up as the applicant as a surrogate for the
Democratic Alliance Party, it perhaps bears noting
that the papers
show that opposition to the tolling project on the grounds of its
perceived adverse effect on the people and
economy of Cape Town and
its surrounding areas has been consistently articulated by both the
municipal and provincial spheres
of government irrespective of the
party in power - whether it be the African National Congress or the
Democratic Alliance - at
the various stages the toll roads proposal
has been under consideration.
[3]
Cf.
e.g.
Government
of the Republic of South Africa and Others v Grootboom and Others
2001
(1) SA 46
(CC),
2000 (11) BCLR 1169
(re government housing policy)
and
Minister
of Health And Others v Treatment Action Campaign and Others
(No 2)
[2002] ZACC 15
;
2002 (5) SA 721
(CC) (re the provision by government of
antiretroviral medication), which serve as salient examples of
judgments which impacted
on the functions of the executive arm of
government without infringing the separation of powers.
[4]
Ex
Parte Chairperson of the Constitutional Assembly:
In
re: Certification of the Constitution of the Republic of South
Africa
[1996] ZACC 26
;
1996
1996 (4) SA 744
(CC), at para 109.
[5]
Section
41 of the Constitution.
[6]
At
para 95 (per Moseneke DCJ).
[7]
Appeals to the courts in tax matters have been described as
proceedings that combine the characteristics of appeals and judicial

review; see
Kommissaris
van Binnelandse Inkomste v Transvaalse Suikerkorporasie Bpk
1985 (2) SA 668
(T), at 676C and
ITC
936
24
SATC 361
.
[8]
Fedsure
Life Assurance Ltd and Others v Greater Johannesburg Transitional
Metropolitan Council and Others
[1998] ZACC 17
;
1999 (1) SA 374
(CC);
1998 (12) BCLR 1458
, at para 56-59.
[9]
The
declaration of a national road as a toll road in terms of s 27
of the South African National Roads Agency Limited and
National
Roads Act No. 7 of 1998 (‘the SANRAL Act’) is one of the
functions of the Agency provided in terms of ss
25 and 26 of the
Act.  Section 25(1) requires SANRAL to discharge its functions,
amongst other matters ‘
within
the framework of government policy
’.
See paras [76]-[83], below.
[10]
National
Treasury and Others v Opposition to Urban Tolling Alliance and
Others
2012 (6) SA 223
(CC);
2012 (11) BCLR 1148
, at para 93 (minority
judgment, Froneman J).
[11]
Section
1 of PAJA provides as follows insofar as currently relevant:
“
administrative
action
” means any
decision taken, or any failure to take a decision, by-
(a)
an organ of state, when-
(i)
exercising a power in terms of the Constitution or a provincial
constitution; or
(ii)
exercising a public power or performing a public function in terms
of any legislation; or
(b)…,
which
adversely affects the rights of any person and which has a direct,
external legal effect, but does not include- ….
“
decision”
means any decision of an administrative nature made, proposed to
be made, or required to be made, as the case may be, under an
empowering provision, including a decision relating to-
(a)
making, suspending, revoking or refusing to make an order, award
or determination;
(b)
giving, suspending, revoking or refusing to give a certificate,
direction, approval, consent or permission;
(c)
issuing, suspending, revoking or refusing to issue a licence,
authority or other instrument;
(d)
imposing a condition or restriction;
(e)
making a declaration, demand or requirement;
(f)
retaining, or refusing to deliver up, an article; or
(g)
doing
or refusing to do any other act or thing of an administrative
nature,
and a
reference to a failure to take a decision must be construed
accordingly
.
[12]
Section 6(2) of PAJA provides:
A court or
tribunal has the power to judicially review an administrative action
if-
(a) the
administrator who took it-
(i) was not
authorised to do so by the empowering provision;
(ii) acted
under a delegation of power which was not authorised by the
empowering provision; or
(iii) was
biased or reasonably suspected of bias;
(b) a
mandatory and material procedure or condition prescribed by an
empowering provision was not complied with;
(c) the
action was procedurally unfair;
(d) the
action was materially influenced by an error of law;
(e) the
action was taken-
(i) for a
reason not authorised by the empowering provision;
(ii) for an
ulterior purpose or motive;
(iii) because
irrelevant considerations were taken into account or relevant
considerations were not considered;
(iv) because
of the unauthorised or unwarranted dictates of another person or
body;
(v) in bad
faith; or
(vi)
arbitrarily or capriciously;
(f) the
action itself-
(i)
contravenes a law or is not authorised by the empowering provision;
or
(ii) is not
rationally connected to-
(aa) the
purpose for which it was taken;
(bb) the
purpose of the empowering provision;
(cc) the
information before the administrator; or
(dd) the
reasons given for it by the administrator;
(g) the
action concerned consists of a failure to take a decision;
(h) the
exercise of the power or the performance of the function authorised
by the empowering provision, in pursuance of which
the
administrative action was purportedly taken, is so unreasonable that
no reasonable person could have so exercised the power
or performed
the function; or
(i) the
action is otherwise unconstitutional or unlawful.
[13]
Cf.
Wolgroeiers
Afslaers (Edms) Bpk v Munisipaliteit van Kaapstad
1978 (1) SA 13
(A) at 41E-42C;
Gqwetha
v Transkei Development Corporation Ltd and others
2006 (2) SA 603
(SCA) at para 22-23 and
Opposition
to Urban Tolling Alliance and Others v The South African National
Roads Agency Ltd and Others
[2013] 4 All SA 639
(SCA), at para 25.
[14]
Cf. e.g.
Oudekraal
Estates (Pty) Ltd v City of Cape Town and Others
2010 (1) SA 333
(SCA) (‘
Oudekraal
2’), at para 33, and
Opposition
to Urban Tolling Alliance and Others v The South African National
Roads Agency Ltd and Others
[2013] 4 All SA 639
(SCA) at para 22.
[15]
See
Khumalo
and Another v MEC for Education, KwaZulu-Natal
2014 (5) SA 579
(CC), at para 47.
[16]
A court may invoke the delay rule
mero
motu
at common law (
Mamabolo
v Rustenburg Regional Local Council
[2000] ZASCA 133
;
2001 (1) SA 135
(SCA);
[2000] 4 All SA 433
at para 10).  It is
an incident of the court’s inherent jurisdiction to regulate
its own procedure.  In
Camps
Bay Ratepayers’ and Residents’ Association and Another v
Harrison and Another
2011 (4) SA 42
(CC);
2011 (2) BCLR 121
, at para 53, it was held
that the position remains unaffected under the Constitution and
PAJA.  However, no consideration
was given to the effect of an
agreement between the parties in terms of s 9(1) of PAJA on the
court’s power to raise
inordinate delay
mero
motu
as
a reason to refuse an application for judicial review.
The,
on the face of it, unqualified right given to the parties to a
review application to extend the period for the institution
of
proceedings by agreement appears potentially to negate the concept
of protecting of the position of members of the general
public who
may have acted on the decision that is part of the rationale for the
common law rule.
The current case does not require us to decide the question, but it
seems to us that it would be within the power of the
court, in
appropriate circumstances, especially when the position of persons
other than the litigants might be prejudicially
affected, to decline
to recognise an agreement between the parties to extend the time
limits provided in terms of s 7(1)
of PAJA.
[17]
See para 26 of the judgment.
[18]
At
paragraph [122], below.
[19]
Para 17-18 of SANRAL’s heads of argument.
[20]
See
Setsokosane
Busdiens (Edms) Bpk v Voorsitter, Nasionale Vervoerkommissie en 'n
Ander
1986 (2) SA 57
(A), at 86A-D, quoting from Miller JA’s
judgment in
Wolgroeiers
Afslaers (Edms) Bpk v Munisipaliteit van Kaapstad
1978
(1) SA 13
(A) at 39C.
[21]
The
same considerations might inform the drafting of the court’s
judgment; cf.
Loghdey
and Others v City of Cape Town and Others; Advanced Parking
Solutions CC and Another v City of Cape Town and Others
2010 (6) BCLR 591
(WCC) at para 57.
[22]
Cf.
the remarks of Skweyiya J in analogous circumstances concerning
the effect of s 237 of the Constitution in
Khumalo
supra,
at para 46.
[23]
2004
(6) SA 222
(SCA) and
2010 (1) SA 333
(SCA).
[24]
Associated
Institutions Pension Fund v Van Zyl and Others
supra
,
Gqwetha v Transkei Development Corporation Ltd
supra;
Van
Wyk v Unitas Hospital
supra
;
Oudekraal (2)
supra;
Price
Waterhouse Coopers Inc and Others v Van Vollenhoven NO and Another
[2010] 2 All SA 256
(SCA);
Camps
Bay Ratepayers' and Residents' Association v Harrison
[2010] 2 All SA 519
(SCA);
Camps
Bay Ratepayers’ and Residents’ Association and Another v
Harrison and Another
2011 (4) SA 42
(CC);
Beweging
vir Christelik-Volkseie Onderwys v Minister of Education
supra;
OUTA
(SCA)
supra and
Khumalo
v MEC for Education: KwaZulu-Natal
supra.
.
[25]
Van
Wyk v Unitas Hospital
supra,
at para 20.
[26]
Note
14, above.  We are mindful that
Oudekraal
2 was not a PAJA regulated review because the impugned decision
preceded the enactment of that legislation by several decades,
but
s 7(1) read with s 9 of PAJA does not seem to us to have
introduced anything relevant that could be considered
new in respect
of the courts’ application of the delay rule.  As we have
noted (in para [16]), the only relevant change
has been the
translation of what used to be a matter of judicial policy into a
matter of constitutional law.  That might
explain why (at para
81) the judgment appeared to hold that the issue of delay and the
principle of legality were distinct –
a proposition that is no
longer tenable in the context of PAJA regulated reviews now that the
delay rule has been constitutionally
incorporated as part of the
principle of legality.
[27]
Oudekraal 2
supra,
at para 57.
[28]
See
e.g.
Van
Wyk v Unitas Hospital
supra,
at para 20.
[29]
PPC
was cited as the sixth respondent.  It did not play an active
part in the proceedings.
[30]
The
text of
s 28
of the SANRAL Act is set out in para [231], below.
[31]
Thirty
years.
[32]
Section
21 of the ECA.
[33]
‘
EIA’
is the acronym for ‘environmental impact assessment’.
[34]
Promulgated in GN R 1183 of 5 September 1997 and amended by GN R
1645 of 11 December 1998 and GN R 672 of 10 May 2002 (corrected
by
GN R 783 of 7 June 2002).  The character of a ‘record of
decision’ was regulated in terms of regulation 10
of the
General EIA Regulations.
[35]
The
‘
intent
to toll process
’
was the expression adopted by all the parties to describe the
process provided for in terms of s 27(4) of the SANRAL
Act,
which is quoted in para [76], below.
[36]
The
agreement contained a definition of ‘roads’ that
anticipated that which was inserted into the EIA regulations
in item
11 of schedule 1 to GN R1182
of
5 September 1997, as amended by GN R 1355 of 17 October 1997,
by
GN R 670 of 10 May 2002.  The provision in the agreement most
pertinent for current purposes recorded that ‘
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
(Act No 7 of 1998)
’.
[37]
The
February 2008 decision was amended in respects not material for
present purposes in April 2008.
[38]
Interestingly, the authorisation in respect of the erection of toll
plazas appears to have been limited to the N2 on the portion
of that
national road between the R300 and Bot River.
[39]
Promulgated in GN R 1182 of 5 September 1997 and amended by GN R
1355 of 17 October 1997, GN R 448 of 27 March 1998 and GN R
670 of
10 May 2002 (corrected by GN R 782 of 7 June 2002)
[40]
See
the preamble to NEMA.
[41]
Section
2(4)(a) provides:
Sustainable
development requires the consideration of all relevant factors
including the following:
(i)
That the disturbance of ecosystems and loss of biological diversity
are avoided, or, where they cannot be altogether avoided,
are
minimised and remedied;
(ii)
that pollution and degradation of the environment are avoided, or,
where they cannot be altogether avoided, are minimised
and remedied;
(iii)
that the disturbance of landscapes and sites that constitute the
nation's cultural heritage is avoided, or where it cannot
be
altogether avoided, is minimised and remedied;
(iv)
that waste is avoided, or where it cannot be altogether avoided,
minimised and re-used or recycled where possible and otherwise

disposed of in a responsible manner;
(v)
that the use and exploitation of non-renewable natural resources is
responsible and equitable, and takes into account the
consequences
of the depletion of the resource;
(vi)
that the development, use and exploitation of renewable resources
and the ecosystems of which they are part do not exceed
the level
beyond which their integrity is jeopardised;
(vii)
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; and
(viii)
that negative impacts on the environment and on people's
environmental rights be anticipated and prevented, and where they

cannot be altogether prevented, are minimised and remedied.
Cf. also
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) at para 61.
[42]
“
[S]
ustainable
development
”
means the integration of social, economic and environmental factors
into planning, implementation and decision-making
so as to ensure
that development serves present and future generations
.
[43]
‘
Running
right through the preamble and guiding principles of NEMA is the
overarching theme of environmental protection and its
relation to
social and economic development.  This theme is repeated again
and again. Economic sustainability is not treated
as an independent
factor to be evaluated as a discrete element in its own terms.
Its
significance for NEMA lies in the extent to which it is
inter-related with environmental protection
.
Sustainable development presupposes accommodation, reconciliation
and (in some instances) integration between economic development,

social development and environmental protection.  It does not
envisage social, economic and environmental sustainability
as
proceeding along three separate tracks, each of which has to be
weighed separately and then somehow all brought together in
a global
analysis. The essence of sustainable development is balanced
integration of socio-economic development and environmental

priorities and norms.  Economic sustainability is thus not part
of a check-list that has to be ticked off as a separate
item in the
sustainable development enquiry.
Rather,
it is an element that takes on significance to the extent that it
implicates the environment.
When economic development potentially threatens the environment it
becomes relevant to NEMA. Only then does it become a material

ingredient to be put in the scales of a NEMA evaluation
’.
(Our underlining for emphasis.)
[44]
The
most obvious confirmation that some socio-economic considerations
were taken into account in the environmental authorisation

decision-making is to be found in the ameliorating provisions made
in respect of the impact on the Helderzicht community in Somerset

West.
[45]
Quoted in para [43], above.
[46]
Cf.
Natal
Joint Municipal Pension Fund v Endumeni Municipality
2012 (4) SA 593
(SCA);
[2012] 2 All SA 262
at para 18-19.
[47]
In
para [47].
[48]
The
City’s counsel argued that this could not happen because
erecting gantries to read the cars’ registration numbers
in an
open road tolling system would require EIA approval because the
gantries would be ‘associated structures’ within
the
meaning of the listed activity.  We do not purport to decide
the point, but it is not clear to us that this is necessarily
so.
Unlike a toll plaza, a gantry is not an integral part of the road
works.  Inasmuch it is arguable whether a roadside
advertising
billboard is an ‘associated structure’, so too is the
proper characterisation of a metering gadget next
to the road as an
‘associated structure’ uncertain.  Neither of them
is inherently associated with the construction
or layout of the
road, or its use.
[49]
In terms of s 1 of NEMA ‘environment’ is defined as
follows:
‘
environment
’
means the surroundings within which humans exist and that are made
up of-
(i) the land,
water and atmosphere of the earth;
(ii)
micro-organisms, plant and animal life;
(iii) any
part or combination of (i) and (ii) and the interrelationships among
and between them; and
(iv) the
physical, chemical, aesthetic and cultural properties and conditions
of the foregoing that influence human health and
well-being
.
[50]
Section 24(b)(iii) of the Constitution; underlining provided for
emphasis.
[51]
Section
24 of NEMA provided as follows in relevant part before its
substitution with effect from 7 January 2005 in terms of the
National Environmental Management Amendment Act 8 of 2004
:
Implementation
(1)
In order to give effect to the general objectives of integrated
environmental management laid down in this Chapter, the potential

impact on-
(a)
the environment;
(b)
socio-economic conditions; and
(c)
the cultural heritage,
of
activities* that require authorisation or permission by law and
which may significantly affect the environment,
must
be considered, investigated and assessed prior to their
implementation and reported to the organ of state charged by law

with authorising, permitting, or otherwise allowing the
implementation of an activity
.
(2)
The Minister may with the concurrence of the MEC, and every MEC may
with the concurrence of the Minister, in the prescribed
manner-
(a)
identify activities which may not be commenced without prior
authorisation from the Minister or MEC;
(b)
identify geographical areas in which specified activities may not be
commenced without prior authorisation from the Minister
or MEC and
specify such activities;
(c)
…;
(d)
..; and
(e)
...:
Provided
that where authorisation for an activity falls under the
jurisdiction of another Minister, a decision in respect of paragraph

(a) or (b) must be taken in consultation with such other Minister.
(3)
(a) The investigation, assessment and communication of the potential
impact of activities contemplated in subsection (1) must
take place
in accordance with procedures complying with subsection (7).
(b
)
Every Minister and MEC responsible for an organ of state that is
charged by law with authorising, permitting, or otherwise allowing

an activity contemplated in subsection (1) may prescribe regulations
laying down the procedures to be followed and the report
to be
prepared for the purpose of compliance with paragraph (a)
.
(c)
Any regulations made in terms of this subsection or any other law
that contemplates the assessment of the potential environmental

impact of activities must, notwithstanding any other law, comply
with subsection (7).
(d)
….
(4)
….
(5)
….
(6)
…).
(7)
Procedures for the investigation, assessment and communication of
the potential impact of activities must, as a minimum, ensure
the
following
:
(a)
Investigation of the environment likely to be significantly affected
by the proposed activity and alternatives thereto;
(b)
investigation of the potential impact, including cumulative
effects, of the activity and its alternatives on the environment,

socio-economic conditions and cultural heritage, and assessment of
the significance of that potential impact
;
(c)
investigation of mitigation measures to keep adverse impacts to a
minimum, as well as the option of not implementing the activity;
(d)
public information and participation, independent review and
conflict resolution in all phases of the investigation and

assessment of impacts;
(e)
…;
(f)
…;
(g)
co-ordination and co-operation between organs of state in the
consideration of assessments where an activity falls under the
jurisdiction
of more than one organ of state
;
(h)
that the findings and recommendations flowing from such
investigation, and the general objectives of integrated
environmental
management laid down in this Act and the principles of
environmental management set out in section 2 are taken into account
in
any decision made by an organ of state in relation to the
proposed policy, programme, plan or project; and
(i)
….
(Underlining
and bold type used for highlighting.)
*
“
activities
”
was defined as follows prior to the
amendment effected in terms of Act 56 of 2002:
'activities'
when used in Chapter 5 means policies, programmes, plans and
projects
[52]
See
s 2(1)(a) of NEMA, which provides:
‘
The
principles set out in this section apply throughout the Republic to
the actions of all organs of state that may significantly
affect the
environment and-
(a)
shall apply alongside all other appropriate and relevant
considerations, including the State's responsibility to respect,

protect, promote and fulfil the social and economic rights in
Chapter 2 of the Constitution and in particular the basic needs
of
categories of persons disadvantaged by unfair discrimination
’
.
[53]
We
have not overlooked that the EIA regulations (although not the
special definition therein of ‘
road
’)
predate the SANRAL Act.  The legislative framework applicable
when the EIA regulations were made was not, however,
materially
different from the current regime.  Section 9 of the then
applicable National Roads Act 54 of 1971 was equivalent
in material
respects to s 27 of the SANRAL Act.  It provided for a
broadly equivalent ‘intent to toll’
process.
[54]
‘
ACT
To provide for co-operative environmental governance by establishing
principles for decision-making on matters affecting the
environment,
institutions that will promote cooperative governance and procedures
for co-ordinating environmental functions exercised
by organs of
state; to provide for certain aspects of the administration and
enforcement of other environmental management laws;
and to provide
for matters connected therewith.
’
[55]
The
original iteration of s 24 of NEMA (prior to the substitution
of the provision in terms of Act 8 of 2004; see note 51,
above)
contained similar enjoinders in respect of co-operative and
co-ordinated decision making between different departments
of
government.  The Department of Transport’s commitment to
integrated environmental management was recorded in the
White Paper
on National Transport Policy (20 August 1996),  sv. ‘
Policy
Goal and Objectives:  To achieve the above objectives in a
manner which is economically and environmentally sustainable
and
minimises side effects
’.
[56]
In
s 1 of the Act, ‘
administrative
body
’
is defined as meaning ‘
a
Minister, competent authority, local authority, government
institution or a person who makes a decision in terms of the
provisions
of this Act
’.
[57]
Cf.
MEC
for Agriculture, Conservation, Environment and Land Affairs v Sasol
Oil (Pty) Ltd and Another
2006 (5) SA 483
(SCA), at para 26.
[58]
See
note 16
above.
[59]
Cf
Sea
Front For All and Another v MEC, Environment and Development
Planning Western Cape and Others
2011
(3) SA 55
(WCC), at para 65-76.
[60]
The
relief described in para [17].1-3, above.
[61]
Section
32(3) is not relevant on the facts of the City’s case.
[62]
As
appears from the
OUTA
(SCA) judgment supra, the White Paper also featured as the relevant
policy document in the high profile litigation in which the
decision
to toll seven highways in Gauteng - the so-called ‘GFIP
project’ - was challenged.
[63]
Section
35(2) of the SANRAL Act.
[64]
In paras [123] and [159]-[161].
[65]
At
para [68].
[66]
The
regulations were made in terms of s 20 of the National Roads
Act 54 of 1971, which was the statutory predecessor of the
SANRAL
Act.  In terms of s 58(3) of the SANRAL Act, the
regulations made under the previous Act are still in force
for the
purposes of SANRAL Act.
[67]
The
so-called ‘2008 report’ was in fact an updated version
of a report prepared by Prof Standish in 2007.
[68]
The
meaning of ‘base toll tariff’ is explained at
para [235], below.
[69]
At
para [38].
[70]
At
para [80].
[71]
Opposition
to Urban Tolling Alliance and Others v South African National Roads
Agency Ltd and Others
[2012] ZAGPPHC 63 (28 April 2012);
National
Treasury and Others v Opposition to Urban Tolling Alliance and
Others
2012 (6) SA 223
(CC);
2012 (11) BCLR 1148
;
Opposition
to Urban Tolling Alliance and Others v South African National Roads
Agency Ltd and Others
[2012] ZAGPPHC 323 (13 December 2012) and OUTA (SCA) supra.
[72]
See
para [76], above, for the text of s 27(3) of the SANRAL
Act.
[73]
See para [17].4 and [17].5, above.
[74]
The
relevant provisions of s 27 of the SANRAL Act have been set out
in para [76], above.
[75]
In
terms of s 18(5)(d) of the SANRAL Act.
[76]
Section
12 of the SANRAL Act.
[77]
At
para [82].
[78]
Underlining
in the original.
[79]
The
substituted provision was further amended in terms of Act 27 of 1994
and Act 24 of 1996.
[80]
Section
3 of the SANRAL Act.
[81]
Section
25 of the SANRAL Act.
[82]
Section
39 of the SANRAL Act.
[83]
Section
35 of the SANRAL Act.
[84]
Section
34(2) of the SANRAL Act.
[85]
Section
33 of the SANRAL Act.
[86]
See
para [77], above.
[87]
The
definition has been quoted in note 11, above.
[88]
Hayes
and Another v Minister of Finance and Development Planning, Western
Cape, and Others
2003 (4) SA 598
(C) at 611C.
[89]
Notably,
President
of the Republic of South Africa and Others v South African Rugby
Football Union and Others
2000 (1) SA 1
(CC),
1999 (10) BCLR 1059
, at para 135 -143.  For
a general discussion of the concept, see Cora Hoexter,
Administrative
Law in South Africa
,
2
nd
ed, (Juta, 2012), at chap 4.
[90]
At
para 17 of the judgment.
[91]
At para [124]-[130], above.
[92]
In
terms of s 1 of PAJA, ‘
administrator
’
means an organ of state or any natural or juristic person taking
administrative action.
[93]
See
also the Regulations on Fair Administrative Procedures published in
GN R1022 of 2002 on 31 July 2002 as amended by GN R614
of 2005 dated
27 June 2005.
[94]
At
para [150].
[95]
See paras [76]-[83], above.
[96]
Plascon-Evans
Paints Ltd v Van Riebeeck Paints (Pty) Ltd
[1984] ZASCA 51
;
1984
(3) SA 623
(A), at 634E-635C.
[97]
In
South
African Veterinary Council and Another v Szymanski
2003 (4) SA 42
(SCA),
2003 (4) BCLR 378
, at para 24, it was
suggested in passing that ‘denials that are 'so far-fetched or
clearly untenable that the Court is
justified in rejecting them
merely on the papers’ constitute a separate category of
‘uncreditworthy denials’
from those which do not raise
‘a real, genuine or
bona
fide
dispute of fact’. With respect, we doubt whether there is in
fact a basis for such a distinction:  a denial that is
so
far-fetched or clearly untenable to be rejected on the papers cannot
provide the evidential basis for a genuine dispute of
fact.  We
read the distinction drawn by Corbett JA in
Plascon
Evans
supra,
at 634I-635C, as having been made on a different basis; viz. as
between the effect of the failure by the respondent who
makes a bald
denial to an inherently credible allegation by the applicant and
fails to apply to cross-examine the applicant as
being insufficient,
within
the ambit of the general rule
,
to raise a genuine dispute of fact and,
by
way of an exception to the general rule
,
the rejection of the respondent’s evidence where its
allegations or denials of the respondent are so far-fetched or

clearly untenable that the court is justified in rejecting them
merely on the papers.  In both of the posited situations,

whether within the general rule, or by way of an exception to it,
the effect will be the same; the respondent’s averments
will
not be sufficient to bar the applicant from obtaining final relief
on the papers.  In the current matter the City needed
to
persuade us to disregard SANRAL’s denial in terms of the
exception to the
Plascon-Evans
rule.
[98]
See
National
Scrap Metal (Cape Town) (Pty) Ltd and Another v Murray & Roberts
Ltd and Others
2012 (5) SA 300
(SCA) at para 21 and 22 and
Mathewson
and Another v Van Niekerk and Others
[2012] ZASCA 12
at para 7.
[99]
At
para 26.
[100]
See
e.g.
Mokala
Beleggings and Another v Minister of Rural Development and Land
Reform and Others
2012 (4) SA 22
(SCA) at para 11;
Wright
v Wright and Another
2015 (1) SA 262
(SCA) at para 15; and
Grancy
Property Ltd v Manala and Others
2015 (3) SA 313
(SCA) at para 19-20.
[101]
Section 242 of the Companies Act, 1973, provided:
Keeping of
minutes of directors' and managers' meetings
(1) The
directors of a company shall cause minutes in one of the official
languages of the Republic of all proceedings of meetings
of
directors or managers to be entered in one or more books to be kept
for that purpose at the registered office of the company
or at the
office where such minutes are made up.
(2) Any
resolution of directors or managers of a company in the form of a
written resolution signed by the directors or managers
shall be
deemed to be a minute of a meeting and shall be entered in the book
or books provided for in subsection (1) and be noted
by the next
following meeting of directors or managers.
(3) For the
purposes of this section loose leaves of paper shall not be deemed
to constitute a minute book unless they are bound
together
permanently without means provided for the withdrawal or insertion
of leaves, and the pages or leaves are consecutively
numbered.
(4) The
minutes of any meeting of the directors or managers of a company
purporting to be signed by the chairman of that meeting
or by the
chairman of the next succeeding meeting shall be evidence of the
proceedings at that meeting.
(5) If
default is made in complying with any requirement of subsection (1),
(2) or (3), the company, and any director, manager
or officer of the
company who knowingly is a party to the default, shall be guilty of
an offence.
[102]
At
para [125], above.
[103]
Cf.
Sugden
and Others v Beaconhurst Dairies (Pty) Ltd and Others
1963 (2) SA 174
(E) at 181
fin
– 182A.
[104]
Section
15(2) of the SANRAL Act.
[105]
The
chief executive officer is a director
ex
officio.
[106]
When
s 12(2A), which was inserted in the SANRAL Act in terms of
s 14(b) of Act 42 of 2007, came into effect.
[107]
Even
before the substitution of s 12(2), with effect from 15 May 2008, a
contextual construction of the Act would support the
inference that
in appointing the members of the Board, in terms of s 12(2) as
it read prior to substitution, the Minister
would be mindful, having
regard to the nature of the decisions that the Board would be called
upon to make in terms of the statute,
of the need for an appropriate
mix of qualifications, skills and experience in the directorship.
[108]
Section
12(2A) of the SANRAL Act.
[109]
Section
18(5) of the SANRAL Act.
[110]
Cf.
James
Brown & Hamer (Pty) Ltd (Previously named Gilbert Hamer & Co
Ltd) v Simmons, NO
1963 (4) SA 656
(A), at 660 and
Hano
Trading CC v JR 209 Investments (Pty) Ltd and Another
2013 (1)
SA 161 (SCA) at para 12.
[111]
At our request, the City’s counsel provided us with a list of
topics that they would wish to canvas in the proposed
cross-examination.
[112]
At
para [107], above.
[113]
Annexure
AE 116 to the City’s supplementary founding affidavit;
discussed at para [86]-[91], above.
[114]
Compare,
for example,
the
comment at note 46 in
Harksen
v Lane NO and Others
[1997] ZACC 12
;
1998 (1) SA 300
(CC) about the inadvisability of an unfair
discrimination challenge to the gender neutral provisions of s 21
of the Insolvency
Act, which, it was accepted, would nevertheless
adversely affect women more than it would men.
[115]
Compare
the remarks in
City
of Cape Town v South African National Roads Agency Ltd and Others
[2013] ZAWCHC 74
(21 May 2013) at para 91.
[116]
Citing
Woolf et al,
De
Smith’s Judicial Review
6ed (2007) at 318-19.
[117]
In
Joseph
and Others v City of Johannesburg
2010
(4) SA 55
(CC),
2010 (3) BCLR 212
at para 42 (per Skweyiya J).
[118]
Described
in para [17].4 and [17].5, above.
[119]
Cf.
Joubert
Galpin Searle Inc and Others v Road Accident Fund and Others
2014
(4) SA 148
(ECP) at para 59 (Plasket J).
[120]
At para [114], above.
[121]
At
para [261]
ff.
[122]
See paragraph [122], above.
[123]
To
recap, in terms of s 27(3) of the SANRAL Act, the toll tariffs are
determined by the Transport Minister on SANRAL’s
recommendation.
[124]
At para [233].
[125]
Setlogelo
v Setlogelo
1914 AD 221
, at 227.
[126]
Op
cit supra, at 319.
[127]
Referring
to contractual restrictions Baxter,
Administrative
Law
(Juta,
1984) notes (at p.419) that, ‘
As
a general principle, public authorities cannot commit themselves in
advance against exercising their discretionary powers to
act for
public good. This implies that public contracts which purport to do
this are either invalid or may become so
.
See also
Southern
Metropolitan Substructure v Thompson and others
[1997] 1 All SA 571
(W) at 575g to 576b.
[128]
Prof
Floor and Ms Naude, who gave expert opinion evidence in support of
the City’s application, state that it is clause
10.4.2 that
allows the tenderers to rely on the base toll tariffs in their
internal financial assessments of the project before
toll tariffs
are determined by the Minister of Transport. They acknowledge that
realistically a concessionaire would not accept
the risk of
concluding and performing in terms of the BOT concession contract if
its revenue were dependent on uncertain toll
tariffs and toll
payments, without the reimbursement provision.
[129]
Bolton
,
The
Law of Government Procurement in South Africa
(LexisNexis, 2007) at 88.
[130]
Baxter,
op
cit
supra,
at 419-423; Bolton,
Government
Contracts and the fettering of discretion – a question of
validity
,
(2004) 19 SA Public Law 90, at 91.
[131]
Bolton,
ibid at 96 and 102.
[132]
At
note 89.
[133]
See
Southern Metropolitan Substructure v Thompson
[1997]
1 All SA 571
(W
)
,
1997 (2) SA 799
, at 803 (SALR)
;
President of the RSA and others v South African Rugby Football Union
and others
supra,
at para 198, and
Government
of the Province of the Eastern Cape v Frontier Safaris (Pty) Ltd
[1997] ZASCA 84
;
[1997]
4 All SA 500
(A),
1998 (2) SA 19
(SCA), especially at 29-30 (SALR)
and Bolton,
Government
Contracts
(2004)
19 SA Public Law 91, at 106-07.
[134]
Craig,
Administrative
Law
7ed (2012) at 552-555.  See also Wade & Forsyth,
Administrative
Law
11
th
ed. (Oxon, 2014), at 278-281, where passing reference is made to the
doctrine of
fait
du prince
in French law, under which a contractor with an organ of state can
claim ‘an equitable adjustment’ if the government,
by
use of its paramount powers, upsets the calculations on which the
contract was made.
[135]
Bolton,
Government
Contracts
supra, at 107.
[136]
At para [236].
[137]
At paragraphs [160]-[162].