The law reports – March 2015

March 1st, 2015
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Heinrich Schulze BLC LLB (UP) LLD (Unisa) is a professor of law at Unisa.

January 2015 (1) South African Law Reports (pp 1 – 313); [2014] 4 All SA Law Reports December no 1 (pp 539 – 672); and no 2 (pp 673 – 763); 2014 (12) Butterworths Constitutional Law Reports – December (pp 1397 – 1513)

This column discusses judgments as and when they are published in the South African Law Reports, the All South African Law Reports and the South African Criminal Law Reports. Readers should note that some reported judgments may have been overruled or overturned on appeal or have an appeal pending against them: Readers should not rely on a judgment discussed here without checking on that possibility – Editor.

Abbreviations:

CC: Constitutional Court

GP: Gauteng Division – Pretoria

KZP: KwaZulu-Natal Division – Pietermaritzburg

SCA: Supreme Court of Appeal

Arbitration

Disputes arising from agreement: In Zhongji Development Construction Engineering Company Ltd v Kamoto Copper Company SARL [2014] 4 All SA 617 (SCA) the court was asked to pronounce on the question whether disputes that arise from an arbitration agreement, are arbitrable. The appellant, Zhongji, a Chinese company, was awarded a tender for certain work at the mining site of a Congolese company, DCP. DCP later merged with the respondent, Kamoto and Kamoto took over all the rights and obligations in terms of the agreement between DCP and Zhongji. Kamoto was also a Congolese company. In consequence of the award of the tender, Zhongji and Kamoto entered into an agreement (the main agreement). In terms of the agreement, the ‘governing law’ thereof was ‘English law’. The agreement provided that, unless the parties otherwise agreed, disputes between them would ‘be finally settled under the Rules for the Conduct of Arbitrations as published by the Association of Arbitrators (Southern Africa) (the “Arbitration Association”)’.

Problems arose with the implementation of the main agreement. Zhongji and Kamoto then signed an interim agreement to cover the parties until there was more certainty around the project.

In 2010, Zhongji claimed payment from Kamoto as a result of a dispute arising from the contractual relationship between them. Zhongji threatened that if its demand went unsatisfied, it would institute proceedings. The parties agreed that the dispute would be referred to arbitration. Relying on the arbitration clause in the main agreement, Zhongji sought redress by way of arbitration. It approached the High Court for a declaratory order that because Kamoto had assumed the rights and obligations under the main agreement; that it was bound by the arbitral regime catered for in the main agreement in relation to disputes in connection with or arising out of the main agreement; and that certain stipulated disputes to be arbitrable.

Kamoto argued that if the court were to find that there was a binding obligation, in terms of the main agreement, read together with the merger agreement, Kamoto was to submit to arbitration in respect of Zhongji’s claims arising from the main agreement. The duly appointed arbitration tribunal would then have the power to decide whether or not Kamoto was liable to Zhongji for its claims that arose from the interim agreement.

The High Court upheld Kamoto’s argument, and dismissed Zhongji’s application.

It is trite that both Zhongji and Kamoto were peregrine in South African courts.

On appeal Willis JA held that in terms of the Rules of the Arbitration Association, an arbitrator may decide any dispute regarding the existence, validity, or interpretation of the arbitration agreement and, unless otherwise provided therein, may rule on his or her own jurisdiction to act. Accordingly, once the arbitration tribunal has been duly appointed in terms of the main agreement, the rules of the Arbitration Association would give the tribunal itself jurisdiction to decide the issues, which may be raised before it. Because an arbitrator has the power to determine his or her jurisdiction in an issue that arises from the referral to arbitration itself, there was no reason why the dispute about whether or not the claims arising from Zhongji’s performance in terms of the interim agreement were indeed arbitrable, should not be decided by the arbitration tribunal prior to an application to the High Court. The process of arbitration, therefore had, to be respected.

The court referred with approval to earlier English case law (Fiona Trust and Holding Corporation and Others v Primalov and Others [2007] UKHL 40; [2007] 4 All ER 951 (HL)) in which a liberal construction of an arbitration clause is advocated and which allows for a presumption in favour of so-called one-stop arbitration. In terms of such a ‘one-stop arbitration’ approach, arbitrators are allowed, where possible, to resolve issues which arise during the arbitration process.

The court concluded that Zhongji’s application to the High Court was thus premature and perhaps even unnecessary.

The appeal was accordingly dismissed with costs.

Voluntary association disciplinary proceedings: The facts in De Lange v Presiding Bishop, Methodist Church of Southern Africa and Another 2015 (1) SA 106 (SCA); De Lange v Presiding Bishop for the time being of the Methodist Church of Southern Africa and Another [2015] 1 All SA 121 (SCA) were as follows. De Lange, a Methodist Church minister, announced to her congregations her intent to enter into a same-sex marriage. This caused the church to charge her with breaking its rules. The rule in question was that ministers had to obey church policy, and church policy recognised only heterosexual marriages. The church’s district disciplinary committee later found her guilty.

De Lange appealed to the church’s connexional disciplinary committee. It confirmed the verdict, and as sentence discontinued her holding of the office of minister. De Lange then referred the matter to arbitration, and its convenor entered into an arbitration agreement on her behalf. The church rules provided that arbitration had to be used for resolution of disputes between ministers and the church.

However, before the arbitration proceeded, De Lange approached the High Court and applied to set aside the arbitration agreement; for a declaration that the decision to discontinue her ministry was unlawful in its being based on a policy that was unfairly discriminatory on the ground of sexual orientation; for the review and setting-aside of the disciplinary committee’s decisions; and for her reinstatement. She later abandoned the claim of unfair discrimination in her replying affidavit.

The High Court dismissed the application and held that De Lange ought first to have concluded the arbitration. It granted leave to appeal to the SCA.

The SCA held that in view of De Lange’s express disavowal of any contention that she was discriminated against on the grounds of her sexual orientation, the court did not have to explore the relationship between her equality rights and the rights of freedom of religion enjoyed by the church and all people in South Africa.

The crisp issue was therefore about an alleged arbitration agreement and whether it should be set aside or avoided. Ponnan JA held that De Lange had not concluded the arbitration proceedings. In this regard the court reasoned that the grounds she advanced as constituting good cause were without merit; and because the dispute – concerning church rules – ought to be left to the church to determine. It further pointed out that a court should only become involved in such a dispute if it were strictly necessary; and if it did become involved, it ought to refrain from deciding issues of religious doctrine.

The appeal was dismissed. The church commendably agreed to forgo the costs of the appeal.

In a separate concurring judgment Wallis JA considered two issues that were of obiter value only. These issues nevertheless merit a reference here. The first was whether this was a ‘matter relating to status’. Section 2(b) of the Arbitration Act 42 of 1965 provides that ‘a reference to arbitration shall not be permissible in respect of any matter relating to status’. Wallis JA held that because ‘a matter relating to status’ possibly included a person’s right to hold office; and an office could include the position of an ordained minister of religion, the present issue might indeed be not referred to arbitration. The second issue was whether there was an arbitration agreement. The litigants simply assumed there was, but Wallis JA held that there was no agreement. Methodist ministers did not contract with the church to be bound by the Laws and Discipline of the Methodist Church. Ministers followed the Laws rather as a discipline.

Constitutional law

Right of asylum seeker: The facts in Somali Association of South Africa and Others v Limpopo Department of Economic Development, Environment and Tourism and Others 2015 (1) SA 151 (SCA); [2014] 4 All SA 600 (SCA) were as follows. Musina is a town in the northern part of the Limpopo province and the closest major town to the South African border with Zimbabwe. Municipal and police officials stationed in Musina informed spaza-shop proprietors in that town that they needed permits to operate. However when Ethiopian and Somali proprietors attempted to apply, the municipality allegedly frustrated their efforts. The police meanwhile conducted inspections, and on a proprietor not producing a permit, immediately closed the business and confiscated the proprietor’s stock and equipment. In some cases the police closed the shops of Somalis and Ethiopians even where they held permits. This prompted the appellants (the applicants) to approach the GP.

The applicants were an organisation representing Somalis, an organisation representing Ethiopians, an Ethiopian asylum seeker, an Ethiopian and a Somali refugee, and a Somali permanent resident. They asked for declarations that asylum seekers and refugees had the following rights:

• First, the right to self-employment.

• Secondly, the right to apply for and to renew licenses and permits in terms of the applicable legislation and land-use scheme.

• Thirdly, that closure of businesses run by asylum seekers and refugees with valid permits were unlawful.

The High Court dismissed the application. It held that s 22 of the Constitution gave only South Africans a right to self-employment, and it concluded from this that there was a blanket prohibition on asylum seekers and refugees’ self-employment.

On appeal to the SCA, Navsa ADP held as follows:

• First, neither Minister of Home Affairs and Others v Watchenuka and Another 2004 (4) SA 326 (SCA) nor Union of Refugee Women and Others v Director: Private Security Industry Regulatory Authority and Others 2007 (4) SA 395 (CC) considered s 22 of the Constitution as placing a blanket prohibition on asylum seekers and refugees seeking employment. Section 27(f) of the Refugees Act 130 of 1998 entitles refugees to ‘seek employment’ and does not restrict that expression to wage-earning employment.

• Secondly, the court decided that refugees and asylum seekers have a right to self-employment, where they have no other means to support themselves. This on the basis of the constitutional right to dignity.

• Finally, in the present case there were in fact no restrictions on the grant of permits or licenses to asylum seekers and refugees.

The court thus declared that asylum seekers and refugees had the right to apply for and renew licenses and permits in terms of the legislation and land-use scheme involved; and that the closure of businesses run by asylum seekers and refugees holding valid permits were unlawful.

The appeal was allowed with costs.

Defamation

Facebook: The decision in RM v RB 2015 (1) SA 270 (KZP) concerned an application for an interdict restraining the respondent from posting further defamatory postings about the applicant on her Facebook page.

The parties involved in the present application, RM, the applicant and the father of the child, and RB, the respondent and the mother of the child, had been in a relationship. They were the biological parents of a five-year-old daughter. The applicant and respondent were never married. The child stayed with the respondent. In terms of an arrangement the applicant had contact with his daughter every alternate weekend. After one such weekend the respondent made certain postings on her Facebook page relating to the applicant’s care of their daughter and referring to the use of alcohol and drugs. A Facebook debate ensued with many of the respondent’s Facebook ‘friends’ critical of the applicant’s behaviour. At the time of the posting the respondent had 592 ‘Facebook friends’. The applicant alleged that the postings had defamed him as a father and were detrimental to his business reputation. He approached the High Court for an urgent interdict ordering the respondent to –

(a) remove the messages from her Facebook page;

(b) refrain from posting further defamatory statements about him on her Facebook; and

(c) refrain from publishing defamatory statements about him in any other way.

Satisfied that a prima facie case had been made for relief, the court granted a rule nisi as prayed for. In the application for final relief the main area of dispute concerned the ability of the court to restrain material not yet known to the court as per (b) and (c) above.

Chetty J pointed out that other than a denial that the postings were defamatory, the respondent did not make out any argument of the public interest in respect of the statements attributed to the applicant. The rule nisi had therefore to be confirmed in respect of prayer (a).

The court held that not every defamatory statement about the applicant by the respondent would be actionable. If she were to repeat her conduct in the future and make derogatory or defamatory statements about him, the applicant could always approach the court for relief in the form of an interdict or sue for damages. The court further held that despite the possibility of defamatory postings on the internet posing a significant risk to the reputational integrity of individuals, to have granted the relief sought in prayers (b) and (c) above, would have been too drastic a limitation and restraint on the respondent’s freedom of expression. The court accordingly dismissed prayers (b) and (c).

As a case had been made on the papers by the applicant for the first part of the rule nisi it was accordingly confirmed. The respondent was ordered to pay the costs of the application.

Delict

Exclusion of liability: In Thomas v Minister of Defence and Military Veterans 2015 (1) SA 253 (SCA) the appellant, Thomas, who was employed as a medical registrar by the Western Cape Department of Health (the Department of Health), slipped and injured herself in 2 Military Hospital (the hospital). It was trite the hospital was a building under the control of the Department of Defence (the defendant). Thomas claimed compensation from the Department of Health under the Compensation for Occupational Injuries and Diseases Act 130 of 1993 (the Act) and instituted a claim for damages against the Minister of Defence (the Minister).

The Minister raised a special plea based on s 35(1) of the Act. It provides that: ‘No action shall lie by an employee … for the recovery of damages in respect of any occupational injury … against such employee’s employer.’

The Minister contended that for the purpose of determining who an ‘employer’ was, the Act regarded all parts of the state (in this case the Department of Health and the Department of Defence) as simply the state. Thus Thomas was employed by the state (the Department of Health). As a result, so the Minister argued, Thomas’ claim against her employer, the state, was invalid. The High Court upheld the Minister’s plea but granted leave to appeal.

On appeal the SCA upheld the appeal and rejected the Minister’s contention. Gorven AJA held that each part of the state was an ‘employer’ for the purposes of the Act. It based this conclusion on ss 31(1), 39(2), 84(1) and 88(1) of the Act. In this regard it pointed out that the significance of s 84(1) read with s 39(2) is as follows. A clear distinction is drawn between the heads of the listed departments who are the employers in the national and provincial spheres of government. These are distinguished from the employers in the legislative bodies in these spheres. These are, in turn, distinguished from the employers in the sphere of local government. If, for the purposes of the Act, all of these entities were regarded as a single employer, s 84(1) would read very differently. All that it would need to say is that the state, regardless of whether it is the national, provincial or local sphere and regardless of whether it is the executive or legislative entity, would not be assessed for the purposes of the Act in respect of its employees. The Act does not provide this.

This means that, for the purposes of the Act, and in particular s 35(1), the employer of Thomas was not the state as a single, overarching entity, but the Head: Western Cape Department of Health. It further means that s 35(1) does not find application in the action and Thomas is entitled to pursue her claim against the Minister.

The SCA concluded that the special plea was incorrectly upheld and her claim incorrectly dismissed by the court a quo.

As a result, so the SCA reasoned, Thomas’ employer was the Department of Health, and s 35(1) did not bar her claim against the Minister.

The appeal was allowed with costs.

Medical negligence: In Medi-Clinic Ltd v Vermeulen 2015 (1) SA 241 (SCA) Vermeulen, the plaintiff, was admitted to Medi-Clinic’s hospital, the defendant, in Nelspruit for treatment for malaria, which he contracted in Mozambique. During his two month stay in the intensive care unit (ICU) in the defendant’s hospital, he developed a bedsore in the area of his sacrum, which, in turn, caused nerve damage. The nerve damage left him paralysed and bound to a wheel chair. He sued the defendant for damages, alleging that the latter’s nurses had negligently failed to regularly turn him, and that this had caused the bedsore. The High Court agreed, but granted the defendant leave to appeal to the SCA.

The crisp issue before the SCA was how a court should evaluate conflicting expert opinion on what constituted reasonable conduct.

Zondi JA held that to determine whether or not the defendant’s nurses were negligent in not turning the plaintiff while he was in ICU, the court below had to have regard to the views of the parties’ experts (see Buthelezi v Ndaba 2013 (5) SA 437 (SCA) at para 14). This is so because a court’s preference for one body of distinguished professional opinion to another also professionally distinguished is not sufficient to establish negligence. Failure to act in accordance with a practice accepted as proper in the relevant field is necessary, and it was for the court to decide that issue. And in doing so, it had to be satisfied that their opinions have a logical basis and whether, in forming their views, the two experts had directed their minds to the question of comparative risks and benefits and reached a defensible conclusion on the matter.

It held that the court a quo erred in simply accepting the plaintiff’s expert witness’ opinion and deciding the issue of negligence on the basis thereof. It did not subject the plaintiff’s expert witness’ opinion to critical analysis with a view to establishing two findings. First whether it had a logical basis, and secondly, whether in forming his views the expert witness directed his mind to the question of comparative risks and benefits and reached a defensible conclusion on whether the pressure sore which the plaintiff sustained was avoidable.

Accordingly its finding of negligence, based on the opinion of the plaintiff’s expert witness, was wrong, and its judgment had to be set aside.

The appeal was allowed with costs.

Delict – pure economic loss: The facts in Country Cloud Trading CC v MEC, Department of Infrastructure Development 2015 (1) SA 1 (CC); Country Cloud Trading CC v Member of the Executive Council, Department of Infrastructure Development, Gauteng 2014 (12) BCLR 1397 (CC) were as follows. The appellant, Country Cloud, had lent money to a construction company contracted by the respondent’s Department (the Department) to complete the construction of a partially built clinic. In terms of the loan agreement, Country Cloud stood to make a profit of R 8,5 million. However, the Department cancelled the construction contract, which ultimately led to the liquidation of the construction company. Country Cloud instituted an action against the Department in the High Court, for delictual damages in an amount of R 20,5 million together with interest.

The Department’s contention was that the contract had been validly cancelled as a result of misrepresentations by the contractor regarding the validity of its tax clearance certificate and because the tender awarded to the contractor was contrary to the procurement regulations and policies of the Department. The court a quo held that the contract was invalid and unlawful and dismissed Country Cloud’s claim (Country Cloud Trading CC v MEC, Department of Infrastructure Development [2012] 4 All SA 555 (GSJ) (see 2014 (May) DR 49 – 50)).

Country Cloud appealed to the SCA, which, citing policy reasons, refused to impose delictual liability on the Department.

On appeal in the CC, Country Cloud argued that the SCA erred in focusing on the building contract instead of the loan agreement. As a result, so Country Cloud argued, the Department unlawfully interfered in this contract, rendering it liable to Country Cloud under the established delict of interference with a contractual relationship.

For its argument on wrongfulness Country Cloud relied, among other things, on the nature of the department’s fault (intent) and the constitutional value of state accountability. Khampepe J held that the central issue was whether the Department’s conduct was wrongful vis-à-vis Country Cloud. Since Country Cloud’s claim was one for pure economic loss, and wrongfulness was not assumed, liability would depend on whether Country Cloud was able to positively establish wrongfulness.* (*Country Cloud was unable to bring its claim within the established ambit of the delict of unlawful interference in a contract. Had Country Cloud succeeded in doing so, the department’s conduct would have been regarded as prima facie wrongful.) While the Department’s blameworthiness and the risk of indeterminate liability were relevant, they did not compel a finding of wrongfulness because Country Cloud was unable to indicate which of its legal rights or interests were harmed by the Department. Nor did Country Cloud’s reliance on state accountability aid its cause: The doctrine did not always give rise to a private-law duty, and in the present case there was no dishonesty or corruption on the part of the Department on which to hang liability. In any event, the link between Country Cloud and the department was too tenuous to impose liability on this basis.

The court’s decision regarding wrongfulness as a brake on liability in cases of pure economic loss merits our attention. In dealing with the aspect of pure economic loss the court confirmed that the wrongfulness enquiry focuses on ‘the [harm-causing] conduct and goes to whether the policy and legal convictions of the community, constitutionally understood, regard it as acceptable. It is based on the duty not to cause harm – indeed to respect rights – and questions the reasonableness of imposing liability.’

Wrongfulness is generally uncontentious in cases of positive conduct that harms the person or property of another. Conduct of this kind is prima facie wrongful. However, in cases of pure economic loss – that is to say, where financial loss is sustained by a plaintiff with no accompanying physical harm to her person or property – the criterion of wrongfulness assumes special importance.

Our law is generally reluctant to recognise pure economic loss claims, especially where it would constitute an extension of the law of delict. Wrongfulness must be positively established. It has thus far been established in limited categories of cases, like intentional interferences in contractual relations or negligent misstatements, where the plaintiff can show a right or legally recognised interest that the defendant infringed.

An additional obstacle for the plaintiff was that a delictual award would interfere with the existing contractual relationship between Country Cloud and Tau Pride. In the premises Country Cloud failed to show that the Department was responsible for its loss.

The appeal was dismissed with costs.

Exchange control

Lawfulness of regulations: The decision in Shuttleworth v South African Reserve Bank and Others [2014] 4 All SA 693 (SCA) elicited huge media attention. The facts were as follows: During 2009 the respondent, South Africa Reserve Bank (the Reserve Bank) imposed a 10% levy on the appellant, Shuttleworth, when he took his assets out of South Africa. Shuttleworth paid the levy under protest. The levy amounted to more than R 250 million. The levy was imposed in terms of s 9 of the Currency and Exchanges Act 9 of 1933 (the Act); read with various Exchange Control Regulations, specifically, reg 10(1)(c); and Exchange Control Circulars.

In the GP, Shuttleworth argued that these legislative measures were unconstitutional and therefore invalid. He further argued that by introducing reg 10(1)(c) the Reserve Bank and the Minister of Finance did not comply with the enabling legislation, in particular s 9(5)(a) of the Act which empowered a person to make orders and rules by regulation. The GP dismissed Shuttleworth’s application.

On appeal to the SCA Shuttleworth again argued that taxation required a statute passed by Parliament. He further submitted that the requirement contained in ss 75 and 77 of the Constitution, that a money bill (including the appropriation of money or imposition of taxes), must be approved by Parliament. It was common cause that reg 10(1)(c) was not approved by Parliament.

The SCA was thus asked to pronounce on the constitutionality and validity of the 10% exit levy.

Navsa ADP and Ponnan JA in a joint judgment held that the 10% exit levy on the export of capital was a levy of general application that, while in force, was imposed on the export of capital in excess of R 750 000. It can hardly be in dispute that the levy was a revenue-raising mechanism for the state.

The levy could only have been intra vires reg 10(1)(c) if the regulation legitimately authorised the raising of revenue for the state. It was common cause that reg 10(1)(c) had not followed the procedure for taxation prescribed by s 9(4) of the Act.

Section 9(4) is animated by the ‘no taxation without representation by Parliament principle’. The Constitution requires that the power of taxation should be tightly controlled. First, s 77(1) of the Constitution provides that a so-called money bill is one that appropriates money, or imposes taxes, levies, duties and surcharges. Secondly, s 73(2) of the Constitution provides that only the Minister of Finance may introduce a money bill in Parliament. It is thus unconstitutional for taxes or levies to be raised by delegated legislation, which is not specifically authorised in a money bill enacted in accordance with the provisions of the Constitution.

The imposition of the 10% levy is inconsistent with ss 75 and 77 of the Constitution and invalid and ultra vires reg 10(1)(c).

The appeal was accordingly upheld and the Reserve Bank was ordered to repay Shuttleworth the amount of R 250 474 893 with interest. Each party had to pay its own costs.

In passing it needs to be mentioned that the court considered the possibility of a flood of similar claims, but held that because the exit levy had been repealed by the Minister more than three years ago (on 27 October 2010), there is no danger of a flood of similar claims.

Land

Unlawful occupation: In MCDenneboom Service Station CC and Another v Phayane 2015 (1) SA 54 (CC); MC Denneboom Service Station CC and Another v Phayane 2014 (12) BCLR 1421 (CC) the respondent, Phayane, had bought an immovable property from the insolvent estate of the second applicant, Chiloane, at a public auction. Phayane subsequently obtained an eviction order in the High Court against Chiloane and the first applicant, Denneboom, who together had run businesses on the property. The eviction order was sought and granted only in respect of the commercial occupants, specifically excluding ‘all residential occupants of the premises’, so that no compliance with the Prevention of Illegal Evictions from and Unlawful Occupation of Land Act 19 of 1998 (PIE) was required. However, the order was ambiguous because Chiloane, in addition to running the business with Denneboom, had also resided on the premises.

Although the court of first instance GP and the SCA refused leave to appeal against the eviction order, the CC allowed leave to appeal on the narrow issue of the effect of this ambiguity on the validity of the eviction order.

Khampepe J held that PIE did not apply to the eviction of juristic persons and persons not using buildings and structures as ‘a form of dwelling or shelter’. Phayane was, therefore, not obliged to comply with the requirements of PIE in seeking the eviction of Denneboom and persons working for it or working for Chiloane, provided those persons did not also reside on the property. But because Chiloane was an ‘unlawful occupier’ under the Act and thus the court was required to ensure that PIE’s requirements were met before ordering his eviction. The High Court’s order was defective in that it could potentially result in Chiloane’s eviction when it was common cause that the PIE Act was not complied with. It would, therefore, be just and equitable to amend the high court’s order to exclude Chiloane, as a residential occupant, from its operation.

The court accordingly refused leave to appeal, except insofar as it related to the amendment to the order granted by the High Court. The order of the High Court was set aside and replaced with the following order: ‘Ejecting [Denneboom] and all those persons working for it, excluding [Chiloane] as a residential occupant, and any other residential occupant [from the present property]’ (own insertions). Each party was ordered to pay its own costs.

Security industry

Validity of regulations: The decision in Security Industry Alliance v Private Security Industry Regulatory Authority and Others 2015 (1) SA 169 (SCA); Security Industry Alliance v Private Security Industry Regulatory Authority and Others [2014] 4 All SA 21 (SCA) concerns the review of amendments to certain regulations by the Minister of Police (the Minister). These regulations affect the security industry in South Africa. The Minister amended the regulations on the recommendation of the Private Security Regulatory Authority (the Authority). The amendments entailed an increase in the fees payable by all security businesses to the authority by huge margins. The Security Industry Alliance (SIA), an umbrella body representing various interests within the security industry, brought an application to have it reviewed and set aside. When this failed the present appeal was lodged with the SCA.

One of SIA’s main complaints was the failure by the Authority to differentiate between the fees payable by large and small security service providers with very serious consequences for the latter. Although it appreciated the need for such differentiation, the Authority believed that the enabling legislation, which is contained in s 32(2) of the now repealed Security Officers Act 92 of 1987, did not permit this.

After examining the section in the context of the repealed legislation as a whole, Mpati P concluded that such differentiation was permissible. The Authority had misconstrued the provision, thereby committing an error of law, which had materially affected the outcome of its decision. The Minister was consequently misinformed on two fronts. The first is that he was incorrectly informed that the authority had no power to impose differentiated fees. This constituted an error of law. The second is that he was incorrectly informed that all avenues had been exhausted to arrive at a more equitable fee structure when there was no evidence to support that assertion. This constituted a misinformation as to the facts. The court held that in these circumstances the Minister could not be said to have taken a proper decision.

The Minister’s decision was contaminated by the incorrect interpretation, by the authority, of the provisions of s 32(2) of the repealed legislation and the consequent misapprehension of its powers, as well as the factual misinformation.

The amendment to the regulations was set aside. The appeal was thus allowed with costs.

OTHER CASES

Apart from the cases and topics that were discussed or referred to above, the material under review also contained cases dealing with administrative law, civil procedure, constitutional law, criminal procedure, evidence, immigration, judges, local authority, minerals and petroleum, mortgage, practice, revenue and traditional leadership.

This article was first published in De Rebus in 2015 (March) DR 29.