Running out the clock: When to condone an unreasonable delay

August 1st, 2020

Picture source: Gallo Images/Getty

The commentary on 4 Africa Exchange (Pty) Limited v The Financial Sector Conduct Authority and Others (GJ) (unreported case no 17/20474, 28-2-2020) (Molefe J) in this article will focus only specifically on the issue of ‘unreasonable delay’ as per s 7(1) of the Promotion of Administrative Justice Act 3 of 2000 (PAJA).

Section 7(1) of PAJA reads as follows:

‘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) subject to subsection (2)(c), on which any proceedings instituted in terms of internal remedies as contemplated in subsection (2)(a) have been concluded; or

(b) where no such 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’.

The 180-day period is calculated either from the date of the notification of the decision or the date on which the affected individual ‘might reasonably have become aware of the action and the reasons’ (Iain Currie and Jonathan Klaaren The Promotion of Administrative Justice Act: Benchbook (Cape Town: SiberInk 2001) at 180). Section 7(1) of PAJA requires an applicant for a review to institute proceedings ‘without unreasonable delay’. When it comes to what constitutes an ‘unreasonable delay’ the courts have pointed out many times that it is dependent on the facts of each particular case. If a delay of less than 180 days on the part of the applicant can be shown to be ‘unreasonable’, the court may decline to hear the matter. However, it can be argued that the 180-day period is not a particularly long time in the world of litigation and it may give an impression that it is unlikely that an agreement, which an applicant has delayed unreasonably before the expiry of this period, will be successful.

4 Africa Exchange (Pty) Limited (4 Africa) filed an application against the decision taken on 31 August 2016 by the then Registrar of Securities Services of the Financial Services Board (FSB) (now known as the Financial Sector Conduct Authority (FSCA)) to grant an exchange licence to ZAR X (Pty) Limited (ZAR X) before the then FSB Appeal Board (Appeal Board). The Appeal Board considered the application and took a decision on 9 February 2017 and confirmed the decision by the FSCA and dismissed internal administrative appeals against the decision brought by 4 Africa and the Johannesburg Stock Exchange Limited (JSE).

On 9 June 2017, 4 Africa filed an application for the review and setting aside of decisions of the FSCA and the Appeal Board before the High Court. This was four months after the decision was since taken on 9 February 2017. The FSCA accepted that the review application was launched within the 180-day period, as referred to in s 7(1) of PAJA. However, the FSCA submitted that 4 Africa delayed unreasonably before launching the review.

The FSCA contended that 4 Africa appeared to have been aware that ZAR X commenced trading shortly after the judgment of the Appeal Board was delivered on 9 February 2017. The FSCA argued that 4 Africa allowed its competitor to begin operations while 4 Africa took a leisurely four months to launch a review, which was intended to deprive ZAR X of the exchange licence that is necessary for its operations.

The FSCA further argued that the delay in the launching of the review was unreasonable and had prejudiced ZAR X. On this ground alone, the FSCA submitted that the review application by 4 Africa should be dismissed.

The FSCA relied on, among other things, the case of Opposition to Urban Tolling Alliance v South African National Roads Agency Limited [2013] 4 All SA 639 (SCA) wherein Brand JA clarified the effects of s 7(1) of PAJA at para 26 by stating that the ‘delay exceeding 180 days is determined to be per se unreasonable, but a delay of less than 180 days may also be unreasonable and require condonation’. However, 4 Africa in its motivation for the delay, flagged two points as follows –

  • the review application is ‘complex and voluminous’ and involves ‘novel’ issues; and
  • the preparation of the review was hampered by the confidentiality obligations, which ZAR X imposed on it, by non-disclosure agreements.

4 Africa accepted that proceedings for judicial review must be instituted without unreasonable delay, and that the circumstances may require the review to be launched sooner than within 180 days, but argued that these are both independent requirements in the sense that 180 days is the outer-limit. 4 Africa contended that the fact that it brought its review two months earlier than the 180 days outer-limit, alone would suggest that it had acted reasonably and not for the improper reasons attributed to it.

The court held that given the objects of the Financial Markets Act 19 of 2012 (the Act) to maintain stability and public confidence in South African’s financial markets, any appeal against the decision taken under the Act must be lodged expeditiously. The court further held that ‘within 30 days of the person becoming aware of the decision – and that decision taken under the [Act] may be suspended by the FSB Appeal Board Chair, pending appeal’.

The court emphasised the need to submit a review within a reasonable time, which according to the court might well, in the circumstances of the case, require it to be brought sooner than the outer-limit. The court further quoting the case of Chairperson, Standing Tender Committee and Others v JFE Sapela Electronics (Pty) Ltd and Others 2008 (2) SA 638 (SCA) 650D – E, held that this is to avoid prejudice to the respondents, and to promote the public interest in reaching finality on the status of administrative acts, on grounds of pragmatism and practicality.

The court noted that the mere fact that there has been an unreasonable delay alone does not necessarily require a dismissal of the review. The court held that it has a wide discretion to condone the delay. The court quoting the case of Khumalo and Another v MEC for Education, KwaZulu-Natal 2014 (5) SA 579 (CC) at para 44, held: In exercising its discretion the court considers the prejudice to a respondent is an important consideration, among others, including the values of the Constitution.

The court dismissed 4 Africa’s application on the grounds of ‘unreasonable delay’. The court held that in the ‘circumstances, and given the obvious widespread prejudice that would be caused by any delay, [4 Africa’s] institution of the review application [after the lapse of time] was plainly unreasonable and is not in the interests of justice’. The court was of the view that 4 Africa had failed to provide a satisfactory explanation for the delay, and thus should not be condoned.

Michael Kabai LLB (University of Limpopo) LLM (Unisa) LLM (NWU) is a legal practitioner, adviser and senior manager of the Market Infrastructure and SROs at the Financial Sector Conduct Authority in Pretoria. The views expressed in Mr Kabai’s article are his own and do not reflect the views of the Financial Sector Conduct Authority.

This article was first published in De Rebus in 2020 (Aug) DR 23.