Department of Transport and Others v Tasima (Pty) Ltd

• Jurisdiction: South Africa
• Judgment Date: 09 November 2016
• Citation: 2017 (2) SA 622 (CC)

Department of Transport and Others v Tasima (Pty) Ltd
2017 (2) SA 622 (CC)

2017 (2) SA p622

Citation	2017 (2) SA 622 (CC)
Case No	5/16; [2016] ZACC 39
Court	Constitutional Court
Judge	Mogoeng CJ, Bosielo AJ, Froneman J, Jafta J, Khampepe J, Madlanga J, Mhlantla J, Nkabinde J and Zondo J
Heard	May 24, 2016
Judgment	November 9, 2016
Counsel	JJ Gauntlett SC (with D Unterhalter SC, J Motepe SC, M du Plessis and F Pelser) for the applicants.; A Franklin SC (with J McNally SC and A Rowan) for the respondent.

Flynote : Sleutelwoorde B

Administrative law — Administrative action — Decision of functionary — Collateral challenge to validity of decision — Whether available to state functionaries against validity of their own decisions — State functionaries entitled to C challenge exercises of public power, including their own, in appropriate circumstances.

Contempt of court — Disobedience of court order — Where invalid order giving rise to contempt order — Duty to obey court orders subsequently found to be invalid — Effect on contempt order of setting aside disobeyed invalid D order — Constitution, s 165(5).

Review — Application — Delay in bringing application — Condonation — Whether constitutional injunction that courts must declare unconstitutional conduct invalid, having effect that courts must always condone delay in bringing application for review of clearly unconstitutional conduct — Constitution E ss 172(1) and 237.

Headnote : Kopnota

Tasima (Pty) Ltd (Tasima) successfully tendered for the provision of services to the Department of Transport (the DoT) relating to the electronic National Traffic Information System (eNaTIS). They subsequently entered into an F agreement for a fixed period of five years at the end of which Tasima would transfer the operation of eNaTis to the DoT in accordance with a specified transfer-management plan. Such transfer did however not happen after expiry of the fixed period; instead some time thereafter the parties agreed that Tasima would continue providing the services it rendered under the expired contract on a month-to-month basis. This arrangement was G eventually substituted by an extension of the expired agreement for a further five years (commencing 1 May 2010), agreed to by the then Director-General of the DoT (the DG) at the request of Tasima.

The auditor-general however declared the extension irregular for not following the prescribed procurement process, and so the DG initiated negotiations with Tasima relating to the termination of the extension and transfer of H eNaTIS to the Department. When these negotiations failed (around June 2012) the DoT stopped all payments relating to eNaTIS. In response Tasima obtained a High Court order enforcing the extension agreement pending arbitration of a dispute regarding the validity of the extension. Tasima invoked this order on a number of occasions in contempt proceedings against the DoT and the Road Traffic Management Corporation (the Corporation) when payment in terms of the impugned agreement was not I made.

When, close to the expiry of the extension period, the DoT took certain preparatory steps for the transfer of the eNaTIS system to itself, Tasima again instituted contempt proceedings (in March 2015). This on the basis that taking such steps prior to the transfer-management plan being implemented J was in contempt of court orders enforcing the agreement (see

2017 (2) SA p623

[172] – [176]). Tasima also asked the court to interdict the relevant state A respondents from taking any preparatory steps prior the transfer-management plan being implemented. The DoT's defence was founded principally on its counter-application, a collateral/reactive challenge of the DG's extension of the agreement. It consisted of a delayed review for which condonation was requested, and a 'classical' collateral challenge which it submitted was not time-barred (see nn 60, 61 and 63). B

The High Court condoned the nearly five-year delay in bringing the review application, upheld the collateral/reactive challenge and dismissed Tasima's application. The Supreme Court of Appeal (the SCA) however upheld Tasima's appeal against the High Court decision, mainly on the basis that it was not competent for a state organ to raise a collateral challenge against its own administrative action. C

This case, the appeal against the SCA's decision, concerned the Constitutional Court's determination of the following issues:

• Whether the applicants, as organs of state, may raise collateral/reactive challenges.

Held, by the majority — the second and fourth judgments — that it was both a D logical and pragmatic consequence of the developments in our jurisprudence to allow state organs to challenge the lawfulness of exercises of public power by way of reactive challenges in appropriate circumstances.

Held, by the minority — the first and third judgments — that, without expressing a final opinion on the issue, there was no justification in logic or principle to deny an organ of state the right to challenge the validity of administrative action when it was faced with coercive action based on a constitutionally E invalid act. (Paragraphs [86] and [138] – [140] at 646D – F and 658A – 659B.)

• Whether, in light of the peremptory terms of s 172(1) of the Constitution (that courts must declare conduct inconsistent with the Constitution invalid), a court may decline to condone a delay in bringing a review of administrative action that was clearly unconstitutional. F

Held, by the majority, that s 237 of the Constitution (that '(a)ll constitutional obligations must be performed diligently and without delay') raised the timely performance of constitutional obligations themselves to a constitutional concern that was not automatically subordinated by s 172(1); courts should not substitute a factual, multifactorial, and context-sensitive framework for a strict rule that a delay can never prevent a court from deciding the matter. (Paragraphs [141] – [144] at 659B – 660D.) G

Held, further, that, although the delay was unreasonable, the court would exercise its discretion to overlook it and nevertheless entertain the application; and that the reactive challenge should succeed. (Paragraphs [159] – [171] at 664A – 666F.)

Held, by the minority, that the Promotion of Administrative Justice Act 3 of 2000 H (PAJA) could not be invoked as justification for a court not to comply with s 172(1)(a) of the Constitution; this because the Constitution, and not PAJA, was the supreme law from which PAJA itself derived its validity. (Paragraph [78] at 644B – C.)

• The duty to obey court orders subsequently found to be unlawful (the DoT arguing that because there was contractually no valid basis I for the purported extension, the orders giving effect thereto were invalid and of no consequence).

Held, by the majority, that under s 165(5) of the Constitution a court order is binding until set aside, irrespective of whether it was valid; judicial orders wrongly issued were not nullities but existed in fact and may have legal consequences; whether an order was enforceable depended on whether the J

2017 (2) SA p624

A judge had the authority to make the decision at the time that he made it. (Paragraphs [180], [182] and [198] at 668E – G, 669A – B and 674D – F.)

Held, further, that was the case here — the extension was successfully challenged only after the enforcement order was made, and so the outcome of the review had no effect on the enforcement order's validity; the DoT and the Corporation were thus obliged to have complied with the enforcement B orders until their counter-application succeeded and the various findings of the SCA regarding their contempt for these must stand. (Paragraphs [198] – [199] at 674D – 675A.)

Held, by the minority, that where (as here) the validity of the source of the right the applicants sought to preserve was impugned on the basis that it was an illegal source, it was inappropriate for a court to grant an order preserving C an illegally obtained right; in law conduct or a decision taken in contravention of a statutory prohibition was invalid from the outset. (Paragraphs [36], [90] and [110] at 635A – C, 647G – I and 652C.)

Cases cited

Southern Africa

3M South Africa (Pty) Ltd v Commissioner, South African Revenue Service [2010] 3 All SA 361 (SCA) ((2010) 72 SATC 216; [2010] ZASCA 20): referred to D

Affordable Medicines Trust and Others v Minister of Health and Others 2006 (3) SA 247 (CC) (2005 (6) BCLR 529; [2005] ZACC 3): referred to

Allpay Consolidated Investment Holdings (Pty) Ltd and Others v Chief Executive Officer, South African Social Security Agency and Others 2014 (4) SA 179 (CC) E (2014 (6) BCLR 641; [2014] ZACC 12): applied

Attorney-General of Natal v Johnstone & Co Ltd 1946 AD 256: referred to

Barkhuizen v Napier 2007 (5) SA 323 (CC) (2007 (7) BCLR 691; [2007] ZACC 5): referred to

Bel Porto School Governing Body and Others v Premier, Western Cape, and Another 2002 (3) SA 265 (CC) (2002 (9) BCLR 891; [2002] ZACC 2): F considered

Bengwenyama Minerals (Pty) Ltd and Others v Genorah Resources (Pty) Ltd and Others 2011 (4) SA 113 (CC) (2011 (3) BCLR 229; [2010] ZACC 26): referred to

Camps Bay Ratepayers' and Residents' Association and Another v Harrison and Another 2011 (4) SA 42 (CC) (2011 (2) BCLR 121; [2010] ZACC 19): referred to G

Carmichele v Minister of Safety and Security and Another (Centre for Applied Legal Studies Intervening) 2001 (4) SA 938 (CC) (2002 (1) SACR 79; 2001 (10) BCLR 995; [2001] ZACC 22): referred to

Clipsal Australia (Pty) Ltd and Others v Gap Distributors and Others 2010 (2) SA 289 (SCA) H ([2009] ZASCA 49): dictum in para [21] applied

Cool Ideas 1186 CC v Hubbard and Another 2014 (4) SA 474 (CC) (2014 (8) BCLR 869; [2014] ZACC 16): referred...