Johannesburg Municipal Pension Fund and Others v City of Johannesburg and Others

• Jurisdiction: South Africa
• Citation: 2005 (6) SA 273 (W)

Johannesburg Municipal Pension Fund and Others v City of Johannesburg and Others
2005 (6) SA 273 (W)

2005 (6) SA p273

Citation	2005 (6) SA 273 (W)
Case No	04/20655
Court	Witwatersrand Local Division
Judge	Malan J
Heard	December 14, 2004
Judgment	April 18, 2005
Counsel	R D Levin SC (with him P J Pretorius SC, G J Marcus SC, M Chaskalson and J M A Cane) for the applicants.; M S M Brassey SC (with him A I S Redding SC and D L Wood) for the first to twelfth respondents.; P M Kennedy SC (with him A I S Redding SC and L H Barnes) for first to twelfth and fourteenth respondents.; No appearance for thirteenth respondent.

Flynote : Sleutelwoorde B

Administrative law — Administrative action — What constitutes — Unilateral decision of local authority to terminate pension fund of its employees — Semble: Decision constituting 'administrative action' as intended in Promotion of Administrative Justice Act 3 of 2000. C

Administrative law — Right to administrative justice — Source of — Semble: Promotion of Administrative Justice Act 3 of 2000 not exhaustive of right to administrative justice.

Administrative law — Review — Interim interdict pending review — Applicants in interim D proceedings showing prospects of success, and thus prima facie right, in pending review — Local authority unilaterally terminating pension funds in terms of pension fund rules — Local authority's decision subject to principles of administrative law on any of several bases, namely: (1) Promotion of Administrative Justice Act 3 of 2000; (2) ss 1, 23, 25 and 195 of Constitution; (3) s 187(1)(c), as read with E s 186(1)(a), of Labour Relations Act 66 of 1995 and s 23 of Constitution; (4) communiqué from local authority to employees; (5) collective agreements; and (6) agreement by local authority to revoke decision — Accordingly, applicants showing prima facie right in pending review and thus being entitled to interim relief. F

Interdict — Interim interdict — Interdict pending review — Requirements for granting of — Prima facie right — Applicants showing prospects of success, and thus prima facie right, in pending review — Local authority unilaterally terminating pension funds in terms of pension fund rules — Local authority's decision subject to principles of administrative law on any of several G bases — Applicants showing prima facie right in pending review — Accordingly entitled to interim relief.

Labour law — Labour Relations Act 66 of 1995 — Unfair labour practice — Interim interdict pending review — Applicants showing prima facie right to have decision of local authority reviewed and set aside as constituting unfair labour practice within meaning of H s 187(1)(c), as read with s 186(1)(a) of Labour Relations Act 66 of 1995 (LRA) and s 23 of Constitution — Local authority unilaterally terminating pension funds in terms of pension fund rules — Such decision being subject to principles of administrative law and, prima facie, such decision constituting unfair labour I practice within meaning of LRA and Constitution — Accordingly, applicant showing prima facie right to have decision reviewed and set aside in pending review and applicant thus entitled to interim relief.

Local authority — Pension fund — Unilateral termination of — Application for interim interdict pending review of decision — Decision subject to principles J

2005 (6) SA p274

of administrative law — Accordingly, applicants showing prima facie right in pending review and thus being entitled to interim relief. A

Headnote : Kopnota

The respondents (the city) purported unilaterally to terminate the first and second applicants (the funds), to cease contributions to the funds and to transfer the members of the funds to a new pension fund, as it claimed it was entitled to do in terms of the rules of the B respective funds. On application to the High Court the funds sought an interim order interdicting the city from implementing its decision pending finalisation of the review of the city's decision and a declarator to the effect that the decision had been unlawful in terms of the Constitution of the Republic of South Africa, 1996, read with the Promotion of Administrative Justice Act 3 of 2000 (PAJA) C and the common law. The issue in the application for interim relief was whether the applicants had shown a prima facie right, even though open to some doubt, in the pending review. The applicants contended in the pending review that the city's decision was unlawful because, inter alia, it breached: (1) the provisions of the Promotion of Administrative Justice Act 3 of 2000 (PAJA); (2) the provisions of ss 1, 23, 25 and 195 of the Constitution, in that it D constituted a change in conditions of employment; (3) the provisions of s 187(1)(c), as read with s 186(1)(a), of the Labour Relations Act 66 of 1995 and s 23 of the Constitution, in that it constituted an unfair labour practice; (4) a communiqué from the city to its employees, which created a legitimate expectation on the part of the employees; (5) collective agreements which required changes E in retirement benefits to be negotiated at national level; and (6) an agreement in terms of which the city bound itself to revoke its decision. The respondents contended, inter alia, that the city's decision was not subject to the principles of administrative law as it did not constitute 'administrative action' as defined in PAJA.

Held, that the requirements for the granting of an interim interdict were: (a) a prima facie right, even though open to some doubt; (b) a well-grounded apprehension F of irreparable harm to the applicants if the interim interdict were not granted; (c) no other satisfactory remedy: and (d) the balance of convenience favoured the granting of interim relief. (Paragraph [8] at 280F - H.)

Held, further, that a prima facie right, though open to some doubt, existed when there was a prospect of success in the claim for principal relief. For that reason, the Court was called upon G to consider whether the applicants had a prospect of success in the pending review. (Paragraph [8] at 280H - I.)

Held, further, that while questions of law might in certain circumstances be disposed of in interim proceedings, the questions of law raised in the present application were too involved and were of such gravity that they could not, and should not, be disposed of in interim proceedings. (Paragraph [9] at 282J - 283B.) H

Held, further, that it appeared from the constitutional and statutory framework that the decision to terminate the funds constituted 'administrative action' (as intended in PAJA) in that it had been a decision taken by an organ of State in the exercise of a power under the Constitution, or exercising a public power or performing a public function in terms of the Local Government: Municipal Systems Act 32 of 2000. (Paragraph [14] at 288D - E.) I

Held, further, that there was in any event merit in the applicants' contention that PAJA was not and could not be exhaustive of the right to administrative justice since to hold otherwise would be subversive of the principle of constitutional supremacy. (Paragraph [15] at 289E.) J

2005 (6) SA p275

Held, further, that even if the conduct in question did not constitute 'administrative action' for the purposes of PAJA and s 33 A of the Constitution could not be invoked directly, it was nevertheless subject to constitutional scrutiny under s 195 of the Constitution. (Paragraph [16] at 289G - H.)

Held, further, that it was thus apparent that, contrary to the respondents' contention, the city's decision was subject to the principles of administrative law on the following bases: (1) the city had acted in its capacity as a public authority and exercised B public powers and the decision thus constituted 'administrative action' as defined in s 1 of PAJA (paras [13] and [14] at 287D and 288D); (2) in the context of public service employment, powers affecting the rights, property or legitimate expectations of workers were subject to administrative law (para [14] at 288E); (3) s 33 of the Constitution, which did not define 'administrative action', was available to the applicants (para [15] at 289C); (4) s 195 of the C Constitution required that public administrators be accountable, act lawfully and fairly and not arbitrarily, act honestly and ethically and be bound by their lawful undertakings (para [16] at 289G - H); (5) the communiqué was binding in administrative law (para [19] at 292F); (6) the city's unilateral action at local level, contrary to the collective agreement, constituted an 'unfair labour practice' as D defined in s 186(2)(a) of the Labour Relations Act, and also constituted an unfair labour practice in terms of s 23 of the Constitution (para [20] at 293I and 293J).

Held, further, that the applicants had established a prima facie case (even if open to some doubt) for the declarator and the review. (Paragraph [25] at 296D.) E

Held, accordingly, that the application had to succeed. (Paragraph [1] at 278B.)

Cases Considered

Annotations

Reported cases F

Administrator, Natal, and Another v Sibiya and Another 1992 (4) SA 532 (A): applied

Administrator, Transvaal, and Others v Traub and Others 1989 (4) SA 731 (A): applied

Administrator, Transvaal, and Others v Zenzile and Others 1991 (1) SA 21 (A): dictum at 33J - 34D applied G

American Cyanamid Company v Ethicon Ltd [1975] 1 All ER 504 (HL): referred to

Beecham Group Ltd v B-M Group (Pty) Ltd 1977 (1) SA 50 (T): dictum at 55H applied H

Bester v Bethge 1911 EDL 18: referred to

Bricktec (Pty) Ltd v Pantland 1977 (2) SA 489 (T): referred to

Brink v Kitshoff NO 1996 (4) SA 197 (CC) (1996 (6) BCLR 752): referred to

Collett v Priest 1931 EDL 27: referred to

Democratic Alliance and Another v Masondo NO and Another 2003 (2) SA 413 (CC) (2003 (2)...