The Boundaries of Intervention: Judicial Restraint and the Choice Between Remittal and Substitution in Administrative Law.
The KwaZulu-Natal Division of the High Court as per Nkosi J, in the most recent Overrox case, has emphasised that the courts must not interfere with the decision-making of other arms of government without any justifiable grounds to do so. This case reinforced respect to the long-standing doctrine of separation of powers of government by exercising judicial restraint in situations where interference therewith is not legally justified.
Overrox case involved an appeal against the decision of the High Court as court of first instance presided over by honourable Shapiro AJ. Shapiro AJ, in para 6 of his judgment – (1) reviewed and set aside the decisions of the first respondent (Controller of Petroleum Products) and second respondent (Minister of Energy) (hereinafter, administrators); (2) mero motu (on its own accord) granted ‘an order substituting the first and second respondents (administrators)’ decisions with its own decision dismissing the site and retail licences (licences) and dismissing the appellants’ applications for the granting of the site and the retail licences in respect of the property specified under Petroleum Act.
Brief factual background.
On 9 November 2017, the first respondent approved licence applications of the first appellant (Overrox Trading 70 cc) and second appellant (Trafford Road Convenience Centre(Pty) Ltd) (the appellants). However, the third to sixth respondents, dissatisfied with the first respondent’s decision, unsuccessfully appealed this decision to the second respondent. The third to sixth respondents then proceeded with a judicial review application in the High Court. In this Court, the third to sixth respondents sought an order reviewing and setting aside the decisions of the 1st and 2nd respondents.
The matter came before Shapiro AJ as a court of first instance. This found that the decisions of the 1st and 2nd respondents unconstitutional and unlawful and therefore reviewed and set them aside. This court then proceeded, without being asked, to make an order substituting the decisions of the 1st and 2nd respondents with its own decision dismissing the appellants’ applications for the granting of the site and retail licenses. Aggrieved by this order, the appellants took the matter on appeal.
Appellate Court
On appeal , the appellants’ argument was that the third to sixth respondent’s affidavit does not make out a case for exceptional circumstances which justifies the substitution order of the administrative decision as contemplated in s 8 (1)(c) of Promotion of Administrative Justice Act[1](PAJA).
S 8(1)(c) of PAJA reads as follows:
“The court in proceedings for judicial review may grant an order that is just and equitable, including an order: ‘Setting aside an administrative action and – (i) remitting the matter for reconsideration by the administrator, with or without directions; or (ii) in exceptional cases – (aa) substituting or varying the administrative action or correcting a defect resulting from the administrative action; or (bb) directing the administrator or any other party to the proceedings to pay compensation”
The appellate court proceeded to hold that the term ‘exceptional cases’ was adopted by the legislature to describe the circumstances under which courts may issue an order substituting or varying the administrative action of an administrative body in terms of that Act.
The appellate court considered one of the leading cases on the issue of substitution, namely: Gauteng Gambling Board v Silverstar Development Ltd and Others[2] in which honourable Heher JA, at paragraph 28, provided guidance on what constitutes exceptional cases as follows when he stated the following:
“A case is exceptional when, upon a proper consideration of all the relevant facts, a court is persuaded that a decision to exercise the power should not be left to the designated functionary. How that conclusion is to be reached is not statutorily ordained and will depend on established principles informed by the constitutional imperative that administrative action must be lawful, reasonable and procedurally fair”.
The court thereafter held that the following factors must exist for a matter to constitute an exceptional case : (a) ‘it would serve no purpose to remit the matter to the administrative body concerned because the end-result is a foregone conclusion (foregone conclusion); (b)’ it is more than likely that further delay would cause undue prejudice to the other party if the matter is remitted’( delay); (c) ‘there is a reasonable apprehension of bias or incompetence on the part of the decision-maker’(bias or incomplete); (d) ‘the court is in as good a position as the decision-maker to make the decision’(in as good a position as administrator) and (e) ‘there is a likelihood of the decision-maker not applying his or her mind fairly or at all’ (failure to apply mind).
The appellate court ultimately held that none of the above exceptional factors existed that justified the lower court to a substitution order. It held that an order which was just and equitable was remittal (send the matter back to the administrator for reconsideration).
The appellate court also held that ordinarily if an order of substitution is sought, relevant material facts establishing exceptional circumstances would need to be set out in applicant’s application papers. The respondent would then have an opportunity to respond to those material facts. In the matter before the appellate court there was no exchange of papers dealing with the issue of substitution. The appellate court then held that the granting of the substitution order by the lower court infringed the appellants’ rights. The appeal was upheld.
Critical discussion: Overrox case
Overrox case, raises important issues which are worth dealing with. These issues are: (a) when can a court act mero motu; and (b) the appropriate way of establishing the exceptional case factors envisaged by s 8 (1) (c) of PAJA.
- Mero motu dealing with the issue
As to when the court may raise an issue Mero Motu is a controversial issue that depends on the circumstances of the case. However, the Constitutional Court provided some guidance on this issue when it held[3]:
“… Where a point of law is apparent on the papers, but the common approach of the parties proceeds on a wrong perception of what the law is, a court is not only entitled, but is in fact also obliged, mero motu, to raise the point of law and require the parties to deal therewith. Otherwise, the result would be a decision premised on an incorrect application of the law. That would infringe the principle of legality.”
Furthermore, Vally J, in his judgement[4], called upon the parties to make representations on two issues, inter alia, on when can a court mero motu raise the issue of locus standi? In deciding on this issue, Vally J relied on the Constitutional Court dictum[5] which provided as following:
“It is trite that courts are bound by the issues that the litigating parties raise. However, a court can raise an issue mero motu where (i) raising it is necessary to dispose of the matter, and (ii) it is in the interests of justice to do so, which depends on the circumstances at hand”
Vally J continued to say on para 13
“The issue of locus standi is, on these principles, a legal one. The proof thereof, however, is a factual one. In this case the facts, as is shown below, are common cause and uncomplicated. It is a constitutional issue which may be dispositive of the applicants’ case. Thus, this court is entitled to raise the issue mero motu. Accordingly, it is in the interests of justice that it be raised”[6]
In the premises, the following appears to be the requirements justifying the court to mero motu raise an issue or issues: (i) if it is necessary to dispose the matter; (ii) it is in the interest of justice to do so; (iii) the issue raised is directly or indirectly connected with the facts of the matter; (iv) all parties must be given an opportunity to respond to the issue raised mero motu (my argument). This argument aligns with Overrox case which held that the appellants and respondents (all parties) must have been afforded an opportunity to make representations on the mero motu substitution order. Outside of the above, it is argued that the court, as was done in the court of first instance in Overrox case, cannot, on its own accord deal with issues not raised by the parties.
- Correct application of the exceptional factors envisaged by s 8 (1) (c) of PAJA.
Khampempe J, in the judgment of Trencon Construction (Pty) Ltd v Industrial Development Corporation of South Africa Ltd and Another[7] (‘Trencon’) briefly clarified the confusion as to the applicability of factors as follows:
“[G]iven the doctrine of separation of powers, in conducting [the] enquiry there are certain factors that should inevitably hold greater weight. The first is whether a court is in as good a position as the administrator to make the decision. The second is whether the decision of an administrator is a foregone conclusion. These two factors must be considered cumulatively. Thereafter, a court should still consider other relevant factors. These may include delay, bias or the incompetence of an administrator. The ultimate consideration is whether a substitution order is just and equitable. This will involve a consideration of fairness to all implicated parties. It is prudent to emphasise that the exceptional circumstances enquiry requires an examination of each matter on a case-by-case basis that accounts for all relevant facts and circumstances.’ This test was subsequently accepted and cited by Swanepoel N.O (Executor in the Estate Late Mignon Adelia Steyn) v Profmed Medical Scheme[8] in which it was held that “[Trecon] test for substitution is well-established”
It is submitted that the above test is the correct approach regarding the applicability of factors envisaged by PAJA because, (a) it emphasises the importance of separation of powers, as an overarching principle, in substitution orders; (b) it requires the court to be in the same position as the administrator (institutional competence; and availability of information relevant for decision-making); and (c), the decision must be a foregone conclusion. The two factors above hold great weight, and the fact that these two factors must be considered cumulatively makes substitution order even more justifiable (or appropriate); and lastly, other factors such as bias and incompetence, as relevant factors, which must of course hold lesser weight must also be considered. These other relevant factors must be accorded lesser weight. Underlying all this exercise is fairness implicated on both parties as well whether the order is just and equitable in the circumstance of the case.
Concluding remarks
This article, by now, has alarmed parties involved in judicial review proceedings that presiding officers do not have powers to usurp decision-maker’s decisions (administrative decisions) by their own decisions without any justifiable ground in terms of s 8 (1) (c) of PAJA. Overrox case is a clear example of the court’s violation of separation of powers and correction thereof. The parties involved in judicial review proceedings must be aware of the requirements justifying the court to act Mero Motu on issues; and the circumstances justifying substitution of administrative decisions.
Contributor: Mthokozisi Goodwill Mkhize, Candidate Attorney (under supervision of his principal Agrippa Mpungose).
Email: agrippa@atmd.co.za
Tel: +2733 815 1511
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