Easier now to challenge dodgy contracts
A precedent has been confirmed in the Constitutional Court’s recent ruling in Buffalo City Metropolitan Municipality v Asla Construction (Pty) Ltd that may allow government entities to appeal their own decisions – where there is evidence that those past decisions were unlawful – potentially even after several years have passed, and even if their reasons for appealing are possibly questionable.
Journalist and author Rebecca Davis adds that the judgment is significant: the court was willing to make a finding on the legality of the contract in question – even though more than four years had passed since it was awarded, and even though the municipality had no good reason for having waited so long to appeal it.
In an analysis on the Daily Maverick site, Davis notes that since the landmark ruling in State Information Technology Agency SOC Limited v Gijima Holdings (Pty) Ltd, an organ of state looking to review its historical decisions has to do so under the principles of a legality review, rather than the 180 days stipulated in terms of the Provision of Administrative Justice Act.
A legality review – the Constitutional Court judges wrote in the Buffalo City ruling – ‘has no similar fixed period’.
If the delay in bringing the appeal can be explained and justified, it can be overlooked. And even if the delay cannot be properly justified, the Constitutional Court can still rule – as it did – that the government decision in question was unlawful.
According to Davis, the majority judgment found that the precedent set by Gijima means that the unlawfulness of the underlying contract could not be ignored – and that ‘this court is obliged, as it did in Gijima, to set aside a contract it knows to be unlawful’.
She says in confirming and extending the Gijima precedent, the latest judgment has particular significance in light of the upcoming elections and attempts to resuscitate SA’s state-owned entities. ‘The issues raised in this matter have a broader impact beyond the immediate parties. This is so given the current political context where many municipalities are changing administrations and undertaking to ‘‘clean house’’,’ Justice Leona Theron wrote.
‘This case not only raises legal questions of import but also affords this court the opportunity to provide guidance to organs of state who may wish to bring similar applications in the future and to lower courts dealing with these cases.’
Davis says the ruling ‘provides welcome evidence that dodgy decisions made by previous administrations can successfully be challenged even after some years. The same applies to the new brooms attempting to sweep clean at state-owned entities.’
© Juta and Company (Pty) Ltd 2016
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