Case CCT 175/23
[2026] ZACC 07
Hearing Date: 12 September 2024
Judgement Date: 24 February 2026
Post Judgment Media Summary
The following explanatory note is provided to assist the media in reporting this case and is not binding on the Constitutional Court or any member of the Court.
On 24 February 2026, the Constitutional Court handed down judgment in an application for leave to appeal against a judgment and order from the Labour Appeal Court (LAC).
The applicant in this matter was Reynolds Maleka (Mr Maleka). The first respondent was Timothy Boyce (Mr Boyce), a Commissioner, cited in his official capacity as the arbitrator appointed by the second respondent, the Commission for Conciliation Mediation and Arbitration (CCMA). Mr Boyce arbitrated the dispute between Mr Maleka and the third respondent, ADT Security (Pty) Limited (ADT), a security company. The main issue in this matter was whether Mr Maleka was constructively dismissed by ADT, in accordance with section 186(1)(e) of the Labour Relations Act 66 of 1995 (LRA), that is whether he resigned because ADT made his continued employment intolerable.
Since 2014. Mr Maleka was employed as IT Director by Tyco, an Irish company, and placed to work at ADT, Tyco’s South African subsidiary. As a director, he formed part of ADT's executive committee. Mr Maleka reported to two people: internationally, he reported to Mr Paul Birmingham (Tyco’s global Head for IT). and locally, he reported to Mr Stuart Clarkson (ADT's Managing Director). In late 2016, there were negotiations between Tyco and Fidelity Security Group (FSG) for FSG to acquire ADT from Tyco. Ahead of this planned acquisition, at ADT's December 2016 executive committee strategic planning meeting, Mr Clarkson announced that ADT had appointed Mr Allen Quinn (Mr Quinn) as its new financial director. and that Mr Quinn would oversee the IT portfolio that Mr Maleka headed. Once FSG acquired ADT, Mr Maleka would thus report to someone on the same level as him. Mr Clarkson said that this reporting line aligned with FSG’s structure. To Mr Maleka, the announcement appeared to be a restructure requiring him to report to someone on his level, and as he had not been consulted about the change, he immediately expressed his concerns with Mr Clarkson. He expressed that he would not accept the change, claiming it would negatively impact his status, authority. work, and working conditions. Mr Clarkson’s response was that he did not have to consult with Mr Maleka on the change. FSG’s acquisition of ADT was approved by the Competition Commission on 15 March 2017. On 22 March 2017, Mr Maleka requested a meeting with Mr Clarkson to discuss his reporting line change. Mr Clarkson provided him with 10 minutes and stated that his decision was final. On 23 March 2017, Mr Maleka resigned.
On 24 April 2017, Mr Maleka referred an unfair dismissal dispute to the CCMA alleging that he was constructively dismissed, and sought his reinstatement at ADT. The matter remained unresolved after conciliation, and was referred for arbitration. The sole issue of the arbitration was whether ADT made Mr Maleka’s continued employment intolerable. The Commissioner noted that this was assessed objectively, not by an employee’s perceptions and rejected Mr Maleka's claim that the planned change in his reporting line constituted a demotion and made his continued employment intolerable. The Commissioner also noted that the change would not have affected his title, position. income, responsibilities, or his position on ADT's executive committee. It concluded that the proposed change was a reasonable operational response to the pending sale of ADT to FSG. and that Mr Quinn, as an expert in the software system used by FSG which would be used by ADT post-acquisition, would be better able to support Mr Maleka in his role than Mr Clarkson. As Mr Maleka did not use ADT's grievance procedure before resigning, the Commissioner found that Mr Maleka failed to prove that he resigned because ADT made ongoing employment intolerable for him, therefore ADT did not constructively dismiss him.
Mr Maleka then approached the Labour Court to review and set aside the CCMAs arbitration award. The Labour Court noted that the review test for the Commissioner’s finding that Mr Maleka was not constructively dismissed is one of correctness, not reasonableness. The Court found that the Commissioner’s finding was correct. reasoning that without a compelling reason for Mr Maleka to ignore ADT’s grievance procedure, this was fatal to his constructive dismissal claim. The Court further found that the change in Mr Maleka’s reporting line was a result of FSG’s acquisition of ADT. and that as his salary., role and title did not change, the change did not make his employment intolerable. Therefore, it held that his resignation was impulsive and not a measure of last resort, and dismissed his review application with no costs order.
Aggrieved, Mr Maleka approached the LAC to appeal the Labour Court’s order. The LAC found that Mr Maleka’s resignation was premature because, aside from using ADT's grievance procedure, he could have referred unfair labour practice claims relating to demotion or unfair discrimination to the CCMA before resigning, and that his failure to do so was objectively unjustifiable. The LAC found that when Mr Maleka resigned, the situation was not yet objectively intolerable. Thus, Mr Maleka failed to prove that he was constructively dismissed, and the CCMA and Labour Court findings in that regard were correct. The LAC therefore dismissed Mr Maleka’s appeal and made no costs order.
Before this Court, Mr Maleka sought an order that he was constructively dismissed by ADT as well as orders that his dismissal was unfair and that ADT must reinstate him as its IT Director. He submitted that because this matter concerns the interpretation and application of the LRA, and his right not to be unfairly dismissed or subjected to unfair labour practices, it engaged this Court’s constitutional jurisdiction, and that it was in the interests of justice to grant leave to appeal as the matter affects workers who resign after being subjected to intolerable conditions caused by the transfer of their employment to another employer under section 197 of the LRA. In terms of the merits, Mr Maleka submitted that as ADT's IT Director, he was solely responsible for the execution of all IT deliverables within ADT. FSG’s acquisition of ADT changed his reporting line such that he would report to an employee on the same level as him, and because there would then be two executives in one department, this effectively demoted him. He submitted this demotion would render his role in ADT redundant, making him an affected employee in a section 197 transfer of employment. Despite assurance from Mr Clarkson that his salary, benefits and title would not change, Mr Maleka argued that he would become a token at ADT as he would lose his authority and responsibilities as an IT Director. As such, Mr Maleka submitted that the CCMA, Labour Court and LAC erred in finding that he was not constructively dismissed because he failed to resolve his grievance through ADT’s grievance procedures or the CCMA, and on focusing on his failures and conduct as the employee, rather than ADT’s. Mr Maleka further submitted that that ADT’s failure to consult him makes his constructive dismissal an unfair dismissal. He sought reinstatement as a remedy.
ADT opposed Mr Maleka’s application and disputed that this Court had jurisdiction over the matter simply because the LRA’s provisions are invoked. ADT submitted that rather than requiring Mr Maleka to use ADT’s grievance procedure or that his resignation be a last resort to meet the constructive dismissal test, the Labour Court and LAC merely correctly required that he use the reasonable remedies available to him to correct the alleged intolerable conditions. ADT submitted that Mr Maleka was changing tack by now submitting that the intolerability of his continued employment is based on ADT’s failure to consult him under section 197 of the LRA on the change in his reporting, as his prior position was that the change was effectively a demotion. ADT submitted that objectively, Mr Maleka’s continued employment was not intolerable; that a change in reporting is not a material change in employment; that ADT can have multiple executives in one department, and that Mr Maleka himself submits that any intolerability from the change in his reporting did not yet exist when he resigned. As such, any intolerability was merely anticipated and sought for this Court to dismiss Mr Maleka’s application and that he pays ADT’s costs on an attorney and client scale.
First judgment
In the majority judgment penned by Seegobin AJ, concurred in by Kollapen J, Majiedt J, Tolmay AJ and Tshiqi J, the Court held its constitutional jurisdiction was engaged as the matter involved the interpretation of section 186(1)(e) of the LRA as well as the protection of the constitutional right to fair labour practices. It further engaged its general jurisdiction as the legal issues of the matter were of paramount importance because it raised the need for employees to safeguard the right to dignity.
Relying on Solid Doors (Pty) Ltd v Theron N.O. [2004] ZALAC 14; (2004) 25 ILJ 2337 (LAC), the Court held that there are three requirements necessary for constructive dismissal. It held that the first requirement is not contentious but the second and third are as they require the employee to display that the conduct of the employer or conditions of employment were so intolerable that they could not have been reasonably expected to continue with their employment contract. The Court further found the inquiry into intolerability is an objective one that requires proper examination to determine the presence and that the threshold to establish intolerability under section 186(1)(e) is high. Intolerability requires more than just conduct or working conditions. In light of Mr Maleka’s resignation letter, the Court held that his dissatisfaction did not come from a state of intolerability but rather, it came from the fact that his reporting line had changed. Additionally, he failed to discharge the onus in section 186(1)(e) of the LRA. It is also inconceivable that his employer made his continued employment so intolerable that he had no other option but resignation. As such, his resignation occurred as a result of anticipated intolerability rather than existing one and such intolerability, is not contemplated under section 186(1)(e). Lastly, the Court found that an employee in his position should first explore other suitably alternative remedies prior to resigning. To conclude, the Court held that Mr Maleka has no prospects of success and as such, his condonation application must fail. No costs order was made.
Second judgment
A dissenting judgment penned by Madlanga ADCJ, concurred in by Maya CJ, Mathopo J and Rogers J (second judgment), disagreed with the first judgment’s reasoning and outcome. The second judgment was of the firm view that Mr Maleka was constructively dismissed and that the constructive dismissal was unfair.
The second judgment noted that the historical context of racial inequality in South Africa’s corporate environment could not be ignored, and that Mr Maleka’s rise to an executive position was significant given the challenges faced by black professionals in a predominantly white corporate landscape. It was in this important context that the second judgment found that it gave rise to grievous intolerability to displace a highly qualified and experienced black executive who had risen against all odds in South Africa’s white dominated corporate landscape, and against whom there was not a single blemish, and to replace them with a white executive who had not cogently been shown to be more qualified or experienced than the black executive. It was thus inaccurate to say that Mr Maleka had retained his position on Exco, title, status and conditions of employment. His position, title and status had been rendered hollow. He was a director in name only. This was tokenism.
The second judgment held that ADT treated Mr Maleka in a manner that displayed a total disregard for his self-worth and an uncaring attitude about his dignity. This was the fundament of the intolerability.
Lastly, the second judgment found that fairness of the dismissal had not been established by the employer, because of the lack of a cogent reason for interposing Mr Quinn as the person to whom Mr Maleka had to report. The reasons given by Mr Clarkson for having Mr Quinn oversee Mr Maleka were manifestly untenable. Mr Maleka had tried to resolve the situation amicably, but was rebuffed. Resignation was a measure of last resort.
Consequently, the second judgment would have granted leave, upheld the appeal, awarded compensation in the form of a year’s remuneration and ordered ADT to pay costs in all the Courts.
The Full judgment here
Case CCT 295/24
[2026] ZACC 06
Hearing Date: 13 May 2025
Judgement Date: 13 February 2026
Post Judgment Media Summary
The following explanatory note is provided to assist the media in reporting this case and is not binding on the Constitutional Court or any member of the Court.
On Friday, 13 February 2026, the Constitutional Court handed down judgment in an application for leave to appeal against part of the judgment and order of the Supreme Court of Appeal. The court a quo had found that section 6(4) of the Housing Development Scheme Act (HDSA) does not provide a statutory remedy for repayment of funds entrusted with a practitioner, under section 6(3)(a), and paid over to a developer prior to the developer’s insolvency.
The appeal was brought by a purchaser, Mr Grondel, and a number of executors of the estates of deceased purchasers (the applicants). Between April 2009 to November 2011, the applicants purchased “life rights” in the St Leger Retirement Hotel, a ‘housing development scheme’ under the HDSA. The purchase price was paid into the trust account of the respondent, Herold Gie and Broadhead Inc (HGB) in terms of the contracts concluded with the developer. HGB opposed the matter.
On 24 October 2014, the applicants cancelled their “life rights” agreements and requested a refund of their purchase price, alleging that they had not been furnished with the certificates of compliance contemplated under section 6(1)(a) of the HDSA and section 14(1)(a) of the National Building Regulations Standards Act 103 of 1977. They also claimed that the developer had failed to inform them prior to the conclusion of the agreement that use and occupation of the hotel would not be “legally possible.”
Litigation was launched in the High Court in October 2017 and the High Court separated three questions for determination. The first separated question was: whether section 6(4) of the HDSA provides a statutory remedy for the repayment of proceeds of a section 6(3) “entrustment” where a practitioner has paid away these proceeds without compliance with section 6(1). The second separated question was whether section 6(4) of the HDSA can found an action by a purchaser, or an executor of a deceased purchaser, of a “housing interest” from a developer, for repayment by a “practitioner” of an amount contemplated in section 6(3)(a), prior to the developer becoming insolvent and the purchaser cancelling the contract. The third separated question was whether in the case that section 6(4) of the HDSA does not apply, the averments in the applicant’s particulars of claim, read with the averments in the respondent’s plea that were admitted, were sufficient to sustain an action.
The High Court ruled in favour of the applicants on all three questions. The Supreme Court of Appeal, however, upheld the appeal of the respondent with costs. It held that the section 6(4) did not found a claim where the funds held by HGB had been paid out to the developer. The first separated question was therefore answered in favour of the respondent. It set aside the High Court answer to the third question and remitted that issue together with all the remaining issues to the High Court for determination.
Before the Constitutional Court the applicants submitted that the Supreme Court of Appeal’s answer to the first separated question did not give effect to the intention of the legislature to provide protection for vulnerable elderly purchasers. The applicants submitted that the true purpose of section 6(4) is to provide for immediate and unconditional reimbursement to a purchaser of the proceeds of a section 6(3)(a) entrustment or payment to a purchaser under a section 6(3)(b) guarantee in the event of the developer becoming insolvent without having complied with the requirements of section 6(1).
The applicants submitted that this matter raised constitutional issues as it concerned the interpretation of section 6(4) of the HDSA, which has previously been held to constitute consumer protection legislation. Further, the interpretation has implications for the right to equality (section 9) as well as the right to housing provided by section 26 and right to healthcare. The applicants also contended that this Court had jurisdiction under section 167(3)(b)(ii) as the matter raised an arguable point of law of general public importance.
The respondent submitted that there was no constitutional issue in this matter, nor was there any arguable point of law of general public importance which would have given this Court jurisdiction to entertain the matter. Further, the respondent submitted that the Supreme Court of Appeal’s interpretation of section 6(4) of the HDSA was correct and aligned with established principles of statutory interpretation. Additionally, the respondent submitted that the applicants had alternative remedies available to them, which they had not pursued.
The respondents submitted that section 6(4) on its plain wording is clear and unambiguous and does not support the extended interpretation put forward by the applicants. Instead, the respondent submitted that the Supreme Court of Appeal’s judgment was correct and does not place retirees in a more vulnerable position, but rather that they would possibly be able to bring claims on a different cause of action.
First Judgment
The first judgment (minority judgment), penned by Goosen AJ (with Kollapen J and Theron J concurring), accepted that the matter engaged this Court’s general jurisdiction, but ultimately would have dismissed the appeal on the merits.
On jurisdiction, the first judgment found that it is unlikely that the matter raised a constitutional issue, as the interpretation of section 6(4) of the HDSA did not require the consideration of a constitutional rule or principle. However, it did not conclusively reject the applicant’s arguments on constitutional jurisdiction. Instead, it found the matter engaged with the Court’s general jurisdiction. The first judgment held that the meaning and effect of section 6(4) is of general public importance, and that its interpretation may bear on other legislation containing similarly-worded provisions such as the Alienation of Land Act, the Share Blocks Control Act, and the Property Time-Sharing Control Act.
The first judgment went on to examine the interpretive approach adopted by the Supreme Court of Appeal, in light of the concerns raised by the applicants that the interpretation adopted would render retired persons more vulnerable to financial hardship when a developer of a housing scheme becomes insolvent. The first judgment found that it was not the interpretive approach adopted by the Supreme Court of Appeal which was at issue, but the effect the interpretation would have on retired persons..
Next, it turned to the purpose of the HDSA, finding that the HDSA constitutes a piece of “social” or “consumer protection” legislation which aims to protect elderly or retired persons who invest their savings in a housing development scheme from possible exploitation by a developer. The manner in which the HDSA achieves this is by allowing elderly or retired persons to purchase a “life right” to live in a housing scheme, and by offering a number of statutory protections to residents in such housing schemes.
Importantly, section 6 of the HDSA provides protections for elderly and retired persons during the process of buying into a housing development scheme. Generally, section 6 prevents the developer of a housing scheme from taking payment from potential residents until the scheme has been certified as ready for the residents to move in. There are two exceptions to this rule contained in section 6(3) of the HDSA: first, the purchase price can be entrusted to an attorney or estate agent for the benefit of the developer once the housing scheme is certified, or second, the developer can provide a financial guarantee to the purchaser and receive the purchase price before the housing scheme has been certified as ready for occupancy.
The first judgment found that these two provisions enabled the payment, albeit through different mechanisms, of the purchase price to the developer. The protections created by the HDSA operate in the same manner in each case, by guaranteeing to the purchaser that the developer will only receive the payment on condition that the purchaser is able to take up residence in the housing scheme. In the former instance, this is achieved by the legal obligation of an attorney or estate agent to abide by the terms of the HDSA and not release funds before the housing scheme can be occupied, and in the latter instance by providing a guarantee that the funds will be returned if the housing scheme cannot be occupied.
Turning to the interpretation of section 6(4) specifically, the first judgment held that the section allowed for the repayment of funds held in trust under section 6(3) if the developer becomes in solvent. However, this only applies to funds still held in trust at the time that the developer becomes insolvent. If the funds have been properly disbursed to the developer prior to the insolvency, then the purchasers may claim against the developer for the return of their payments, but not against the attorney or estate agent who had been holding the funds in trust. A claim against the attorney or estate agent would only be possible if the funds had not been unlawfully disbursed to the developer, or otherwise misappropriated. As the applicants had taken up residency at the time of the developer’s insolvency, and HGB had properly disbursed the funds held in trust to the developer prior to the insolvency, the applicants did not have a claim against HGB.
The first judgment would thus have dismissed the appeal.
Second Judgment
The second judgment (majority judgment), penned by Majiedt J (with Madlanga ADCJ, Mhlantla J, Opperman AJ and Tshiqi J concurring), held that section 6 of the HDSA had to be interpreted purposively and in light of its character as legislation enacted to protect vulnerable elderly purchasers.
The Court held that section 6(4) did establish a statutory cause of action against a practitioner for repayment of funds entrusted under section 6(3)(a) where those funds should have been kept in trust at the time of the developer’s insolvency, regardless of whether the practitioner had unlawfully disbursed them beforehand. It held that the phrase “kept in a trust account” required a legal, rather than factual, inquiry and that funds unlawfully paid away remained, in law, funds that were required to be kept in trust. The practitioner’s statutory duty to safeguard the entrusted funds therefore persisted, and any deficit caused by unlawful payment had to be made good by the practitioner.
The Court held further that section 6 created a statutory escrow-type arrangement regulating the flow of consideration between purchaser, practitioner and developer. Until the statutory conditions in section 6(1) were fulfilled, funds entrusted under section 6(3)(a) could lawfully flow only in one direction, namely back to the purchaser upon cancellation or insolvency.
The second judgment held that the true purpose of section 6(4) is not to protect the purchasers from the operation of the concursus creditorum. Instead, it held that its purpose was to make plain that the financial relationship between the developer and the purchaser comes to an end upon the insolvency of the developer prior to fulfilment of the conditions under section 6(1). Any payment of entrusted funds by the practitioner will be unlawful.
The Full judgment here
Case CCT 266/24
[2026] ZACC 05
Hearing Date: 28 August 2025
Judgement Date: 11 February 2026
Post Judgment Media Summary
The following explanatory note is provided to assist the media in reporting this case and is not binding on the Constitutional Court or any member of the Court.
On Wednesday, 11 February 2026, the Constitutional Court handed down judgment in an application for leave to appeal against a judgment and order of the High Court of South Africa, Gauteng Division, Pretoria (High Court).
This matter arises from an application for leave to appeal and concerns whether a procurement decision of a private entity/body could be reviewed under the Promotion of Administrative Justice Act (PAJA), alternatively, under the principle of legality or alternatively, or under the common law.
The background to this matter is as follows. The applicant is Famous Idea Trading 4 (Pty) Limited, trading as Dely Road Courier Pharmacy, a company that unsuccessfully tendered for the delivery of medical courier pharmacy services for the Government Employee Medical Scheme (GEMS), the first respondent. The tender was instead awarded to the fourth and fifth respondents, Marara Pharmacy (Pty) Limited and Pharmacy Direct (Pty) Limited, who formed a joint venture (JV), as well as the sixth respondent, HH Durrheim (Pty) Limited, trading as Medipost Pharmacy.
On 9 March 2023, the applicant instituted a review application in the High Court, where it sought to challenge the decision made by GEMS. The two main issues were GEMS’ decision to reject its tender; and GEMS’ decision to award part of the tender to the JV (excluding the sixth respondent). In its main application, the applicant challenged the decision on three grounds:
- 1. The impugned decision constituted administrative action within the meaning of PAJA and that it was reviewable under the Act;
- 2. In the first alternative, in taking the impugned decision, GEMS exercised public power and the impugned decision was reviewable under the legality principle; and
- 3. In the second alternative, the impugned decision was reviewable under the common law.
The applicant further called on GEMS to deliver the record of the impugned decision in terms of rule 53 of the Uniform Rules of Court. GEMS refused to file the record, filing instead a rule 6(5)(d)(iii) notice raising two points of law. Before the High Court, GEMS submitted that it was not obliged to provide a record of its decision as it was not an organ of state, nor was it exercising public power at the time that the impugned decision was made; subsequently, its decision was not reviewable. The applicant argued that the courts have previously held that the obligation to disclose a rule 53 record is triggered by a review application itself, as well as review jurisdiction.
The High Court’s judgment found that the impugned decision was a commercial decision that related to the procurement of services by a medical scheme. It further held that it was not necessary to consider the merits of the main application when dealing with the jurisdictional challenge as the Supreme Court of Appeal, in GEMS and Others v Public Protector of the Republic of South Africa and Others (GEMS v Public Protector decision), had made a decision on GEMS’ specific, unique position. Furthermore, the Court held that a court should first determine whether it has review jurisdiction before making an order that compels the delivery of a record, and that this should be done before determining the merits of the review. The Court noted that it would be dangerous to set a precedent that allows for the decisions of private parties to appoint service providers to be reviewed, especially if the ambit of common law review is broadened. The Court held that GEMS’ use of rule 6(5)(d)(iii) was not incompetent.
It reasoned that GEMS was entitled to show cause why its decision should not be reviewed by way of a dispositive point of law
The applicant then filed an application for leave to appeal against the judgment, which was later dismissed, with the Court reasoning that there were no compelling grounds to grant leave to appeal, nor were there any reasonable prospects of success on appeal, and ordered costs against the applicant. The applicant then petitioned the Supreme Court of Appeal, which also dismissed the application for leave to appeal, with costs, on the grounds that there was no reasonable prospect of success nor any other compelling reasons to grant leave to appeal. The applicant then sought leave to appeal in this Court. It further sought condonation for the late filing of its application and, later, for leave to file a replying affidavit.
Before this Court, the applicant submitted that this Court’s constitutional and general jurisdiction were engaged. On constitutional jurisdiction, it submitted that there was a violation of its rights under sections 33 and 34 of the Constitution, as well as a breach of the principle of legality. On general jurisdiction, it submitted that the matter raises an arguable point of law and that the question of whether GEMS is insulated from any review (including common law) is an important legal consideration which the High Court did not adequately address. Additionally, the question of whether a court has jurisdiction to entertain the merits of a rule 53 review application when the record has not been disclosed must be pronounced by this Court.
On the merits, the applicant submitted that the High Court erred in its findings for several reasons. First, the applicant contended that jurisdiction ought to have been decided during the adjudication of the merits, once the record was produced. It submitted that the facts supported its assertion that the impugned decisions were reviewable. Second, the applicant maintained that GEMS exercised public power, and not private contractual power, in reaching the impugned decision. It argued that the Court’s focus should have emphasised the nature of the power exercised rather than the nature of the functionary. Third, the applicant submitted that its case was based on common law and public law grounds of review. In concluding that the impugned decision was not reviewable, the Court, in the applicant’s view, only did so “in terms of the common law” and did not consider the public law grounds or the other grounds relied on by the applicant. Finally, the applicant persisted in its contention that GEMS’ rule 6(5)(d)(iii) notice was incompetent, as the record had not been produced. According to the applicant, such a notice had the effect of frustrating the review.
Both GEMS and the JV submitted that this Court’s constitutional jurisdiction is not engaged. However, GEMS conceded that this Court’s general jurisdiction might be engaged. The JV resisted making this concession. Regarding leave to appeal, both GEMS and the JV submitted that the matter was moot, as the agreement forming the subject matter of the review expired on 31 December 2023.
GEMS submitted that a review application must show jurisdiction in its founding papers. Should such papers be lacking on jurisdiction, there is no entitlement to disclose the record in order to bestow the Court with jurisdiction. In addition, GEMS argued that the Court did not find that it was common cause that the impugned decision was the exercise of private contractual power. The Court reached such a decision based on the common cause facts. GEMS alleged that the applicant confined itself to a common law review in both its written submissions and oral arguments. As such, the Court found that the impugned decision was not administrative action and, following from that, not reviewable. Asserting its support for the Court’s reliance on the GEMS v Public Protector decision in the High Court’s determination, GEMS submitted that its decision was made in the “business of medical scheme”.
The JV raised the contention that the parties specifically asked the Court to determine the jurisdictional point and that the applicant did not take the Court into its confidence by failing to disclose the agreement between the parties. Just as GEMS has submitted, the JV also accentuated the point that the purpose of the joint practice note was to inform the Court of the issues that were to be determined, borne out of agreement between the parties. In addressing the jurisdictional point raised by the applicant, the JV argued that the jurisdictional point was brought before the Court through the parties’ shared request and that it was dispositive of the applicant’s entire application. In raising confidentiality concerns in its answering affidavit to the rule 30A application, the JV once more highlighted that a litigant should not be able to, by way of a purported “review” application, obtain insight into information which it would not ordinarily be entitled to under PAIA, if the decision is not capable of being reviewed. In support of the High Court’s determination, the JV agreed that a dangerous precedent would be set if the decisions of private bodies to appoint service providers were capable of being reviewed.
In a unanimous judgment penned by Musi AJ, regarding jurisdiction, this Court held that the question of whether the applicant is entitled to the rule 53 record raises a constitutional issue, as it implicates the right to access to court. This Court further held that the question of whether GEMS was exercising a public power similarly raises a constitutional issue. For this reason, this Court’s constitutional jurisdiction was engaged. This Court recognised two arguable points of law of general public importance which engaged its general jurisdiction. The first was whether decisions which are neither administrative action nor exercises of public power or the performance of a public function are reviewable in terms of the common law. The second was whether rule 53 is applicable to the common law review of decisions made by private bodies. With regard to mootness, this Court concluded that, because the contract was renewed, and that renewed contract derived its validity from the initial contract, the matter was not moot. For these reasons, leave to appeal was granted.
This Court held that serving a rule 6(5)(d)(iii) notice before the record has been produced is competent. The Court reasoned that the purpose of such a notice is to resist an application devoid of legal grounds by raising a point in limine (preliminary legal objection). The effect of this is that the court does not have to consider the merits of the matter and may dispose of it early.
Regarding the reviewability of the decision, this Court held that, if a party fails to establish on the facts that a decision is reviewable under PAJA, the principle of legality or the common law, it will have failed to engage the court’s review jurisdiction. Under these circumstances, the party is not entitled to a review record. A court’s review jurisdiction may be challenged by way of a rule 6(5)(d)(iii) notice. For this reason, the issue of jurisdiction must be determined before the record is produced. Accordingly, this Court concluded that POLMED and Murray were wrongly decided.
In considering the High Court review jurisdiction, this Court noted that GEMS is not an organ of state. Based on the Supreme Court of Appeal’s reasoning in GEMS v Public Protector, it concluded that the business of a medical scheme does not entail the exercise of public power or the performance of a public function. GEMS’ decision was therefore not administrative action. This Court therefore held that the PAJA and the principle of legality were not applicable and that the High Court did not have review jurisdiction in terms of these pathways. This Court further held that the High Court had indeed considered the public law grounds when it considered the question of jurisdiction and concluded that GEMS’ decision had been commercial and not administrative.
This Court then went on to consider whether a private law review was appropriate. It noted that, despite the courts’ general reluctance to interfere in the affairs of private entities, interference may be warranted where the entity exercises decision-making or adjudicative powers in terms of a private contract. When tender conditions pursuant to a public invitation for the procurement of goods and services by private entities, like GEMS, stipulate that the acceptance of those conditions constitute a contract between the procurer and the tenderer, the latter may subsequently claim, depending on the contractual terms, that the rules of natural justice should be implied as a term of their contract. Although GEMS exercised an adjudicatory function when it decided to grant the contract to the JV, the applicant did not plead that the tender conditions constituted a contract between it and GEMS. This Court therefore held that a private law quasi review was not supported.
For the reasons elucidated above, this Court held that the appeal should be dismissed. As there was no reason why costs should not follow the result, this Court ordered costs against the applicant..
The Full judgment here