Editorial note: This judgment has been anonymised to protect personal information in compliance with the law.
IN THE HIGH COURT OF SOUTH AFRICA
GAUTENG LOCAL DIVISION, JOHANNESBURG
(1) REPORTABLE: NO
(2) OF INTEREST TO OTHER JUDGES: NO
(3) REVISED. No
29 April 2025 ………………………...
Date T ENGELBRECHT
CASE NO: 2022/054821
In the matter between:
BAROLONG ENTERPRISE APPLICANT
and
CONSTRUCTION INDUSTRY DEVELOPMENT BOARD FIRST RESPONDENT
ENOCH MASIBI N.O SECOND RESPONDENT
SIPHO ZWANE N.O THIRD RESPONDENT
MINISTER OF PUBLIC WORKS FOURTH RESPONDENT
This order is made an Order of Court by the Judge whose name is reflected herein, duly stamped by the Registrar of the Court and is submitted electronically to the Parties/their legal representatives by email. The Order is further uploaded to the electronic file of this matter on Caselines by the Judge his/her secretary. The date of this Order is deemed to be 29 April 2025..
JUDGMENT
ENGELBRECHT, AJ
Introduction
[1] This is a review application in terms of the Promotion of Administrative Justice Act, 3 of 2000(“PAJA”’) and the principle of legality, in which the Applicant is dissatisfied with the outcome of their application for an upgrade of its grading status regulated by the Construction Industry Development Board Act, 38 of 2000 “the CIBD Act” ) and the Regulations in terms of the Construction Industry Development Board Act, 9 June 2004(‘the Regulations”’) .The Applicant requests the following relief in terms of the Amended Notice of Motion :
1. Condoning the late filing of the Applicant’s filing of this supplementary founding affidavit.
2. Condoning the Applicant’s late filing of this application in terms of section 9 of the Promotion of Administrative Justice Act.
3. That the decision to deregister the Applicant as a contractor by the First Respondent must be reviewed, declared invalid, and set aside.
4. That the following decisions of the First Respondent be reviewed, set aside and declared invalid:
(a) The decision and refusal to upgrade the grading status of the Applicant from 2ce to a 5ce.
(b) The decision and refusal to upgrade the status of the Applicant from 4GB to 5GB
(c ) The decision dismissing the Applicant’s appeal.
5. That the Applicant’s applications for the upgrading of its grading status made on 24 June 2021 in terms of section 17(2) of the CIBD Act 38 of 2000, be remitted to the Second Respondent and/or an assessment committee of the First Respondent for reconsideration.
6. When reconsidering the Applicant’s application, the Second Respondent and/or First Respondent’s assessment committee be directed to consider:
6.1 The mandate and objects of the CIDB Act in empowering potentially emerging enterprises;
6.2 The transformation imperative of the CIDB Act and Constitution;
6.3 The Applicant’s financial ability and work ability as contained in its track record.
6.4 Any additional information the First Respondent may require to reach a decision.
7. In the alternative to prayers 4 to 6 above, the Appeal decision be reviewed and set aside and declared invalid.
8. In so far as may be necessary, the period of 180 days referred to in section 7(1) of PAJA is extended to the date of the launch of this application.
9. The costs of this application must be paid jointly and severally by any Respondents opposing this relief.
10. Such further and/or alternate relief as the Honourable Court deems fit.
[1.1] The First to Third Respondents request that the Application be dismissed with costs.
[2] The Applicant requests condonation for the late filing of the application for judicial review and for the filing of the Supplementary Affidavit dated 16 May 2023.
[2.1] A Supplementary Affidavit was filed and served in 2023, to which no objection was received on the amendment of the Notice of Motion. The Supplementary Affidavit was issued after the Rule 53 record with all applicable documents, so submitted to the First Respondent, became available.
[2.2] The application was to be instituted within 180 days after internal remedies had been exhausted in terms of Section 7(1) of PAJA, which the First Respondent does not oppose. The Applicant explains the reasons for the late filing in paragraphs 72 – 77 of the Founding Affidavit which can be summarized as follows:
[2.3] After the appeal was dismissed on 07 March 2022, a letter was sent to the Second Respondent, causing the Applicant to believe that the matter was still under consideration after numerous clarifications were provided.1
[2.4] On 2 August 2022, the Applicant then requested reasons for the refusal to update the grading status of the Applicant from the First Respondent in terms of Section 5 of PAJA.2 and a further letter was sent on 15 November 2022 to which a response was received that the First Respondent will respond within 30 days. However, no reasons or further correspondence were provided.
[2.5] The Applicant then issued this application within 180 days from 2 September 2022.
[2.6] From the timeline and the requirements of PAJA, the 180 days then commenced to run on 2 September 2022. Even if that is not accepted and the days commenced on 7 March 2022 the application should have been issued on 7 September 2022.
[2.7] In Melane v Santam Insurance Co Ltd3 the court held that what was needed was an “objective conspectus of all the facts”.
[2.8] Condonation is therefore clearly not to be had for the mere asking. In Grootboom v National Prosecuting Authority and Another 4 the Constitutional Court held that:
“A party seeking condonation must make out a case entitling it to the court’s indulgence. It must show sufficient casu. This requires that party to give a full explanation for the non-compliance with the rule or Court’s directions. Of great importance, the explanation must be reasonable enough to excuse the default.
[2.9] I accept that a full explanation was provided, that the First Respondent did not provide reasons as they stated in their letter dated 2 August 2022 within 30 days, that the record became available and needed to be placed before court necessitating the Supplementary Affidavit, that the First Respondent did not oppose the late filing or the Supplementary Affidavit, that the Respondents perused the Supplementary Affidavit and addressed same in their Answering Affidavit and therefore in the interest of justice prayers 1,2 and 8 are granted.
[3] The remaining issues to be determined, as stated in the joint practise note, are:
[3.1] Whether, when considering the matter, to consider what the Applicant submits amounts to be five new reasons for rejecting its upgrade application, which it submits were raised by the Respondents for the first time in the answering affidavit and whether the matter should be determined solely on the reasons relied on by the respondents in the emails dated 24 November 20221 and 18 February 2022.
[3.2] Whether considering the reasons provided on 24 November 2021 and 18 February 2022, when making the impugned decisions
[3.2.1] The Respondents took irrelevant considerations into account and failed to take relevant considerations into account.
[3.2.2] The decisions were influenced by a material error of law or fact and;
[3.2.3] The decisions were tainted with bias, alternatively, a reasonable perception of bias.
[3.3] Whether the Respondent's deregistration of the applicant as a contractor constitutes a procedurally unfair administrative action given that when the decision to deregister the applicant was taken:
[3.3.1] the applicant was not given notice of first respondent’s intention to deregister the applicant or provided the reasons for the intended deregistration;
[3.3.2] the applicant was not given an opportunity to make any representations or informed of its right to review the decision or launch an internal appeal and
[3.3.3] The applicant was not notified or informed after the fact that the respondents had deregistered the applicant.
[3.4] Whether, when taking the empowering provisions of the First Respondent into account, the Applicant had complied with the requirements for its grading to be upgraded – which requirements the First to Third Respondent submit are pre-emptory.
[3.5] Costs.
[4] Review applications are not concerned with the merits of the decision maker’s decision but with whether or not the decision was arrived at correctly and appropriately. In Rustenburg Platinum Mines Ltd v Commission for conciliation, mediation and Arbitration5 it was held that the focus of review applications is on the process and how the decision-maker came to a decision. The enquiry is not directed at whether the decision was right or wrong, but rather about issues such as (a) the impartiality of the decision-maker and (b) the admissibility of evidence that he or she takes into account by him or her.
[4.1] The Applicant also referred me to par 31 of the above-mentioned matter, where it is stated that
“In a review, the question is not whether the decision is capable of being justified…but whether the decision maker properly exercised the powers entrusted to him or her. The focus is on the process, and on the way in which the decision-maker came to the challenged conclusion”.
APPLICANT’S CASE
[5] At the time of the application, the Applicant was a contractor registered with the First Respondent with registration number CRS [...]. A contractor is defined in the Act as a person or body that undertakes to execute and complete construction works.6
[5.1] The Applicant brought the review on the following grounds:
[5.1.1] First Respondent took irrelevant considerations into account and failed to take relevant considerations into account;
[5.1.2] A material error of law or fact influenced the decision.
[5.1.3] The decision to reject the upgrade application is tainted with bias, or alternatively, a reasonable perception of bias.
[5.1.4] The Applicant also requested a hearing and setting aside of the First Respondent’s decision to deregister the Applicant as a contractor, as it was procedurally unfair.
[5.2] The Applicant also states that it is an emerging enterprise, as defined in section 1 of the Act: “means an enterprise which is owned, managed and controlled by previously disadvantaged persons and which is overcoming business impediments arising from the legacy of apartheid.”7 Regulation 5 provides for the identification of potentially emerging contractors, which is denoted by the letters PE.
[5.3] On 24 June 2021, the Applicant made an application to the First Respondent for the upgrading of its grading category from 2CE to 5CE and from 4GB to 5GB in terms of Section 17(2) of the Act and Regulation 11, which sets out the requirements needed to upgrade its grading category.8 Section 17(2) of the Act reads as follows:
“17.2 A contract party may apply to the Board to amend its category status.”
[5.3.1] Regulation 11 read as follows:
“11. Manner of determination of contractor grading designation.
(1) The contractor grading designation of a contractor is determined by determining the least of
(a) the financial capability of the contractor in accordance with sub-regulation (2) and
(b) the works capability of the contractor in accordance with sub-regulation (5)””.
(2) The financial capability of a contractor is determined by establishing whether
(a) The contractors; best annual turnover over the two financial years immediately preceding the application equals or exceeds the minimum annual turnover in the third column of Table 1 determined in relation to the financial capability designation contemplated in regulation 12(1)
(b) The contractor during the five years immediately preceding the application has completed at least one construction works contract of which the total contract value exceeds the amount in the fourth column of Table 1 of the financial capability referred to in regulation 12(1) and
(c ) The contractor has available capital, calculated in accordance with sub regulation (3), equal to or exceeding a value determined in relation to the financial capability designated as contemplated in regulation 12(1).
(5) The work capability of a contractor must be determined by establishing whether
(a) the contractor has satisfied the requirement contemplated in regulation 12(5) in relation to any specific class of construction works and
(b) the contractor has, during the five years immediately preceding the application, at least one construction works contract in the category of construction works for which the contractor wishes to register, of which the value equals or exceeds the amount of that works capability designation as contemplated in regulation 12(7). In the Applicant’s case this would be R 1 500 000,00.
[5.3.2] From this, it is clear that the Contractor must meet both these requirements to be considered for a specific grading.
[5.4] This application is then to be submitted in accordance with Regulations 8(1) which read as follows:
“8(1) An application in terms of section 17(2) of the Act must be done on the approved form, and the contractor must ensure that any information in terms of regulation 7(4) that has changed since that contractor’s first application or latest confirmation of particulars, is supported by the evidence required in terms of regulation 7(4)”.
[5.5] A financial sponsorship referred to in these Regulations is as stated in sub-regulation 7 (10), which reads as follows:
“10. A financial sponsorship referred to in these Regulations must be a collectable financial guarantee by one person to another( the beneficiary)
(a) for a fixed amount
(b) is available to the beneficiary as and when required
(c) to support the operations of the contractor concerned to complete his or her projects
(d) if applicable, available third person, such as a bank, to advance funds or such as a supplier to advance a line of credit
(e) if applicable, in a form acceptable to any financial institution in South Africa as defined in the Financial Services Board Act, 97 of 1990;
(f) If not provided by a financial institution, to an amount which does not exceed 15% of the sponsor’s net asset value as determined from the sponsor’s latest financial statements.
[5.5.1] When such a financial sponsor passes these requirements, then Sub-regulation 11(3) is applicable, which reads as follows:
“11(3) Available capital is calculated by adding any financial sponsorship to the sum of the net asset value of a contractor, as indicated in the contractor's financial statements and financial sponsorship
(a) Where the sponsor is a registered contractor or owns 50 percent or more of the applicant contractor, may constitute up to 100 percent of the total amount of required available capital;
(b) Where the sponsor is not a registered contractor and owns 25 percent or more of the applicant contractor, may not exceed 75 percent of the total amount of the required available capital and
(c) Where the contractor is not a registered contractor and the sponsor owns less than 25 percent of the applicant contractor, the amount of the required available capital may not exceed 50 per cent.
[5.7] In terms of Regulation 12 under designation 5 :
[5.7.1] The contractor’s best annual turnover of the two financial years immediately preceding the application equals or exceeds the minimum annual turnover determined concerning the financial capability designation in regulation 12(1) in the applicant’s case, R 3 250 000,00.
[5.7,2] The contractor, during the five years immediately preceding the application, has completed at least one construction works contract of which the total contract value exceeds the amount of the financial capability referred to in regulation 12(1) – in the applicant’s case, R 1,500,000.00.
[5.7.3] The contractor has the ability to mobilise a total employable capital calculated in accordance with sub-regulation (3), exceeding a value determined in relation to the financial capability designation as contemplated in regulation 12(1) – in the applicant’s case, R 650,000.00.
[5.8] One of the issues to be addressed as a ground for review is the lack of consideration by the First Respondent that the Applicant is from the emerging sector and registered as a PE. In the Preamble of the Act the emerging sector is addressed, which reads as follows:
“Whereas the development of the emerging sector is frustrated by its inability to access opportunity, fiancé and credit as well as vocational and management training, Emerging enterprises ( PE)
[5.8.1] It is clear from the Act and this preamble that the object, powers, functions and duties of the Board are confined within the ambit of this Act as it is a statutory creature and therefore does not have the discretion to deviate from any of the regulations and criteria prescribed within the Act except where it is provided for such discretion in section 5 of the Act.
[5.8.2] To promote emerging contractors and to enable access to work by the emerging sector and development opportunity, the minister must prescribe the requirements for registration as an emerging sector constructor, taking into account the different stages of development of contractors in the construction industry and the development of the emerging sector and the objectives of the Act
[5.8.3] The Board is also empowered to establish best practices for the growth of the emerging section and effective participation by the emerging sector, and has implemented various best practices as referred to by the First Respondent in their Answering Affidavit.
[5.8.4] I was also provided with the Construction Industry Development Board Training Manual in which the requirements for an application as a potential emerging contractor are set out and the benefits of having such a PE status.
5. The result of this is that a contractor graded with a PE status may be allowed to tender at one grade higher than the level he was awarded, if a tender calls for such contractors. It is then the client's responsibility to support that contractor through various methods, including mentorship.
[5.8.5] There is no reference to any right for a deviation from the financial capability or works capability requirements, as published by the Minister in terms of the Regulations, when a contractor is considered or so identified as a potential emerging section contractor, and the Applicant could also not refer me to any such Regulation or Section in the Act.
PROCESS FOLLOWED
[6] Applicant applied for the upgrading of it’s contractor’s grading status on 24 June 2021 in terms of section 17(2) of the CIBD ACT from 2CE to 5CE and from 4GB to 5GB. The Applicant argues that the consultant of the First Respondent reviewed the upgrade application when it was submitted. She was satisfied with all the documents submitted; therefore, the Applicant believed that the application complied with all the requirements in the Act and Regulations.
[6.1] After the lapse of 21 working days, the Applicant followed up about the status of its application, telephonically and then in person, from July to September 2021.
[6.2] On 23 September 2021, the Applicant was informed that the application was rejected. At a meeting with a senior representative, the applicant was informed that the reasons for such rejection were based on outstanding information and/or documents. However, after a thorough perusal of the application, it was found that these documents were provided, and the application will be placed back in the pool of applications.
[6.3] On 24 November 2021, the First Respondent through the Third Respondent, being the review supervisor, rejected the Applicant’s application and provided six reasons for the rejection of the application:
[6.3.1] The accounting officer is not in good standing with the SAIBA where a membership certificate was provided.
[6.3.2] Available capital falls short of grade 5.
[6.3.3] The project from Rau-Mon is labour only as per the cession document submitted, where the cession agreement indicated that the Applicant's subcontractor will be liable and responsible for the construction. Still, the employer will provide all materials.
[6.3.4] No completion certificate was submitted for the Rau-Mon project which was explained at the meeting with the senior consultants that because the agreement with the main contractor was a subcontract agreement, the order numbers in terms of the agreement between the client and the main contractor differs from the order number at their meeting on 17 February 2022. The Applicant also indicated that he did submit the Completion Referral Certificate, which was referred to in the Respondents’ Answering Affidavit, which is a confirmation that this project was finalised.
[6.3.5] The reference number or contract number on the project's award letter differs from the submitted cession document.
[6.3.6] No project amount is stated on the award and cessions document.
[6.4] The Applicant lodged an internal appeal against the decision, met with the consultants on 17 February 2022, and submitted the same documents previously provided and included as Annexures to the application, clarified information the First Respondent and Third Respondent requested or referred to in these reasons for declining the application. Still, the appeal was then declined on 18 February 2022 for the same grounds as stated in the letter dated 24 November 2021.
[6.3] On 2 August 2022, the Applicant requested reasons for the decision of the First Respondent, which, despite an undertaking of the First Respondent to provide the same, was not furnished.
[6.4] The First Respondent then deregistered the Applicant on an unknown date.
[6.5] The Applicant further alleges that in the Answering Affidavit of the Respondents they provided five new reasons for these proceedings, which they cannot do in terms of the Primary Media (Pty) Ltd v Independent Communications Authority of South Africa and another (42817/2019)[2021] ZAGPPHC 302 ( 19 May 2021) at par 27 matter by Tolmay J where it was held that:
“It has been held by our courts that administrators are bound by the reasons given at the time of their decisions, and it is not permissible to provide a new reason after the fact as a justification for a decision. It is accordingly not permissible to, after the fact, provide a new reason as a justification for a decision. Any further reasons are irrelevant and “’ an ex post facto' rationalisation of a bad decision.”
[6.6] The Applicant further argued that the grounds for review should not be cumulative and that if it is found on one ground that it must be reviewed, the review application must be successful.
[6.7] The Applicant further argues that these five new reasons should be disregarded as they were not included in the reasons for declining the application. These refer to:
1. Applicant’s submitted documentation shows that for neither of the two financial years immediately preceding the application did the Applicant’s turnover equal or exceed the required amount of R 3 250 000.00. It then sets out what was stated in the application on the form as referred to in paragraph 9.1.1.
2. The Applicant failed to provide complete financial statements, as it only provided statements for the financial year ending 28 February 2021.
3. Proof of payment of Value Added Tax is incomplete as the invoice issued by SARS only starts at 2020/05/29 and does not support the applicant's turnover for the two years.
4. VAT 201 forms are incomplete as VAT 2021 has not been provided for every payment cycle, and therefore, the Board cannot determine the annual turnover.
5. Proof of financial sponsorship must be provided in regulation 7(10) even though the Applicant alleges that the cession agreement is evidence of the financial sponsorship.
LEGAL GROUNDS FOR REVIEW
[7] The Applicant bases its grounds for review on several grounds. The first is that the decisions were taken without considering or taking into consideration of relevant considerations based on the documentary evidence provided to the First Respondent.
[7.1] The Applicant also alleges that the consultant who assessed the application was satisfied that all documentation was provided when the application was submitted and after it was declined and resubmitted, including, for example, the different order numbers in the subcontract project.
[7.2] The Applicant alleges that the Third Respondent did not have all the information before him when he made the first decision, but also did not take into consideration the further explanations provided to the consultants in making the second decision and therefore, in declining the application, did not consider the works and financial capability of the Applicant.
[7.3] The Applicant also alleges that the Third Respondent failed to consider the broader interest as a PE and did not consider the transformation imperative of the Act when this decision was taken.
[7.4] Applicant alleges that irrelevant considerations were also taken into consideration with regard to whether the Applicant’s accounting officer was in good standing and whether the project was labour only.
RESPONDENT’S OBJECTION TO THE REVIEW.
[8] The Respondent’s main reasons for opposing this application are:
[8.1] Its rejection is based on a proper, holistic, contextual, and purposive interpretation of the empowering provisions informed by the preamble of the Act.
[8.2] The Applicant did not comply with the pre-emptory requirements of the Act with specific reference to the financial capability of the Applicant.
[8.3] The First Respondent must be provided with some latitude for exercising its discretion within the statute's ambit regulating such administrative decisions.
[8.4] If the First Respondent did approve the application despite the non-compliance of the peremptory requirements, then such a decision would be reviewable.
[8.5] The review of the decision will be academic due to the Applicant not complying with material and pre-emptory legislative requirements.
[8.6] The issue of Potentially Emerging Enterprise ( PE) is just one of a host of statutory considerations the Board must consider in determining the grading application.
ANALYSIS
[9] The Applicant submitted its application for the upgrade and provided 233 pages of documents to the First Respondent. From a proper reading of the Act and the applicable Regulations, the Applicant was responsible for ensuring all necessary and applicable information was placed correctly before the First Respondent. However, the First Respondent can request further documentation and will then reconsider the application, which was requested and submitted by the Applicant before the Applicant issued the Appeal.
[9.1] To consider the Applicant's financial capability, it provided the completed forms, financial statements for 2021, VAT 201 returns, proof of value-added tax payment and cession agreements. As stated above, following the regulations, the Applicant must have an annual turnover in the last two years before applying of R 3 250 000,00. If I then look at the documents provided by the Applicant, the Applicant must ( in terms of the Act) complete such form and ensure that all information is correct.
[9.1.1] On the application form under Section D, the Applicant stated that it had a total financial year turnover of R 2 855 680,00 in February 2020 and R 3 044 823, 00 in 2021. This corresponds with the Financial Statements attached to the Founding Affidavit.
[9.1.2] The Respondents stated that the financial statements provided by the Applicant are incompetent because the accounting officer who provided them is not in good standing with their own regulatory authority. This is incorrect, as the Applicant referred me to the certificate of good standing, which is included in the record uploaded onto Caselines. However, it is doubtful that on this ground alone can result in an order to review or set aside the decision.
[9.1.3] From the attached correspondence and the documents so attached to which I was referred, it is shown that the outstanding documents as referred to in these reasons have been submitted. Still, I cannot find from these documents that the same would prove that the Applicant complies with the required legislative requirements with regard to the annual turnover of R 3 250 000,00 over the last two years or that the Respondents made an error in law in not considering same.
[9.1.4] During the argument, I was referred to the fact that the Joint Venture and the Cession Agreement must be considered. No argument is placed before this court that these documents impact the Applicant's annual turnover, as that is based on the financial statements so provided.
[9.1.5] In the Replying Affidavit, the Applicant states that it was brought under the impression that the documents so provided concerning the financial statements, projects completed, numbers that differed, Joint Venture and cession documents were sufficient for this upgrade application as per the advice from the senior consultants in February 2022.
[9.2] Capital Requirements: Regarding Regulation 11(3), the Applicant must have available capital of R 650 000,00. The Applicant indicated in Section D(iii) that it has net assets of R 48 511,00 plus sponsorships of R 418 000,00 to a total of R 466 511,00, which falls short of the threshold of R 650 000,00.
[9.2.1] The First Respondent alleges that it has no discretion to deviate from this requirement. The Applicant referred me to statements and invoices attached to their application, which they allege show that the Applicant has more available funds.
[9.2.2] The Applicant then alleged that it has chosen to indicate that it has a sponsorship but the total amount under paragraph D is not R 650 000,00.
[9.2.3] Even if it is accepted that the reasons in the Answering Affidavit dealing with the requirements when sponsorships are new reasons, the Applicant still falls short of the requirement of R 650 000,00.
[9.2.4] Comparing the financial statements for 2021 to the amounts stated on the Form, these amounts were taken from those statements. Then, in comparing these documents, I was referred to the bank statements, which clearly show that payments were received from July to December 2020, which must be included in the financial statements for 2021 and therefore cannot be seen as separate to be included with the stated figures.
[9.2.5] I agree with Adv.Eilers that the Applicant does not comply with the specific financial requirements of annual turnover and available capital.
[9.3] In considering whether it has the required work capability, the Applicant must include the details of the largest contract completed during the last 5 years. Reference is made to a contract with Raubex Imfra ( Pty) Ltd, whose share of the contract was R 3 108 598,22, excluding VAT. The Applicant also included documents of this contract and alleges in the Replying Affidavit that it complies with the requirement of R 3 250 000,00 annual turnover, which argument does not correspond with the financial statements so attached.
[9.3.1] In terms of Regulation 12(1) there is a requirement that the contractor has, during the five years immediately preceding the application, at least one construction works contract in the category of construction works for which the contractor wishes to register, of which the value equals or exceeds the amount of that works capability designation as contemplated in regulation 12(7). This requirement is then also repeated under work capabilities. The amount required would be R 1 500 000,00 and therefore the documents submitted by the Applicant complies with this requirement under both Financial Capabilities and Work Capabilities.
[9.3.2] The Respondents refer to these documents in their Answering Affidavit but state that they cannot be seen in isolation; they need to be viewed with the other documents, such as the financial statements and the VAT 201 forms, submitted by the Applicant which does not increase the available capital or the annua turnover.
[9.3.3] According to the submitted documents, the Applicant complied with the work capability requirements.
[9.4] According to the Regulations, both the Financial and Work Capabilities must be complied with to be eligible for an upgrade. It should be noted that the First Respondent in the reasons provided only refers to the available capital, which falls short of Grade 5. Then, in their Answering Affidavit, reference is made to the shortfall on the annual turnover in terms of the empowering legislative Act and Regulations.
[9.4.1] However, even if it is accepted that the First Respondent did not refer to the shortfall of the annual turnover for their reasons when it was not approved, this is legally a requirement that the Applicant had to comply with. If this matter is then remitted back to the First Respondent based on these documents, it will still not be able to comply with the legislative mandatory and pre-emptory requirements.
[9.5] When the alleged new reasons are considered, it is clear that the Respondents summarised the legislative requirements as per the Regulations. The Applicant argues that these reasons were never provided to the Applicant on 24 November 2021 and 18 February 2022.
[9.5.1] In the Primedia matter, this exact issue was addressed, and the finding that no new reasons may be provided ex post facto is endorsed in the Constitutional Court in National Energy Regulator of South Africa and Another v PG Group ( Pty) Limited and others 202 (1) SA 450 (CC) at par 39.
[9.5.2] However, if these alleged new reasons are ignored, the Applicant does not comply with the Regulations pertaining to the financial capabilities from which the Respondents have no discretion to deviate. Therefore, this matter is distinguishable from the Primedia matter where there was a notable contravention of section 6(2)9e)(i) of PAJA as “’the impugned decision was taken for a reason not authorised by the empowering provision and section 6(2)9f)(ii) of PAJA in that the impugned decision was not rationally connected to the purpose for which it was taken.”
[9.5.3] The decision by the Respondents was for the reasons as set out above, not based on errors of law, where irrelevant considerations were taken into consideration and where the Respondent failed to consider relevant considerations.
[9.6] During the argument, Advocate Eilers emphasised that the aspects about financial and work capabilities were the essential aspects that the Applicant had to prove to comply with the requirements of the Regulations to be updated. He further argued that the Applicant did not comply with the annual turnover for R 3 250 000,00 or the available capital of R 650 000,00, so the Respondents had no option but to dismiss the upgrading application.
. [9.6.1] From the papers and the applicable law and regulations that the First Respondent and its representatives must consider, I cannot find that these reasons influenced the decision, as any approval would have contravened the requirements stipulated in the Regulations, specifically pertaining to the Applicant's financial capabilities.
[9.6.2] On behalf of the Respondents, it is argued that a holistic approach must be followed where the Respondents are to take all relevant factors into consideration and especially the empowering legislative provisions.
[9.6.3] In terms of President of the Republic of South Africa and others v South African Rugby Football Union and others 2000(1) SA 1(CC) para 216 the court stated that meeting the requirement of reasonableness depends not only on the expectation in the mind of the person relying on it but also on whether, “viewed objectively, such expectation is in a legal sense legitimate”.
[9.7] In considering the accusation of bias, the Applicant referred me to the emails between Ms Sethlako and the Third Respondent, which show that the Third Respondent was biased in not accepting that all documents were provided and thereafter his subsequent communication with the Applicant also revealed bias.
[9.7.1] After consideration of the communication between the Applicant and the Third Respondent, I cannot find evidence that the decisions by the Third Respondent were tainted with bias, or alternatively, that there was a reasonable perception of bias.
[9.7.2] From the papers before me, it is clear that the Applicant based his perception that all the documents needed for his application to be approved on what Ms Sethlako and Mr Masibi informed him, which was then not accepted by the Third Respondent, who had to make the final decision. I believe the Respondents should deal with their administrative processes better, but I cannot find that it shows bias or a reasonable approach to bias.
TERMINATION OF MEMBERSHIP
[10] The Respondents admit that the Applicant's registration was terminated based on the non-payment of the registration fees in terms of Regulation 27, which reads as follows:
“27(1) The registration of a contractor who remains in arrears in respect of the payment of his or her annual fees for a period in excess of 90 days despite notification of the fact, must be suspended until those arrears are paid in full or arrangements for such payment has been made with the CIDB to its satisfaction.
27(3) If a contractor has not rectified his or her failure to comply with these Regulations as contemplated in sub-regulations *(1) or (2) on the date one year after the suspension referred to in sub-regulation (1), or of the arrangements made in sub-regulation (1) are not honoured by the contractor concerned, the name of that contractor must be removed from the register of contractors. .
[10.1] The Applicant argues that such suspension can only be done 90 days after being notified thereof and that such notification can be done via registered mail in terms of the Act in their Replying Affidavit, which they deny they ever received. The Respondents does not attach a copy of such notification to their Answering Affidavit. During the argument, I was also not referred to any such notification as stipulated in Regulation 27. Therefore, if the Respondent's argument is accepted that it does not have the discretion to deviate from the requirements in terms of the capital and work capabilities, then it surely does not have the discretion to deviate from this requirement.
[10.2] Therefore, the decision to deregister the Applicant as a contractor is invalid and unlawful and should be reviewed, declared invalid and set aside
COSTS
[11] The Applicant requested costs on Scale C, where the Respondents request that the application be dismissed with costs on Scale B.
[11.1] From the outset, the Applicant argued that the consultants at the First Respondent indicated that all documents were available when the application was submitted, that the Third Respondent did not take cognisance of these new documents and therefore the application should never have been dismissed. This is based on the recommendations and communications with the consultants and senior representatives at the First Respondent.
[11.2] Furthermore, the Applicant also requested that his membership termination be reviewed and set aside, which is to be granted.
[11.3] Therefore, in proceedings of this nature, where a litigant is not vexatious but approaches the court to request assistance and is partially successful, a costs order against any of the parties would not be warranted.
ORDER
[12] Therefore, the following order is made.
[12.1] The Applicants’ filing of their supplementary affidavit is condoned.
[12.2] The Applicant’s late filing of this application in terms of section 9 of the Promotion of Administrative Justice Act is condoned.
[12.3] The decision to deregister the Applicant as a contractor, by the First Respondent, is reviewed, declared invalid and set aside.
[12.4] The period of 180 days referred to in section 7(10 of PAJA is extended to the date of the issuing of this application.
[12.5] Prayers 4 – 7 are dismissed.
[12.6] Each party is to pay their own costs.
ENGELBRECHT T
ACTING JUDGE OF THE HIGH COURT
GAUTENG LOCAL DIVISION
Delivered: This judgment and order were prepared and authored by the Judge whose name is reflected and is handed down electronically by circulation to Parties / their legal representatives by email and by uploading it to the electronic file of this matter on Case Lines. The date of the order is deemed to be the 25 April 2025.
Appearances:
For the Applicant: Advocate NSH Ali
For the Respondent: Advocate Paul Eilers
Date of Hearing: 04 March 2025
Date of Judgment: 29 April 2025
1 Founding Affidavit Caselines 02-35 para 71.
2 Founding Affidavit Caselines 02-36 and paragraph 72.
3 1962(4) SA 531 ( AD) at 532 E.
4 201492) SA 68 ( CC) at 76D.
5 2007(1) SA 576 (SCA) at [31]
6 Founding Affidavit par 7.2.
7 Founding Affidavit par 7.3.
8 Founding Affidavit par 53 and Supplementary Affidavit
Cited documents 3
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Dispute Resolution and Mediation
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Human Rights
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