Variation of order in terms of rule 42: Minister of Finance v Sakeliga NPC (previously known as Afribusiness NPC) and Others [2022] ZACC 17 (“present case”)

Rule 42 of the Uniform Rules of Court (“Rule 42”) provides for instances in which a court may reconsider its final decision. This mechanism, in addition to those such as reviews, appeals and condonation for late filings are designed to safeguard the miscarriage of justice based on the common understanding that no justice systems is without fault. Rule 42 therefore permits a court to rescind or vary its order or judgment where such order or judgment has ambiguities, patent errors or omissions.

The present case found itself up for deliberation before the Constitutional Court (“CC”) due to an urgent application in terms of Rule 42 brought by the Minister of Finance (“the Minister”) in which he sought variation of a previous order of the CC dated 16 February 2022 (“the first order”). The Minister argued that the first order was ambiguous and/or lacked clarity based on the second sentence of a footnote in the minority judgment. The sentence originated from the 12-month suspension of the declaration of invalidity by the Supreme Court of Appeal (“SCA”) which was said to expire on 12 November 2021. This article seeks to briefly outline the two judgments preceding the present case and summarise the court’s findings in the present case.

BACKGROUND 

The first order emerged from the Minister’s application to CC for leave to appeal the SCA’s order dated 8 September 2020. The SCA found that the Minister acted outside his powers under section 5 of the Preferential Procurement Policy Framework Act 5 of 2000 (“the Act”) when he promulgated regulations 3(b), 4 and 9 of the Preferential Procurement Regulations, 2017 (“Procurement Regulations”). Such promulgation was declared to be unlawful, invalid and a contradiction of the requirements of the Act as well as section 217 of the Constitution. The SCA cited the following reasons:

(1)   The Act provides a framework which requires that, when evaluating tenders, the highest point scorer must first be determined and only thereafter may the objective criteria which justify the award of the tender to a lower scorer be considered;

(2)    This framework does not allow for the preliminary disqualification of tenderers without any consideration of a tender; and

(3)    This unlawfulness was not cured by the fact that the application of pre-qualification in the Procurement Regulations was discretionary and, in any event, the Procurement Regulations failed to provide organs of state with a framework to guide the exercise of that discretion, which may lend itself to abuse.

The SCA’s declaration of invalidity was consequently suspended for 12 months to allow the Minister to take remedial action. This resulted in an appeal by the Minister and therefore the first order of the CC. The majority reasoned as follows in their judgment:

(1)    Section 5(1) provides that: “The Minister may make regulations regarding any matter that may be necessary or expedient to prescribe in order to achieve the objects of this Act.” The CC found that the words “necessary or expedient” serve to limit the powers of the Minister to make regulations, rather than permitting the Minister to simply make regulations to further the objects of the Act;

(2)     The words “necessary or expedient” should be read together with section 2(1) of the Act, which provides that an organ of state must determine its preferential procurement policy. Since each organ of state is empowered to determine its own preferential procurement policy, it cannot also lie with the Minister to make regulations that cover the same field; and

(3)     It can neither be necessary nor expedient for the Minister to make regulations that seek to achieve that which can already be achieved in terms of section 2(1) of the Act.

PRESENT CASE

Subsequent to the first order of the CC, the National Treasury Communique dated 25 February 2022 addressed to organs of state was circulated wherein mention was made of the need for clarity and guidance, as well as the Minister’s intention to urgently approach the CC for variation and/or clarification of the first order. There were also various other media publications which reiterated a similar concern with the potential consequences of the first order, including concern about its effect on the APP (Annual Performance Plan) targets of organs of state. Around March 2022, the Minister accordingly brought an urgent application for direct access in which he sought variation of the first order that dismissed his appeal. He claimed that the first order was ambiguous or lacked clarity and was thus susceptible to variation in terms of Rule 42.

The Minister based this application on a footnote of the minority judgment of the CC that referred to the 12-month suspension of the declaration of invalidity of the Procurement Regulations. The Minister claimed that the majority’s lack of input and/or comment on the footnote caused confusion. The Minister further submitted that the first order gave rise to three interpretations, namely that:

(1)   The SCA’s order was suspended from the date the Minister lodged an appeal with the CC on 23 November 2020, and the operation only resumed on the date of the first order of 16 February 2022; and/or

(2)    The regulations were invalidated with immediate effect prospectively from 16 February 2022; and/or

(3)    The regulations were invalidated with effect from date of promulgation in accordance with the doctrine of objective constitutional invalidity.

Therefore, the main issue for determination by the CC was whether the first order was susceptible to variation and/or whether such order in any way lacked clarity.

The basis of the CC’s findings was section 18(1) of the Superior Courts Act 10 of 2013 which states that “subject to subsections (2) and (3), and unless the court under exceptional circumstances orders otherwise, the operation and execution of a decision which is the subject of an application for leave to appeal or of an appeal, is suspended pending the decision of the application or appeal.”

The CC founded that in accordance with section 18(1), the operation and execution of the SCA’s order was halted upon the launching the appeal proceedings by the Minister to the CC. In practical terms and immediately after the SCA’s order, the countdown on the 12-month period of suspension began. However, such countdown was halted on the 21st day by the lodgement of the application for leave to appeal in the CC. This is because section 18(1) suspends the operation and execution of a judgment “pending the decision of the application [for leave to appeal] or appeal”. The CC found that the countdown resumed only after the dismissal of the first order on 16 February 2022. The CC thus concluded that the legal position was plain and clear, and that the Minster’s submissions were without substance.

The CC accordingly dismissed the present case with costs.

While the CC in the present case ultimately found the variation application made by the Minister in terms of Rule 42 to be unnecessary as the legal stance is clearly articulated through statute, the judgment did provided clarity to all relevant stakeholders.