Zikhulise Cleaning Maintenance and Transport CC v The Chairman: Investigating Committee of the Construction Industry Development and Others (61574/14) [2017] ZAGPPHC 1108 (8 November 2017)

IN THE HIGH COURT OF SOUTH AFRICA

(GAUTENG DIVISION, PRETORIA)

(1) NOT REPOTABLE

(2) NOT OF INTEREST TO OTHER JUDGES

(3) REVISED

Case Number: 61574/14

8/11/2017

In the matter between:

ZIKHULISE CLEANING MAINTENACE AND

APPLICANT

TRANSPORT CC

and

THE CHAIRMAN: INVESTIGATING COMMITIEE OF

1st RESPONDENT

THE CONSTRUCTION INDUSTRY DEVELOPMENT

TSELISO MAKHETHA N.O

2nd RESPONDENT

SIYABULELA MAGAGA N.O

3rd RESPONDENT

WERNER BOUWER N.O

4th RESPONDENT

Coram: HUGHES J

JUDGMENT

HUGHES J

Introduction

[1] In this application the applicant, Zikhulise Cleaning Maintenance and Transport CC (Zikhulise), a registered contractor, seeks to review the decision taken by the first respondent, Johann Kruger, Chairman of the Investing Committee of the Construction Industry Development Board (the CIDB) on 24 July 2014.

[2] On 25 April 2013 the applicant was notified by CIDB of the impending enquiry to be conducted in terms of regulation 29(1) of the Regulations promulgated in terms of the Construction Industry Development Board Act, 38 of 2000 (the Act). In response to the notification the applicant lodged an objection to the enquiry being held. This in limine objection was set down for hearing by the CIDB. It heard submissions from the applicant as well as the prosecutor and evidence leader, Adv. Bouwer, representing the fourth respondent. In addition Adv. Bouwer provided the Chairman with the relevant documentation. It culminated in the CIDB orally rejecting the in limine objections raised by the applicant, hence this review.

[3] The applicant contended that the objections it raised were legally sound and the rejection is thereof 'grossly unreasonable and legally wrong, to the extent that it rendered the proposed proceedings a nullity'.

[4] The party opposing the review is the fourth respondent, Werner Bouwer N.O, cited in his representative capacity. The second responden,t Tseliso Makhetha N.O and third respondent, Siyabulela Magaga N.O, are members of the investigation committee chaired by the first respondent and they have all chosen to abide by the decision of the court.

Can incomplete proceedings be reviewed by this court?

[5] As alluded to above, this review application emanates from an objection raised with regards to the outcome of an in limine object ion to the impending enquiry to be held which decision was oral.

[6] I am mindful of the fact that our courts are hesitant to interfere with incomplete proceedings and will only do so in exceptional circumstances where serious injustice or justice cannot be attained by other means. See Ginsberg v Additional Magistrates of Cape Town, Johannesburg, 1908 T.S 525 where at 526 Innes CJ states the following:

"This is really an appeal from the magistrate's decision upon the objection, and we are not prepared to entertain appeals piecemeal. If the magistrate finds the appellant guilty, then let him appeal, and we shall decide the whole matter.•

[7] It was further stated in Wahlhaus and Others v Additional Magistrates, Johannesburg and Another 1959 (3) SA 113 (A) at 119H-120B:

"It is true that, by virtue of its inherent power to restrain illegalities in inferior courts, the Supreme Court may, in a proper case, grant relief - by way of review, interdict or mandamus- against the decision of a magistrate's court given before conviction... This, however, is a power which is to be sparingly exercised. It is impracticable to attempt any precise definition of the ambit of this power; for each case must depend upon its own circumstances. The learned authors of Gardiner and Lansdown (6th ed ., vol.l.p 750) state:

'While a superior court having jurisdiction in review or appeal will be slow to exercise any power, whether by mandamus or otherwise. upon the unterminated course of court proceedings in the court below, it certainly has the power to do so, and will do so in rare cases where grave injustice might otherwise result or where justice might not by other means be attained ...•

[8] The courts are more inclined to interfere where the review is aimed at continuing and terminating uncompleted proceedings than where the object is to nullify such proceedings. See Herbstien and Van Winsen: The Civil Practice of the High Court of South Africa 5/h Edition volume 2, Chapter 40, part C at page 1269 to 1270.

[9] The applicant argued that the decision taken by the CIDB is reviewable.

Firstly, it contends that though the enquiry proceedings are not complete, the issue subject to review proceedings is the CIDB's power to conduct the proposed enquiry. That being said, the issue of the ClDB's jurisdictional power ought to be determined prior to the parties embarking on the proposed path of the enquiry only to establish that it was for nought because the CIDB did not have the jurisdictional power.

[10] Secondly, the applicant argues that the circumstances of the applicant are exceptional as a possibility exists that by subjecting itself to the proposed enquiry, where the CIDB has no jurisdiction there is a possibility of incriminating the director in impending criminalproceedings, which make up part of the charges that the applicant faces in the enquiry. Why should the applicant subject itself to a process where the CIDB has no jurisdiction to even conduct the enquiry in the first place, so it is argued?

[11] Lastly, the applicant contends that the CIDB in making the decision amounts to an administrative action, section 1 of PAJA, as it is a juristic person exercising public power or performing a public function when it makes a decision, which decision is subject to review. See the Promotion of Administration of Justice Act, 3 of 2000 (PAJA), specifically section 2(a) (i), (b) and (f). The review of the CIDB's decision is also covered by the common law.

[12] The CIDB is a juristic body created by statute and it exercises legislative powers. Thus, the CIDB was performing a quasi-judicial function when it took the decision prior to the enquiry being held. Is that decision subject to review by this court? The answer, in my view, is to be found in the dicta of WahIhaus, in the passage quoted above, where it was held I reiterate, only in exceptional circumstances will this court interfere with incomplete proceedings of a lower court; the exception being that it would review and interfere if the result would either be to continue or terminate incomplete proceedings, and not in instances where there would be nullity of those proceedings.

[13] In the matter before me, I find that this is one of those cases where the review of a decision in incomplete proceeding sought to be entertained. In my opinion the exceptional circumstance of the possibility exist of incriminating the director in impending criminal proceedings. This, in my view, would amount to a serious injustice. If the CIDB is found to be wanting in respect of jurisdiction to conduct the enquiry then PAJA and the common-law will kick in. In terms of the common law this would equate to the alleged wrong-performance of the CIDB and in terms of PAJA it would be the alleged lack of authority to make the decision in terms of section 2(a). Refer to Clur v Keil 2012 (3) SA 50 (ECG) at 53 para [12].

The Objections raised by the applicant

[14] The in limine objections raised by the applicant are the crux of this review application and as such I set these out below:

(i) The CIDB does not have jurisdiction to regulate the conduct of the applicant who is not registered with it;

(ii) The charges levelled against the applicant are not covered by the code of conduct governing the conduct of contractors who are subject to the Act;

(iii) In terms of Regulation 29 the CIDB failed to comply with the peremptory requirements of Regulation 28;

(iv) The delay in instituting the Regulation 29 enquiry and the fact that the CIDB having condoned the applicant's

conduct, is unfair.

The Applicant's submissions

[15] The applicant avers that from time to time it has and still is registered with the CIDB. Incidentally for the period 2012 the applicant's registration with the CIDB expired on 31 March 2012 and the renewal thereof was only on 17 September 2012. The applicant states that during the period when it was not registered with the CIDB no legal relationship existed between it and the CIDB in terms of the Act. This relationship only resurfaced when the applicant was re-registered with the CIDB in terms of section 20 of the Act. According to the applicant it is whilst one is registered with the CIDB that one is regulated by the Act, the regulations therein and the prescribed Code of Conduct. Thus, the CIDB has no authority to penalise or regulate a contractor, the applicant, for failure to comply with the code, regulations or the Act, during the period when it was not registered.

[16] The applicant further contends that even during the periods when it is registered with the CIDB and it transgresses, if the CIDB fail to act against it during the period of registration when it transgressed, the time for CIDB to have acted against it would have come and gone. This, it was pointed out in terms of Regulation 28 (1)(b) which impresses upon the CIDB to investigate any suspicion of conduct contrary to the code or were one has omitted to act in terms of the code. Thus, the CIDB does not have a residual right to pursue a contractor, such as the applicant, for a transgression which it ought to have done during that specific period of registration.

[17] Still on the aspect of having relinquished its rights where there are reasonable grounds of transgressing the code, if the CIDB does not elect to conduct its investigation on the suspicion, the applicant contends that the CIDB would have failed to comply with Regulations 28(1) and 29(1), which are peremptory. The investigation called for under Regulation 28 is conducted prior to the institution of the inquiry.

[18] The applicant submits that the relationship between the CIDB and the contractor is

regulated by Regulation 27A that provides that the code applies from registration of the contractor to completion of the project, however, the applicant states that this is limited to the period that the contractor is registered.

[19] The applicant states that during the time it was not registered with the CIDB, any

transgressions committed by it, such as a criminal offence in terms of section 18(2) of the Act, which states:

"Any contractor who carries out any construction works or portion thereof under a public sector contract and who is not a registered contractor of the Board in terms of the Act, is guilty of an offence and liable. on conviction, to a fine not exceeding ten per cent of the value of the contracts carried our".

The applicant contends that the code of conduct would not be applicable as it was not registered with CIDB and there was no relationship

between the applicant and CIDB for the code to be applicable.

[20] Non-compilance with Regulations 28(12) and 29(1), argues the applicant, nullifies

the inquiry. The applicant states that Regulaiton 28 which deals with the manner in which the investigation ought to be conducted prior to the inquiry is peremptory. According to the applicant Regulation 28, specifically at 28(10), 28(11) and 28(12) sets out the process to be followed if an organ of state other than the board conducts the investigations for the board. What should happen is that the organ of state which conducted the investigation would compile a report, hand it to the board then the board must refer the report to an investigating officer appointed by the board. This investigating officer must within 30 days of the referral submit report to the board which contains his/her opinion and recommendation. This process, states the applicant, was not followed by the CIDB at all.

[21] In the applicant's case, the investigator appointed was a private investigator sub-contracted to the Special Investigator Unit (SIU). Thus, he was not appointed in terms of section 3(2) of the Special Investigating Unit and Special Tribunals Act, 74 of 1996. In terms of section 3(2) the investigating officer ought to have been appointed from SIU instead. This means that the appointment was not done in terms of Regulation 28(10) and the said investigator appointed was

not legally empowered to conduct the investigation.

[22] This culminates to Regulation 29 coming into operation, which states that after the

board has considered the report of the appointed investigator and it is satisfied that sufficient grounds exist, it may then institute a formal inquiry.

[23] The applicant states that the non-compliance with the aforesaid mandatory requirements evokes section 6(2) (b) and 6(2) (f) (i) of PAJA. Further, the legality principle comes into play when peremptory prescripts are not adhered to when an administrative action is taken, so concludes the applicant.

[24] The applicant argues that an inquiry is convened by the board in terms of section

29(1) of the Act for the purpose of enforcing the code of conduct. In terms of Regulation 28(12) the statement that the investigating

officer must compile has to express whether he/she is of the view that the person so investigated omitted to act in terms of the code or failed to comply with the code. The logical conclusion being, according to the applicant, conduct not covered by the code of conduct can clearly not be inquired upon by the board. The applicant contends that on an examination of the charges metered against the applicant these do not fall within the scope of the code of conduct.

The Fourth Respondent's submissions

[25] In the submissions of the fourth respondent a more legalistic approach is taken and

reliance is placed on the Act, Regulations and Code of conduct in addressing the aspect of the jurisdictional powers of the CIDB,

raised by the applicant. The fourth respondent characterises the CIDB as an organ of state in the national, provincial or local sphere of government or an entity identified in national legislation, consequently, if such an entity contracts goods and services, it must be done in a manner that is fair, equitable, transparent, competitive and cost effective as per section 217(1) of the Constitution. Even though this is so in terms of section 217(2) the organs of state or these institutions referred to in section 217(1) have the power to implement a procurement policy, which makes provision for category preference in the allocation of contracts and the protection or advancement in specific categories, for example, such as old and previously disadvantaged persons. This is fortified by section 217(3) of the Constitution of the Republic of South Africa, which makes provision that national legislation 'must prescribe a framework within which a procurement policy for organs of state or previously mentioned institutions may be implemented.'

[26] Firstly, the fourth respondent avers that the procurement of goods and services, on behalf of organs of the state, is subject to the prescripts of section 217(1) of the Constitution, which makes provision that when an organ of state contracts for goods and services it must do so in a fair, equitable, transparent, competitive and cost effective manner.

[27] Secondly, in terms of section 16(1) of the Act the CIDB has a statutory duty to compile a national register of contractors duly categorised in order to assist to promote contractor development and facilitate public sector procurement. In addition, the CIDB establishes best practices for the construction industry, provides leadership for reform and growth in the construction sector and promotes uniform and ethical standards within the industry in terms of sections 4(b) & 5(1); 4(c) &

5(2); 4(f) & 5(4) of the Act.

[28] Thirdly, if a contractor wishes to engage in work in the public sector that contractor must be registered in terms of section 18(1) with the CIDB. Section 18(1) states:

"A contractor may not undertake, carry out or complete any construction work or portion thereof for public sector contracts, awarded in terms of competitive tender or quotation, unless he or she is registered with the Board and holds a valid registration certificate issued by the Board."

[29] Fourthly, the CIDB must establish a code of conduct for all construction-related procurement and all participants involved in the procurement process as stated in section 5 (4)(a) of the Act. To this end, the fourth respondent contends that the legislature did not intend to constrain

the jurisdiction to those who were registered contractors excluding those not registered.

[30] I believe it prudent to set out section 5(4) of the Act in its entirety to assist in the determination of this dispute:

"5(4) To promote uniform and ethical standards within the construction industry, the Board -

(a) must publish a code of conduct for all construction-related procurement and all participants involved in the procurement process; and

(b) may initiate, promote and implement national programmes and projects aimed at the standardisation of procurement documentation n.

practices and procedures." [My emphasis]

Discussion

[31] The stance adopted by the applicant is that, it was not registered with the CIDB during the period, 31 March 2012 to 17 September 2012, being the period which the CIDB seeks to hold the enquiry for. Thus, the applicant argues, the CIDB does not have jurisdiction to hold an enquiry for that period as no contractual relationship existed. In addition, if whilst registered with the CIDB and the CIDB opts not to pursue or investigate a contractor for an incident or transgression during the period so registered, the applicant argues, that the right to do so does not accrue, meaning the CIDB cannot opt to pursue it at a later stage.

[32] In addressing the submissions advanced by the applicant I am mindful of the dicta of Wallis JA in Natal Joint Municipal Pension Fund v Endumeni Municipality 2012 (4) SA 593 (SCA) at pages 603-4 para [18]:

"The present state of the law can be expressed as follows: Interpretation is the process of attributing meaning to the words used in a document, be it legislation. some other statutory instrument, or contract. having regard to the context provided by reading the particular provision or provisions in the light of the documents a whole and the circumstances attendant upon its coming into existence.

Whatever the nature of the document, consideration must be given to the language used in the light of the ordinary rules of grammar and syntax; the context in which the provision appears; the apparent purpose to which it is directed and the material known to those responsible for its production. Where more than one meaning is possible each possibility must be weighed in the light of all these factors.15 The process is objective, not subjective. A sensible meaning is to be preferred to one that leads to- insensible or unbusinesslike results or undermines the apparent purpose of the document. Judges must be alert to, and guard against, the temptation

to substitute what they regard as reasonable, sensible or businesslike for the words actually used. To do so in regard to a statute or statutory instrument is to cross the divide between interpretation and legislation; in a contractual context it is to make a contract for the parties other than the one they in fact made. The 'inevitable point of departure 1s the language of the provision

itself,16 read in context and having regard to the purpose of the provision and the background to the preparation and production of the document". [Footnotes omitted]

[33] The Act provides for the formation of the CIDB and the purpose of the Act's provision of the ClDB is "to implement an integrated strategy for the reconstruction, growth and development of the construction industry and to provide for matters connected therewith". Further reasons for the formation of the CIDB and the promulgation of the Act are set out in the preamble. Just to mention but a few: it is acknowledged that the construction industry plays a crucial role in the South African economy, infrastructure and development; it is also acknowledged that the construction operates in a uniquely project specific and complex environment; that the construction industry impacts directly on the community and the public at large and lastly the Government's "vision of a construction industry development strategy that promotes stability, fosters economic growth and international competitiveness, creates sustainable employment and addresses historic imbalances as it generates new construction industry capacity'' was envisaged by the Act.

[34] It is evident, from the preamble of the Act that the functioning of the CIDB is public in nature and it exercises legislative powers nationally. Thus the CIDB is an organ of state performing a public function. It is created to perform its functions in terms of a legislative Act of parliament. Thus it has legislative powers to ensure that the construction industry is properly controlled and role players in the industry, the community and public at large are adequately protected . In the CIDB performance of a public function it is bound to comply with the prescripts of the Constitution especially so in the procurement of services in terms of section 217. See AAA Investments (Pty) Ltd v Micro Finance Regulatory Council and Another [2006] ZACC 9; 2007 (1) SA 343 (CC) at 365 para [42] to [44].

[35] In my view, the answer lies within the provision of section 5(4) (a) of the Act. From a reading of this section there is no differentiating between whether a construction company is registered or not registered. The regulation and standardisation is sought of the industry per se of 'all participants involved in the procurement processes and ' all construction-related procurement'. The aim being, to promote uniform standards and ethics in the construction industry. Therefore, as long as the applicant is a contractor in the construction industry and was a participant in construction-related procurement processes, the applicant as a contractor would be subject to uniformed standards and ethics, whether one is a registered contractor or not.

[36] The issue of seeking to limit the powers of the CIDB, in my view it cannot be that one can limit the powers of the CIDB as against a contractor or participant in construction procurement proceedings. This is so, because the Act developed a Code of Conduct to assist the CIDB to regulate the participants engaged in construction procurement. This covers participants or contractors in private or public construction­ related procurement. See section 1 of the code which reads as follows:

"This Code of Conduct applies to the various parties involved in public and private procurement relating to the development, extension, installation, repair, maintenance, renewal, removal, renovation, alteration. dismantling demolition of an asset including building and engineering infrastructuer. In this context, it includes work associated with the provision of supplies, services and engineering and construction works and disposals..."

[37] Notably, from section 1 of the code no distinction is made with regards to whether a contractor or participants registered or not with the CIDB. The wording of the section is clear that it pertains to the various

parties involved in construction procurement and it set out the principles governing the conduct of those participants.

[38] In addition, there is regulation 27A (set out below) which specifically makes mention that the code is applicable to "a// participants" involved in procurement and it relates to all construction-related procurement. Yet again no distinction is made with regards to whether one is registered or not with the CIDB.

[39] Regulation 27A prescribes:

'The code of conduct applies to all construction-related procurement and all participants involved in the procurement process, from the application for registration as a contract or, through to the tender process and the registration and completion of a project, including participation in the best practice proiect assessment scheme and the best practice contractor recognition scheme."[My emphasis]

[40] What also emerges from regulation 27A is that there is no time bar set out with regards to the applicability of the code. I say so because, from my reading of the aforesaid regulation, its application extends beyond the completion of the project. It encompasses 'participation in the best practice project assessment scheme and the best practice contractor recognition scheme'. These to my mind are evaluations or assessments conducted after the contractor has participated in the completion of the project. Thus, it cannot be that the CIDB is unable to act against an errant contractor after the period of registration has expired as the applicant asserts.

[41] In the circumstances I make the following order:

[41.1] The review application is dismissed with costs.

W. Hughes

Judge of the High Court Gauteng, Pretoria

Appearances:

For the Applicant: Adv. Penzhorn SC

Adv. Howse

Instructed by: Garlicke & Bousfield

For the 4th Respondent: Adv. Du Preez

Instructed by: Werner Kruger Attorneys

Date heard: 19 June 2017

Date delivered: 08 November 2017