This blog was co-authored by Felix Le Roux, Candidate Attorney.
On 6 July 2023, the Cape Town High Court dismissed an application brought against the South African Reserve Bank (SARB) for the release of funds subject to a blocking order that was issued due to alleged exchange control contraventions from which the applicant gained R60 million. In doing so, the court held that the applicant ought to have challenged the SARB’s decisions by way of a review application under the Promotion of Administrative Justice Act, 2000 (PAJA).
The applicant sought to secure the release of R150 000 per month for living expenses plus money for reasonable legal fees. The application was based on an alleged agreement between the parties and on the applicant’s constitutional rights to healthcare services, sufficient food and water, and social security. The court was required to determine whether the applicant had a contractual or other legal right to the release of the amounts sought.
The court assessed the correspondence between the applicant and the SARB and found that the parties had agreed to the release of R150 000 per month for all reasonable expenses. The applicant then made repeated requests for further monthly payments to cover her reasonable legal fees, which the SARB refused on the basis that the agreed R150 000 per month included cover for her reasonable legal fees. The court held that by launching the application and demanding monthly payments in addition to the agreed R150 000 per month, the applicant indicated that she no longer considered herself bound by the agreement. Accordingly, the applicant had repudiated the agreement and the SARB was entitled to cancel the agreement, which it did. Consequently, the SARB was not contractually obliged to release any amounts to the applicant. The applicant could still make ad hoc requests for the release of funds, which the SARB would need to consider.
Regarding the applicant’s reliance on her constitutional rights, the court held that the decision by the SARB to block the applicant’s funds, as well as any decisions to refuse the applicant’s requests for the release of the blocked funds, constituted administrative action as defined in PAJA. Accordingly, the appropriate remedy against the SARB’s decisions was a review application under PAJA. In terms of the principle of subsidiarity, the applicant was not entitled to invoke constitutional rights directly and bypass the legislative remedy.
The judgment is a reminder to private persons and entities dealing with organs of state that their primary remedy against improper administrative action is a review application under PAJA.