On 20 November 2024, the high court handed down a judgment which confirmed that if the common approach of the parties to a point of law is based on a wrong perception, a court is not only entitled, but obliged, to raise that point of law of their own accord.          

The matter involved an application in terms of the Promotion of Administrative Justice Act (PAJA), brought by two commercial entities against the City of Johannesburg for the review and setting aside of disputed decisions regarding water service charges. The court found that the decisions did not constitute administrative action and that they were not subject to review in terms of PAJA.     

The parties had proceeded from the common perception that the decisions were administrative action as defined in PAJA. The court that heard the matter was not convinced of this proposition and asked the parties to file supplementary heads of argument dealing with this point of law, which they did.   

From the court’s analysis of the supplementary heads of argument and the relevant legislative provisions, it concluded that the decisions were part of the City’s executive and legislative functions, specifically those related to setting and implementing service fees, rates, and tariffs. The definition of administrative action in PAJA expressly excludes the executive and legislative functions of the City. 

The court dismissed the application. However, the court ordered each party to bear their own costs, as the City had failed to respond to the applicants’ prior dispute resolution efforts in accordance with the Local Government Municipal Systems Act. The court stated that the City’s conduct in this regard was inimical to the rule of law and constituted a failure by the City to discharge its constitutional obligations.     

If the applicants had relied on the review grounds under the principle of legality in the alternative to their primary reliance on PAJA, they could have avoided the dismissal of the application, as the principle of legality also regulates the exercise of public power which does not constitute administrative action, including executive and legislative functions.      

The case is Bidcorp Food Properties (Pty) Limited and Another v City of Johannesburg Metropolitan Municipality and Another (2022/030828) [2024] ZAGPJHC 1192 (20 November 2024).