In January 2026, the Supreme Court of Appeal ruled in favour of a trust that challenged the retrospective implementation of increased levies by SANRAL, which in performing public functions, failed to follow the required public participation process.
The trust had sought to construct and operate a filling station on the N12 road between Klerksdorp and Wolmaransstad. During 2016, the trust started negotiations with SANRAL, as the registered servitude holder of the road reserve, for approval to construct and operate the filling station. At that time, SANRAL’s policy provided for a 0.5% levy on the sale of petroleum products and a 1% levy on the sale of other products.
The parties were close to finalising an agreement by the end of 2020 but, in January 2021, SANRAL sent a draft agreement to the trust containing substantially increased levies of 2.5% and 6% respectively, apparently in line with SANRAL’s new policy, which the trust was unaware of. It was later discovered that the increased levies were only published in the Rapport newspaper of 18 July 2021 and the new policy document was uploaded to SANRAL’s website after that date.
The trust obtained feasibility studies which determined that the proposed filling station would no longer be commercially viable under the increased levies. Further negotiations followed but the parties were unable to resolve the matter. The trust took SANRAL’s retrospective implementation of the increased levies to court on judicial review. The court had to decide:
- whether SANRAL’s decision was an exercise of public power capable of review; and
- if so, whether SANRAL’s decision ought to be reviewed and set aside.
The court rejected SANRAL’s contention that it was merely acting as a private contracting party. SANRAL is a state-owned entity (SOE) and a regulatory and service-delivery agency, established in terms of legislation, that performs public functions which are in the public interest. Accordingly, it is an organ of state whose decisions are subject to public law scrutiny, despite it being incorporated as a company. Furthermore, its decision to implement increased levies impacts on the broader industry, not only the single contract with the trust.
SANRAL’s decision was therefore an exercise of public power that needed to comply with administrative law standards, including procedural fairness; but SANRAL did not follow a public participation process before adopting its new policy and it failed to publish the new policy in the Government Gazette as required by legislation. On that basis, the court reviewed and set aside SANRAL’s decision, and the matter was remitted to SANRAL for reconsideration in compliance with its public law duties.
The judgment illustrates that the decisions of SOEs that perform public functions are generally subject to judicial review.