Cape Metropolitan Council v Metro Inspection Services Western Cape CC and Others

The Cape Metropolitan Council, a statutory local government body, contracted with Metro Inspection Services (Western Cape) CC to register levy payers and collect arrear regional services levies in return for commission. Following allegations by a competitor that Metro had submitted fraudulent commission claims, the Council conducted an internal investigation and summarily terminated the contract, alleging material breach involving substantial fraud. Metro denied fraud and approached the Cape Provincial Division to have the termination set aside, claiming a violation of its constitutional right to procedurally fair administrative action and seeking reasons and access to documents. The High Court set aside the termination, reinstated the contract, ordered reasons to be furnished, granted access to documents, and awarded costs. The Council appealed.

The appeal succeeded in part. The order setting aside the cancellation of the contract and requiring the Council to furnish written reasons was overturned. The order granting the first respondent access to specified documents under section 32 of the Constitution was upheld.

The case is a leading authority on the distinction between administrative action and contractual conduct by organs of state. It clarified that cancellation of a purely commercial contract by a public authority does not, without more, constitute administrative action under section 33 of the Constitution. The judgment also affirmed a broad interpretation of the right of access to information under section 32, extending it to information required to protect or exercise any rights, not only fundamental rights.