Asla Construction (Pty) Limited v Buffalo City Metropolitan Municipality

Asla Construction (appellant) entered into two contracts with Buffalo City Metropolitan Municipality (respondent) to address housing needs in Duncan Village: the 'Turnkey' contract (concluded 30 May 2014) and the 'Reeston' contract (concluded 14 January 2015). The appellant sought provisional sentence based on payment certificates issued under these contracts. The respondent opposed the claim, alleging that both contracts were unlawfully awarded because of non-compliance with section 217 of the Constitution and procurement legislation. The respondent launched a counter-application to review and set aside the award of the Reeston contract and declare the payment certificates void ab initio. The Reeston contract was awarded on 7 August 2014 and concluded on 18 December 2014. The appellant was instructed to proceed with implementation on 23 January 2015. Irregularities were reported to the Council on 25 August 2015, and an investigation report became available on 21 October 2015. The review application was launched in November 2015, approximately 15 months after the contract was awarded. By the time of the appeal, the appellant had completed work valued at approximately R65 million, with the respondent's apparent permission.

• Whether the respondent's review application was brought within the 180-day period stipulated in section 7 of the Promotion of Administrative Justice Act (PAJA)
• Whether the respondent was required to launch a substantive application for extension of time under section 9 of PAJA
• What constitutes a full and adequate explanation for delay covering its entire duration
• What factors should be considered when exercising the discretion to extend the 180-day period under section 9 of PAJA
• Whether a court should determine the merits of a review application before deciding an application for condonation of delay
• Whether serious breach of constitutional procurement requirements prevents 'validation' of an administrative decision through delay
• What prejudice to the respondent, affected parties and the public interest should be considered in extension applications
• Whether the award of the Reeston contract breached section 217 of the Constitution
• The admissibility of hearsay and opinion evidence in review proceedings

The appeal succeeded with costs, including costs of two counsel. The High Court's order was set aside. In case 5246/2015 (provisional sentence): the respondent was ordered to pay the appellant's costs, including costs of two counsel. In case 5668/2015 (review application): the application was dismissed with costs, including costs of two counsel. The appellant's payment certificates were declared valid. No punitive costs order was granted.

The binding legal principles established are: (1) Under section 7(1) of PAJA, the 180-day period for instituting review proceedings runs from the date the decision-maker became aware or ought reasonably to have become aware of the administrative action and its reasons, not from when they became aware the decision was tainted by irregularity. (2) Section 9 of PAJA requires a substantive application to court for extension of the statutory time period; a mere allegation in a replying affidavit is insufficient. (3) A court must determine an application for condonation or extension of time before adjudicating the merits of the review application, as absent extension the court has no jurisdiction to entertain the review. (4) The interests of justice inquiry under section 9 requires: (a) a full and reasonable explanation for delay covering its entire duration; (b) consideration of the nature of relief sought; (c) consideration of the extent and cause of delay; (d) consideration of effect on administration of justice and other litigants; (e) consideration of importance of the issues; (f) assessment of prospects of success; and (g) proper evaluation of prejudice to all affected parties including third parties and the public interest. (5) Even serious breaches of constitutional provisions (including section 217) do not automatically warrant extension of time - the constitutional enjoinder to fair administrative action as expressed through PAJA recognises that even unlawful administrative action may be rendered unassailable by delay. (6) An administrative decision can be 'validated' by unreasonable delay in bringing review proceedings, even if the decision was unlawful.

The Court made several non-binding observations: (1) It was unnecessary to determine whether the Turnkey contract encompassed the Reeston contract such that separate compliance with section 217 was not required for the Reeston contract. (2) It was unnecessary to consider whether the Turnkey contract was inchoate due to non-fulfilment of a condition precedent regarding a funding agreement. (3) The Court noted that payment certificate number 4 (issued under the Turnkey contract) would not have supported the provisional sentence claim as the engineer lacked authority under that contract, but certificates 1, 2 and 3 (issued under the Reeston contract) would have entitled the appellant to provisional sentence. (4) The Court declined to award punitive costs despite allegations that the respondent failed to provide an honest explanation for delay, finding that consideration of all evidence did not justify such an order. (5) The Court admitted fresh evidence on appeal showing substantial completion of the contract, noting this was relevant to enforceability even though supervening events cannot affect whether the original order was correct when issued. (6) The Court observed that much of Ms York's evidence constituted inadmissible hearsay (based on documents not annexed and interviews without confirmatory affidavits) and inadmissible opinion evidence (interpretation of documents being the preserve of the court).

This judgment is significant for establishing important principles regarding review of administrative decisions under PAJA. It confirms that: (1) The 180-day period in section 7 runs from when the decision-maker knew or ought to have known of the decision and its reasons, not from when they discovered it was irregular (affirming Aurecon); (2) Section 9 requires a substantive application for extension of time, which should be brought when the matter first comes to court; (3) A court must decide the condonation/extension application before determining the merits of the review; (4) Even serious constitutional breaches do not automatically warrant extension - unlawful administrative action can be validated by delay; (5) A full explanation covering the entire duration of delay is required; (6) Proper consideration must be given to prejudice to all affected parties, including third parties and the public interest, not just whether the decision was unlawful; (7) Fresh evidence may be admitted on appeal in exceptional circumstances where material, weighty, undisputed and relevant to the interests of justice. The case emphasizes the public interest in finality of administrative decisions and demonstrates the courts' reluctance to set aside decisions after significant performance and reliance, even where procurement irregularities may have occurred. It highlights the importance of procedural compliance in review applications and the balancing of rule of law considerations against finality and prejudice.