Remedy in review proceedings

In Central Energy Fund SOC Ltd and Another v Venus Rays Trade (Pty) Ltd and Others [2022] 2 All SA 626 (SCA) question on appeal was whether the relief granted by the High Court was just and equitable.

By Merilyn Rowena Kader LLB (Unisa), Legal Editor at LexisNexis South Africa.

Administrative law - Remedy in review proceedings: The Strategic Fuel Fund Association NPC (SFF) is a wholly owned subsidiary of the Central Energy Fund SOC Limited (CEF). Its facilitation of the rotation of South Africa’s strategic stock of some 10 million barrels of crude oil, and transactions that followed led to a review application. The impugned transactions involved the sale by SFF, acting through its then CEO, Mr Gamede, of the strategic stock to various of the first to eighth respondents. The SFF brought the review application under the doctrine of legality, and the CEF applied for review in terms of the Promotion of Administrative Justice Act 3 of 2000.

Despite finding that the appellants had delayed unreasonably in bringing the review application, the High Court condoned the delay and declared the impugned decisions invalid based on their clear and indisputable illegality. It held the SFF to be culpable, rejecting the submission that Mr Gamede was solely to blame. As the fourth, sixth and seventh respondents were innocent parties, the High Court set aside their contracts subject to payment of compensation for out-of-pocket expenses.

The question on appeal in Central Energy Fund SOC Ltd and Another v Venus Rays Trade (Pty) Ltd and Others [2022] 2 All SA 626 (SCA) was whether the relief granted by the High Court was just and equitable.

A court in review proceedings has a wide discretion to craft an appropriate remedy based on what is just and equitable in the circumstances. The remedy must be fair to all those affected by it, and yet effectively vindicate the rights violated.

Courts must be guided firstly by the corrective principle, that neither contracting party should unduly benefit from what has been performed under a contract that no longer exists. The second guiding principle is the ‘no-profit-no-loss’ principle. While innocent parties are not entitled to benefit from an unlawful contract, they are not required to suffer any loss because of the invalidation of a contract. The court’s remedial discretion may only be interfered with on appeal if at odds with the law.

The court rejected the appellants’ contention that a claimant for compensation must initiate its own proceedings, confirming that application proceedings were appropriate in this case. The appellants’ attempt to challenge the cost order against them was unsuccessful.

Merilyn Rowena Kader
Legal Editor at LexisNexis