South Africa's Trade, Industry and Competition Minister loses bid to appeal court ruling on appointment of National Lotteries Commission chair

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Trade, Industry and Competition Minister Ebrahim Patel’s determination to have a final word in the running of the affairs of the National Lotteries Commission (NLC) board has once again been rejected by the Pretoria High Court, which ordered him to pay costs as the judge dismissed his leave to appeal the removal of his preferred candidate as acting chair.

The ongoing scuffle between Patel and the NLC board has been linked to contestation over the issuing of the new licence for the next lotteries operator, which is worth an estimated R130 billion in revenue.

In the application for leave to appeal, Patel based his argument on the alleged need for legal certainty regarding the powers which he had claimed, citing that these powers were implied in law even if they were not explicitly spelled out.

But the court disagreed, once again blaming him for the delay that led to the position of board chairperson continuing to be vacant after he had bypassed Parliament and instead presented it with a shortlist of candidates that did not go through the normal selection process conducted by the portfolio committee on trade and industry.

Parliament rejected Patel’s shortlist, which included former Public Protector Thuli Madonsela, human rights lawyer and academic Barney Pityana, and former presidency director-general Frank Chikane.

The process to appoint a new chairperson was under way in Parliament and nearing completion. The term of former chairperson Alfred Nevhutanda expired in November 2020.

Last week, Judge Norman Davis said in his ruling against Patel’s leave to appeal application that he had a “difficulty” with the argument that the court had erred because “for purposes of considering the prospects of success of an appeal, this argument cannot be considered in a void or in the air”.

“Counsel for the minister, in well-researched and articulate argument, had to concede that it must be accepted that any implied power cannot be greater than the express power provided in the statute. Similarly, it must therefore follow that where the express powers are limited or circumscribed, any implied powers will be similarly limited.”

“The express powers of appointing a chairperson to the board are, firstly, limited by the requirement that invitations for nominees for such an appointment had to be made nationally and as wide as possible.”

The second limitation, said the judge, “is that the nominees thereafter have to be considered by a committee of Parliament and the third limitation is that of a recommendation to the minister, from which he then proceeds to make an appointment. None of this had taken place in respect of the appointment of Ms Brown.”

The court found that “the only way in which the minister could escape the consequences of his non-compliance with the limitations placed on the exercise of the alleged implied powers was to argue that there had been ‘substantial compliance’ with the aforementioned restrictions”.

However, such a submission would not be correct because “there was no prior invitation for nominees for the acting position, there was no prior parliamentary oversight or involvement, nor were any recommendations made, and the appointment was limited by the minister to the board member designated by him”.

“The best the minster could do was to claim that the ex post facto reluctant acceptance of the acting appointment, expressed by the portfolio committee upon the subsequent extension of the appointment, amounts to ‘substantial compliance’. This can never pass muster,” Davis found.

The judge ruled that “the consequence of the above is that, even if the minister were to convince the court that an appeal would have a “truly reasonable prospect of success” in relation to the statutory interpretation issue, on the factual issue of alleged substantive compliance with the powers the minister claims, the appeal would have no prospects of success. The further result is then that the “sound, rational basis’’ of successfully appealing this court’s order does not exist, he said.

Patel had argued that “it is of substantial importance that a minister obtains certainty about whether he or she has the implied powers to appoint an acting chairperson or not”.

But, as Davis found: “What is, however, also factually the position in the present case is that, on oath, the minister has stated that the recommendations of the names of a possible chairperson would be considered by the National Assembly when it resumes sit-in in the second week of May 2021.”

He said that during the hearing of the application for leave to appeal, disclosure of the published parliamentary order papers indicating that this matter was indeed on the parliamentary schedule for the week during which the application for leave to appeal was heard, was made without demur.

“This would mean that presumably by the time of this judgment, but definitely by the time that any subsequent appeal might be heard, the order granted by this court would have become overtaken by events and, accordingly, moot,” the court found, and that “an appeal will have no practical effect”.

The court noted that “the circumstances in the present matter came about by way of time delays caused by the minister [and] the situation has not happened before in the many years [in terms of the law], and is, to a large extent, preventable”.

“Taking all of the above into account, I am of the view that this is not a matter which merits the exercise of the court’s discretion in favour of the application for leave to appeal,” Davis ruled.