INTRODUCTION

In the matter of Yahke Kwinana v the Chairperson of the Disciplinary Enquiry Instituted by the South African Institute of Chartered Accountants and Another¹, the Johannesburg High Court had to consider the decision of the South African Institute of Chartered Accountants (‘’SAICA’’) to exclude her membership from their entity as a result of charges of professional misconduct whilst in the employ of South African Airways (‘’SAA’’).

This article will seek to unpack the case, with a focus on the question of what kinds of action or conduct constitutes administrative action in terms of the Promotion of Administrative Justice Act (‘’PAJA’’)².

CASE BACKGROUND

Miss Yakhe Kwinana (‘’Ms Kwinana’’) was the Chairperson of the board at the South African Airways Technical SOC Ltd (‘’SAAT’’), as well as a non-executive board member of the South African Airways (SAA) company. It should be noted that Ms Kwinana was also a member of SAICA as a chartered accountant.

During the course of 2020, Ms Kwinana was summoned to appear before the Zondo Commission³, to provide an account into the irregularities that occurred during her employ at SAA and SAAT.

In his report, the Honourable Chief Justice Zondo had found that Ms Kwinana was not a credible person during her testimony before the Commission and recommended that SAICA should launch an investigation into Ms Kwinana’s fit and properness to practise as a charted accountant.

In light of Zondo’s report, SAICA chaired a disciplinary inquiry, where it was found that Ms Kwinana was not a fit and proper person and was accordingly stripped of her SAICA membership on 13 March 2023.

On 13 September 2023, Ms Kwinana launched a review application against SAICA, to set aside its decision to strip her of her membership. This review application considered whether the act of stripping her of her membership constituted ‘’administrative action’’ in terms of PAJA⁴.

WHAT IS ‘’ADMINISTRATIVE ACTION’’?

PAJA was enacted to ensure that decisions which are taken are deemed to be lawful, reasonable and procedurally fair as enshrined in Section 33 of the Constitution⁵.

Section 1 (a) of PAJA defines ‘’administrative action’’ as a decision or omission to make a decision by an:

1. Organ of state who is exercising a power in terms of the Constitution⁶; or
2. Organ of state who is exercising public power or function in terms of legislation; or
3. A natural or juristic person who is exercising public power or function in terms of an empowering provision⁷.

In order for a decision to constitute administrative action, the decision must have a direct, external and adverse legal effect on a person’s rights. PAJA prescribes that should an aggrieved party elect to have an administrative decision reconsidered, they have no later than 180 days from date of the former decision to proceed to take their matter on judicial review proceedings⁸.

REVIEW APPLICATION BEFORE THE HIGH COURT

The Johannesburg High Court had to consider the review application brought by Ms Kwinana, which was issued 184 days after SAICA’s findings.

In its submissions before the court, SAICA expressed that:

1. Ms Kwinana caused unreasonable delay to the matter and that the application should have been brought under PAJA;
2. Whilst SAICA was a voluntary association, some of its decisions amount to ‘’administrative action’’ as its disciplinary powers amounted to public power or functions;
3. That it was permitted to admit or exclude a person from its membership through means of the Chartered Accountants Designation (Private) Act⁹, which is deemed to be an ‘’empowering provision’’; and
4. That the decision of SAICA had a direct, external effect on Ms Kwinana’s rights as she could no longer refer to herself as a ‘’chartered accountant’’, which inhibited her ability to serve in certain offices¹⁰.

Ms Kwinana, in her submissions, denied that PAJA is the law which governs the grounds for the review application and she argued that she had instead relied on common law to review the decision of SAICA. In brief her submissions were:

1. SAICA is a quasi-judicial body that derives its powers from a contractual relationship with its members, therefore it does not derive its powers from any empowering provisions or legislation.
2. SAICA is a private voluntary association that is for the membership of chartered accountants, therefore it is not an organ of state that is exercising public powers.
3. As a voluntary association, SAICA is governed by its own rules and regulations as a private entity, therefore she relied on the following sources of law for her review application:
   • Section 33 of the Constitution;
   • Rule of law and legality; and
   • Common law.
4. PAJA is only applicable to public administrators and SAICA falls out of the ambit for the remedy of review under its Act¹¹.

COURT’S FINDINGS

Firstly, the court concluded that SAICA is not an organ of state. However it is a private entity exercising a public function as the purpose of the disciplinary hearing against Ms Kwinana was regulatory, to enforce professional ethical standards in the accounting profession. Therefore it resembled a state function and was public in its nature. As a ‘’chartered accountant’’, the private contractual relationship of persons with SAICA shifts to public interest once membership has been granted to a person who has qualified and been entrusted to act in the interests of the public when it comes to carrying out their respective function in the accountancy profession.

Therefore the court concluded that SAICA, as a private body, had exercised a public function and that its decision fell within the ambit of PAJA.

Secondly, the court had to determine if SAICA’s decision to revoke Ms Kwinana’s membership was taken in terms of an empowering provision. The court held that the constitution and by-laws of SAICA were deemed to be empowering provisions.

Next the court had to consider if the decision had adversely affected the rights of Ms Kwinana. The revocation of Ms Kwinana’s membership meant that she could not carry the designation of ‘’Chartered Accountant’’, therefore the decision had professional and financial consequences with impact on her reputation in the general public as well as her ability to earn an income as a ‘’Chartered Accountant’’.

Finally, the court had to determine if SAICA’s decision had an ‘’external legal effect’’ on Ms Kwinana. Given the decision of SAICA’s disciplinary body as being final and binding, the decision had an external legal effect on Ms Kwinana’s ability to hold certain offices.

As a result, the court concluded that the decision by SAICA to strip Ms Kwinana of her membership of SAICA as a “Chartered Accountant”, constituted administrative action within the meaning of section 1 of PAJA.

Ordinarily this would have meant that Ms Kwinana’s court review would have had to have been brought in terms of PAJA (and not in terms of common law or legality). Because Ms Kwinana brought her action in terms of common law and not PAJA the court also questioned whether Ms Kwinana could have rather relied on common law to review SAICA’s decision instead of PAJA. The court indicated that common law could be applicable when the decision fell out of the scope of PAJA. Ultimately the court found that it was not correct for the application by Ms Kwinana to have been brought in terms of common law.¹²

Therefore Ms Kwinana’s review application was not successful and was dismissed by the court.

CONCLUSION

The Kwinana case is a clear, cautious tale to prospective litigants who may be aggrieved by a decision in terms of the rules of their respective organisations. Parties who seek the intervention of the court are advised to ensure that they appoint legal representatives who are experienced in complex administrative law matters in order to ensure that the cases brought to court are the strongest they can be, and have the best chances of success.

There is another lesson to be learned here – perhaps by legal representatives – to admit mistakes when they are made and solve the problems that the mistakes have caused, rather than to stubbornly persist that no mistake was made and argue tenuous cases against the client’s best wishes.