Republic of South Africa
REPORTABLE

IN THE HIGH COURT OF SOUTH AFRICA

(CAPE OF GOOD HOPE PROVINCIAL DIVISION)

							CASE No:  3542/2000
							
In the matter of

ANDREAS BRUNO VON PUPPKA LIPINSKI				Applicant

and
	
1.	THE MINISTER OF HOME AFFAIRS				First Respondent 
2.	THE DIRECTOR-GENERAL : DEPARTMENT
	OF HOME AFFAIRS						Second Respondent 
3.	THE CHAIRMAN, WESTERN CAPE REGIONAL
	COMMITTEE OF THE IMMIGRATION SELECTION
	BOARD								Third Respondent 

JUDGMENT  DELIVERED  :  21  SEPTEMBER  2005

MOOSA, J:

Introduction
1.	The applicant brought review proceedings against the respondents in terms of which he firstly challenged the validity of the appointment of certain members to the Western Cape Regional Committee of the Immigration Selection Board and, secondly, challenged the rejection of his application for permanent residence in terms of Section 25 of the Aliens Control Act, No 96 of 1991 (as amended).

2.	It is common cause that the matter was settled on 29 August 2003 on the following terms:  (a)  that the application be withdrawn;  (b)  that the respondents, jointly and severally, pay the costs of the applicant to be taxed on a party and party scale up to and including 12 May 2003;  (c)    that the applicant’s residence status be extended until 12 October 2003; and  (d)  that the applicant be required to submit a fresh or new application for permanent residence status in terms of the Immigration Act of 2002, by not later than 30 June 2003 (hereinafter referred to as the settlement agreement).

3.	In pursuance of the settlement agreement, applicant submitted his application for permanent residence in terms of the Immigration Act, No 13 of 2002 (“the Act”) to second respondent.  Second respondent refused to accept and process the application as it did not accompany a valid passport of applicant.  In terms of the Regulations promulgated under the Act an application for permanent residence must be accompanied by a valid passport of the applicant.

4.	Applicant also refused to file a Notice of Withdrawal in terms of the settlement agreement on the basis that there was allegedly no proper foundation to such settlement. Applicant questioned respondents’ bona fides in concluding the settlement agreement.  Applicant’s attorneys called upon second respondent to waive the requirement of a passport, as provided for in terms of the Regulations, failing which, respondents were required to file their Answering Affidavits.  Correspondence followed between the parties and on 16 March 2004 respondents were put to terms to file their Answering Affidavit by 30 April 2004.  First and second respondents complied.  Third respondent had in the meanwhile ceased to exist because of the repeal of the Aliens Control Act of 1991 in terms of which he and his Committee were appointed.  In the meantime the Aliens Control Act was superceded by the Immigration Act, No 13 of 2002, which came into operation on 7 April 2003. 

Challenge to the Settlement Agreement
5.	The Answering Affidavit essentially sets out the negotiations for the settlement of the matter and confirms the terms of the settlement as recorded in the letters of respondents’ attorneys, dated 25 August 2003 (annexure “FJ3”) and of applicant’s attorneys, dated 29 August 2003 (annexure “FJ4”).  Respondents opposed the relief sought by applicant on two grounds.  The first is that the matter has been settled on the basis of the terms and conditions set out in the settlement agreement and the second is that the “lis” or cause of action on which applicant relies in his founding affidavit, has fallen away by virtue of the repeal of the Aliens Control Act by the Immigration Act.

6.	Applicant filed a Replying Affidavit in terms of which he raised certain issues in limine to which I shall refer later.  On the merits of the settlement agreement, applicant postulated two possibilities:  firstly, that respondents negotiated the settlement of the matter in bad faith because, at all material times they knew that applicant was not in possession of a valid passport;  secondly, that respondents negotiated the settlement in good faith, but they did not know that applicant was not in possession of a valid passport and accordingly there was no meeting of the minds or consensus between the parties.

7.	The original application for permanent residence was submitted by applicant in terms of the Aliens Control Act.  The basis for such application was that applicant, as a businessman, would be making a substantial capital injection into this country.  The application, which was made in terms of the settlement agreement, and which second respondent refused to process, was based on the ground that he has a permanent espousal relationship with a partner, who has a permanent residential status in this country.  The Notice of Motion was not amended to incorporate the new relief sought by applicant. 

Preliminary Issues
8.	Before dealing with the merits of the principal dispute, I will discuss the matters raised by the parties in limine.  Firstly, Adv Arendse SC (with him Adv Nobatana) for respondents, submitted that in motion proceedings applicant must make out his case in the founding affidavit and not in the replying affidavit.  It is a trite principle of our law that in an application the applicant’s case should be made out in his founding papers.  The court has a discretion to allow applicant in his replying affidavit, to amplify his case founded in his founding papers, subject to the right of respondent to deal with such amplification in a further set of answering affidavits.  

9.	However, the court will not permit the abandonment of an existing case and the substitution thereof by a new case based on a different cause of action. Nor will the court permit an applicant to make a case in reply when no case is made out in the original application.  (See:  Erasmus on Superior Court Practice at B1- 45 and 46;  Triomf Kunsmis Edms Bpk v A E & C I Bpk en Andere 1984 (2) SA 261 (W) at 270A;  Poseidon Ships Agencies (Pty) Ltd v African Coaling & Exporting Co (Durban) (Pty) Ltd 1980 (1) SA 313 (D) at 316A;  Port Nolloth Municipality v Xhalisa and Others 1991 (3) SA 98 (C) at 111F-H.)  In view of my conclusion, it will not be necessary for me to make a formal finding in respect of this issue.

10.	Secondly, Adv Arendse in his oral argument, submitted that for applicant to pursue this application in the face of a settlement agreement, amounted to an abuse of the process of the court.  In my view it is not necessarily so.  It depends on the facts. An applicant is quite entitled to plead or state in the same proceedings that the compromise is not legally binding and is accordingly null and void, without claiming an order of cancellation.  In West Assurance Co v Caldwell’s Trustee 1918 AD 262 at 275, Solomon, JA said:
“Now it would scarcely be questioned that for a plaintiff to proceed with an action in the face of a valid compromise, into which he had entered, would be an abuse of the process of the court.  But the case assumes a different aspect when the validity of the compromise itself is challenged.  No doubt if the objections raised are obviously insufficient, and it clearly appears from the evidence that a bona fide compromise had been arrived at, there would be no possible justification for proceeding with the suit and a court would in such circumstances be entitled, in my opinion, to stay the action as being vexatious.  Where, however, the objections to it are genuine and are supported on substantial grounds even though they might not ultimately prevail, I do not think that it can be said that a plaintiff is abusing the process of the court by persisting in his claim.”

11.	In my view, this approach is equally applicable to motion proceedings.  In the case of motion proceedings additional affidavits may have to be filed in order to ventilate the issue of the compromise, whereas in actions, additional pleadings may have to be filed.  The caveat, however, is that should the party succeed in having the compromise set aside, the original cause of action or any amendment thereto shall prevail.

12.	The first preliminary issue raised by applicant is that first and third respondents have failed to file replying affidavits.  The Assistant Director in the Department of Home Affairs, who is also the head of the Department’s regional office in Cape Town, Mr Frederick Joubert, deposed to and filed an affidavit on behalf of both respondents.  In the affidavit he stated that he was authorised to depose to the affidavit on behalf of first and second respondents.  His authority to depose to and file the affidavit has not been placed in issue.  It is not necessary for the respondents personally to depose to replying affidavits in motion proceedings.  It is sufficient for a person, who can testify to the facts, to execute and file such an affidavit on behalf of the respondents (see:  Ganes and Another v Telcom Namibia Ltd 2004 (3) SA 615 (SCA) at 624G-I).    

13.	The second preliminary issue raised by applicant in his Replying Affidavit is the admissibility of respondents’ opposing affidavits.  He challenged it on the ground of hearsay.  However, Adv Van Zyl SC (with him Adv Katz), did not pursue this objection in their Heads of Argument or in argument before me in court and rightly so.  Firstly, because the facts were substantially common cause;  secondly, because the deponents said in their affidavits that the information was within their personal knowledge;  thirdly, Mr Joubert, as head of the regional office of the Department of Home Affairs, in all likelihood, gave instructions to the respondents’ attorneys to settle the matter and would therefore have had knowledge of the settlement agreement; even if that was not so, as head of the office, he, in all probability, would have been aware of the terms of settlement and lastly, applicant did not bring an application to strike out the affidavits as he was entitled to do in terms of the Rules of Court. 

14.	For the reasons I have alluded to, I am satisfied that the preliminary issues raised by the parties are either without merit or do not require determination because of the findings arrived at.  A further issue which has crossed my mind is the question of locus standi in judicio of applicant by virtue of the fact that he is a fugitive from justice.  This issue was not raised in the papers by respondents nor was it argued before me.  Because of my findings, it would also not be necessary for me to express a definite view on that aspect. 

The Principal Dispute
15.	I now turn to the merits of the application.  It is common cause that the settlement agreement or “transactio” was reached by the parties in terms whereof all the issues in dispute between them were determined.  As a general rule, a “transactio”, whether it is made an order of court or not, has the same effect as a consent to judgment or res judicata.  It destroys the lawsuit and is an absolute defence to the original cause of action.   The effect thereof can be avoided if there is a caveat that entitles the applicant to proceed on the original cause of action or where the “transactio” is tainted with fraud.  (See:  Cachalia v Harberger & Co 1905 TS 457 at 464;  Van Zyl v Nieman 1964 (4) SA 661 (A) at 668D & 669H;  Western Assurance Co v Caldwell’s Trustee 1918 AD 262 at 270;  Gollach Gomperts (1067) (Pty) Ltd v Universal Mills & Produce Co (Pty) Ltd 1978 (1) SA 914 (A)  at 922C.)   In the present settlement agreement there is no implied or expressed reservation to the effect that applicant can proceed on the original cause of action if the terms and conditions of the settlement agreement are breached.  Even if there was one, it would have had no force or effect as the Aliens Control Act which formed the basis of applicant’s cause of action was repealed by the Immigration Act. 

16.	Applicant sought to impeach the settlement agreement on two possible bases.  The one is the lack of good faith and the other is the lack of consensus.  The settlement agreement, like any other contract, can be set aside on the grounds of fraud or justus error. The dictum in the Gollach case supra at 922C-D is apposite: 
“It is obvious that, like any other contract (and like any order of court) a transaction may be set aside on the ground that it was fraudulently obtained.  There is authority to the effect that it may also be set aside on the ground of mistake where the error is justus.” 

Lack of Good Faith
17.	The lack of good faith alleged by applicant, seems to me to be based on second respondent’s intentional non-disclosure of the fact that his application for permanent residence, pursuant to the settlement agreement, will not be considered in the absence of a valid passport.  The fraudulent non-disclosure of a material fact is, like fraudulent misrepresentation ex hypothesi wrongful.  Wrongfulness usually takes the form of an enquiry whether or not there is a duty on the part of one party to a contract to speak or to disclose information of a material nature and an involuntary reliance on the part of the other party to receive such information.  If there is no such duty and no such reliance, the non-disclosure cannot be wrongful.  (Lawsa:  First Issue, Vol 17, para 421;  Meskin N O v Anglo American Corporation of SA Ltd and Another 1968 (4) SA 793 (W) at 799D;  Mc Cann v Goodall Group of Operations (Pty) Ltd 1995 (2) SA 718 (C) at 722F-723C.)

18.	There is in our law no general duty upon contracting parties to disclose to each other any material facts and circumstances which are known to each other and which influence the mind of the other party in deciding whether or not to conclude a contract.  The failure, therefore, not to disclose such information does not necessarily amount to bad faith.   It is common cause that at the time the settlement agreement was concluded, both applicant and his attorneys, as well as second respondent and his attorneys, were aware of the fact that applicant’s passport was revoked by the German authorities.  

19.	In order to determine the validity of the settlement, it is necessary to examine the negotiations leading up to the conclusion thereof.  The negotiations for settlement between the parties were conducted by their respective attorneys by means of correspondence.  Respondents’ attorneys made an offer of settlement to applicant’s attorneys as per letter dated 9 June 2003 (annexure “FJ1”).  Applicant’s attorneys made a counter offer to respondents’ attorneys as per letter dated 28 July 2003 (annexure “FJ2”).  The counter offer was rejected by the respondents as per letter dated 25 August 2003 (annexure “FJ3”).  

20.	One of the terms of the counter offer by applicant’s attorneys was couched in the following manner: 
“Your client, the Director-General of the Department of Home Affairs shall consider and adjudicate our client’s permanent residence application on its own merits on the basis of our client’s life partnership with Ms Melanie Deland, a South African permanent resident.” 
              In rejecting the counter offer, Respondents’ attorneys countenanced as follows:
“It goes without saying that your client’s application in terms of the Immigration Act of 2002 will be considered on its merits, and in accordance with the applicable law and regulations.  This is a statutory duty in respect of which no undertaking is necessary.”  

21.	The applicant’s attorneys accepted the original offer as per their letter dated 29 August 2003 (annexure “FJ4”).  The requirement for an application for permanent residence was the existence of a valid passport.  Alternatively, second respondent could waive such requirement in special circumstances.  The application for permanent residence was neither accompanied by a valid passport nor an application for the waiver thereof.  Second respondent in the circumstances refused to accept, process and consider the application in question. 

22.	In the negotiations leading up to the settlement agreement, applicant was represented by Eisenberg & Associates, who described themselves as specialist immigration attorneys.  Adv Arendse  submitted that it is common cause that both applicant’s attorneys and his junior advocate, Adv Katz, acted recently in a number of prominent immigration matters and were therefore not ignorant of the provisions of the Immigration Act and the Regulations promulgated thereunder.  Applicant, by accepting the comprise inherent in the settlement offer, was either aware or should have been aware of the contingent risk he took by accepting such offer.  

23.	In that regard, the dictum of Miller, JA in Gollach (supra) at 923D is appropriate:
“Voluntary acceptance by parties to a compromise of an element of risk that their bargain might not be as advantageous to them as litigation might have been, is inherent in the very concept of compromise.  This is a circumstance the court must bear in mind when it considers a complaint by a dissatisfied party that, had he not laboured under an erroneous belief or been ignorant of certain facts, he would not have entered into the settlement agreement.” 

24.	In the settlement agreement there is no express or implied term, nor can the court read one into the agreement, that second respondent would consider the application in the absence of a passport or would be prepared to waive such requirement.  On the contrary, applicant was specifically put to terms to comply with the requirement of the law.  It is common cause that at the time the agreement was concluded, the parties, as well as their attorneys were aware of the fact that applicant’s passport had been revoked.

25.	On the facts of this case, I am satisfied that there was no duty on the respondents to speak or to warn applicant of the risk he was taking in accepting the compromise settlement offer or that his application would not be processed and considered if he did not comply with the statutory requirements.  Applicant was legally represented and if such a duty did exist, then it clearly fell within the scope of his lawyers’ brief.  In the circumstances, I come to the conclusion that there was no bad faith on the part of respondents in negotiating the settlement agreement.

Lack of Consensus
26.	I now turn to the second issue, namely the lack of consensus.  Applicant in his Replying Affidavit raised the possibility that respondents negotiated in good faith on the basis that they were not aware of the fact that applicant’s passport was revoked.  In that event he contended there was no meeting of the minds and hence no consensus.  In the circumstances applicant submitted that the settlement agreement should be set aside.  The two issues which were postulated as possibilities to invalidate the settlement agreement are obviously mutually exclusive.  Explicit in the first issue is the element of bad faith and explicit in the second issue is the element of good faith.  I will assume in applicant’s favour that the two issues are raised in the alternative.  

27.	The applicant in his founding affidavit mentions that on 15 March 2000, he received annexure "AL8(a)” from the German Consul-General stating that the German authorities had revoked his passport.  It appears from the sworn translation of the letter, annexure “AL8(b)”, that applicant was convicted in Germany of 15 counts of tax evasion and one count of wrongfully assuming a false title of “Doctor”.  He was sentenced to three years imprisonment for tax evasion and fined 2.400 Deutschmark for assuming a false title.  A warrant of arrest was issued for him to serve his term of imprisonment.  The warrant is pending.  Applicant is therefore a fugitive from justice.

28.	Applicant admits in his Founding Affidavit that he had failed to disclose such information to his attorneys or to respondents prior to him launching the present court application.  The reasons advanced by him for his failure to disclose such information are unconvincing.  I am of the view that he acted in bad faith and deliberately concealed such information from the respondents and his erstwhile attorneys.  The issue was broached for the first time by third respondent with applicant at an interview held on 17 March 2000.  It appears that both applicant and his then attorney, Ms Fleischer, were taken by surprise and they asked for an adjournment to investigate the matter.  At that point in time applicant was aware of the fact that his passport was revoked as on his own admission he had received the letter revoking his passport on 15 March 2000.

29.	Applicant’s contention that respondents were not aware of the fact that his passport was revoked is not borne out by the facts.  Third respondent was aware of it at least on 17 March 2000 as the matter was raised at the interview on that date.  The second respondent was furthermore informed by applicant’s attorneys by letter dated 17 October 2001 of the revocation of the passport.  The submission that, at the time the settlement agreement was concluded between the parties, i e on 29 August 2003, there was no meeting of the minds and accordingly no consensus is without foundation.  It is not applicant’s case that the settlement agreement is vitiated by “justus error” and this ground can therefore be discounted.

Robust Approach
30.	Finally, Adv Van Zyl asked me to take a robust approach and either substitute my decision for that of second respondent, or alternatively compel second respondent to accept, process and consider applicant’s application for permanent residence in terms of the law as it was on 10 October 2003.  I will deal with each approach separately.  Applicant in his Replying Affidavit states that the application should not be remitted to second respondent for a decision.  Instead I should make that decision and issue a declarator that applicant is entitled to a permanent residence permit in terms of Section 26 of the Immigration Act.  My first difficulty in this respect is that the Notice of Motion does not seek such relief;  nor has applicant seen fit to amend the Notice of Motion.  The second difficulty I have is that this is a drastic approach and has far-reaching consequences for the separation of powers between the executive and the judiciary.  The third difficulty I have is that this application was never considered by second respondent and consequently there is no decision by him on the merits of the application for the court to consider.  

31.	Furthermore, if I should issue a declarator, as prayed by applicant, I would be overriding certain statutory requirements and usurping the function of second respondent.  I do not think that I have those powers, either in terms of the Immigration Act or in terms of my inherent powers.  Applicant justifies such a course of action on two grounds.  The one is on the basis of the sanctity of family life, which is underpinned by the right to dignity.  The other is based on the fact that, in terms of Section 26 read with Sections 25 and 29 of the Immigration Act, second respondent is enjoined to issue applicant a permanent residence permit by virtue of his espousal relationship with his partner who enjoys permanent residential status in South Africa. 

32.	It may very well be the case that applicant can qualify for permanent residential status, but it is not the function of this court to make such a decision.  It is an executive function properly vested in second respondent and no decision in respect thereof has been made by him.  It would be foolhardy on my part to usurp his function and issue a declarator as requested by applicant as it would not only be unconstitutional but would offend against the doctrine of the separation of powers.  To issue such a declarator would be tantamount to me making a decision for second respondent. 

33.	The general principle is that a review court will not substitute its own decision for that of a functionary or an administrative organ unless there are special circumstances.  (Erf one six seven Orchards CC v Greater Johannesburg Metropolitan Council (Johannesburg Administration) and Another 1999 (1) SA 104 (SCA) at 109F-G.)  The object and ambit of judicial review has been succinctly captured in the following passage of a full bench judgment in Masamba v Chairperson, Western Cape Regional Committee, Immigration Selection Board and Others 2001 (12) (BCLR) 1239  (C) at 1259E:
“The purpose of judicial review is to scrutinise the lawfulness of administrative action in order to ensure that the limits to the exercise of public power are not transgressed, not to give courts the power to perform the relevant administrative function themselves.”

34.	I was also referred, by counsel for applicant, to the case of the University of the Western Cape and Others v Members of Executive Committee for Health and Social Services and Others 1998 (3) SA 124 (C). The facts in casu are distinguishable from the facts in the University case.  The functionary in the present case did not make a decision on the merits of the application.  Whereas in the University case the court was asked to reconsider the decision of the functionary and substitute its decision as there were exceptional circumstances. 

35.	I am precluded by law from making a decision on behalf of second respondent and even if I had such power, on the facts of this case, there are no special circumstances justifying me to do so. 

36.	I now turn to the question of remitting the matter to second respondent to consider the application.  Adv Arendse submitted, and correctly so, that applicant, on the one hand, attacked the validity of the settlement agreement and, on the other hand, wants the court to recognise the validity thereof and refer the application to second respondent for consideration.  The problem in such an approach is that, once I accept the validity of the settlement agreement, there is no “lis” which entitles me to act in terms of the present proceedings.  (See:  Minister van Wet en Orde v Matshoba 1990 (1) SA 280 (A) at 289H.)  The referral in terms of the settlement agreement will constitute a new cause of action and if applicant wants to enforce the terms of the settlement agreement he will have to institute fresh proceedings.  On the other hand, if the court had upheld the invalidity of the settlement agreement, then applicant would have had to fall back on his original cause of action, which has been superceded by new legislation as well as new circumstances.  It appears to me that applicant finds himself in an untenable situation.

Order
37.	For the reasons given by me, I conclude that a valid settlement agreement was entered into between the parties and no “lis” remained in the present proceedings for the court to adjudicate upon.  In the circumstances, the relief sought by applicant is dismissed with costs, including the costs of two counsel.  Such costs shall exclude the costs tendered in the settlement agreement.           

……………………….        E  MOOSA