Court name
Supreme Court
Case number
SA 57 of 2019
Title

Hashagen v Public Accountants and Auditors Board (SA 57 of 2019) [2021] NASC 34 (05 August 2021);

Media neutral citation
[2021] NASC 34
Case summary:

The Public Accountants’ and Auditors’ Board (‘PAAB’) established by the Public Accountants’ and Auditors’ Act 51 of 1951 (the Act), has the power under the Act to either investigate and ‘if necessary’ to conduct a disciplinary hearing against an accountant or auditor. The appellant is a member of PAAB against whom a member of the public, lodged a complaint of unprofessional and unethical conduct. The complaint was referred to an investigation committee (ICOM) established by the PAAB board in terms of s 10(1) of the Act. The ICOM, after taking legal advice and considering the complaint, resolved that the complaint had no prospect of successful disciplinary proceedings. The ICOM had the power to make such a determination under the Act.

 

The board of PAAB had the power to not follow that course, but after receiving a report of the ICOM summarily dismissing the complaint, it resolved to communicate the ICOM's summary dismissal to the complainant. After the complainant was so advised and that he could submit a fresh complaint on affidavit, the complainant lodged a complaint on affidavit on the strength of which the PAAB served charges for a disciplinary hearing on the appellant. The appellant approached court to have the charges declared null and void and to be reviewed and set aside.

 

The PAAB maintained that the decision to charge was not reviewable, that the challenge was premature, and that the appellant's recourse was to raise any and all defences before the PAAB fora and that in so failing, he failed to exhaust internal remedies. The appellant's case, amongst others, was that the PAAB unreasonably delayed to institute the charges, that having summarily dismissed the first complaint, the PAAB had lost further jurisdiction in the matter.

 

The PAAB urged the High Court to dismiss the application based on its in limine objections alone as those were dispositive of the entire application. The High Court agreed with PAAB that the in limine objections were dispositive and it did not consider the jurisdictional objections to the charges raised by the appellant.

 

The appellant's appeal seeks to fault the High Court’s election not to consider the collateral challenge to the charges and that if it did the application should have succeeded.

 

Held per Frank AJA (Damaseb DCJ and Hoff JA concurring):

 

That the approach of the court a quo with regard to the general rule to premature reviews is correct, however this principle, although a general one, is not absolute and courts will, where prejudice has already resulted or is inevitable, interfere in processes where the final stage in such proceedings has not yet been reached. This approach applies likewise to the rule providing for exhaustion of available internal or domestic remedies.

Also held that, the court a quo should not have discarded the point of functus officio as having been raised prematurely as this rule raises the issue of the power or authority of the PAAB to prefer the charges against the appellant and as a consequence competency of the disciplinary body to hear the matter.

 

Held that, the reason why an unreasonable delay can result in a quashing of the disciplinary proceedings is because it is accepted that such delay may cause prejudice to the person accused of the wrongdoing or that the prejudice is presumed.

 

Held that, the court a quo erroneously upheld respondent’s two points in limine. It was not premature for the appellant to raise the functus officio and unreasonable delay grounds

 

Held that the High Court erred in overlooking the appellant's jurisdictional objections as those, if upheld, were dispositive of the matter without regard to the PAAB's in limine objections. Because of the conclusion reached on functus, the court did not find it necessary to deal with the unreasonable delay objection raised by the appellant.

 

Held that the board's failure to revoke or disavow the ICOM's summary dismissal of the first complaint rendered it functus; and that the appeal must succeed.

Coram
Damaseb DCJ
Hoff JA
Frank AJA

 

REPORTABLE

CASE NO: SA 57/2019

 

IN THE SUPREME COURT OF NAMIBIA

 

 

In the matter between:

 

 

HANS FREDRICH HASHAGEN                                                                     Appellant

 

 

and

 

 

PUBLIC ACCOUNTANTS’ AND AUDITORS’ BOARD                         Respondent

 

 

Coram:                      DAMASEB DCJ, HOFF JA and FRANK AJA

Heard:                       28 June 2021

Delivered:                 5 August 2021

 

Summary:     The Public Accountants’ and Auditors’ Board (‘PAAB’) established by the Public Accountants’ and Auditors’ Act 51 of 1951 (the Act), has the power under the Act to either investigate and ‘if necessary’ to conduct a disciplinary hearing against an accountant or auditor. The appellant is a member of PAAB against whom a member of the public, lodged a complaint of unprofessional and unethical conduct. The complaint was referred to an investigation committee (ICOM) established by the PAAB board in terms of s 10(1) of the Act. The ICOM, after taking legal advice and considering the complaint, resolved that the complaint had no prospect of successful disciplinary proceedings. The ICOM had the power to make such a determination under the Act.

 

The board of PAAB had the power to not follow that course, but after receiving a report of the ICOM summarily dismissing the complaint, it resolved to communicate the ICOM's summary dismissal to the complainant. After the complainant was so advised and that he could submit a fresh complaint on affidavit, the complainant lodged a complaint on affidavit on the strength of which the PAAB served charges for a disciplinary hearing on the appellant. The appellant approached court to have the charges declared null and void and to be reviewed and set aside.

 

The PAAB maintained that the decision to charge was not reviewable, that the challenge was premature, and that the appellant's recourse was to raise any and all defences before the PAAB fora and that in so failing, he failed to exhaust internal remedies. The appellant's case, amongst others, was that the PAAB unreasonably delayed to institute the charges, that having summarily dismissed the first complaint, the PAAB had lost further jurisdiction in the matter.

 

The PAAB urged the High Court to dismiss the application based on its in limine objections alone as those were dispositive of the entire application. The High Court agreed with PAAB that the in limine objections were dispositive and it did not consider the jurisdictional objections to the charges raised by the appellant.

 

The appellant's appeal seeks to fault the High Court’s election not to consider the collateral challenge to the charges and that if it did the application should have succeeded.

 

Held per Frank AJA (Damaseb DCJ and Hoff JA concurring):

 

That the approach of the court a quo with regard to the general rule to premature reviews is correct, however this principle, although a general one, is not absolute and courts will, where prejudice has already resulted or is inevitable, interfere in processes where the final stage in such proceedings has not yet been reached. This approach applies likewise to the rule providing for exhaustion of available internal or domestic remedies.

Also held that, the court a quo should not have discarded the point of functus officio as having been raised prematurely as this rule raises the issue of the power or authority of the PAAB to prefer the charges against the appellant and as a consequence competency of the disciplinary body to hear the matter.

 

Held that, the reason why an unreasonable delay can result in a quashing of the disciplinary proceedings is because it is accepted that such delay may cause prejudice to the person accused of the wrongdoing or that the prejudice is presumed.

 

Held that, the court a quo erroneously upheld respondent’s two points in limine. It was not premature for the appellant to raise the functus officio and unreasonable delay grounds

 

Held that the High Court erred in overlooking the appellant's jurisdictional objections as those, if upheld, were dispositive of the matter without regard to the PAAB's in limine objections. Because of the conclusion reached on functus, the court did not find it necessary to deal with the unreasonable delay objection raised by the appellant.

 

Held that the board's failure to revoke or disavow the ICOM's summary dismissal of the first complaint rendered it functus; and that the appeal must succeed.

 

 

APPEAL JUDGMENT

 

 

DAMASEB DCJ (concurring):

Introduction

[1]        I have had the pleasure of reading, in draft, the main judgment prepared by Frank AJA. I agree with him that the High Court should have considered the two jurisdictional objections raised by the appellant against the respondent administrative body: of unreasonable delay in the pressing of disciplinary proceedings against the appellant; and of functus officio.

 

[2]        I also agree with the main judgment that the appellant had made out the case that the respondent had become functus officio and could not proceed with disciplinary proceedings against the appellant. That makes it unnecessary to deal with the objection by the appellant that the respondent unreasonably delayed in bringing disciplinary proceedings against the appellant. In the view that I take on functus officio, I find it unnecessary to deal with unreasonable delay. For the reasons that I set out below, I support the order proposed by my Brother.

 

[3]        The appeal is not about the correctness of the otherwise admirable exposition by the court a quo of the law on premature challenge to administrative action and the failure to exhaust internal remedies. It is about whether that court was correct to overlook the jurisdictional challenges to the respondent’s administrative action, raised by the appellant.

 

[4]        The appeal arises from a judgement of the High Court upholding in limine objections raised by the respondent, a statutory body, in review proceedings, that a decision it made was not reviewable because (a) the challenge was premature and (b) the challenger failed to exhaust internal remedies.

 

[5]        The respondent, the Public Accountants’ and Auditors’ Board (PAAB) is created by s 2 of the Public Accountants and Auditors Act 51 of 1951 (the Act). It has the power in terms of s 21(1)(f)(i) of the Act to:

 

‘prescribe the manner in which an allegation or a charge of improper conduct shall be investigated and, if necessary, heard, and the punishments, including a fine, removal from the register, qualified, temporary or permanent disqualification for, suspension from practice for such period as the board may determine, a caution or a reprimand, which may be imposed by the board after such an investigation or hearing’.  (Emphasis supplied).

 

[6]        Section 10 of the Act empowers the PAAB to establish committees to assist it in the performance of its functions and duties and to assign to a committee any power it may otherwise perform under the Act. The section states:

 

‘(1) The board may establish committees to assist it in the performance of its functions and duties, and may appoint such persons, including persons other than members of the board, as it may deem fit to be members of any such committee.

 

(2) The board may assign to a committee so established such of its powers as it may deem fit, but shall not be deemed to be divested of any power which it may have assigned to a committee, and may amend or repeal any decision of any such committee: Provided that if the board has assigned to a committee the power to decide whether a person has passed an examination conducted in terms of section twenty-five, or the power to determine whether or not any person shall be registered as an accountant and auditor, or the power to cancel the registration of any person as an accountant and auditor, or the power to enquire into any case of alleged improper conduct, and to impose a punishment in respect thereof in accordance with the provisions of section twenty-seven, it shall not amend or repeal any decision arrived at or anything done by such committee under the power so assigned.

 

(3) Any reference in this Act to the board in relation to the exercise of any power which it has assigned to a committee shall be construed as including a reference to that committee.’ (My emphasis).

 

[7]        As shown in para [5] above, the board has general powers under s 21 of the Act, including the power to ‘investigate’ and ‘if necessary’ to conduct a disciplinary hearing.[1] Under s 27(1)[2] of the Act, the board has the specific power to ‘investigate’ and ‘if necessary’ to hold a disciplinary hearing or enquiry. If the board chooses to conduct an enquiry, as opposed to only an investigation, s 28(1)[3] sets out the powers it enjoys to conduct an enquiry.

 

[8]        Section 10(3) makes clear that either the general power under s 21(1)(f)(1) or the specific power under s 27(1) (to either investigate or conduct an enquiry) and the further specific power under s 28(1)(a) and (b) (to summon witnesses and to call for documents etc) may be performed by a committee created by the board under s 10(1).  It follows that when a committee chooses to investigate and not to proceed to an enquiry, it does so as if it were the board exercising such power itself. It is manifest from the proviso to s 10(2) that the board of the PAAB has the power to reverse a decision of a committee to dismiss a complaint summarily.

 

[9]        It is common ground that the PAAB had established an investigation committee (ICOM) in terms of s 10(1) of the Act to deal with complaints of misconduct against members of the accounting and auditing profession. The appellant is a member of the accounting and auditing profession and was, at the time when the events relevant to the appeal occurred, a partner of the firm Ernst & Young (E&Y).

 

[10]      A member of the public (Mr Ritter) laid a complaint with the PAAB against the appellant for alleged misconduct arising from professional work the appellant performed as a partner of E&Y on the instructions of Namibia Financial Institutions Supervisory Agency (NAMFISA) in which the latter suspected Mr Ritter of wrongdoing as its chief executive officer (CEO).

 

[11]      The report that the appellant submitted to NAMFISA on 26 March 2009 resulted in Mr Ritter being charged with misconduct resulting in disciplinary proceedings. In the wake of NAMFISA’s pursuit of those disciplinary proceedings, the parties settled the matter and Mr Ritter resigned as CEO in May 2009. Two years after that event, Mr Ritter laid a complaint of misconduct with the PAAB against the appellant (the first complaint) accusing him of unprofessional and unethical conduct. The first complaint was referred to the ICOM in May 2013.

 

[12]      Although the PAAB made the appellant aware of the first complaint in November 2011, no disciplinary hearing was held - as contemplated in ss 27 and 28 of the Act. About two years after the first complaint, the ICOM wrote a letter to Mr Ritter on 15 April 2015 after taking legal advice, inter alia stating:

 

‘We have spent considerable time on studying and evaluating all the documents provided to us herein and have tested same against similar cases to reach our opinion. Furthermore, we have sought legal advice to assist in reaching a conclusion in this matter. It is our opinion that the conduct of the Respondent was reasonable under the circumstances of this case. The Respondent’s conduct cannot be said to be improper, and therefore unprofessional, given the limited scope of the mandate provided to the Respondent as well as the nature of the documents and information provided by NAMFISA to Ernst & Young. We accordingly see no prospects of success in bringing charges of improper conduct against the Respondent during disciplinary proceedings. Against the background of the above, our Investigation Committee considers this matter closed. Should you not agree with our findings, a formal new complaint is required, and this would then be forwarded to our newly formed Disciplinary Committee.’  (Emphasis supplied).

 

[13]      The letter by the ICOM was preceded by a meeting of the board of PAAB which was held on 1 April 2015 and whose deliberations regarding Mr Ritter’s complaint are recorded as follows:

 

‘CH informed meeting that ICOM’s (sic) resolved to adopt the legal opinion of lawyer Theron on case that found accused not guilty. This decision was however not unanimous and attempts to organise a session with lawyer and EDB was not successful. EDB’s opinion was that lawyer’s investigation failed to consider key auditing principle critical to investigation. The meeting discussed as to whether the Theron legal opinion accepted by ICOM should be shared with complainant. KM indicated that complainant be informed of decision to close case with some details extracted from the legal opinion.

 

Resolution: Provide written feedback to Mr Ritter and share relevant extracts from legal opinion of lawyer Theron.’ (Emphasis supplied).

 

[14]      It is clear, therefore, that the PAAB debated the matter based on a report by its ICOM. There was, as would be expected, a difference of opinion amongst the members of the board but nowhere does the record show that the board disavowed the decision of the ICOM to close the case after ‘investigation’. The ICOM’s decision was that the Ritter complaint had no merit and should be closed. That decision is in harmony with the statutory scheme which allows the PAAB to either close a case after investigation or to proceed to a full-blown hearing.  

 

[15]      Mr Ritter replied to the ICOM letter on 23 April 2015 expressing displeasure at the decision communicated to him. In short, he did not consider the matter closed and correspondence ensued between him and the PAAB. The latter in the end obtained legal advice to the effect that disciplinary proceedings must be commenced against the appellant and that Mr Ritter be requested to submit a complaint on affidavit. On 2 September 2015, the PAAB wrote a letter to Mr Ritter and, in relevant part, stated as follows:

 

‘1.   We are in receipt of the complaint you initially laid. We suggest that you reduce the complaint to an affidavit and deliver same before or on the 7th September 2015.

 

2.   We shall forward the complaint in affidavit form to Mr Hans Hashagen (Accused) and shall await his reply to the charges as contained within 30 days from the date of receipt by him.

 

3.    Once the reply is received from Mr Hands Hashagen, we shall send same to you (Complainant) and shall await an answer from you within 7 days of receipt.

 

4.    On receipt of your answer the Chairman of the Board will consider the matter and thereafter communicate his decision to the parties within 14 days’.

 

[16]      Mr Ritter was not impressed. Acting through a lawyer he wrote a letter to the PAAB on 4 September 2015 making clear that his original complaint remained unresolved, that the requirement of an affidavit was a ‘grossly unfair administrative procedure’ but that he would provide an affidavit in any event in order not to further delay the matter. Mr Ritter proceeded to submit an affidavit on 23 October 2015. It bears mention that the exchange of correspondence between the PAAB and Mr Ritter was not disclosed to the appellant.

 

[17]      Upon receipt of the affidavit, the PAAB on 24 November 2015 invited the appellant to make representations on the complaint. On 17 December 2015, the appellant via his lawyer declined to do so and made clear that he would only make representations if a formal charge was brought against him and that, in any event, he had no case to answer. A series of letters then followed between PAAB’s and appellant’s lawyer until 16 February 2016. On the latter date, PAAB’s lawyer informed appellant’s lawyer that:

 

‘We are instructed to inform you that our client awaits a proper reply to the allegations of misconduct on or before 26 February 2016.’

 

[18]      The appellant did not heed the demand. The PAAB on 17 August 2016 issued the appellant with a notice containing charges to attend a disciplinary hearing. Again, correspondence ensued between the parties which included the appellant demanding to receive documents from the PAAB and raising all manner of technical and jurisdictional objections to the disciplinary proceedings. The exchange of correspondence continued until end of September and on 3 October 2016, the PAAB’s lawyer informed the appellant that any legal objections he had should be raised at the disciplinary hearing. It was made clear to him that the PAAB intended to proceed with the disciplinary hearing against him based on the strength of the affidavit submitted by Mr Ritter on 23 October 2015.

 

[19]      The appellant however resisted to participate in any hearing and persisted with his legal and procedural objections against the disciplinary process initiated by the PAAB. For its part, the PAAB decided to proceed with the hearing and invited the appellant to confirm availability for the hearing. The appellant then launched the review application in June 2017.

 

[20]      The review application included the following grounds:

 

(a)   ‘That the bringing of charges were barred for unreasonable delay;

 

(b)   That the PAAB had become functus officio in view of the decision communicated to Ritter on 15 April 2015;

 

(c)   Irrationality and unreasonableness of the decision to charge;

 

(d)  Impermissible delegation of functions;

 

(e)  The prejudicial process followed;

 

(f)   Lack of jurisdiction to deal with the complaint.’

 

[21]      The PAAB opposed the review relief and, in addition to pleading over on the merits, raised in limine objections to the review application. They maintained that (a) the decision to charge the appellant was not an administrative decision capable of being reviewed, (b) that the appellant failed to exhaust internal remedies by pleading to the charges and raising whatever defences he wished to rely on before the relevant PAAB bodies, and (c) the review application was unreasonably delayed.

 

The High Court

[22]      It is common ground that the entirety of the application was fully argued by the parties a quo, that is, both the in limine and jurisdictional objections raised by either party, and the merits. The PAAB, however, invited the High Court not to deal with the merits if it considered its in limine objections to have merit, and to dismiss the review challenge on that basis alone. As the court explained at para [16] of the judgment:

 

‘In the premises, I am of the view that it would be convenient and proper to first deal with the points in limine for the reason that if any of the points raised are upheld, they may be dispositive of the entire application.’  (Emphasis supplied).

 

[23]      The High Court found merit in two in limine objections raised by the PAAB which it held to be dispositive of the entire application: that the review was premature, and that the appellant failed to exhaust internal remedies. (It did not consider the objection that the review application was unreasonably delayed).[4] The High Court therefore dismissed the review challenge on that basis. As the court recorded at para [45] of the judgment:

 

‘Having regard to the foregoing considerations, I have, after much rumination, come to the considered view that the application for review ought to be refused at this stage as it is premature. As intimated above, the . . . decision sought to be reviewed . . . is not one that is amenable to review at this stage of the proceedings before the disciplinary tribunal. Secondly, the court adopts the view that the applicant has at his disposal, effective local remedies that he did not access and let alone exhaust’.

 

[24]      The court a quo chose not to consider any of the objections raised by the appellants to the competence of the disciplinary proceedings. It is that choice made by the court a quo which is the foundation for the present appeal.

 

[25]      The appellant’s case in essence is that his objections of unreasonable delay and functus officio are jurisdictional matters which should have been considered as ‘anterior’ issues for, if valid, the PAAB had no jurisdiction in law to entertain Mr Ritter’s complaint beyond 15 April 2015. In other words, it is those jurisdictional objections to the charges, instead of the in limine objections raised by the PAAB, which were dispositive of the matter.

 

[26]      The PAAB’s principal submission on appeal as regards the alleged misdirection by the High Court is that the court was entitled in its discretion to dispose of the matter on the basis of its in limine objections that the decision to charge the appellants was both premature and not reviewable.

 

Essence of functus officio doctrine

[27]      An administrative decision is deemed to be final and binding once it is made. Once made, such a decision cannot be re-opened or revoked by the decision maker unless authorised by law, expressly or by necessary implication. The animating principle for the rule is that both the decision maker and the subject know where they stand. At its core, therefore, are fairness and certainty.[5]

 

[28]      As Pretorius aptly observes:[6]

 

‘The functus officio doctrine is one of the mechanisms by means of which the law gives expression to the principle of finality. According to this doctrine, a person who is vested with adjudicative or decision-making powers may, as a general rule, exercise those powers only once in relation to the same matter. This rule applies with particular force, but not only, in circumstances where the exercise of such adjudicative or decision-making powers has the effect of determining a person’s legal rights or of conferring rights or benefits of a legally cognizable nature on a person. The result is that once such a decision has been given, it is (subject to any right of appeal to a superior body or functionary) final and conclusive. Such a decision cannot be revoked or varied by the decision-maker.’

 

[29]      What that means then is that once an administrative body has exercised an administrative discretion in a specific way in a particular case, it loses further jurisdiction in the matter. It cannot go back on it or assume power again in respect of the same matter between the same parties.

 

[30]      If we apply the principle to the facts before us, the appellant’s case is that the PAAB assumed jurisdiction over him by accepting Mr Ritter’s first complaint, considered it and found that it had no merit. The PAAB cannot now come back and revive the same complaint which it had previously found to be without merit. Viewed thus, the functus objection concerns whether or not the appellant could be charged after Mr Ritter had been advised that there was not a reasonable basis on which the appellant could be found guilty of unprofessional or unethical conduct.

 

[31]      That necessarily required the court a quo to evaluate the common cause facts in the light of the applicable statutory framework.

 

Did the High Court err in ignoring the appellant’s jurisdictional objections?

[32]      Where a court is faced with competing legal objections, either of which has the potential to dispose of the case without the need for consideration of the merits or the legal objections raised by the other side, it must be sure that the objection it chooses to accept makes it unnecessary for it to consider the other objections as those ‘other objections’ cannot override the one issue it resolves in favour of one of the parties. A good example of that is where the first instance court is faced with main and alternative relief such as was the case in Village Hotel (Pty) Ltd v Chairperson of the Council for the Municipality of Swakopmund & others.[7]

 

[33]      In that case, this court made clear that where a party seeks main and alternative relief and fails in the former, it is a misdirection for a first instance court to fail to consider the alternative relief which is independent from and does not depend for its success on a decision on the main issue.  That approach was recently followed in Imalwa & others v Gaweseb & others.[8]

 

[34]      For the High Court to have overlooked the objections to the continuation of disciplinary proceedings against the appellant after Mr Ritter was informed that his complaint had no prospect of success, it ought to have considered and satisfied itself that its sustaining the two in limine objections raised by the PAAB would render those raised by the appellant a dead letter.

 

[35]      A decision made when a body making it has no jurisdiction, is a nullity. A person adversely affected by it is entitled to challenge its validity in court. It lies ill in the mouth of the maker of the decision to say, ‘Let us go through the motions and you will have the opportunity after we have completed the process to go to court and to have it set aside’.

 

Is the PAAB functus?

[36]      Section 10(1) of the Act, it will be recalled, empowers the PAAB to establish committees to perform any of its functions and duties. Sub-section (3) of s 10 makes clear that a committee created by the PAAB to perform an assigned function or duty has the same power as the board of PAAB. The effect of the proviso to s 10(2) is that the board of the PAAB was competent to reverse the ICOM’s decision to summarily dismiss the first complaint. This case turns on whether the PAAB had disavowed the ICOM decision.

 

[37]      Just like legislative acts, to be valid, non- legislative administrative action must be reasonably clear, complete, and unambiguous.[9] That is so because, as Baxter correctly argues, ‘individuals are directly and immediately affected thereby.’[10]

 

[38]      At best for the board, its decision to have the ICOM’s summary dismissal conveyed to Mr Ritter without disavowing its terms, creates a doubt what it intended to do. That doubt, in my view, must be resolved in favour of the appellant, especially because of the patently prejudicial conduct which involved him being kept in the dark about the deliberations which directly affected his rights. Had the appellant been informed that the board intended to proceed with an enquiry irrespective of the ICOM’s summary dismissal, he might already have made representations to the board on that issue, allowing the parties to have the matter properly ventilated, and possibly resolved.

 

Disposal: functus officio

[39]      It is not disputed that the ICOM had resolved that the first complaint had no prospect of success. Although the appellant had not been advised of that decision, it assumed the force of law and was binding on the ICOM. The ICOM could not revoke that decision or reopen the case made by Mr Ritter against the appellant relating to the same matter. Only the board of the PAAB could, but at its meeting of 1 April 2015 preceding the written communication to Mr Ritter, it deliberated on the matter and took the decision that the ICOM decision to close the case be communicated to Mr Ritter. Why would it do that if it did not agree with the result?

 

[40]      Nowhere in the minute of the meeting of 1 April 2015 is there any suggestion that the board took a decision other than that the decision of the ICOM be communicated to Mr Ritter. In fact, prior to the ICOM decision being conveyed to Mr Ritter, there is no decision of the board either disavowing the ICOM decision or that the case should proceed to an enquiry. In my view, because the proviso to s 10(2) empowers it to amend a committee’s summary dismissal of a complaint, it was incumbent upon the board to act clearly and unambiguously and to record its reasons for doing so.

 

[41]      Section 28 of the Act empowers the PAAB (either acting as a board or a committee) to conduct a full-blown enquiry if it chooses to do so. Section 28 must, however, be read together with s 21(1)(f)(i). The latter provision makes clear that when faced with a complaint against a member, the PAAB may initiate an investigation and thereafter conduct a hearing; alternatively, it may choose not to conduct a hearing after an investigation and dismiss the complaint summarily.

 

[42]      Clearly, that is what the PAAB did in the present case. Not only did the ICOM dismiss the first complaint after the investigation – which in of itself would have been competent in view of the language of s 10(2) – but the PAAB is deemed, in view of its deliberations of 1 April 2015, to have ratified the outcome of the ICOM deliberations which led to the communication to Mr Ritter regarding the first complaint.

 

[43]      The significance lies in the fact that the board did not amend the ICOM’s summary dismissal decision and not that it did not expressly disapprove the ICOM decision. For its validity, the ICOM decision did not require specific board approval because, as soon as it was taken, it had the same effect as a decision of the board. Unless lawfully amended it remained valid in law.

 

[44]      As Mr Heathcote for the appellant correctly submitted, the fact that the PAAB invited Mr Ritter to submit a fresh complaint on affidavit does not make that action any less impermissible on the functus doctrine. The suggestion that the complaint on affidavit was based on new or additional facts is inimical to the functus doctrine. If it holds sway it would mean that the disciplinary process can continue for as long as and every time a complainant can produce ‘new facts’ relating to the same transaction once his or her complaint is rejected in relation to the same underlying facts.

 

[45]      I am satisfied that it was a misdirection for the High Court not to consider the functus officio objection raised by the appellant. The plea of functus was dispositive of the case and took precedence over the dilatory pleas of prematurity and non-reviewability raised by the PAAB to resist the review. That makes it unnecessary for me to deal with the unreasonable delay in the bringing of charges – another jurisdictional ground relied upon by the appellant.

 

Should the matter be remitted?

[46]      During oral argument on appeal, some debate occurred as regards whether this is a proper case for this court to itself determine the issues the High Court elected not to deal with - in the event it is found that it should have done so. The rationale undergirding the concern is this court’s reluctance to resolve legal disputes as a court of first and final instance.[11] Although it is a rule of practice and not the law of the Medes and Persians, it is salutary one, applied by this court on a case-by- case basis to guard against the right of appeal to this court becoming illusory.

 

[47]      I am satisfied because of the peculiar circumstances of this case that it is not necessary for that issue to be remitted to the High Court to render a decision thereon. As is by now apparent, to assess whether the court a quo acted properly in not considering the jurisdictional objections raised by the appellant, I had to interpret the relevant provisions of the Act which have a bearing on the functus doctrine – and in the process authoritatively interpreted those provisions in a way that is now binding on the High Court.

 

[48]      If one has regard to the statutory scheme that I discussed in the body of this judgment, a finding that the PAAB had become functus is therefore a foregone conclusion. In the light of the overwhelming prospects that a court below properly directing itself will conclude that the PAAB had become functus, it is in the public interest that the litigation is brought to an end at once, bearing in mind that Mr Ritter’s complaint against the appellant had been pending since 2011.

 

Was the review application unreasonably delayed?

[49]      The PAAB maintains that there was unreasonable delay in bringing the review. That issue was raised by the PAAB in the answering affidavit in opposition to the appellant’s review application. The appellant countered that unreasonable delay did not arise because the review was intended as a collateral challenge to coercive administrative action by officialdom. The PAAB’s counsel, Bhana SC, maintains on appeal that the review application was unreasonably delayed and ought on that ground alone to be dismissed if the two in lime objections against the review do not find favour with the court.

 

[50]      Mr Heathcote for the appellant retorts that the review was mounted as a collateral challenge to coercive action by the PAAB to haul the appellant before a disciplinary process which he considers unlawful. It is trite that a collateral challenge to coercive administrative action is not caught by limitations of time.[12]

 

[51]      Counsel for the appellant relied on dicta from South Africa to the effect that a collateral challenge does not cease to be so just because it is brought pre-emptively by way of a review and not as a defensive challenge to court proceedings to enforce compliance with the law.[13] That approach is sound in law and in principle and in my view provides a complete answer to the plea of unreasonable delay raised by the PAAB to the review.

 

[52]      Although the relief sought is discretionary, the present is not the sort of case where the interests of certainty in administration trumps the importance of legality.[14] At all events, there are compelling reasons why this is a proper case for the pre-emptive collateral challenge to be entertained. The disciplinary proceedings have not been completed and a plea to the charges has not happened yet. The appellant is perfectly entitled therefore to raise the absence of jurisdiction at the relevant PAAB fora. That issue will have to be determined anterior to the merits of Mr Ritter’s complaint on affidavit against the appellant. If not sustained, the appellant would be perfectly entitled to approach the High Court on review to have that issue resolved before the matter may proceed on the merits in the disciplinary proceedings. The prospects of it succeeding are overwhelming as I have already demonstrated.

 

[53]      For the avoidance of doubt, I fully support the reasons given by Frank AJA for the order that he proposes.

 

 

 

 

_____________

DAMASEB DCJ

 

 

FRANK AJA (HOFF JA concurring):

Introduction

[54]      Per notice dated 17 August 2016 the Public Accountants’ and Auditors’ Board (the PAAB) informed the appellant that he is being charged with unprofessional conduct in relation to an investigation undertaken at the Namibia Financial Institutions and Supervisory Authority (NAMFISA) by an auditing firm contracted by NAMFISA for this purpose. The appellant was, at the time, employed by the said auditing firm and was the lead investigator in respect of this specific investigation.

 

[54]      The investigation at NAMFISA, with the appellant as lead investigator, commenced on 21 January 2009 and was concluded with the presentation of a final report to NAMFISA on 26 March 2009. Pursuant to this report disciplinary charges were pressed against the then Chief Executive Officer (CEO) of NAMFISA, Mr Ritter. During the disciplinary hearing and in May 2009 Mr Ritter and NAMFISA settled their dispute, and the disciplinary hearing thus did not continue.

 

[55]      About two years subsequent to the discontinued disciplinary hearing and the settlement between NAMFISA and Mr Ritter the latter lodged a complaint of unprofessional conduct against the appellant and the auditing firm by way of a letter dated 4 April 2011 addressed to the Institute of Chartered Accountants of Namibia (ICAN) and the PAAB. It is this complaint that triggered the unprofessional conduct charges eventually presented to the appellant per the notice dated 17 August 2016 ie six and half years subsequent to the original complaint.

 

[56]      Subsequent to the receipt of the notice containing the charges of unprofessional conduct, correspondences were exchanged between the parties culminating in the lodging of an application by the appellant (as applicant) in the High Court on 27 June 2017 for an order:

           

            ‘Setting aside or reviewing and correcting the respondent’s decision to charge applicant as set out in the respondent’s notice dated 17 August 2016.’

           

[57]      The application raised a number of review grounds. These were:

 

(i)        That a previous decision not to press charges against the appellant rendered the PAAB functus officio and hence the PAAB could not institute the current charges.

 

(ii)     The inordinate and unexplained delay in instituting the charges.

 

(iii)    The PAAB could not lawfully rely on the Code for Professional Accountants (IFAC) on which it did in the charges and could not seek to apply IFAC retrospectively when the code was not in existence when the conduct complaint of occurred.

 

(iv)    The PAAB lacks jurisdiction as it was not properly constituted when the conduct complaint of occurred.

 

(v)     That appellant was not given a proper opportunity to respond to the allegations prior to the decision to press charges.

 

(vi)    The decision to press charges was irrational and one that no reasonable decision maker would have taken.

 

(vii)   The decision to level charges was delegated by the PAAB to its legal practitioner.

 

(viii)  The PAAB failed to take relevant facts into account when it decided to level the charges.

 

(ix)    The PAAB was motivated by an ulterior or improper motive to press charges.

 

(x)     The PAAB acted with bias or reasonable suspicion of bias in revoking its previous decision not to press charges against the appellant.

 

[58]      The PAAB in its answering affidavit took three in limine objections to the application for review, namely that the decision to put the disciplinary charges was not reviewable at all, that the appellant (applicant) should have exhausted his internal remedies before turning to the court and that the appellant (applicant) had unreasonably delayed in bringing his review application.

 

[59]      The court a quo upheld the first two points in limine and as this disposed of the application, it did not deem it necessary to deal with the unreasonable delay to bring the application point. The court a quo reasoned that as the outcome of the disciplinary proceeding was the event that would have a final effect in respect of the appellant; that the application to review the institution of the disciplinary process (the notice of 17 August 2016) was thus premature. In other words, since the disciplinary process had not yet run its course there was no final decision that could be reviewed. It thus followed that to seek to review the decision to institute the disciplinary proceedings was premature. The court a quo further held that the applicant did not provide any explanation as to why the internal remedies could not be pursued and that there is ‘no allegation or evidence that the unlawfulness complained of in this matter served to undermine the domestic remedies themselves’. In this regard the court a quo was of the view that the issues should first be raised at the disciplinary hearing.

 

[60]      The appeal thus lies against the finding of the court a quo to uphold the mentioned points in limine which resulted in the review application being dismissed with costs.

 

Review application premature

[61]      As mentioned above the PAAB took the point in limine that the decision to charge the appellant was not reviewable. This position was essentially based on the premise that the decision was a preliminary or procedural step that would put a process in place which would determine the guilt or otherwise of the appellant. This determination would be the final step or administrative act in this process which would then be the decision that could be reviewed if there were grounds for review.

 

[62]      This approach is in general correct, and the court a quo in its judgment admirably explains the rationale for this general rule. Where the objections raised against the decision to charge the appellant can be raised at the disciplinary process in his favour and even be used to persuade those presiding at such proceedings to acquit him, a court should be loath to interfere and let the proceedings run its course to finality. In other words, where the objections go to the factual matrix that needs to be decided in the disciplinary process, this is best left for determination in that process.

 

[63]      To avoid any doubt I reiterate that the above principle, although a general one, is not an absolute one and courts will, where prejudice has already resulted or is inevitable, interfere in processes where the final stage in such proceedings has not yet been reached.[15]

 

[64]      Useful as the discussion by the court a quo in the above context is, it does not in my view address the functus officio point raised by the appellant as this point does not directly address the considerations that led to the decision to charge the appellant. It raises the competency (power or vires) of the PAAB to have taken the decision to charge the appellant. It is obviously a prerequisite for the exercise of such power that the PAAB had the competency to exercise such power. If it had previously made a final and binding decision to the contrary it had no power to revisit the decision and to make a contrary decision. This is so because ‘. . . an administrator/decision maker/official who has once “discharged his official function” by making a decision is unable to change his mind and revoke, withdraw or revisit the decision.’[16]

 

[65]      If the functus officio point is a good one then the PAAB acted ultra vires their powers to even consider the pressing of the current charges and to put them to the appellant and then these charges will have to be set aside. The question then is whether it is expected from the appellant to raise this in front of the disciplinary committee constituted to hear the charges instead of approaching the court to have the charges set aside? I return to this point below.

 

[66]      Counsel for the PAAB submitted that for the appellant to succeed, he should have sought to review the revocation of the earlier decision and not the decision to press the current charges. I disagree. There is nothing on the record to indicate that the previous decision was explicitly revoked. This is so because the PAAB obviously did not deem it necessary to expressly revoke the earlier decision as they were of the view that they could simply take a contrary decision to the previous one. The fact that the previous decision was revoked is implicit in the contrary later decision, ie the decision to level charges against the appellant. Appellant was thus in my view entitled to seek the review in the terms it was done.

 

[67]      To seek to review the decision to put the charges to appellant based on the functus officio point was thus not premature. This legal point, if supported by the facts which have nothing to do with the merits of the charges and hence would be irrelevant to that enquiry, will finally dispose of the whole matter. It is not the discretion to institute the charges which is attacked but the authority (power) of the PAAB to institute the charges. Simply put the issue goes to the jurisdiction of the disciplinary body and would be a final answer on that score.

 

[68]      Similarly, reviews based on undue delay to press charges and lack of jurisdiction as the PAAB was not properly constituted when the conduct complained of occurred cannot be premature. These grounds also rely on facts either not relevant to the hearing at the disciplinary proceedings or on facts to indicate that a fair process was no longer possible which also is not contemplated and inherent in the charges to be dealt with at the hearing. A review on either of these grounds does not address or have the merits of the charges pressed as its main focus.

 

[69]      A matter is normally not ripe for hearing where a multi-staged process is in place to reach a final decision and where it is only at the last stage where a final decision is made and where it is inherent in the process that an irregularity in the process can also be reconsidered, or becomes immaterial, in the process prior to the final decision in that process. It follows that where there is a material irregularity affecting the jurisdiction to institute the process a review cannot be premature as the decision to institute the process is flawed and the process should ideally be stopped before it can even get off the ground.

 

[70]      Whereas the notice of appeal states it is against the whole of the order and judgment of the court a quo, it is clear from the grounds of appeal and the heads of argument filed on appellant’s behalf that the gravamen of the attack on the judgment is the fact that the court a quo held that the functus officio point and the unreasonable delay point had to be raised at the disciplinary hearing. I shall also confine myself to these two aspects.

 

[71]      Before I proceed, I should mention that I agree with the court a quo’s finding that the review grounds raised by appellant and summarised above in para 5(iii), (v), (vi), (vii), (viii), (ix) and (x) were such that they could be raised at or during the hearing of the disciplinary charges. I point out that the PAAB in essence grudgingly conceded the review ground mentioned in para 5(iii) and has identified the code for professional conduct it intends to rely on. If any issue still arises in this regard the appellant can raise it ab initio at the disciplinary hearing. If appellant’s grounds for review mentioned above are sound, he will be vindicated by an acquittal. Review ground (iv) is notionally of a different nature as it goes to jurisdiction but it has not been advanced at all in argument and I cannot see any reason why this court thus should consider it.

 

[72]      The court a quo upheld the first point in limine and according to it the review was premature and stated that appellant ‘must husband his powder for the contest before the disciplinary tribunal, where he would be within his rights to unleash it with reckless abandon’. The court a quo then proceeded with the in limine point raised by the PAAB based on the failure of appellant to exhaust his internal remedies ‘out of an abundance of caution’. This point was also upheld as the court a quo held that the appellant should have used the internal or domestic remedies, ie the disciplinary tribunal. It is to this aspect that I now turn.

 

Duty to exhaust internal remedies

[73]      As is evident from what is stated above the rule relating to premature reviews is to prevent intermittent stoppages to proceedings where no final decision has yet been made. The rule that requires applicants to make use of internal or domestic remedies is because those remedies are there to provide expedient and cost effective remedies when compared to litigation.[17]

 

[74]      Like the rule relating to premature reviews, the rule that an applicant must exhaust internal remedies is not an absolute one. For a court to consider whether to assume jurisdiction in the face of available internal remedies two considerations are of importance. These two considerations were referred to by the court a quo as follows with reference to Baxter:[18]

           

            ‘Two considerations appear to be paramount: First, are the domestic remedies capable of providing effective redress in respect of the complaint, and secondly, has the alleged unlawfulness undermined the domestic remedies themselves.’

 

[75]      According to the court a quo, the domestic remedy ie an approach to the disciplinary body, was effective and ‘there is no allegation or evidence that the unlawfulness complaint of in this matter served to undermine the domestic remedies themselves’.

[76]      The grounds of appeal virtually concede the finding of the court a quo quoted above in respect of all the review grounds save the two mentioned in para 5(i) and (ii) above. The relevant ground of appeal reads as follows:

           

            ‘4.        In any event, the learned judge erred:

                       

4.1       . . .

 

4.2       . . .

 

4.3       Where he found there was no allegation or evidence that the unlawfulness complained of by appellant served to undermine the disciplinary process. There were, indeed, such complaints, being the functus officio and unreasonable delay issues raised by the appellant which issues should have been determined in favour of the appellant (which the court erred in not doing).’

 

[77]      Once again the only real issue when it comes to the rule relating to the exhausting of domestic remedies is whether the functus officio point and the point of unreasonable delay should have been dealt with by the court a quo as an exception to the general rule in this regard.

 

[78]      I thus now turn to deal with the issues of functus officio and unreasonable delay.

 

Functus officio

[79]      The functus officio doctrine received no mention in the judgment a quo and was dismissed under both the general rule relating to premature review and the exhaustion of domestic remedies.

 

[80]      I have already indicated that the functus officio point should not have been discarded as being raised prematurely because this rule raises the issue of the power or authority of the PAAB to prefer the charges against appellant and as a consequence competency of the disciplinary body to hear the matter. The facts relevant to the decision in this regard are uncontroverted and the application of those facts to the principles governing the doctrine of functus officio is essentially a legal issue which goes to the powers (vires) of the disciplinary body. The court a quo was thus in as good, if not in better position, than the disciplinary body to decide the issue. Furthermore, the potential impact of the decision on the envisaged disciplinary proceedings was potentially drastic. If the point is upheld the proceedings cannot continue. Lastly, to expect the disciplinary body to determine the point is in essence to ask it to determine its own jurisdiction which should normally be avoided if possible.

 

[81]      I am thus of the view that, the functus officio point should have been considered by the court a quo. The question that arises is whether this court should consider it or whether it should be referred back to the court a quo for consideration.

 

[82]      As pointed out above, the relevant facts to determine the issue of functus officio are straightforward and common cause and it is simply a question of applying the law to those facts. This means this court is in the same position as the court a quo was to determine the issue.

 

[83]      In addition, the law is fairly straightforward and there is no dispute between the parties as to the law. Thus it is accepted that the final decision by an administrative official cannot be revoked and that the point of finality arises when the decision is published, announced or otherwise conveyed to those affected by it.[19] A statute may, of course, provide for a deviation from the above general principle where it authorises a revocation or variation by the original decision maker or by a higher authority.[20]

 

[84]      The purpose of the functus officio rule is to ensure finality in decision-making. This is important where person’s rights are at stake. The PAAB as a body is the supervisory entity in respect of accountants and auditors. In this capacity they must examine charges of alleged unprofessional misconduct, and if necessary, see to it that disciplinary proceedings are instituted. These proceedings and resultant findings of misconduct can have potentially devastating effects on persons convicted of professional misconduct. In extreme cases, such persons can be banned from further practise with the result that their whole livelihood may be affected.

 

[85]      The structure of the Public Accountants’ and Auditors’ Act[21] (the Act) is such that accountants or auditors charged with misconduct will be investigated and judged by their peers. These persons know the perils, constraints and circumstances under which accountants and auditors perform their daily tasks and hence also when they have investigated a complaint to the full so as to enable them to make decisions in respect of such alleged misconduct.

 

[86]      I can do no better than to quote from a Canadian case which expressed the functus officio rule as follows:[22]

           

            ‘As a general rule, once a tribunal has reached a final decision in respect of a matter that is before it in accordance with its enabling statute, that decision cannot be re-visited because the tribunal has changed its mind, made an error within jurisdiction or because there has been a change in circumstances. It can only do so if authorised by statute . . .’

 

[87]      It follows that if the PAAB had made a final decision which was communicated to Mr Ritter not to press charges against appellant prior to the decision underpinning the charges forwarded to appellant on 17 August 2016 then it simply did not have the power or authority to level the charges it did in August 2016.

 

[88]      To support his submission that the PAAB was functus officio, counsel for appellant referred to two documents, namely an extract from the minutes of a PAAB meeting of 1 April 2015 and a subsequent letter to Mr Ritter by the chair of the Investigation Committee (ICOM) on 15 April 2015.

 

 

[89]      The extract from the PAAB meeting reads as follows:

 

[90]     



The letter to Mr Ritter from the chair of ICOM reads as follows:

 

[91]      As is evident from the cryptic minutes of the PAAB there seems to have been no decision as to the view expressed by EDB that the legal opinion did not properly deal with or considered certain key auditing principles. And critically nothing to indicate that this aspect needed further consideration by either the PAAB or ICOM before a final decision would be made. The only matter that was discussed according to the minutes was to what extent the legal opinion relied upon should be disclosed to Mr Ritter. In conclusion a PAAB member identified as KM indicated that Mr Ritter be informed that the matter was considered closed with reference to extracts from the legal opinion.

 

[92]      The resolution followed immediately after the input from KM. The resolution, in this context, clearly was to the effect that the feedback was to inform Mr Ritter that the complaint would not to be taken any further as it did not warrant a hearing against Mr Hashagen and that this conclusion was supported by legal opinion obtained. As the PAAB clearly intended that the feedback to Mr Ritter would in effect be that he be informed of the decision of ICOM, it by necessary implication meant that PAAB endorsed the stance of ICOM for if not, this would have been evident from the minutes as the PAAB would have sought further clarification or investigation of the ‘key auditing principles’ issue raised and either not have directed a response to Mr Ritter at that stage or a response to inform him that his complaints were still under investigation.

 

[93]      It follows that it is implicit in the PAAB resolution that it endorsed the finding of ICOM and hence it became functus officio in respect of the complaints of Mr Ritter. This being so it could not revisit the decision irrespective of whether it became aware of new or further facts thereafter as pointed out above with relation to the general principles relating to the functus officio doctrine.

 

[94]      It thus follows that the functus officio point raised on behalf of the appellant is a good one.

 

[95]      The result of the aforegoing conclusion is that the only outstanding issue to determine is whether appellant was too late in his challenge based on the functus point. The respondent’s stance is that he was and it is submitted on their behalf that the appellant unduly delayed in bringing his review application to set aside the charges based on, among others, the functus officio point.

 

[96]      My brother Damaseb DCJ deals with this unreasonable delay aspect in his judgment and points out that as the review application amounted to a collateral challenge to the charges pressed against the appellant the question of unreasonable delay does not arise. I fully associate myself with his views and have nothing further to add in this regard.

 

[97]      As a result of the conclusions reached above it is not necessary to consider the attack of the appellant raised against the PAAB based on unreasonable delay on its part in pressing the charges against him.

 

[98]      Having succeeded in the appeal, the appellant is entitled to his costs.

 

 

 

[99]      In the result the following order is made:

 

(a) The appeal succeeds and the order of the High Court is set aside and replaced with the following order:

 

‘(i) The respondent’s in limine objections are dismissed;

 

(ii)   The applicant’s objection that the respondent is functus officio is upheld;

 

(iii)  The application is granted and the respondent’s decision to charge the applicant on the charges and basis as set out in the respondent’s notice dated 17 August 2017 is declared null and void, reviewed and set aside.

 

(iv)  Costs are awarded to the applicant against the respondent consequent upon the employment of one instructing and one instructed counsel.’

 

(b) The appellant is awarded costs in the appeal consequent upon the employment of one instructing legal practitioner and two instructed legal practitioners.

 

 

 

__________________

FRANK AJA

 

 

 

 

 

__________________

HOFF JA

 

 

APPEARANCES

 

 

 

APPELLANT:

 

 

 

 

R Heathcote (with him Y Campbell)

Instructed by H D Bossau & Co

 

 

 

RESPONDENT:

 

 

 

A R Bhana SC

Instructed by Kangueehi & Kavendjii Inc

 

 

 

 

 

[1] See s 21(1)(g)(i).

[2] Which states: ‘The board may investigate or cause to be investigated and, if necessary, hear any allegation or charge, of improper conduct whether prescribed or not, of which a person who is or was registered in terms of this Act is alleged to have been guilty while he was so registered…’

[3] It states: ‘For the purpose of any enquiry under section twenty-seven, the board may – (a) summon any person who in its opinion may be able to give material information concerning the subject of the enquiry or who is believed to have in his possession or custody or under his control any book, document or thing which has any bearing on the subject of the enquiry, to appear before it at a time and place specified in the summons, to be interrogated or to produce that book, document or thing, and retain for examination any book, document or thing so produced; (b) call and, by its chairman or by any other person authorized thereto by it, administer an oath to, or accept an affirmation from, any person present at the enquiry who was or could have been summoned in terms of paragraph (a) and interrogate him and require him to produce any b