Case  CCT 159/21 
[2022] ZACC 25

Hearing date: 01 March 2022

Judgement Date: 04 July 2022

Post Judgment Media Summary  

The following explanatory note is provided to assist the media in reporting this case and is not binding on the Constitutional Court or any member of the Court.

On Monday, 4 July 2022 at 10h00, the Constitutional Court handed down judgment in an application for leave to appeal against the judgment and order of the Supreme Court of Appeal, which dismissed the applicant’s appeal against the judgment and order of the High Court of South Africa, Limpopo Division, Polokwane (High Court). The crux of the appeal was the validity and enforcement of an agreement for the sale of property entered into between the applicant, Merifon (Pty) Limited (Merifon), and the first respondent, the Greater Letaba Municipality (Municipality), which did not comply with inter alia section 19 of the Local Government Municipal Finance Management Act 56 of 2003 (MFMA).

The agreement was entered into on 7 March 2013, by Merifon, represented by Mr Mangena, and the Municipality, represented by Ms Mashaba, the Municipal Manager. The agreement was for the sale of land, consisting of three immovable properties situated at Farm Mooiplaats. The purchase price was R52 million payable on or before 29 March 2013, which amount would be paid in cash directly to the transferring attorneys. The agreement further stipulated that the transfer of the property into the name of the Municipality would be effected as soon as reasonably possible after payment by the Municipality to the transferring attorneys of the transfer costs and the purchase price.

However, the Municipality did not pay the purchase price and it later transpired that the Provincial Treasury had declined the request for funding, on the basis that the purchase price was excessive.

Determined to enforce the agreement, Merifon addressed a letter of demand to the Municipality, giving it 14 days within which to pay the purchase price and transfer costs, failing which, it would face legal proceedings. This notice was not heeded by the Municipality. On 2 May 2013 the municipal manager replied to Merifon, indicating that the agreement was conditional upon funding authorisation by the Provincial Treasury.

In 2014, Merifon instituted an action in the High Court against the Municipality and the second respondent, the Housing Development Agency, a national housing agency established to assist in the acquisition of land required for human settlements development purposes, which had been instrumental in identifying the property. The High Court dismissed the action and granted judgment in favour of the Municipality, declaring the agreement “null and void and unenforceable”. The Court in essence found that the Municipality’s representative, Ms Mashaba, lacked the authority to sign the agreement because the Municipality’s Council had at no stage resolved “to acquire the property”.

Merifon appealed to the Supreme Court of Appeal which dismissed the appeal. The central question for determination before it was whether it would be appropriate, in the context of the facts of this case, for the Supreme Court of Appeal to grant an order for specific performance in favour of Merifon. The Supreme Court of Appeal held that the doctrine of legality and the rule of law lie at the heart of the Constitution, and that the fundamental truism is that the exercise of all public power derives from the Constitution. Accordingly, no organ of state or public official may act contrary to or beyond the scope of their powers as laid down in the law. The Supreme Court of Appeal concluded that the High Court was correct to conclude that the agreement was legally unenforceable on account of the Municipality’s non-compliance with section 19. This is the section that made it obligatory that a Municipal Council resolution be adopted authorising the transaction as it involved a capital project.

The Supreme Court of Appeal also considered whether the agreement could be “validated” by estoppel. Based on its finding that the provisions of the MFMA were peremptory, the Court held that to remedy the transaction by estoppel would “render the relevant provisions of the MFMA nugatory”.

In this Court, Merifon submitted that the matter is a constitutional matter and engages this Court’s constitutional jurisdiction because it concerns the interpretation and application of sections 19, amongst others. On this score, Merifon submitted that the Supreme Court of Appeal erred insofar as it found that non-compliance with section 19 rendered the contract null and void and unenforceable. Merifon further argued that persons contracting in good faith with a statutory body or its agents are not required, in the absence of knowledge to the contrary, to enquire whether the relevant internal arrangements or formalities have been satisfied, and are entitled to assume that all the necessary arrangements or formalities have indeed been complied with. Merifon argued that the Supreme Court of Appeal should have applied the Turquand rule and/or estoppel. Accordingly, Merifon submitted that it was entitled to claim specific performance and the Municipality ought to have been estopped from relying on its own non-compliance with section 19.

The Municipality argued that neither this Court’s constitutional nor general jurisdiction was engaged. The Municipality contended, in line with the finding of the Supreme Court of Appeal, that neither the doctrine of estoppel not the Turquand rule can displace statutorily imposed requirements. It also argued that section 19 is an empowering provision, and a municipality cannot act outside of that power. The Municipality contended that this case was about whether, as matter of law, there was compliance with the relevant legislation which is the source of the power exercised. And because there was non-compliance with an empowering provision, the agreement is null and void and the question of specific performance does not arise. The Municipality further contended that Merifon’s argument, that section 19 fell within the second category referred to by the Supreme Court of Appeal in City of Tshwane Metropolitan Municipality v RPM Bricks (Pty) Ltd [2007] ZASCA 28 (RPM Bricks), is misplaced. The first category referred to in RPM Bricks is an act beyond or in excess of statutory powers conferred on a municipality as a public authority, and the second category is a decision of a municipality which constituted an irregular or informal exercise of power granted to it as a public body.

In a unanimous judgment penned by Mlambo AJ, this Court found that its constitutional jurisdiction was engaged because it could not be said that Merifon did not raise the validity and enforceability of the agreement in its pleadings, therefore properly raising legality. The Court also found it correct that Merifon denied the applicability of section 19. Further, because the High Court and the Supreme Court of Appeal decided the matter on the basis of the principle of legality, this Court found that its constitutional jurisdiction was engaged.

Having accepted that this Court’s jurisdiction was engaged, the Court had to determine whether it was nevertheless in the interests of justice that leave to appeal be granted. The Court found that there were no reasonable prospects that Merifon would succeed on appeal, thus leave to appeal was refused. The Court reasoned that the authorities which underscore the principle of legality, and which were cited by the Supreme Court of Appeal, are uncontested and settled. The Court also agreed with the Supreme Court of Appeal, in that section 19 was applicable.

Regarding Merifon’s submission based on RPM Bricks, the Court found Merifon’s argument, that section 19 fell within the second category distilled in RPM Bricks misplaced. The Court held that, absent a resolution by the Municipality sanctioning the transaction, any agreement entered into by an agent of the Municipality is plainly impermissible. The Court therefore agreed with the Supreme Court of Appeal’s finding that the Municipality’s decision fell within the first category distilled in RPM Bricks, being that the agreement amounted to an act beyond or in excess of statutory powers of the Municipality as a public authority.

Regarding the applicability of estoppel and the Turquand rule, the Court found these to be of no application because it is trite that, first, void acts cannot be resuscitated through the Turquand rule and, second, the Turquand rule is a species of estoppel and thus cannot be raised to cure an action that is ultra vires, as opposed to one that is intra vires, but suffers some other defect.

Therefore, leave to appeal was refused and Merifon was ordered to pay the Municipality’s costs.

 

The Full judgment  here 

Case  CCT 110/19 
[2022] ZACC 24

Judgement Date: 29 June 2022

Post Judgment Media Summary  

The following explanatory note is provided to assist the media in reporting this case and is not binding on the Constitutional Court or any member of the Court.

On Wednesday, 29 June 2022 at 10h00, the Constitutional Court handed down judgment in an application for an extension of a suspension period in respect of a declaration of invalidity issued by the Constitutional Court in New Nation Movement NPC v President of the Republic of South Africa (New Nation Movement II).

On 11 June 2020, the Court in New Nation Movement II, declared the Electoral Act unconstitutional to the extent that it requires that adult citizens may be elected to the National Assembly and Provincial Legislatures only through their membership of political parties. It ordered that the declaration of constitutional invalidity be suspended for 24 months until 10 June 2022 to afford Parliament an opportunity to remedy the defect giving rise to the unconstitutionality.

On 26 April 2022, approximately seven weeks before the expiry of the suspension period, the Speaker of the National Assembly and the Chairperson of the National Council of Provinces (Parliament), approached the Court and asked for an extension of the suspension period for six months until 10 December 2022. In the alternative, Parliament sought an interim extension while the Court considered the application. The application was opposed by New Nation Movement NPC (New Nation) and Ms Chantal Dawn Revell, the first and second respondents in the extension application (principal application). New Nation and Ms Revell also filed counter-applications on 3 June 2022, less than five court days before expiry of the suspension period.

In support of the principal application, Parliament submitted that it had not been lethargic in giving effect to the order of 11 June 2020 (the order). It submitted that it had taken numerous measures to give effect to the order. These measures include meetings held by the Portfolio Committee of Home Affairs (Portfolio Committee) between 2020 and 2021, a comparative study that was conducted in respect of different electoral systems, and a determination of additional legislation that would also require amendment as a result of an amendment to the Electoral Act. According to Parliament, when the Minister of Home Affairs (Minister) failed to introduce the Electoral Amendment Bill (Bill) before the National Assembly by the agreed upon deadline, Parliament followed up with the Minister continuously. When the Bill had still not been introduced by 21 November 2021, Parliament decided it had no option but to await the Minister’s introduction of the Bill. Parliament submitted that after introduction of the Bill in January 2022, when the Minister did not file an application to extend the suspension period, on 23 February 2022, Parliament instructed the state attorney to file an extension application. Due to internal processes, the application could only be filed on 26 April 2022.

In response to the directives issued by the Court on 11 May 2022, Parliament submitted, amongst others, that although it brought the application in the ordinary course, the application was indeed urgent.

The Minister did not oppose the extension sought on the condition that the extension did not exceed six months. Regarding the steps taken by the Minister to give effect to the order, the Minister averred that on 11 February 2021, a Ministerial Advisory Committee was established to identify the extent of the legislative and policy reform required to give effect to the order. The Minister did not indicate what actions were being taken prior to 11 February 2021. A draft bill was introduced to the National Assembly on 29 December 2021. According to the Minister, after introduction of the Bill, it was up to Parliament to deal with the matter.

The Electoral Commission (Commission) made submissions regarding the urgency of the application and any prejudice that may be suffered in granting the extension sought. The Commission submitted that considering the then looming deadline on 10 June 2022, the application ought to be considered on an expedited basis. Regarding any prejudice that may be suffered, the Commission submitted that should the Bill be enacted in its current form, a six-month extension to 10 December 2022 would not cause prejudice to it and the public. However, if the Bill is amended to include new sub-provincial constituencies, it would be impossible for the Commission to implement the newly enacted Electoral Act in time for the 2024 elections. The Commission communicated this to the Portfolio Committee in 2020.

New Nation and Ms Revell opposed the application. They filed their answering affidavits in the principal application out of time. Additionally, they also filed their counter-applications a mere five court days before expiry of the suspension period. They sought condonation from the Court for the late filing of the affidavits and counter-applications. New Nation contended that its directors are based in different provinces; hence the late filing. Ms Revell submitted that she required additional time to file the counter-application and answering affidavit.

According to New Nation and Ms Revell, Parliament and the Minister were engaged in a “blame game”, trying to escape accountability. They made the submission that if the extension is granted, the Electoral Act may possibly not be amended in time for the 2024 elections. Thus, there is a possibility that the elections might be held without accommodating independent candidates. This would prejudice independent candidates.

In the alternative, if the Court granted the extension, New Nation and Ms Revell asked the Court to issue directions, directing the parties and amici to to file further affidavits and written submissions on an appropriate reading-in order to be made in respect of the Electoral Act, to cure the constitutional invalidity. Additionally, Ms Revell also contended that the public participation process of the Bill followed to date is fundamentally flawed. She argued that the public had not been given an opportunity to comment on the work done by the Ministerial Advisory Committee.

The matter was decided without a hearing. In a unanimous judgment penned by Unterhalter AJ, the Constitutional Court reiterated its’ finding in Electoral Commission of South Africa v Speaker of the National Assembly that extensions should be granted with great caution and not be granted simply as a matter of course or at the last minute.

The Court granted condonation for the late filing of New Nation and Ms Revell’s answering affidavits in the principal application after finding that the late filing did not prejudice Parliament, the Minister and the Commission. However, it refused condonation for the late filing of the counter-applications. In this respect, it held that New Nation and Ms Revell failed to provide a reasonable explanation for the late filing of the counter-applications. Furthermore, the delayed launch of the counter-applications would not have allowed Parliament, the Minister and the Commission a fair opportunity to respond, given the deadline of 10 June 2022.

The Court found that the principal application was urgent in large measure as a result of the dilatory conduct of the Minister and Parliament in bringing the application. However, this did not detract from the accomplished fact that the matter was urgent and had to be dealt with as such.

The Court outlined the factors to be considered when determining whether to grant an extension. The overarching consideration in exercising this power is the interests of justice. It held that Parliament will not be excused from its duty to meet the deadlines imposed by the Court, on the basis that the Minister delayed the legislative process. Furthermore, having considered the Commission’s submission that it will not be prejudiced by the six-month extension, the Court found that the extension sought would not cause any prejudice. Finally, the Court considered the steps taken by Parliament thus far to give effect to the order, as well as a detailed timeline provided by Parliament and found that, based on the evidence before it, Parliament had met its burden to show that it will be able to finalise the Bill’s legislative process by 10 December 2022.

In the circumstances, the Court found that it is in the interests of justice to extend the suspension period from 10 June 2022 to 10 December 2022.

On 10 June 2022, the Court issued an order granting the extension sought and on 29 June 2022, the reasons for the order were issued.

 

The Full judgment  here 

Case  CCT 24/21 
[2022] ZACC 23

Hearing Date: 05 August 2021

Judgement Date: 28 June 2022

Post Judgment Media Summary  

The following explanatory note is provided to assist the media in reporting this case and is not binding on the Constitutional Court or any member of the Court.

On 28 June 2022 at 12h00, the Constitutional Court handed down judgment in an application by the Women’s Legal Centre Trust (WLCT) to confirm an order of the Supreme Court of Appeal. The order declared the Marriage Act 25 of 1961 (Marriage Act), the Divorce Act 70 of 1979 (Divorce Act) and certain provisions of the Divorce Act to be inconsistent with sections 9, 10, 28 and 34 of the Constitution, in that they fail to recognise marriages solemnised in accordance with Sharia law (Muslim marriages) as being valid for all purposes in South Africa, and to regulate the consequences of such recognition.

In addition to the confirmation application, the WLCT’s application also included (i) a conditional cross appeal, in terms of which they asked that if this Court declines to confirm the order of constitutional invalidity, it instead order that the state is under a constitutional obligation to enact legislation to recognise and regulate Muslim marriages; and (ii) an appeal against the limited retrospective relief granted by the Supreme Court of Appeal. 

In the High Court, the WLCT asked the Court to direct the President and Cabinet to prepare, initiate, enact and bring into operation legislation providing for the recognition and regulation of Muslim marriages within 12 months of the date of the order (the composite relief). In the alternative, the WLCT asked the Court to declare the Marriage Act and the Divorce Act unconstitutional to the extent that they fail to recognise Muslim marriages (the alternative relief).

The High Court granted the composite relief and held that the President and Cabinet’s failure to enact legislation to recognise and regulate Muslim marriages meant that they had failed to fulfil their constitutional obligations in terms of section 7(2) of the Constitution.

Aggrieved by the decision of the High Court, the President of the Republic of South Africa and the Minister of Justice and Correctional Services (collectively, the State parties) appealed to the Supreme Court of Appeal. The issues before the Supreme Court of Appeal were (i) whether the state is obligated in terms of the Constitution to enact legislation that regulates and recognises Muslim marriages, (ii) whether the provisions in question were inconsistent with section 15 of the Constitution and (iii) whether the interim relief should have applied retrospectively.

The Supreme Court of Appeal held that the non-recognition of Muslim marriages violates the constitutional rights of Muslim women and children, and that the impugned provisions are inconsistent with sections 9, 10, 28 and 34 of the Constitution. However, the Supreme Court of Appeal found that it is Parliament that has the responsibility to make laws; the President and Cabinet merely have a discretionary power to prepare and initiate legislation. Therefore, ordering the President and Cabinet to enact legislation on the basis of section 7(2) alone would be an infringement of the separation of powers doctrine. The Supreme Court of Appeal held further that retrospective relief backdated to 27 April 1994 would have profound unforeseen circumstances and so it therefore limited retrospectivity to the date of its order.

Before this Court, the WLCT asked for confirmation of the Supreme Court of Appeal’s order that the impugned provisions are inconsistent with sections 9, 10, 28 and 34 of the Constitution insofar as they fail to recognise Muslim marriages as valid marriages. The State parties did not oppose the confirmation application and conceded that the Marriage Act and the Divorce Act are inconsistent with sections 9, 10, 28 and 34 of the Constitution. However, the State parties opposed the WLCT’s application for leave to appeal and the conditional cross appeal. They submitted that the state is under no obligation – in terms of the Constitution or international law - to enact legislation, and that ordering the state to enact legislation would breach the doctrine of the separation of powers. On retrospectivity, the State parties submitted that the retrospective effect of the order had to be limited to avoid disruptions.

Lajnatun Nisaa-Il Muslimaat (Association of Muslim Women of South Africa) opposed the confirmation application. They submitted that, because of certain concessions made by the President during proceedings before the Supreme Court of Appeal, that Court did not properly determine whether the Marriage Act and the Divorce Act were indeed unconstitutional. Lajnatun Nisaa-Il Muslimaat submitted that the Marriage Act and the Divorce Act do not discriminate against Muslim women and are not unconstitutional.

The South African Human Rights Commission (SAHRC) submitted that the state is under a legal obligation (in terms of both domestic and international law) to recognise and regulate Muslim marriages by means of legislation. In relation to South Africa’s obligations under international law, the SAHRC submitted that the Protocol to the African Charter on Human and Peoples’ Rights on the Rights of Women in Africa, the SADC Gender and Development Protocol, the Convention on the Elimination of All Forms of Discrimination Against Women and the International Covenant on Civil and Political Rights all obligate the state to recognise all de facto marriages, including Muslim marriages, and to regulate them by means of legislation. In relation to South Africa’s domestic obligations, the SAHRC submits that section 7(2) of the Constitution places a positive obligation on the state to respect, protect, promote and fulfil fundamental rights and that it simply would not be reasonable for the state to seek to fulfil the rights in the Bill of Rights in relation to Muslim marriages in the absence of the enactment of legislation to that effect. 

The Commission for Gender Equality (CGE) was admitted as an intervening party. They supported the confirmation application but went further to submit that the section 7(2) issue had to be determined directly, even if this Court upholds the declaration of invalidity. The CGE submitted further that determining the section 7(2) issue is the only effective relief that will protect the rights of women and children in Muslim marriages. Similarly to the WLC, the CGE submitted that the relief should be fully retrospective to 27 April 1994. In their view, retrospectivity would not have a disruptive or prejudicial effect on third parties and is not contrary to the separation of powers doctrine.

Muslim Assembly Cape was admitted as the first amicus curiae. They submitted that Muslim marriages must be recognised in their own right, without the need for a civil marriage, in the same way that African customary law marriages are recognised in their own right. They supported retrospectivity, on the basis that it will ensure that Muslim women will be provided with recourse in relation to the patrimonial consequences of divorce. They further submitted that it is not possible to regulate the consequences of Muslim marriages contractually. While Sharia law addresses and encourages marriage contracts, Muslim Assembly Cape submitted that they are not the norm, either because women do not have the means to conclude them, or because they lack the requisite bargaining power to get their prospective spouses to conclude contracts.

The United Ulama Council of South Africa was admitted as the second amicus curiae. They contended that the state is positively obliged to enact comprehensive and stand-alone legislation in terms of section 7(2) of the Constitution, read with section 15(3), to recognise Muslim marriages and their consequences, for all purposes. They argued inter alia that section 15(3) of the Constitution, which expressly provides that the right to freedom of religion does not prevent legislation from recognising marriages concluded under religious law, constitutionally empowers the state to introduce legislation.

In a unanimous judgment penned by Tlaletsi AJ, the Constitutional Court found that the impugned legislation differentiated between people who marry in terms of the Marriage Act and people who marry according to Muslim rites, especially women, and that this differentiation amounts to unfair discrimination because it deprives Muslim women and their children of the remedies and protections that they would otherwise be afforded if the marriage had been concluded in terms of the Marriage Act. The Court held that there is no justification for the continuing non-recognition of Muslim marriages. In addition to this, the Court held that the impugned provisions also infringe the rights to dignity, access to courts and the principle of the best interests of the child. For these reasons, the Court confirmed the order of constitutional invalidity and held that the Marriage Act and the Divorce Act are inconsistent with sections 9, 10, 28 and 34 of the Constitution insofar as they do not afford Muslim marriages recognition. The Court held that its order of constitutional invalidity ought to apply to all unions validly concluded as a marriage in terms of Sharia law and subsisting at the date when the WLCT instituted its application in the High Court (15 December 2014). This extends the extent of retrospectivity that was ordered by the Supreme Court of Appeal, but the Court did not accede to the full extent of unlimited retrospectivity that the WLCT requested. The Court found that it was necessary to strike a balance, given that the rights of third parties could be implicated by the relief if full retrospectivity was granted. The Court stated that limited retrospectivity would ensure that third parties will effectively have been placed on notice, because from the date the action was launched, they could have known that relief was being sought on behalf of the class of persons to whom relief will be made available.

The final issue the Court determined was whether the state is obliged, in terms of section 7(2), to enact legislation recognising and regulating Muslim marriages. On this, the Court held that the applicants failed to establish, in the circumstances of this matter, that section 7(2) places an obligation on the state to enact legislation specific to Muslim marriages. The Court reasoned that here the state has legislated, albeit in a defective fashion, and, as such, it is not appropriate to make a finding that the state is obliged by section 7(2) to enact standalone legislation on Muslim marriages. Instead, the appropriate course was to challenge the legislation, rather than allege that the state has failed to fulfil a duty to legislate.

.

 

The Full judgment  here