Case CCT 290/24
[2025] ZACC 05
Judgement Date: 24 April 2025
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.
Thursday, 24 March 2025 at 09h00, the Constitutional Court handed down a unanimous judgment authored by Rogers J in an application for leave to appeal concerning a punitive costsorder made against the applicant by the High Court, Gauteng Division, Johannesburg. The matter was decided without a hearing.
The High Court granted a joinder order in favour of the applicant, who wanted to join the first respondent to its application for damages. Despite being successful, the High Court granted a costs order against the applicant on the attorney and client scale. The applicant sought leave to appeal the punitive costs order in the High Court and Supreme Court of Appeal but was refused. The applicant then approached the Constitutional Court and sought to appeal the punitive costs order on the basis that the High Court provided no reasons for its order.
The Court held that the matter engages its constitutional jurisdiction. This is because where a costs order does not follow the general rule applicable to a situation, a court must give reasons for its order. This is part of the rule of law and has implications relating to section 34 of the Constitution.
On the merits, the Constitutional Court held that it cannot know whether the High Court properly exercised its discretion in relation to the costs order. Assuming the Constitutional Court can have regard to the transcript of the High Court proceedings, the Court found the High Court did not properly explain the costs order and the High Court’s concerns regarding the applicant’s attorney’s conduct did not, in any event, justify a punitive costs order against the applicant.
The Constitutional Court thus granted leave to appeal and found in favour of the applicant, ordering costs against the first respondent.
The Full judgment here
Case CCT 334/23
[2025] ZACC 04
Hearing Date: 10 September 2024
Judgement Date: 09 April 2025
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 09 April 2025, at 11h00, the Constitutional Court handed down judgment in an application for confirmation of an order by the Labour Court of South Africa, Johannesburg (Labour Court), which declared the inclusion of the phrase “staff member” in section 71B Local Government: Municipal Systems Act 32 of 2000 (Systems Act) unconstitutional and invalid. The applicant is the South African Municipal Workers’ Union (SAMWU), a registered trade union that represents employees in the local government sector. The first respondent is the Minister of Cooperative Governance and Traditional Affairs (COGTA). The second respondent is the South African Local Government Association (SALGA).
On 5 July 2011, the legislature promulgated the Local Government: Municipal Systems Amendment Act with the purpose of, inter alia, barring municipal managers and managers directly accountable to municipal managers from holding office in political parties (old Amendment Act). Section 56A was specifically inserted to serve this stated purpose, to bar the upper echelon of the municipal workforce from holding political office in political parties (narrow limitation). In August 2022, the legislature promulgated the Local Government: Municipal Systems Amendment Act 3 of 2022 (the new amendment) which inserted section 71B into the Systems Act (impugned extension). The main difference between section 56A, introduced by the old Amendment Act and section 71B introduced by the new Amendment Act is that the latter extends the limitation of political rights to all municipal employees, regardless of their status. Section 1 of the Systems Act defines “staff” as, “in relation to a municipality . . . the employees of the municipality, including the municipal manager”.
On 7 July 2023, SAMWU launched a constitutional challenge in the Labour Court against section 71B of the Systems Act, to the extent that it bars employees other than municipal managers and managers directly accountable to them from holding political office in political parties. The Labour Court held, inter alia, that the issue in that instance was the relationship between the limitation of a constitutional right (in the form of the impugned extension) and the purpose as articulated by the respondents. That purpose being to depoliticise and professionalise local government by eradicating political interference in municipal decision-making, so as to maintain management stability and thus improve service delivery. The Labour Court held that the matter would be best assessed through a justifiability inquiry, which requires, among other factors, a consideration of the relation between the impugned limitation and its stated purpose.
In line with the justifiability inquiry, the Labour Court held that there is no dispute that the impugned limitation limits section 19. The bone of contention was whether this limitation was justified or not. On the relationship between the impugned extension and its purpose the Labour Court held, inter alia, that evidence must be tendered to demonstrate that the existence and enforcement of the impugned extension can reasonably be expected to control the risks that the respondents have identified, and advance the purpose of the extension. Further, the Labour Court held that COGTA placed no evidence before it showing that the limitation imposed by the impugned extension was justified. On the argument that the intention of the limitation is to depoliticise and professionalise the public service, the Labour Court held that there is insufficient evidence that has been introduced to establish that the impugned extension is rationally connected to the stated purposes of depoliticisation and professionalisation. The Labour Court also rejected the argument that every junior employee who holds a political position in a political party would necessarily wield undue political influence in the workplace because it amounted to no more than an assumption. The Labour Court also held that there were less restrictive means to achieve the legislative purpose, in the form of the narrow limitation, that has been in existence since 2011.
In conclusion, the Labour Court held that it may well be that improved service delivery will result in the stabilisation of local government, but stabilisation is a consequence of the purpose of improved service delivery being achieved, it is not a means used to achieve that purpose. Based on the above reasoning, the Labour Court held that the limitation in the form of the impugned extension could not be justified in terms of section 36(1) of the Constitution, and thus section 71B was unconstitutional to the extent that it denied municipal employees, who were not municipal managers or managers accountable to them, from holding any political office in any political party.
Before the Constitutional Court, SAMWU submitted that the impugned extension is not reasonable and justifiable in an open and democratic society based on human dignity, equality and freedom, taking into account all relevant factors provided in section 36 of the Constitution. This is because there is no rational link between the impugned extension and the improved service delivery purpose and that the impugned extension potentially left no room for political participation of municipal employees. SAMWU submitted that there is no empirical evidence at all justifying these far-reaching intrusions and generalised assumptions. Further, that the stated purpose of the insertion of section 71B was, in the relevant part of the preamble to the Amendment Act: “to bar municipal managers and managers directly accountable to municipal managers from holding political office in political parties”. SAMWU disputed the notion that improved service delivery would result in the stabilisation of local government.
COGTA opposed the relief sought by SAMWU on the basis that the Labour Court erred in not finding that policy considerations alone may be sufficient to justify the limitation of a right in the Constitution. COGTA criticised the Labour Court judgment because it accepted that the professionalisation of municipal management and improving service delivery are legitimate objectives which require urgent implementation, but failed to consider whether the policy considerations constituted sufficient grounds to limit section 19. COGTA contended that the inroads that section 71B made into section 18 and 19, weighed against the benefit that stood to be derived were minimal and thus justified.
Similarly, SALGA contended that this Court should decline confirmation of the judgment and order of the Labour Court. According to SALGA, it is common cause that depoliticising and professionalising local government to improve service delivery is a legitimate government purpose. It is further common cause that political interference in municipal administration hampers the efficient and effective functioning of municipalities. SALGA submitted that the Labour Court erred in assessing the rationality of the extension. The suggestion that internal disciplinary measures are adequate to deal with recalcitrant junior officials holding high political offices loses sight of the reality that the political fallout for taking such disciplinary measure, in itself, disrupts municipal governance and administration. Thus, the Labour Court also erred in suggesting that the utilisation of disciplinary procedures would be a better means of achieving the same result.
The first judgment penned by Mathopo J (Madlanga ADCJ, Majiedt J, Mhlantla J, Rogers J, Tolmay AJ and Tshiqi J concurring) started its analysis by drawing a distinction between rationality challenge and rights-limitation challenge. The first judgment held that in a rationality challenge, the party impugning the provision bears the onus of demonstrating that the impugned provision lacks a legitimate government purpose or a rational relationship to such purpose. However, where legislation limits a fundamental right, as here, the burden shifts to the party seeking to justify the limitation under section 36(1) of the Constitution. The first judgment held that should the justification analysis reveal that the limitation cannot be justified, this would be sufficient to warrant a declaration of invalidity, rendering a separate consideration of the rationality challenge unnecessary.
In line with the justifiability inquiry, the first judgment found the central issue to be whether there is a limitation of a constitutional right and whether such limitation can be justified in terms of section 36(1) of the Constitution. It held that the nature of the constitutional right at issue is the political right to make political choices, specifically, the right to participate in the activities of a political party, as provided for in section 19(1)(b) of the Constitution. Further that limiting this right hinders citizens’ ability to fully engage in the country’s political activities, and could very well dissuade citizens from participating in political party activities, thus directly undermining the fundamental constitutional value of universal adult suffrage. According to the first judgment the respondents were unable to draw the Court’s attention to any empirical evidence justifying the limitation. While accepting that in some instances empirical evidence may not always be required, the first judgment, however, held that courts cannot operate on the mere say-so of Parliament. Further that even if a robust common-sense approach is adopted, the impugned limitation would still fail the rationality test as there are many fallacious assumptions that this legislative policy stance raises. The limitation fails on policy considerations alone, notwithstanding the absence of empirical evidence.
The first judgment held that it is unconscionable, in the absence of any evidence, to expect the Court to rely on untested and generalised assumptions as evidence of common sense. The solution to curb undue influence and violence is not to ban the constitutional rights of employees, but to ensure broader security through the use of law enforcement and to sustain ethical conduct through proper compliance with the constitutional mandates of the municipalities. The respondents’ problems lie in their inability to implement legal remedies with regard to these infractions. Depriving junior staff members of their hard-fought right, enshrined in section 19 of the Constitution, to hold positions in a political party, simply because managers cannot exercise or administer disciplinary measures, is irrational.
The first judgment agreed with the Labour Court that there are less restrictive mechanisms to achieving the object sought by the legislative purpose, one which was introduced by the old Amendment Act and has, as per SALGA’s concession, resulted in the “stabilisation of the municipal sector which for years has been plagued by political infighting, resulting in instability”. That less restrictive means is the narrow limitation, which has been tried, tested and has proved to be workable. It also remains unchallenged. Other mechanisms also exist, which include the stringent enforcement of rules and disciplinary mechanisms to provide oversight and curtail political interference in the local municipal sector.
The first judgment thus held that the respondents, who have the burden of justifying the impugned extension in a section 36(1) analysis, have failed to do so. The Labour Court’s declaration that the inclusion of the phrase “staff member” in section 71B of the Systems Act renders the section invalid was therefore correct. The retrospective application of the order will not have any disruptive effects or cause any confusion. Therefore, in the interests of justice, the declaration should operate retrospectively from 1 November 2022, being the date when the new Amendment Act commenced. For these reasons, the first judgment confirmed the order of the Labour Court declaring the inclusion of the phrase “staff member” in section 71B of the Systems Act unconstitutional and invalid, ordering the declaration of invalidity to operate retrospectively from 1 November 2022, being the date when the new Amendment Act commenced.
The second judgment penned by Kollapen J, concurred in by Theron J, agrees with the first judgment that section 71B constitutes a limitation on the right to participate in political activities as envisioned in section 19(1) of the Constitution. However, it held that COGTA and SALGA have provided enough information to establish that the limitation is reasonable and justifiable under section 36(1) of the Constitution. In doing so, the second judgment highlights the context within which one must understand section 71B. It held that a primary goal of the Constitution is a non-partisan civil service, and that depoliticisation is one of many mechanisms to achieve that goal. The challenge to section 71B must be seen in light of the legislature’s efforts to achieve depoliticisation, and not as an unsupported prohibition on the right to political activity.
Regarding the substantive rationality challenge, the second judgment held that one must distinguish between a rationality challenge, which is one based on the principle of legality, and the question whether a limitation is rationally related to a legitimate government purpose, which is a question which forms part of the limitation analysis under section 36(1) of the Constitution. It held that the true enquiry here is whether section 71B is reasonable and justifiable in an open and democratic society. If it is, then this disposes of the question of whether section 71B is rational. Given its conclusion that section 71B passed the limitation analysis, the second judgment found it unnecessary to determine whether section 71B was rational.
Regarding the limitation analysis, the second judgment found that the limitation is reasonable and justifiable for five main reasons. First, the nature of the right in question is the right to hold office in a political party which is a minor component of the right to political activity under section 19(1) of the Constitution. Given that the level of justification must be relative to the nature of the right, the information provided by COGTA and SALGA was enough to justify the relatively minor limitation on the section 19 right. Second, depoliticisation is an important purpose given that it is founded in Constitutional Principle XXX, and thus relates to the very foundation of our constitutional democracy. Third, section 71B applies only to those municipal employees who are elected to office in a political party. While, many employees may form part of political parties, only a few of them will be elected to office within that party. The limitation is therefore relatively minor in its nature and extent because, in substance, only a few municipal employees will be affected by the prohibition.
Fourth, the legislature considered a host of information which it relied on to support section 71B. This included a report by the Human Sciences Research Council, a reported judgment, a PowerPoint Presentation by SALGA and scholarly research from Professor Jaap de Visser. This information established a relationship between a prohibition on municipal employees from holding office in a political party and depoliticisation of local government. Finally, the narrow limitation does not constitute less restrictive means to achieve depoliticisation because it is not capable of achieving the level of depoliticisation desired by the Constitution.
The second judgment concluded that the limitation imposed on section 19 of the Constitution by section 71B of the Systems Act is thus reasonable and justifiable in an open and democratic society based on human dignity, equality and freedom.
The Full judgment here
Case CCT94/23; CCT 98/23; CCT 66/23; CCT 72/23 & CCT 320/23
[2025] ZACC 02
Hearing Date: 15 & 16 August 2024
Judgement Date: 31 March 2025
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, 31 March 2025 at 10h00, the Constitutional Court handed down a unanimous judgment authored by Rogers J in five consolidated applications for leave to appeal concerning the interpretation and application of section 105 of the Tax Administration Act 28 of 2011 (TAA).
Section 105 of the TAA provides that a taxpayer must challenge an assessment in the Tax Court unless the High Court directs otherwise, which is to grant a “section 105 direction”. The five cases all raised questions as to whether taxpayers require such a direction in cases where taxpayers seek to judicially review an assessment, or seek a declaratory order related to an assessment. Relatedly, the case concerned whether section 105 of the TAA ousts the jurisdiction of the High Court until a section 105 direction is granted.
In United Manganese (Pty) Limited v Commissioner for the South African Revenue Service (UMK), the taxpayer sought to review additional assessments based on alleged procedural irregularities and to obtain declaratory relief on a point of law. In Rappa Resources (Pty) Limited v Commissioner for the South African Revenue Service (Rappa), the taxpayer launched a review application without first objecting to the assessments and sought to compel SARS to produce a rule 53 record. In Forge Packaging (Pty) Limited v Commissioner for the South African Revenue Service (Forge), the taxpayer applied for leave to appeal the High Court’s refusal to grant a section 105 direction for a review based on alleged non-compliance with section 42(2)(b) of the TAA. In Absa Bank and Another v Commissioner for the South African Revenue Service (ABSA) the taxpayers sought to review the South African Revenue Service’s (SARS) intention to issue assessments under the general anti-avoidance rules. Finally, in Lueven Metals (Pty) Limited v Commissioner for the South African Revenue Service (Lueven), the taxpayer applied for declaratory relief before assessments were issued, with both parties initially agreeing the case was suitable for determination by declaratory order.
The Constitutional Court found that section 105 applies to both review and declaratory applications that effectively dispute the correctness of tax assessments. Until a section 105 direction is granted, the High Court’s jurisdiction to hear such matters is conditionally suspended. This means that a taxpayer cannot compel the production of a rule 53 record until the High Court has decided whether to grant a section 105 direction.
The Court rejected the “exceptional circumstances” test that had previously been adopted by the Supreme Court of Appeal for granting a section 105 direction. The Court held that neither the language of section 105, nor its context and purpose, justified such a heightened test. Instead, the Court held that the test is whether there is justification for departing from the default remedy of appeal to the Tax Court, which may be tested by asking whether the departure is appropriate or whether there is good cause for it.
The Court provided general guidance on factors relevant to granting a section 105 direction. It emphasised that it will generally be inappropriate to grant a direction if the taxpayer has not first objected to the assessment and if SARS has not yet given a decision on the objection. The Court also stated that a factor militating against a section 105 direction is where the taxpayer is pursuing other grounds by way of an appeal to the Tax Court, as piecemeal adjudication is generally undesirable.
The Court further held that the closer a review ground is to a permissible ground of appeal in the Tax Court, the less likely it is that granting a section 105 direction will be appropriate. However, where a taxpayer raises a pure point of law, a section 105 direction may be appropriate, though the High Court must consider whether there are advantages in favour of High Court adjudication over Tax Court adjudication, such as creating precedential value or governing future assessments. In addition, Court held that a section 105 direction may be appropriate in cases where there are egregious and wilful procedural irregularities.
In relation to the individual cases, the Court ruled the following:
(a) In UMK, the Court found that neither the review relief nor the declaratory relief sought by the taxpayer was appropriate for High Court adjudication, and thus a section 105 direction should not be granted. The Court thus granted leave to appeal but dismissed the appeal.
(b) In Rappa Resources, the Court confirmed that until a section 105 direction is granted, the High Court's jurisdiction is conditionally suspended, and thus the High Court could not order production of a rule 53 record. The Court thus granted leave to appeal but dismissed the appeal.
(c) In Forge Packaging, the Court refused to condone the late filing of the taxpayer's application for leave to appeal, as the taxpayer did not enjoy reasonable prospects of success. Based on this, the Court dismissed the application.
In the Absa, the Court granted the taxpayers leave to appeal, overlooking peremption in the interests of justice. The Court found that the two issues raised by the taxpayers were indeed pure points of law, and although the presence of other disputes about the assessments militated against High Court adjudication, it allowed the High Court’s section 105 direction to stand. The Court granted leave to appeal the order of the Supreme Court of Appeal and held that the remaining issues in the appeal will stand over for later determination in accordance with directions to be issued by the Court.
(e) In Lueven, the Court held that since no assessment had been issued when the taxpayer applied for declaratory relief, section 105 did not apply directly. The Court found that the Supreme Court of Appeal had erred in declining to decide the merits of the case. Therefore, the Court granted leave to appeal the order of the Supreme Court of Appeal and held that the remaining issues in the appeal will stand over for later determination in accordance with directions to be issued by the Court.
The Full judgment here