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[2011] ZASCA 222
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Kouga Municipality v Bellingan and Others (121/11) [2011] ZASCA 222; 2012 (2) SA 95 (SCA); [2012] 2 All SA 391 (SCA) (30 November 2011)
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THE SUPREME COURT OF APPEAL OF
SOUTH AFRICA
JUDGMENT
Case No: 121/11
In the matter between:
KOUGA
MUNICIPALITY
…..........................................................................
Appellant
and
MARK
BELLINGAN
…....................................................................
First
Respondent
THE
MEXICAN CC
….................................................................
Second
Respondent
RAPICORP
118CC
….....................................................................
Third
Respondent
Neutral citation:
Kouga Municipality v
Bellingan
(121/11)
[2011] ZASCA 222
(30 November 2011).
Coram:
BRAND, CLOETE, HEHER, THERON and WALLIS
JJA
Heard:
10 November 2011
Delivered:
30 November 2011
Summary:Administrative law
: distinction between
direct and defensive challenge to legislation, discussed; person
charged for contravening allegedly invalid
legislation can bring
application for declaratory order that legislation is invalid.
The provisions of
s 160(4)(
b
)
of the Constitution of the Republic of South Africa Act, 1996, and
s 12(3)(
b
) of The
Local Government:
Municipal Systems Act, 32 of 2000
, discussed and applied.
Kouga Municipality Liquor (Trading Hours) By-law
published in the
Eastern Cape Provincial Gazette Extraordinary
of 27 December 2006 and relating to registrations under the
Eastern
Cape
Liquor Act 10 of
2003
, declared invalid for purposes
of prosecution of respondents.
______________________________________________________________
ORDER
______________________________________________________________
On appeal from:
Eastern Cape High Court,
Grahamstown (Eksteen J sitting
as court of first instance):
1 The appeal is dismissed, with costs.
2 Paragraphs 1, 2 and 3 of the order of the court a quo
are deleted and the following order is substituted:
'It is declared that the Kouga Municipality Liquor
(Trading Hours) By-law published in the
Eastern Cape Provincial
Gazette Extraordinary
on 27 December 2006 is invalid for the
purposes of a prosecution of any of the first, second and third
applicants for contravening
the by-law.'
______________________________________________________________
JUDGMENT
______________________________________________________________
CLOETE JA (BRAND, HEHER, THERON and WALLIS JJA
concurring):
Introduction
[1] The appellant is the Kouga Municipality. The three
respondents are registered under the Eastern Cape
Liquor Act 10 of
2003
to sell liquor for consumption on their premises. Those premises
are situated within the area of jurisdiction of the Municipality.
In
2006 the Municipality passed a by-law regulating liquor trading hours
and caused it to be published in the
Eastern
Cape Provincial Gazette Extraordinary
of 27
December 2006.
[2] The court a quo (Eksteen J) at the suit of the
respondents, who were the first to third applicants and to whom I
shall refer
as the applicants, granted the following relief:
'1. The decision of the Council
of the Kouga Municipality to pass the Kouga Municipality Liquor
(Trading Hours) By-Law in accordance
with
section 12(3)
of the
Local Government: Municipal Systems Act, 32 of 2000
, is hereby
reviewed and set aside.
2. The Kouga Municipality Liquor
(Trading Hours) By-law published in the Provincial Gazette
Extraordinary on 27 December 2006 is
declared to be invalid.
3. The declaration of invalidity
of the Kouga Municipality Liquor (Trading Hours) By-law is suspended
for a period of twelve (12)
months from the date of this order',
and ordered the Municipality to pay the applicants'
costs of the application.
The fourth applicant was found by the court a quo not to
have locus standi to bring the application and was accordingly
non-suited.
The court a quo subsequently granted the Municipality
leave to appeal to this court. No cross-appeal was brought by the
fourth
applicant and it accordingly does not figure in the appeal.
[3] The principal issue in these proceedings is the
validity of the by-law. It is also necessary to consider whether the
order made
by the court a quo was appropriate.
[4] The Municipality contended that the applicants'
application to review and strike down the by-law should have been
dismissed,
because:
(a) of the delay between the date when the by-law was
promulgated on 27 December 2006, and the date on which the
applicants' application
was brought in April 2009;
(b) the prescripts of the Promotion of Administrative
Justice Act 3 of 2000 ('PAJA') were ignored;
(c) the applicants failed to exhaust internal remedies;
(d) the Municipality had indeed complied with the
relevant legal requirements in passing the by-law;
(e) the applicants and the public had adequate
opportunity to comment on the by-law; and
(f) the setting aside of the by-law was not in the
public interest.
The validity of the by-law
[5] The legal position is governed by s 160(4)(
b
)
of the Constitution of the Republic of South Africa, 1996 (the
Constitution) and s 12(3)(
b
) of the Local Government:
Municipal Systems Act 32 of 2000 (the Systems Act). Both require that
a proposed by-law be published
for public comment; but the Systems
Act goes further and adds 'in a manner that allows the public an
opportunity to make representations
with regard to the proposed
by-law'.
[6] The relevant facts are these. The by-law was passed
by the Council of the Municipality on 7 September 2006 and, as I have
said,
was promulgated in the
Eastern Cape Provincial Gazette
Extraordinary
of 27 December 2006. Prior to these two events, the
Council had apparently resolved to advertise the by-law for comment.
Publication
in fact took place on two dates:
(a) on 24 December 2004 in the
Herald
and
Die Burger
newspapers and (according to the Municipality) the
Eastern Cape Provincial Gazette
;
and
(b) on 24 February 2006 in a local newspaper,
Our
Times
.
[7] The first publication in 2004 read:
'KOUGA MUNICIPALITY
NOTICE NO 157 / 2004
DRAFT BY-LAW FOR LIQUOR
TRADING HOURS
NOTICE IS HEREBY GIVEN
that the Council proposes to
make a by-law in terms of the Eastern Cape Liquor Act, 2003 (Act No.
10 of 2003) which shall regulate
the hours of liquor trading and sets
out matters connected therewith.
Copies of the draft by-law are
available free of charge from the Municipal Office at 33 Da Gama
Road, Jeffreys Bay, during office
hours.
Enquiries herein or requests for
assistance may be directed to the Manager: Legal Services during
office hours at 042-293111.
Comment, if any, must be
submitted to the undersigned in writing by or before 12:00 at 24
January 2005.'
The copies of the draft by-law referred to in the
published notice provided:
'5.
TRADING
HOURS
i) The Council has determined
the trading [sic] of the different types of registrations listed in
the first column of Schedule 1
as the trading hours listed in the
second column of the said Schedule.
ii) A departure from the hours
stipulated in Schedule 1 shall be upon application and approval by
the Council.
iii) The Council reserves the
right to depart from the stipulated trading hours in the interest of
the community.'
Schedule 1 listed the different types of registration
permitted by s 20 of the Eastern Cape
Liquor Act in
the first
column and the applicable trading hours in the second column. In the
case of the applicants, the relevant provisions
were, in column 1:
'
Sec. 20(b)
─ Registration
in terms of the
Liquor Act for
the retail sale of liquor for
consumption on the premises where liquor is sold (e.g. restaurants,
night club, sports club, pool
bar, hotel, pub)';
and in column 2:
'Monday ─ Saturday 10:00
to 24:00 Sunday 10:00 to 22:00.'
[8] The second publication in 2006 read (I quote only
the English part):
'KOUGA MUNICIPALITY ─
NOTICE NO 40/2006
DRAFT
BY-LAWS : INVITATION
FOR
PUBLIC COMMENT
Notice is hereby given that the
Kouga Local Municipality intends to adopt by-laws for its area of
jurisdiction. Copies of these
draft by-laws are available for
inspection at the following venues and any comments or submissions
must be submitted in writing
to the undersigned by no later than
12:00 on 31 March 2006.
Jeffreys Bay Library
St. Francis Bay Municipal
Offices
Humansdorp Municipal Offices
Hankey Municipal Offices
Patensie Municipal Offices.'
The copies made available of the draft by-law, which in
fact related to liquor trading hours, provided:
'5.
Hours
of trading
(1) The trading hours, as listed
in Column 2 of Schedule 1 to this By-law of the different kinds of
registrations, as contemplated
in section 20 of the Act, as listed in
Column 1 of the Schedule, have been determined by the Council and may
be reviewed by the
Council from time to time.'
The schedule annexed again specified, in column 1, the
types of registration for which the Eastern Cape
Liquor Act provides
.
Column 2, headed 'TRADING HOURS', was left completely blank. Apart
from this, there were other significant differences between
the draft
by-law referred to in the first publication in 2004 and the draft
referred to in the second publication in 2006, which
the court a quo
summarised as follows:
'The new draft provided for the
establishment of liaison forums in the community for the purposes of
securing community involvement
in matters dealt with in the by-law.
The first draft contained no reference to this phenomenon. The new
draft law provided for
persons, on application, to be granted
exemption from certain provisions of the by-law. The first draft was
silent in this regard.
The new draft provided for an appeal procedure
to dissatisfied persons whose rights had been affected by any
decision of the respondent
in terms of the by-law. This right was not
provided for in the first draft. The first draft provided for the
respondent to authorise
"officials" to see to the
enforcement of the by-law and created various offences relating to
unwarranted conduct towards
such officials. The new draft abandoned
all of this. In the first draft the actual trading hours form part of
the by-law. In terms
of the new draft the respondent is granted the
power to determine times for trading which would be published,
presumably from time
to time.'
The by-law passed by the Council of the Municipality was
the proposed by-law advertised in 2006, with the addition of column 2
from
the proposed by-law advertised in 2004.
[9] These facts lead to the inevitable conclusion that
the Municipality did not comply with the provisions of the
Constitution or
the Systems Act referred to above. The Municipality
contended that the 2004 and 2006 publications were part of one
continuous process.
But the changes to the draft by-laws made
available pursuant to the first publication in 2004 were
far-reaching. As the court a
quo correctly held, not every change has
to be advertised otherwise the legislative process would become
difficult to implement;
but here the two sets of proposed by-laws
were so markedly different that republication of the revised draft
was necessary to meet
the legislative requirements of the
Constitution and the Systems Act. That did not happen. The second
publication in 2006 could
not have served to alert the public that
the Municipality intended to adopt an amended by-law to regulate
liquor trading hours.
A Municipality is entitled to make by-laws in
respect of a considerable number of matters.
1
For all a reader of the second publication would know,
the proposed by-laws could have referred to dog licences or funeral
parlours.
Nor, if a particularly cautious holder of a liquor licence
were to have obtained a copy of the draft by-law at one of the places
listed in the second publication, would he or she have been any the
wiser as to the times fixed for trading hours in respect of
any
registration possible under the Eastern Cape
Liquor Act.
[10
] The Municipality relied on two meetings held
subsequent to the second publication in an attempt to show that the
inhabitants of
the area governed by the Municipality knew of the
proposed amended by-law. But the requirements of the Systems Act are
not satisfied
by showing that some persons had such knowledge. That
Act requires publication in a manner that allows the public an
opportunity
to make representations. Interested members of the public
who did not attend the meetings might have failed to do so or might
have
failed to make representations in another way precisely because
they were unaware of the provisions of the proposed amended by-law.
[11] The by-law passed by the Council of the
Municipality was therefore invalid for want of compliance with the
procedure prescribed
for its adoption, and the court a quo was
correct in coming to this conclusion. The next question is whether
the court a quo should
have granted relief to the applicants and if
so, whether the relief it granted was appropriate.
The relief
[12] In my view, the correct approach to the relief
sought by the applicants would have been to recognise that the
application was
in form a direct challenge, but in substance a
defensive or collateral challenge, to the validity of the by-law. The
two are different;
as this court held in
Oudekraal
Estates (Pty) Ltd v City of Cape Town & others
2004
(6) SA 222
(SCA) para 36:
'It is important to bear in mind
. . . that in those cases in which the validity of an administrative
act may be challenged collaterally
a court has no discretion to allow
or disallow the raising of that defence: The right to challenge the
validity of an administrative
act collaterally arises because the
validity of the administrative act constitutes the essential
prerequisite for the legal force
of the action that follows and
ex
hypothesi
the subject
may not then be precluded from challenging its validity. On the other
hand, a court that is asked to set aside an invalid
administrative
act in proceedings for judicial review [ie a direct challenge] has a
discretion whether to grant or to withhold
the remedy. It is that
discretion that accords to judicial review its essential and pivotal
role in administrative law, for it
constitutes the indispensable
moderating tool for avoiding or minimising injustice when legality
and certainty collide. Each remedy
thus has its separate application
to its appropriate circumstances and they ought not to be seen as
interchangeable manifestations
of a single remedy that arises
whenever an administrative act is invalid.'
[13] The Municipality appreciated the true nature of the
proceedings. In the answering affidavit deposed to on its behalf by
its
Director: Corporate Services, the latter said:
'At the outset it should be
stated that the [Municipality] contends that this application has
been brought solely to serve the self-interests
of the applicants,
who have been charged for criminal transgressions and who now seek to
extricate themselves from such criminal
proceedings in this
roundabout way, by belatedly seeking to challenge the validity of the
applicable by-law which was duly promulgated
nearly three years ago,
namely on 27 December 2006.'
[14] But the Municipality misunderstood the legal
position. To quote again from
Oudekraal
:
2
'When construed against the
background of principles underlying the rule of law a statute will
generally not be interpreted to mean
that a subject is compelled to
perform or refrain from performing an act in the absence of a lawful
basis for that compulsion.
It is in those cases ─ where the
subject is sought to be coerced by a public authority into compliance
with an unlawful administrative
act ─ that the subject may be
entitled to ignore the unlawful act with impunity and justify his
conduct by raising what has
become to be known as a "defensive"
or a "collateral" challenge to the validity of the
administrative act.
(A challenge to the validity of the
administrative act that is raised in proceedings that are not
designed directly to impeach
the validity of the administrative
act.)'
3
That is precisely what the applicants sought to achieve.
The first applicant says, for example:
'[D]uring the festive period of
2007 those trading in liquor were permitted to do so beyond the hour
stipulated in the by-law and
in the new year I was issued with a
Summons for having sold liquor after 24h00. I defended the charge and
it was eventually withdrawn.
Nothing much changed thereafter
until the 5
th
of August 2008 when I was
visited by a member of the South African Police Service who advised
me that the Respondent's by-law would
be enforced in the future.
Notwithstanding this advice and in the light of the history of the
matter and the substantial financial
losses I would suffer if I
curtailed my hours of trade in accordance with the by-law I continued
to trade beyond 24h00.
On the 17
th
of August 2008 I was again
issued with a written notice to appear in Court upon a charge of
having contravened the trading hours
stipulated in the Respondent's
by-law. The criminal proceedings stand postponed until the 15
th
of April 2009 and in consequence
whereof I have sought further legal advice. That advice has prompted
the present application.'
[15] However, the applicants misconceived their remedy.
They brought a direct challenge to have the decision of the Council
of the
Municipality to promulgate the by-law in question reviewed and
set aside. This was inappropriate and led to the order of the court
a
quo which, far from assisting the applicants, prejudiced them. I
shall expand on each aspect.
[16] The direct challenge was inappropriate because in a
review application, whether based on PAJA
4
or a constitutional challenge to legality based on
s 160(4)(
b
) of
the Constitution and s 12(3)(
b
)
of the Systems Act,
5
the court would have a discretion to refuse the relief
sought ─ in particular,
because there was a delay in bringing the application:
see s 7(1) of PAJA,
6
Camps Bay Ratepayers' & Residents' Association v
Harrison
[2010] 2 All SA 519
(SCA) and the
cases quoted in paras 56 to 62, and also the decision of the
Constitutional Court on appeal reported in
2011 (4) SA 42
(CC) para
53. It is that discretion which the Municipality asked the court a
quo to exercise in its favour by dismissing the application
and the
court a quo's failure to do so is a cornerstone of the Municipality's
appeal. But it would be inexplicable to a layman
were the applicants
to fail in civil proceedings the avowed purpose of which was to avoid
their prosecution under the by-law, but
succeed in defending criminal
proceedings on the same facts.
[17] So far as the appropriateness of the order of the
court a quo is concerned, the suspension of the order declaring the
by-law
invalid not only had the effect that the applicants could be
prosecuted during the period of suspension ─ which is precisely
the result they sought to avoid ─ but also meant that they were
precluded during that period from mounting a collateral challenge
to
the validity of the by-law ─ which means that although they
were successful, they were in a worse position than they would
have
been in had they brought no proceedings at all. That is a result
which would also be inexplicable to a layman.
[18] The problems associated with the relief sought by
the applicants in their notice of motion and the order granted by the
court
a quo would be avoided if a declaratory order were to be
granted that the by-law in question is invalid for the purposes of a
prosecution
of any of them based thereon. A collateral challenge to
the validity of a piece of legislation can be mounted at any time and
a
court has no discretion to disallow such a challenge, as appears
from para 36 of
Oudekraal
quoted
in para 12 above.
[19] I can conceive of no reason why a collateral
challenge to the validity of a piece of legislation cannot be brought
in civil
proceedings for a declaratory order by a person who has been
charged with contravening such legislation. Indeed, this court has
allowed precisely such a procedure to be followed:
Attorney-General
of Natal v Johnstone & Co Ltd
1946 AD 256
; and there seem to
be distinct advantages in it:
(a) The question would be dealt with by a court better
versed in administrative law than a specialist criminal court. That
should
exclude both the possibility of persons being wrongly
convicted for contraventions of an invalid by-law, and also the
possibility
of persons being wrongly acquitted for contraventions of
a valid by-law.
(b) The matter could be brought to a head, and delay
(with concomitant uncertainty and expense) avoided ─ in the
present matter,
for example, the prosecution of the first applicant
was withdrawn and then later reinstituted.
(c) The true protagonists ─ in this case, the
applicants and the Municipality ─ would be before the court and
the Municipality,
the author of the legislation impugned, would be
directly involved in defending it.
(d) Those against whom the legislation is sought to be
enforced, could recover costs, if successful.
[20] I expressly leave open the question whether a
collateral challenge by way of a declaratory order may be brought by
a person
who is merely liable to prosecution and who has not been
charged, and therefore whether some of the remarks of this court in
Johnstone's
case especially at 260-2 should be reconsidered in
view of the now clearly established distinction between a direct and
a collateral
challenge: cf
Bengwenyama Minerals (Pty) Ltd &
others v Genorah Resources (Pty) Ltd & others (Bengwenyama ─
ye ─ Maswati Royal
Council intervening
)
2011 (3) BCLR 229
(CC) para 85 where reference is specifically made, in a footnote, to
para 36 of
Oudekaal
quoted above.
[21] A declaratory order given by a high court in a
matter such as the present would have this effect:
'Although such a decision is
directly binding only as between the parties to the proceedings in
which it was made, the application
of the doctrine of precedent has
the consequence of enabling the benefit of it to accrue to all other
persons whose legal rights
have been interfered with in reliance on
the law which the statutory instruments purported to declare' ─
per Lord Diplock in
F
Hoffmann-La Roche & Co AG v Secretary of State for Trade and
Industry
[1975] AC 295
at 365. That means a
declaratory order in favour of the applicants would render all
prosecutions still-born and leave the inhabitants
of the Municipality
without a by-law regulating hours of trading in liquor. But this
result follows from the failure by the Council
of the Municipality to
pass the by-law in accordance with the empowering legislation. As
Lord Irvine said in
Boddington v British
Transport Police
[1998] UKHL 13
;
[1999] 2 AC 143
at 156D
[1998] UKHL 13
; ,
[1998] 2 All ER 203
at 211h (a case quoted with approval in
Oudekraal
para 32), after setting out the passage from the
judgment of Lord Diplock above:
'Thus, Lord Diplock confirmed
that once it was established that a statutory instrument was ultra
vires, it would be treated as never
having had any legal effect. That
consequence follows from application of the ultra vires principle, as
a control on abuse of power;
or, equally acceptable in my judgment,
it may be held that maintenance of the rule of law compels this
conclusion.'
Order
[22] The following order is made:
1 The appeal is dismissed, with costs.
2 Paragraphs 1, 2 and 3 of the order of the court a quo
are deleted and the following order is substituted:
'It is declared that the Kouga Municipality Liquor
(Trading Hours) By-law published in the
Eastern Cape Provincial
Gazette Extraordinary
on 27 December 2006 is invalid for the
purposes of a prosecution of any of the first, second and third
applicants for contravening
the by-law.'
_______________
T D CLOETE
JUDGE OF APPEAL
APPEARANCES:
APPELLANTS: M G Swanepoel SC
Instructed by Neville Borman & Botha, Grahamstown
Naudes Attorneys, Bloemfontein
RESPONDENTS: R W N Brooks
Instructed by Netteltons Attorneys, Grahamstown
Honey Attorneys, Bloemfontein
1
As
appears from s 156 of the Constitution.
2
Para
32.
3
The
passage in parenthesis is contained in a footnote.
4
There
is a dispute as to whether PAJA applies.
5
Fedsure
Life Assurance Ltd & others v Greater Johannesburg Transitional
Metropolitan & others
[1998] ZACC 17
;
1999 (1) SA
374
(CC) para 58.
6
'(1)
Any proceedings for judicial review in terms of section 6(1) must be
instituted without reasonable delay and not later than
180 days
after the date ─
(a) subject to subsection (2)(c), on which any
proceedings instituted in terms of internal remedies as contemplated
in subsection
(2)(a) have been concluded; or
(b)
where no such remedies exist, on which the person concerned was
informed of the administrative action, became aware of the
action
and the reasons for it or might reasonably have been expected to
have become aware of the action and the reasons.'