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[2007] ZASCA 159
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Chagi and Others v Special Investigating Unit (89/07) [2007] ZASCA 159; [2008] 2 All SA 8 (SCA); 2008 (1) SACR 329 (SCA); 2008 (7) BCLR 697 (SCA) (29 November 2007)
Links to summary
REPUBLIC
OF SOUTH AFRICA
THE SUPREME COURT OF APPEAL
OF SOUTH AFRICA
Reportable
Case Number :
89 / 07
In the matter
between
WILMOT MANDLA CHAGI
& 29 OTHERS
................................
APPELLANTS
and
SPECIAL
INVESTIGATING UNIT
................................
RESPONDENT
Coram
: NAVSA, BRAND, JAFTA, PONNAN et COMBRINCK JJA
Date
of hearing
: 9 NOVEMBER 2007
Date
of delivery
: 29 NOVEMBER 2007
SUMMARY
Special
Investigating Units established in terms of Act 74 of 1996 - separate
juristic entities – liability for the wrongful
acts of the one
does not devolve upon the other.
Neutral
citation: This judgment may be referred to as :
Chagi
v
Special Investigating
Unit
[2007]
SCA 159 (RSA)
___________________________________________________________________
J U D G M E N T
___________________________________________________________________
PONNAN
JA
[1] On 14 June 1995, the Premier of the Eastern Cape acting pursuant
to the provisions of the Interim Constitution, established a
commission under the chairmanship of Justice Willem Heath, to
investigate fraud and corruption in the government of the Eastern
Cape
and its constituent parts.
1
On 20 November 1996, the Special Investigating Units and Special
Tribunals Act 74 of 1996 (‘the Act’) was promulgated.
According to the long title of the Act, its purpose is:
‘
To
provide for the establishment of Special Investigating Units for the
purpose of investigating serious malpractices or maladministration
in
connection with the administration of State institutions, State
assets and public money as well as any conduct which may seriously
harm the interests of the public, and for the establishment of
Special Tribunals so as to adjudicate upon civil matters emanating
from investigations by the Special Investigating Units; and to
provide for matters incidental thereto
.’
[2] Section 2(1) of the Act empowered the President to establish a
Special Investigating Unit (‘SIU’) for the purposes
of
investigating allegations of serious mal-administration or unlawful
or improper conduct on any of the grounds specified in s 2(2)
of the
Act. Section 14(1) of the Act provides:
‘
The
President may, in respect of any Commission of Inquiry ─
(a) appointed by him or her prior to the
commencement of this Act; or
(b) appointed by any other executive
authority prior to the commencement of this Act, upon the request of
such executive authority,
and if the objects of such
Commission can in his or her opinion better be achieved by a Special
Investigating Unit and a Special Tribunal,
by proclamation in the
Gazette
dissolve such
Commission and establish a Special Investigating Unit and a Special
Tribunal in its place in terms of this Act:...’.
[3] On 14 March 1997 and at the request of the Premier of the Eastern
Cape, the President, acting in terms of s 14(1) of the Act
and by
virtue of Proclamation R24 of 1997,
2
dissolved the Heath Commission and established in its place a Special
Investigating Unit (‘the first SIU’) to be headed,
in
accordance with s 3(1) of the Act, by Justice Heath, as well as a
Special Tribunal (‘ST’) with Justice GPC Kotze as
the
Tribunal President.
[4] On 11 November 1997 and in terms of s 2(4) of the Act, the
President, by Proclamation R72 of 1997,
3
amended Proclamation R24 by expanding upon the terms of reference of
the first SIU. On 30 June 1998 and in terms of Proclamation
R66 of
1998,
4
the President referred certain specified matters appertaining to the
former Transkei Agricultural Corporation (‘Tracor’),
for
investigation by the first SIU and, if needs be, for adjudication
emanating from such investigation, to the ST.
[5] On 28 November 2000, the Constitutional Court declared s 3(1) of
the Act as well as Proclamation R24 of 1997 to be inconsistent
with
the Constitution and invalid but suspended its declaration of
invalidity for a period of 1 year.
5
The Act was subsequently amended with effect from 31 July 2001 by the
Special Investigating Units and Special Tribunals Amendment Act 2 of
2001
to bring it into line with the judgment of the Constitutional
Court. By Proclamation R118 of 2001,
6
the President repealed Proclamation R24 and established a new Special
Investigating Unit (‘the second SIU’) with William
Andrew
Hofmeyr as its head.
[6] Paragraph 6 of Proclamation R118 of 2001 provides:
‘
The
Special Investigating Unit established under paragraph 2 of this
Proclamation [the second SIU] shall continue to investigate all
the
matters which were referred to the Special Investigating Unit
established by Proclamation No. R24 of 14 March 1997 [the first
SIU],
including those matters referred to it by the said Proclamation and
the Proclamations mentioned in the Schedule. Any reference
in
paragraph 3 of the Proclamations set out in the Schedule to
“Proclamation No. R24 of 14 March 1997”, must be
interpreted
as a reference to this proclamation.’
Amongst the Proclamations referred to in the Schedule, is
Proclamation R66 of 1998, which authorised the investigation into the
affairs
of Tracor.
[7] Tracor was wound up during 1998. On 15 August 2001, the 30
appellants in this matter, who were then unemployed but who
previously
jointly constituted the management of Tracor, issued
summons out of the Grahamstown High Court against defendants
described as the
Special Investigating Unit established in terms of
Proclamation R66 of 1998 (the first defendant) and the MEC for the
Department
of Agriculture and Land Affairs (Eastern Cape) (the second
defendant).
7
The summons comprised four claims, only two of which, namely A and C,
are relevant for present purposes.
[8] Paraphrased these claims read:
CLAIM A:
(a) During August 1998, the plaintiffs
had held banking accounts at various banking institutions;
(b) On or about 25 August 1998 and in
court papers in proceedings instituted by the first and second
defendants against the plaintiffs
before the ST in East London, the
first and second defendants stated to the management and staff of the
aforementioned banking institutions
of and concerning the plaintiffs
that the plaintiffs had:
(i) stolen and fraudulently
misappropriated a sum of R3.3 million from Tracor; and
(ii) utilised Tracor funds without its
permission to settle outstanding balances owed by them to financial
institutions in respect
of motor vehicles in their possession held
under various motor vehicle schemes obtaining at Tracor.
(c) The founding papers in the aforesaid
proceedings together with the temporary interdict were served upon
all of the aforementioned
banking institutions and a statement to the
aforegoing effect was later published in the Daily Dispatch
newspaper.
(d) The aforementioned statements by the
first and second defendant were:
(i) wrongful and defamatory of the plaintiffs;
(ii) made with the intention to defame
the plaintiffs and to injure them in their dignity and reputation;
and
(iii) understood by the management and
staff at the aforementioned banking institutions to mean that the
plaintiffs were bad and disreputable
managers, corrupt and dishonest
individuals and are thieves and frauds.
(e) As a result of the aforesaid
defamation, the plaintiffs have been damaged in their dignity and
reputation and each suffered damages
in the estimated sum of R400 000
for which the first defendant is liable.
CLAIM C:
(a) On or about 21 August
1999, the first and second defendants wrongfully, unlawfully,
maliciously and intentionally set the law
in motion against the
plaintiffs by levelling false accusations against them in an
application for an interdict
pendente lite
before the ST in East London.
(b) When launching the aforesaid
application the defendants had no reasonable and probable cause for
doing so, nor did they have any
reasonable belief in the truth of the
information given to them.
(c) As a result of the grant of the
temporary interdict, the plaintiffs’ bank accounts were frozen
and the plaintiffs were deprived
of access to their funds.
(d) During on or about March 2000, the
first and second defendants withdrew the action that had been
instituted against the plaintiffs
which resulted in the aforesaid
interdict also falling away.
(e) The plaintiffs incurred legal costs
in defending the aforesaid application and action.
(f) As a result of the freezing of their
bank accounts, the plaintiffs suffered an impairment of their
dignity.
(g) The aforementioned conduct by the
first and second defendants was degrading, insulting, injurious and
humiliating to the plaintiffs.
(h) The aforesaid conduct by
the said defendants was wrongful and perpetrated with
animo
iniuriandi.
(i) As a result of the defendants’
aforesaid conduct, the plaintiffs suffered damages in the sum of R150
000 each for the impairment
of their dignity and the amount of R5 000
each in respect of attorney and client costs.
[9] The plaintiffs’ claim was met with the following special
plea:
(1) First defendant pleads that it was
established on 25 July 2001 by virtue of the provisions of
Proclamation R118 of 2001 (the new
unit).
(3) A Special Investigating Unit had been
established in terms of Proclamation R24 of 1997 …( the old
unit).
(3) The plaintiffs’ complaints and
claims all relate to the period August 1998 to March 2000 and are all
therefore directed
against the old unit.
(4) The old unit was abolished in terms
of the provisions of paragraph 1 of Proclamation R118 and therefore
no longer exists.
(6) The first defendant
pleads that it was established as a completely new unit in terms of
the provisions of Proclamation R118, and
that it took over no rights,
powers, obligations, or liabilities of the old unit, other than the
powers set out in paragraph 6 of
Proclamation R118. The first
defendant therefore has no jurisdiction to deal with the matters in
issue in the plaintiffs’ claims,
and therefore has no
locus
standi
to be sued herein.
(7) In the premises plaintiffs have no
claim against the first defendant and their claims against the first
defendant should be dismissed
with costs.’
[10] Dambuza AJ upheld the special plea and dismissed both claims.
The plaintiffs appeal with leave of this Court. The sole issue
for
determination in this appeal is whether liability for the plaintiffs’
claims has devolved upon the second SIU, (‘the
respondent’).
For the reasons that follow the conclusion reached by the court below
on this aspect of the case cannot be faulted.
[11] A unit such as the respondent is similar to a commission of
inquiry and, like a commission, is constrained by the boundaries
set
by the Act and its founding proclamation.
8
Proclamation R118 of 2001 provides, neither expressly nor by
necessary implication, for the rights and obligations of the first
SIU
to devolve upon the second SIU, the respondent. That Proclamation
served a dual purpose. First, it dissolved the first SIU; and,
second, it established the respondent. Those purposes could likewise
have been achieved by the promulgation, with an intervening
time-lapse between them, of two separate proclamations, the first,
dissolving the first SIU and the second establishing the respondent.
Had that happened it could not, without more, have been suggested
that the respondent was the
de jure
successor in title of the
first SIU, and thus liable for any wrongful act perpetrated by it.
That a single proclamation achieved both
ends did not create a legal
nexus
between the two units where none otherwise existed.
[12] Moreover, it was permissible for the President, if he deemed it
necessary, to establish more than one SIU. That, theoretically
at any
rate, is what the Act authorised. And each, according to s 13 of the
Act, was to be a separate juristic person. Had that occurred,
liability for the wrongful acts of the one would not have devolved
upon any of the others. So too in this case, for by parity of
reasoning, the consequence of the original actor’s (the first
SIU’s) unlawful conduct could not, absent any legal nexus,
be
imputed to the respondent.
[13] Finally, if the intention had been for liability of the first
SIU to devolve upon the second, that could have been simply and
briefly stated by the Legislature. That would obviously have been a
clearer and more effective, indeed an easier, method of expression
than the implication inherent in mere silence.
9
After all, it must be accepted that the Act and the Proclamation has
dealt exhaustively with the subject matter. To accede to the
argument
urged upon us on behalf of the appellants would defeat the purpose of
those enactments.
[14] It should perhaps be added that the appellants were not without
remedy. They could have brought the relevant department of National
Government before court by citing the responsible political head of
that department in a representative capacity. In this case that
would
have been the Minister of Justice. That is what
s 2
of the
State
Liability Act 20 of 1957
provides.
10
Approached thus, the mishap encountered here may well have been
avoided.
[15] It follows that the appeal must fail. In the result the appeal
is dismissed with costs.
___________________
V M PONNAN
JUDGE OF APPEAL
CONCUR:
NAVSA JA
BRAND JA
JAFTA JA
COMBRINCK AJA
1
Appointment
of Commission of Inquiry into Matters Relating to State Property and
other Property, EC, PN10, PG72, 14 June 1195.
2
Published
in Regulation Gazette 5884, Government Gazette 17854.
3
Published
in Regulation Gazette 6046, Government Gazette 18431.
4
Published
in Regulation Gazette 6223, Government Gazette 19030.
5
South
African Association of Personal Injury Lawyers v Heath and Others
[2000] ZACC 22
;
2001 (1) SA 883
(CC).
6
Published
in Regulation Gazette 7128, Government Gazette 22531.
7
A
third defendant who was also cited in the summons but whose
particulars are not presently relevant has been omitted.
8
S
v Naudé
1975 (1) SA 681
(A) at
704B-E;
Special Investigating Unit v
Nadasen
2002 (1) SA 605
(SCA) para 5.
9
Per
Howie J in
Muller v Chairman,
Ministers’ Council, House of Representatives
1992
(2) SA 508
(C) at 524E.
10
Jayiya
v Member of the Executive Council for Welfare, Eastern Cape
2004 (2) SA 611
(SCA) para 5.