Brief Summary

Constitutional Law — Legislative Power — Delegation of legislative authority — Applicant challenged the constitutionality of section 2(1)(b) of the Import and Export Control Act, which empowered the Minister to regulate imports without sufficient guidelines — The court held that the delegation of legislative power under section 2(1)(b) was valid as it was enacted prior to the current Constitution, and thus section 37 did not apply to invalidate it.

Comprehensive Summary

Summary of Judgment

1. Introduction

This matter was a constitutional validity referral to the Constitutional Court concerning a statutory provision empowering the executive to regulate imports through a permit system. The proceedings arose as a sequel to earlier litigation in the Transvaal Provincial Division of the Supreme Court, where the dispute had initially been litigated and where the High Court made an order referring a constitutional question for determination by the Constitutional Court.

The applicant was Ynuico Limited, a supplier of tea in South Africa. The respondents were the Minister of Trade and Industry, the Director-General: Trade and Industry, the Government of the Republic of South Africa, and the Tea Council of Southern Africa (Proprietary) Limited.

In the court below, Van Dijkhorst J dealt with the matter and, acting under section 102(1) of the interim Constitution (Constitution of the Republic of South Africa Act 200 of 1993), referred to the Constitutional Court the question “whether section 2(1)(b) of the Import and Export Control Act (No 45 of 1963) is constitutional and valid”. The Constitutional Court’s decision addressed only the constitutional point ultimately pursued before it.

The general subject-matter of the dispute concerned the legality, under the interim Constitution, of an import control regime affecting tea, specifically the Minister’s power to require permits for importation and the applicant’s inability to secure a permit on terms it considered objectionable.

2. Material Facts

The relevant statutory provision, section 2(1)(b) of the Import and Export Control Act 45 of 1963, empowered the Minister, whenever he deemed it “necessary or expedient in the public interest”, to prescribe by notice in the Government Gazette that specified goods could not be imported except under the authority of a permit issued by the Minister or an authorised person, and in accordance with stated permit conditions.

Pursuant to that provision, the Minister caused Government Notice R2582 of 23 December 1988 to be published, prohibiting the importation (without a permit) of various listed commodities, including tea. Both the empowering provision and the relevant parts of the notice remained in operation at the time of the proceedings.

The applicant carried on business as a supplier of tea in South Africa and sought to import tea from a foreign source. It was refused a permit unless it first purchased a percentage of domestically produced tea meeting requirements designed to protect local growers, applied pro rata to merchants in the trade. The Constitutional Court treated the matter on the footing that the import control power and the notice were both delegated and exercised prior to the commencement of the interim Constitution on 27 April 1994, and that this chronology was decisive for the constitutional argument actually advanced.

In the court below, the applicant had relied (among other contentions) on alleged incompatibility with sections 24 and 26(1) of the interim Constitution. However, in the Constitutional Court the applicant’s counsel expressly abandoned reliance on those grounds, and the Court therefore did not decide them and left those issues open for future determination in an appropriate case.

3. Legal Issues

The central legal question the Constitutional Court was required to determine was whether section 2(1)(b) of the Import and Export Control Act 45 of 1963 was inconsistent with section 37 of the interim Constitution (vesting legislative authority in Parliament), and therefore invalid, on the basis that it allegedly constituted an impermissible delegation or transfer of plenary legislative power to a Minister without adequate objective standards.

The dispute before the Constitutional Court was primarily one of law and constitutional interpretation, focused on the temporal reach and field of operation of section 37 (and related provisions), and on whether pre-constitutional delegations of legislative power survived under the Constitution’s transitional arrangements. To the extent that the argument required characterising the relationship between constitutional provisions and pre-existing laws, it concerned the application of constitutional provisions to an agreed legislative chronology, rather than contested factual questions.

4. Court’s Reasoning

The Court’s reasoning began by narrowing the issues to those actually pursued. Although the applicant had previously argued (in the High Court) that section 2(1)(b) violated fundamental rights in sections 24 and 26(1), the applicant abandoned those contentions in the Constitutional Court. The Court considered it both unnecessary and inappropriate to deal with points on which it had heard no argument, and accordingly left them undecided.

The Court then addressed the applicant’s principal submission that section 37 of the interim Constitution entrusted legislative power exclusively to Parliament and did not permit Parliament to surrender or transfer any portion of that power to a Minister, with the result that section 2(1)(b) was unconstitutional because it allowed the Minister, in effect, to legislate without objective guidelines, subject only to his view of what was “necessary or expedient in the public interest”.

A decisive premise for the Court was the chronology. The empowering provision had been enacted long before the interim Constitution came into force, and the notice restricting tea imports had also been issued before 27 April 1994. On that basis, the Court held that section 37 had no bearing on the validity of that earlier delegation and exercise of power. Interpreting section 37 textually and contextually, the Court concluded that it addressed the location and source of legislative authority from the commencement of the Constitution onwards, leaving the pre-constitutional legal position untouched. The Court emphasised that section 37’s language and its placement in the constitutional structure (within provisions regulating the new Parliament) indicated that it referred to the new constitutional order, including the reconstructed Parliament consisting of the National Assembly and the Senate, rather than the prior legislature.

The Court then explained why pre-constitutional delegations of legislative power nonetheless continued in force. Under the previous constitutional dispensation, Parliament’s sovereignty was not subject to substantive constitutional control, and Parliament could competently confer wide, even plenary, delegated legislative powers. The Court noted that such delegations were not uncommon and cited the Native Administration Act 38 of 1927 as a historically notorious example of very broad delegated power. Against this background, the Court relied on section 229 of the interim Constitution, which provided (subject to the Constitution) that all laws in force immediately before the Constitution’s commencement would continue in force, subject to later repeal or amendment by a competent authority. The Court treated both section 2(1)(b) and the 1988 notice as “laws” for purposes of section 229, supported by the definition of “law” in section 2 of the Interpretation Act 33 of 1957 and by the regulatory character of the notice. The Court reasoned that section 229 preserved the pre-existing statutory and regulatory scheme as part of the transitional continuity essential to avoid administrative and economic disruption.

In dealing with the qualifier “subject to this Constitution” in section 229, the Court adopted an interpretive approach informed by the meaning of the phrase “subject to” as analysed in prior authority. The Court accepted that the qualification means that where there is a genuine conflict between a preserved law and the Constitution, the Constitution prevails. The Court illustrated this by noting that preserved laws remain vulnerable to constitutional invalidation if they violate entrenched rights in Chapter 3, and the Court observed that preserved laws had in fact already been struck down on that basis in other matters. The Court assumed, without deciding, that some constitutional challenges outside Chapter 3 might also be cognisable, but held that such considerations did not advance the applicant’s section 37 attack.

The applicant attempted to bring section 37 into play indirectly through section 4(1) (constitutional supremacy), contending that section 37 embodied a cardinal constitutional value and that section 2(1)(b) was inconsistent with it, thereby triggering invalidity under section 4(1). The Court rejected this route on the basis that section 4(1) required an actual conflict or inconsistency. On the Court’s interpretation, section 37 and section 229 operated in distinct fields: section 37 governed legislative authority prospectively under the new constitutional order, while section 229 preserved the pre-existing body of law from the prior era. Once those provisions were reconciled according to their separate functions, there was no inconsistency for section 4(1) to address, and consequently no basis to declare section 2(1)(b) invalid by reference to section 37.

A further argument advanced for the applicant was that the new Parliament had tacitly adopted or endorsed section 2(1)(b) after the Constitution’s commencement by failing to repeal or amend it, and that this post-constitutional “adoption” brought the provision within the scope of section 37. The Court rejected this contention as untenable, holding that it implied Parliament could exercise legislative power by not legislating, equated debate and due legislative consideration with silence, and imputed a positive decision to Parliament without any basis that it had applied its mind to the matter.

Having rejected each attempt to ground invalidity in section 37, the Court concluded that the applicant’s constitutional case before it could not succeed.

5. Outcome and Relief

The Constitutional Court declared that section 2(1)(b) of the Import and Export Control Act 45 of 1963 was not inconsistent with section 37 of the interim Constitution and was therefore not invalid on that basis.

The applicant was ordered to pay the costs of the proceedings in the Constitutional Court, including costs incurred by each respondent as a result of employing two counsel.

The matter was remitted to the Transvaal Provincial Division of the Supreme Court for determination of any remaining issues in the case, including the question of the costs previously incurred in that court which had been reserved.

Cases Cited

Ynuico Ltd v Minister of Trade and Industry and Others 1995 (11) BCLR 1453 (T).

S v Marwane 1982 (3) SA 717 (A).

Zantsi v Council of State, Ciskei, and Others 1995 (4) SA 615 (CC); 1995 (10) BCLR 1424 (CC).

C and J Clark Ltd v Inland Revenue Commissioners [1973] 2 All ER 513 (Ch D).

S v Coetzee and Others (Witwatersrand Local Division, case no 70/92, judgment delivered 28 September 1995) (unreported), as referenced in the judgment.

Legislation Cited

Constitution of the Republic of South Africa Act 200 of 1993 (interim Constitution), including sections 4(1), 24, 26(1), 33(1), 37, 102(1), and 229.

Import and Export Control Act 45 of 1963, section 2(1)(b).

Interpretation Act 33 of 1957, section 2 (definition of “law”).

Native Administration Act 38 of 1927 (mentioned illustratively).

Rules of Court Cited

No rules of court were cited in the judgment.

Held

The Court held that, because section 2(1)(b) and the relevant notice were enacted and issued before the interim Constitution commenced, section 37 (vesting legislative authority in the new Parliament) did not apply so as to invalidate the pre-constitutional delegation of power. The Court held further that section 229 preserved pre-existing “laws” in force at commencement, including section 2(1)(b) and the 1988 import control notice, subject to the Constitution where an actual inconsistency exists. On the Court’s interpretation, there was no inconsistency between section 37 and section 229, nor between section 37 and section 2(1)(b), and consequently section 4(1) could not be invoked to strike down section 2(1)(b) on the applicant’s theory. The Court also held that Parliament’s failure to repeal or amend the provision could not amount to a tacit legislative “adoption” capable of triggering section 37.

LEGAL PRINCIPLES

A constitutional provision allocating legislative authority to the new constitutional legislature may be interpreted as operating prospectively, particularly where its text, tense, and structural context point to regulation of legislative power from the commencement of the Constitution onwards, rather than retrospectively controlling pre-constitutional enactments or delegations.

Transitional provisions preserving existing laws, such as section 229 of the interim Constitution, operate to maintain continuity of the legal order by continuing in force the body of law in existence immediately prior to constitutional commencement, subject to later repeal or amendment by competent authority. Subordinate legislation of a regulatory character may constitute “law” for these purposes where the Constitution uses the term without a contrary indication and where statutory interpretation principles support that classification.

The phrase “subject to” in a constitutional or statutory qualification indicates subordination in the event of an actual conflict: where there is no collision, the qualification does not operate; where there is a clash, the dominant provision prevails. Accordingly, the supremacy clause (such as section 4(1)) depends on establishing a genuine inconsistency between the law under challenge and a constitutional provision applicable to it.

Legislative power is not exercised through legislative silence. A failure by Parliament to repeal or amend an existing statute cannot, without more, be treated as a tacit positive legislative endorsement equivalent to an enactment, and cannot be used to manufacture constitutional inconsistency where the Constitution’s transitional scheme preserves pre-existing laws.

Ynuico Ltd v Minister of Trade and Industry and Others (CCT47/95) [1996] ZACC 12; 1996 (6) BCLR 798; 1996 (3) SA 989 (21 May 1996)