Summary of Judgment

1. Introduction

The matter concerned an application for leave to appeal to the Constitutional Court arising from litigation about the affairs of the Nala Local Municipal Council. The applicants were Gabriel Ntleli Swartbooi and seventeen other individuals, all of whom were members of the municipal council and were personally affected by a punitive costs order made by the Free State High Court. The respondents, Lilian Ray Brink and Gerrit Niewoudt, were also members of the same council and had been the successful applicants in review proceedings in the High Court.

The procedural history was central. In the High Court, review proceedings against the council succeeded, and the High Court made a special costs order directing the present applicants (then respondents in review) to pay costs personally and on the punitive scale of attorney and own client. The municipal council sought leave to appeal in the High Court against the judgment and costs order; leave was refused. The council, joined by the present applicants, then sought leave to appeal in the Supreme Court of Appeal; that application was also refused. Thereafter, an application for leave to appeal was launched in the Constitutional Court.

In contrast to the earlier applications, the Constitutional Court application was brought only in the names of the 18 council members affected by the personal costs order and cited only the original two review applicants as respondents. The municipal council itself, although directly implicated by the costs consequences, was not initially a party in the Constitutional Court proceedings. The general subject matter of the dispute was the propriety and constitutional implications of making de bonis propriis (personal) punitive costs orders against municipal councillors in litigation concerning the validity of council decisions, together with related issues about council members’ statutory privileges and immunities and separation of powers.

2. Material Facts

It was common cause that the underlying High Court proceedings were review proceedings concerning decisions of the Nala Local Municipal Council, and that those proceedings were successful against the council. Although the Constitutional Court judgment did not traverse the merits of the review, it recorded as material that the High Court’s order included a punitive costs award made against individual councillors personally (the present applicants), on the scale as between attorney and own client, rather than against the council itself.

It was also material that, in the High Court, the successful review applicants (the present respondents) had sought attorney and own client costs against the council, but the High Court considered that the conduct of the present applicants warranted that they, rather than the council, should bear punitive costs out of their own pockets.

Chronologically, the material procedural steps were: (a) the council unsuccessfully sought leave to appeal in the High Court; (b) the council and present applicants unsuccessfully sought leave in the Supreme Court of Appeal; and (c) the present applicants then approached the Constitutional Court for leave to appeal, without joining the municipal council.

A further fact treated as significant by the Constitutional Court was the procedural posture in which the municipal council was absent from the Constitutional Court proceedings despite having a material interest in the outcome. The Court considered it likely that if the High Court were found to have erred in ordering the applicants to pay costs personally, liability would “almost inevitably” shift to the council, making the council’s absence material.

The judgment did not set out disputed factual questions about what occurred within the council or the review proceedings; rather, it focused on the costs order, the identity of the parties, and the procedural configuration of the appeal.

3. Legal Issues

The Court identified, through directions issued by the Chief Justice, legal questions requiring determination in the intended appeal. These included whether the determination of the circumstances (if any) in which it is appropriate to order members of a municipal council to pay de bonis propriis costs in proceedings about the validity of municipal council decisions is a matter within the jurisdiction of the Constitutional Court.

If jurisdiction were established, the further questions identified were the circumstances in which it is appropriate to make such personal costs orders against municipal councillors, and whether, on the facts of the present case, the applicants ought to have been ordered by the High Court to pay the costs de bonis propriis.

In addition to these questions (which concern the application of legal standards to facts and the appropriateness of a punitive costs discretion in a constitutional and statutory setting), the Constitutional Court itself raised a significant procedural legal issue during argument: whether the municipal council should be joined as a party to the proceedings because of its material interest in the costs outcome.

The judgment also recorded that the intended appeal raised issues concerning the separation of powers and the scope of the privileges and immunities conferred on municipal councillors by section 28 of the Local Government: Municipal Structures Act 117 of 1998, matters that are legal and constitutional in character and affect municipal governance generally.

4. Court’s Reasoning

The Court’s reasons, at this stage, were directed to whether leave to appeal should be granted and what procedural and participatory steps were required, rather than a final determination of the substantive costs questions. The Court treated the absence of the municipal council from the proceedings as an “important procedural consideration”. It reasoned that the council had been the respondent in the High Court and retained a material interest in the appeal because any setting aside of the personal costs order would likely entail that the council bear the costs. On that basis, the Court considered that the council ought to be joined as a party to the Constitutional Court proceedings.

The Court also evaluated the character of the issues raised by the intended appeal. It considered that, beyond the immediate dispute, the case raised significant questions about the separation of powers and about the proper scope and effect of statutory privileges and immunities for municipal councillors under section 28 of the Municipal Structures Act. The Court reasoned that these issues potentially affected all municipal councils and could significantly influence how councils function, which made it desirable for the Constitutional Court to determine them. This broader institutional significance was treated as a sufficient basis, in itself, to justify granting leave to appeal.

In addition, the Court considered it useful to invite participation from relevant governmental and local government stakeholders. It reasoned that notice should be given to the South African Local Government Association (SALGA), the members of provincial executive councils responsible for local government, and the national minister responsible for local government, and that they should be afforded the opportunity to submit written argument if they chose. The Court stated that the perspectives of those involved in local government would be helpful to the Court, indicating an evaluative judgment about the value of broader input given the systemic implications of the issues.

The Court concluded by indicating that fuller reasons would be provided when judgment on the appeal itself was delivered, underscoring that the present decision was concerned with leave and case management directions rather than the final merits.

5. Outcome and Relief

The Constitutional Court granted the applicants leave to appeal. It ordered that the municipal council of the Nala Local Municipality be joined as a party to the appeal and directed that it could lodge written argument by a specified date.

The Court further ordered that SALGA, the relevant provincial MECs, and the national minister responsible for local government may lodge written argument on the issues identified, subject to timelines for notices of intention and submissions. The applicants and respondents were given leave to reply to any such additional argument within a further prescribed period, and the Registrar was directed to notify the joined council and the identified organs of state and to ensure service of the judgment and attention to the relevant order provisions.

The costs of the application for leave to appeal were ordered to be costs in the cause of the appeal, meaning they would be determined as part of the costs outcome in the appeal proceedings.

Cases Cited

Swartbooi and Others v Brink and Another (CCT27/02) [2002] ZACC 25; 2003 (1) BCLR 21 (CC) (21 November 2002).

Legislation Cited

Local Government: Municipal Structures Act 117 of 1998, section 28.

Rules of Court Cited

No rules of court were cited in the judgment.

Held

The Constitutional Court held that leave to appeal should be granted, principally because the intended appeal raised important issues concerning separation of powers and the scope of privileges and immunities afforded to municipal councillors under section 28 of the Local Government: Municipal Structures Act 117 of 1998, with implications for municipal councils generally. The Court further held that the Nala Local Municipal Council had a material interest in the appeal because an alteration of the personal costs order would likely shift costs liability to the council, and therefore the council had to be joined as a party. The Court also held that it was desirable to permit SALGA and relevant national and provincial local-government authorities to submit written argument.

LEGAL PRINCIPLES

A party with a direct and material interest in the outcome of appellate proceedings, particularly where the relief sought may shift legal liability onto that party, should be joined to ensure proper adjudication and procedural fairness.

Where an intended appeal raises issues of broader constitutional and institutional significance, including questions affecting the functioning of governmental bodies and the delineation of powers or statutory protections, it may be desirable for the Constitutional Court to grant leave to appeal and to manage the proceedings in a manner that facilitates informed adjudication, including by inviting written submissions from relevant stakeholders.

In matters implicating personal liability of public office-bearers for de bonis propriis costs, especially in connection with the validity of governmental decisions and statutory privileges and immunities, the issues may transcend the immediate dispute and warrant determination at constitutional level, subject to the Court’s jurisdiction and proper procedural configuration of the parties.