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[2008] ZACC 22
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Chagi and Others v Special Investigating Unit (CCT 101/07) [2008] ZACC 22; 2009 (2) SA 1 (CC); 2009 (3) BCLR 227 (CC) ; 2009 (1) SACR 339 (CC) (3 December 2008)
Links to summary
CONSTITUTIONAL COURT OF SOUTH
AFRICA
Case CCT 101/07
[2008] ZACC 22
WILMOT
MANDLA CHAGI AND 29 OTHERS Applicants
versus
SPECIAL
INVESTIGATING UNIT Respondent
Heard
on : 15 May 2008
Decided
on : 3 December 2008
JUDGMENT
YACOOB
J:
Introduction
Mr Chagi and 29 other
applicants request the leave of this Court to appeal against a
judgment and order of the Supreme Court
of Appeal.
1
The case concerns the interpretation and effect of a Proclamation
published on 31 July 2001
2
(the 2001 Proclamation) that effectively disestablished one Special
Investigation Unit (the First Unit) and established another
in its
place (the Second Unit). Both the First Unit and the Second Unit
were established pursuant to a provision of the Special
Investigating Units and Special Tribunals Act (the SIU Act).
3
And both were charged by the President with, amongst other things,
investigating the affairs of a state institution known
as the
Transkei Agricultural Corporation Limited (Tracor).
4
The First Unit was established
in 1997 by Proclamation (the 1997 Proclamation).
5
The President commissioned the First Unit to investigate the
affairs of Tracor on 30 June 1998
6
and it can safely be assumed that the investigation commenced
shortly after this date. The applicants were employed by Tracor
at
the time of the investigation. They later sued an Investigation
Unit
7
in the High Court for damages in delict arising out of the alleged
conduct of the representatives of the First Unit in the
course of
that investigation. I do not at this stage identify the
investigation unit against which proceedings were brought
because,
as will appear later, one of the issues in the application before
us has turned out to be the identity of that Special
Investigation
Unit. All that needs to be said at this stage is that the Second
Unit entered the fray and defended the case
throughout its journey
through the High Court, the Supreme Court of Appeal and this Court.
Only two of the applicants’
claims in the High Court are relevant to this application.
8
The conduct of the First Unit relied upon in support of both
claims occurred between August 1998 and August 1999. The
applicants claimed, first, that the First Unit had wrongfully and
unlawfully defamed them in summonses issued in the course of
its
investigation. The summonses alleged that the applicants had
perpetrated fraud and theft. The second claim was that the
applicants had been injured in their dignity as a direct result of
the First Unit having unlawfully caused the freezing of
their
banking accounts.
These claims for damages were
initiated by summons issued on 15 August 2001,
9
about two weeks after the publication of the 2001 Proclamation.
The problem however was that that Proclamation had by then
replaced
the First Unit with the Second.
10
As has been pointed out, the Second Unit defended the proceedings.
Predictably, a defence embraced by the Second Unit was
that,
because the conduct of members of the First Unit had been relied
upon, the Second Unit was not liable. This was so,
according to
the respondent, because upon a proper construction of the 2001
Proclamation, the Second Unit had not assumed the
liabilities of
the First. The point was argued before the High Court
11
and the Supreme Court of Appeal on the footing that the Second Unit
had in fact been sued. Both courts held that the Second
Unit had
been wrongly sued because, on a proper interpretation of the 2001
Proclamation that had created it, the Second Unit
had not assumed
the liabilities and obligations of the First.
The only issue before this
Court when the case was argued before us was whether the High Court
and the Supreme Court of Appeal
were correct in holding that the
Second Unit was not liable for damages that may have been suffered
as a consequence of the
conduct of the members of the First Unit.
The applicants contended that both the High Court and the Supreme
Court of Appeal
were wrong in their construction of the 2001
Proclamation. They argued that this Proclamation, properly read in
the light
of the authorising statute,
12
does by implication burden the Second Unit with the obligations of
the First. The Second Unit, as was to be expected, supported
the
reasoning and conclusion of the Supreme Court of Appeal on the
substantive issue. The respondent however was inclined
to accept
that the Supreme Court of Appeal incorrectly concluded that it was
possible for people in the position of the applicants
to sue the
Minister of Justice as the representative of the state.
13
The applicants had relied on
the provisions of section 12(2)(c) of the Interpretation Act
14
in the High Court. When asked during oral argument before this
Court whether they continued to rely on this provision, the
applicants’ legal representative informed us that they did
not. The case before all the courts including this Court
has been
conducted on the basis that the Second Unit had been cited in the
summons and particulars of claim. After argument
was heard,
however, the members of the Court became concerned that the
application for leave to appeal might not properly be
decided
without considering the impact of section 12(2)(c) of the
Interpretation Act. In addition the issue of the identity
of the
entity cited in the summons had also to be considered because there
was doubt about whether the parties had been correct
in proceeding
on the assumption that the Second Unit had been cited in the
summons.
In the circumstances, the
Chief Justice issued the following further directions:
15
“
The
parties are required to submit further written argument covering the
following issues:
a.
Whether
on a proper construction of the summons the applicants cited the
Unit headed by Mr Hofmeyr [the Second Unit] or that headed
by Judge
Heath [the First Unit] as the first defendant?
b.
The
implications of section 12(2)(c) of the Interpretation Act 33 of
1957 as amended, if any, for the construction of Proclamation
R118
of 2001 concerning the liability of the Unit headed by Mr Hofmeyr
[the Second Unit] for the acts and omissions of the unit
headed by
Judge Heath [the First Unit]; and
c.
The
implications of section 12(2)(c) of the Interpretation Act 33 of
1957, as amended, if any for construction of Proclamation
R118 of
2001 concerning the continued liability, despite its abolition, of
the Unit headed by Judge Heath [the First Unit] for
its acts and
omissions during its existence.”
The applicants and the
respondent furnished additional written argument pursuant to these
further directions. Both urged that
the case be determined on the
footing that the Second Unit had been sued. That is where their
agreement ended however. The
applicants insisted that section
12(2)(c) supported the conclusion that the Second Unit had been
burdened by the 2001 Proclamation
with the liability of the First.
The Second Unit submitted that this interpretation would be
contrary to the provisions of
the SIU Act which did not empower the
President to lumber it with the liability of the First Unit. It
contended further that
the First Unit too was not liable because
its disestablishment by the President evinced the intention that it
should not be
liable. The respondent submitted, in effect, that
neither Unit would be liable and that no entity was liable to the
applicants
for any damages they might have suffered.
Before determining the issues,
it must be pointed out that this Court cannot be bound by any
agreement between the parties in
connection with the identity of
the party sued. That question must be determined by an
interpretation of the pleadings. If
that interpretation produces a
result that is inconsistent with the agreement between the parties,
it will not be in the interests
of justice for this Court to give
effect to the agreement.
The issues
The directions described
earlier
16
and the argument consequently submitted has widened the issues. I
describe them briefly:
The primary set of issues
concerns state liability and involves a determination of the
effect of the 2001 Proclamation in
the light of section 13 of the
SIU Act and 12(2)(c) of the Interpretation Act. More
specifically, it is necessary to decide
whether the liabilities of
the First Unit have been extinguished by the 2001 Proclamation in
the sense that no entity remains
liable for the unlawful conduct
of the members of the First Unit. If the liabilities had not been
extinguished, we must
decide whether the liabilities were
transferred to the Second Unit by the 2001 Proclamation or whether
the First Unit continued
to be liable despite its
disestablishment.
Another issue that might
potentially call for decision is whether the summons cites the
First Unit or the Second Unit. It
arises only if we conclude that
either the First Unit or the Second Unit would be liable and
capable of being sued for the
damages in issue. If it is held
that the First Unit remained liable despite its disestablishment
by the 2001 Proclamation,
a finding that the Second Unit was cited
in the summons would result in the applicants being non-suited in
these proceedings.
By the same token, a finding that the Second
Unit was encumbered with the liability would mean that the
applicants cannot
succeed if the First Unit was cited in the
summons.
Should the application for
leave to appeal be granted?
We can grant leave to appeal
only if the case raises a constitutional matter or an issue
connected with a decision on a constitutional
matter and only if it
is in the interests of justice to do so.
17
That question must now be considered.
Does the case raise a
constitutional issue?
No constitutional issue was
squarely raised by the applicants. It is fair to say that they
placed much reliance on the contention
that their predicament
rendered them victims of injustice. They pointed out that it would
be neither just nor equitable for
the President to disestablish a
Special Investigation Unit with the effect that claims that have
arisen against it consequent
upon its unlawful conduct were
destroyed. They relied, in particular, on section 13 of the SIU
Act which is set out later
in this judgment.
18
The applicants contended that
the SIU Act had imposed liability on the First Unit and that the
President could not relieve it
of that liability without making the
Second Unit liable. They also pointed to the fact that the Second
Unit was, like the
First Unit, also to investigate Tracor. This,
they say, is enough to imply the liability of the Second Unit for
the conduct
of the First Unit.
The correct interpretation and
effect of a statutory provision is not ordinarily a constitutional
matter. A debate on the construction
of a particular provision
does however raise a constitutional issue or a matter connected
with a decision on one if the provision
is capable of two
reasonable constructions, the one being more constitutionally
compliant than the other.
19
A court is obliged always to interpret any legislative provision
consistently with the Constitution and to avoid a construction
that
is inconsistent with the Constitution. Where one party champions a
meaning of the disputed provision that will result
in its
unconstitutionality, a constitutional matter is raised if there is
a reasonable prospect that the interpretation contended
for is
wrong and that there is another construction that results in the
provision being constitutional. In my view—
the meaning which the
applicant submits is the correct meaning would result in the
unconstitutionality of the 2001 Proclamation;
there is a reasonable
prospect that this interpretation is wrong; and
there is also a reasonable
prospect that the 2001 Proclamation can be given a meaning that
will render it constitutionally
compliant.
The question of the correct
construction of the 2001 Proclamation does indeed raise a
constitutional matter as will more fully
appear from what is
contained later in this judgment when I elaborate on each of the
propositions raised here.
But what of the issue of the
identity of the parties cited in the summons? Is the question
whether the First Unit or Second
Unit has been cited in the
applicants’ summons and particulars of claim a constitutional
matter or an issue connected
with a decision on a constitutional
matter? The issue would arise only if this Court were to conclude,
on the primary constitutional
question, either that the First Unit
remained liable for any damages that might have been suffered as a
result of any unlawful
conduct on the part of its representatives
that might ultimately be proved, or that this liability lay with
the Second Unit.
The question would not otherwise arise. In other
words, the issue will need to be decided only if the constitutional
question
is determined in a particular way. It would come into
play as a direct result of the determination of the constitutional
matter
properly before us. In the circumstances, whether the First
or the Second Unit has been cited is an issue closely connected to
the decision of this Court on the constitutional matter.
Interests of justice
It is in the interests of
justice for this Court to consider the appeal. The question
whether the repeal of a proclamation
can result in the extinction
of the liability incurred by the unlawful conduct of the
representatives of an entity that had
been established under the
repealed proclamation is of public importance. This question is
directly raised on the facts of
this case and it is not in the
interests of justice to ignore it.
Consequences of the
respondent’s interpretation
We are not in this section
concerned with the correctness or otherwise of the respondent’s
argument on the interpretation
and effect of the 2001 Proclamation.
The consequence of the respondent’s assertions must be
measured on the assumption
that they are correct. As I have
already pointed out, the respondent would have it that neither the
First Unit nor the Second
Unit could be held liable for the damages
consequent upon any unlawful conduct that might have been committed
by representatives
of the First Unit. If this is right, there
would be no claim against any entity for damages that might have
been suffered
by any person as a result of the unlawful conduct of
the First Unit unless the claim was justiciable against any other
state
entity in terms of any law. If the claim were to be so
justiciable, it would not be extinguished. If it were not
justiciable
against any state entity, it would for all intents and
purposes be extinguished in the sense that it would not be
justiciable
in any court.
During the course of argument
the members of this Court raised concern about the propriety of the
2001 Proclamation effectively
depriving people who allege that they
have a claim for damages against the First Unit from having that
claim adjudicated in
a court.
20
These concerns are rooted in the possibility that the repeal of
the 1997 Proclamation that established the First Unit without
more
would result in the obliteration of the applicants’ claims,
regardless of their genuineness. The Supreme Court
of Appeal held
in this regard:
“
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. Approached thus, the mishap encountered here may
well have been avoided.”
21
(Footnote omitted.)
The provision of the
State
Liability Act adverted
to by the Supreme Court of Appeal reads:
“
In any action or other
proceedings instituted by virtue of the provisions of section one,
the Minister of the department concerned
may be cited as nominal
defendant or respondent.”
22
The effect of the provision is
that, when the state is sued, the minister of the state department
concerned must be cited.
The Supreme Court of Appeal held that it
is permissible for a claimant in the position of the applicants
whose claims lie against
an investigation unit established in terms
of the SIU Act, not against the state generally or against a
particular state department,
to cite the Minister of Justice in
terms of
section 2
of the
State Liability Act. However
, section
13(2) of the SIU Act (a provision not expressly considered by the
Supreme Court of Appeal) makes the correctness of
the approach and
conclusion that the Minister of Justice could have been cited as
the nominal defendant in the applicants’
summons quite
untenable. Section 13(2) provides:
“
The State Liability Act,
1957 (Act No. 20 of 1957), shall apply with the necessary changes in
respect of a Special Investigating
Unit, and in such application a
reference in that Act to ‘the Minister of the department
concerned’ shall be construed
as a reference to the Head of
the Special Investigating Unit concerned.”
The section says that a
reference in the
State Liability Act to
“the Minister of the
department concerned” is to be “construed as a
reference to the Head of the Special
Investigation Unit concerned.”
This means that
section 2
of the
State Liability Act is
to be read
as referring to the head of the investigation unit concerned.
Section 2
of the
State Liability Act read
with section 13 of the
SIU Act precludes the Minister of Justice from being cited as a
nominal defendant in a case in which
a special investigation unit
is being sued. The head of the unit concerned, and only that head,
can be cited. In the case
brought by the applicants in the present
circumstances, only the head of an investigation unit could
properly be named as the
nominal defendant. The Supreme Court of
Appeal was accordingly not correct in its view that the Minister of
Justice could
be sued by the applicants in terms of the
State
Liability Act.
It
follows that any person or
entity in the applicants’ position who has a justiciable
claim arising out of the alleged
unlawful conduct of members or
representatives of the First Unit would, on the interpretation of
the 2001 Proclamation proffered
by the respondent, be precluded
from having the dispute adjudicated by a court. They could not
cite the First Unit or the
Second Unit; nor could they cite the
Minister of Justice. That would plainly be in conflict with
section 34
of our Constitution. Accordingly, if there is a
reasonable prospect that this interpretation is wrong and that an
alternative
interpretation renders the provision constitutionally
unobjectionable, that course must be followed. I now consider the
meaning
and effect of the 2001 Proclamation against this
background.
The meaning and effect of
the 2001 Proclamation
We must consider the meaning
and effect of the 2001 Proclamation to determine whether the
liabilities consequent upon any unlawful
conduct of the
representatives of the First Unit were extinguished by it and, if
not extinguished, whether they were transferred
to the Second Unit
or remained with the First Unit.
Were the liabilities
extinguished?
The 2001 Proclamation, to the
extent relevant, reads:
“
1. Proclamation No. R.24
of 14 March 1997, as amended by Proclamation No. R.72 of 11 November
1997 and Proclamation No. R.42 of
28 April 1998, is hereby repealed.
2. Under section 2(1)(a) of the
[SIU Act], I hereby establish a Special Investigating Unit.
3. Under section 3(1)(a) of the
said Act, I hereby appoint William Andrew Hofmeyr as head of the
Special Investigating Unit.
. . . .
6. The Special Investigating
Unit established under paragraph 2 of this Proclamation shall
continue to investigate all the matters
which were referred to the
Special Investigating Unit established by Proclamation No. R.24 of
14 March 1997, including those
matters referred to it by the said
Proclamation and the Proclamations mentioned in the Schedule.”
The 2001 Proclamation does not
in terms disestablish or abolish the First Unit. It repeals the
1997 Proclamation that established
it. The 2001 Proclamation then
establishes the Second Unit and empowers it to investigate matters
that had been referred to
the First Unit. The Proclamation is
silent on the fate of the liabilities that might have been incurred
by the First Unit
consequent upon the unlawful conduct of its
representatives. The respondent seized upon this silence and
contended that it
shows the intention of the President to
disestablish the First Unit without making any provision for the
way in which the liabilities
of that Unit would be satisfied. The
argument ran that the fact that the First Unit had ceased to exist
meant that it could
not be sued.
There are two obstacles to
this interpretation. First, it flies in the face of section 13 of
the SIU Act read with the provisions
of
section 2
of the
State
Liability Act. Section
13 of the SIU Act provides:
“
(1) Any Special
Investigating Unit shall be a juristic person.
(2) The State Liability Act,
1957 (Act No. 20 of 1957), shall apply with the necessary changes in
respect of a Special Investigating
Unit, and in such application a
reference in that Act to ‘the Minister of the department
concerned’ shall be construed
as a reference to the Head of
the Special Investigating Unit concerned.
(3) No member of a Special
Investigating Unit shall be liable in his or her personal capacity
in respect of anything done by him
or her in good faith in the
course of performing the functions or exercising the powers of such
Special Investigating Unit in
terms of this Act.”
Section 2
of the
State
Liability Act may
be conveniently repeated:
“
(1) In any action or
other proceedings instituted by virtue of the provisions of section
one, the Minister of the department concerned
may be cited as
nominal defendant or respondent.
(2) For the purposes of
subsection (1), ‘Minister’ shall, where appropriate, be
interpreted as referring to a member
of the Executive Council of a
province.”
The two provisions read
together are straight-forward. They provide in effect that the
head of the investigation unit concerned
must be the nominal
defendant in any proceedings brought consequent on the conduct of
the representatives of that unit. In
the present case, these
provisions mean that the First or Second Unit must be cited through
its head as the nominal defendant.
The point to be made here is
this: the necessary implication of
section 13
is that it provides
for the liability of any investigation unit that arises from the
unlawful conduct of its members within
the course and scope of
their duties. The liability of any investigation unit is not
provided for in the proclamation that
establishes that unit. It is
confirmed and regulated by the SIU Act and exists even if the
proclamation establishing the unit
does not expressly provide for
it. Indeed, neither the 1997 Proclamation nor the 2001
Proclamation provides for the liability
of the First Unit or the
Second Unit respectively.
This liability, having been
regulated by section 13 of the SIU Act and not by any proclamation,
could not have been extinguished
by presidential conduct, even less
so by the silence of a proclamation. The President had no power to
extinguish it in the
circumstances of this case as this would have
been in conflict with the Act. It follows that the only possible
consequence
of the silence of the 2001 Proclamation on the question
of the fate of the liabilities that may have been incurred by the
First
Unit is that those liabilities could not have been and were
not extinguished. They remain alive.
The second barrier in the way
of the respondent is that created by section 12(2)(c) of the
Interpretation Act. I set out the
whole of section 12(2):
“
Where
a law repeals any other law, then unless the contrary intention
appears, the repeal shall not—
(a)
revive
anything not in force or existing at the time at which the repeal
takes effect; or
(b)
affect
the previous operation of any law so repealed or anything duly done
or suffered under the law so repealed; or
(c)
affect
any right, privilege, obligation or liability acquired, accrued or
incurred under any law so repealed; or
(d)
affect
any penalty, forfeiture or punishment incurred in respect of any
offence committed against any law so repealed; or
(e)
affect
any investigation, legal proceeding or remedy in respect of any such
right, privilege, obligation, liability, forfeiture
or punishment as
is in this subsection mentioned,
and any such
investigation, legal proceeding or remedy may be instituted,
continued or enforced, and any such penalty, forfeiture
or
punishment may be imposed, as if the repealing law had not been
passed.
”
Section 12(2) applies when one
law repeals another law. The purpose of the provision is to
control the consequences of the
repeal of a law so as to ensure
that the dislocation and unfairness that might follow upon the
repeal would, if not altogether
avoided, be kept to an absolute
minimum.
23
Section 12(2) is of application here because the 1997 Proclamation
has been repealed and replaced by the 2001 Proclamation.
Section 12(2)(c) is concerned
with, amongst other things, rights accrued and liabilities incurred
under the repealed law. It
specifically provides that these rights
and liabilities will remain unaffected by the repeal of the law.
In other words they
must be dealt with as if the law concerned had
not been repealed.
The applicants acquired, at
the very least, the right to bring proceedings against the First
Unit to claim any damage that might
be found to have been suffered
by them. The other side of this coin is that the First Unit would
be liable for any damages
suffered as a result of any unlawful
conduct of any of its members. It cannot be gainsaid therefore
that this right of the
applicants and the potential liability of
the First Unit remained unaffected by the repeal and were to be
dealt with as if
the 1997 Proclamation had not been repealed.
Moreover, we are concerned
here with proceedings that have been instituted by the applicants
in the exercise of the right that
accrued while the 1997
Proclamation was in operation. And in terms of section 12(2)(c),
these proceedings may be instituted
as if the 1997 Proclamation had
not been repealed.
So, the rights and liabilities
remain unaffected unless any contrary intention is revealed. We
must determine whether any contrary
intention is evident from the
repealing law (the 2001 Proclamation) pointing to an extinction of
the liability. I have already
pointed out that the 2001
Proclamation is silent on the question of the fate of the
liabilities that may have accrued under
the 1997 Proclamation which
it repealed. The contention that a contrary intention must be
inferred from this silence has,
in the circumstances, no merit.
Any provision in the 2001 Proclamation that had the effect of
extinguishing all liability
occasioned by the unlawful conduct of
the representatives of the First Unit would have been wholly
incompetent. This is so
because the President had no power to
extinguish a liability confirmed and regulated by the SIU Act and
which, perhaps more
significantly, had to remain unaffected
according to section 12(2)(c) of the Interpretation Act. If any
inference can indeed
be drawn from the silence of the 2001
Proclamation, it is that nothing was said of these liabilities and
their fate is accordingly
modulated by the Interpretation Act.
I accordingly hold that
neither the right of the applicants to institute proceedings nor
the potential liability of the First
Unit to compensate for damage
arising out of the unlawful conduct of its members has been
extinguished by the 2001 Proclamation.
We must now consider the
appropriate route to have been followed by the applicants in their
effort to recover the damages allegedly
suffered by them. There
are notionally three possibilities. The first is that the Minister
of Justice could have been cited
as the nominal defendant; the
second and third routes involve citing the First Unit or the Second
Unit respectively. I have
already pointed out that the Supreme
Court of Appeal favoured the first option and have held that this
approach is precluded.
24
The appropriateness of the second and third possible directions
remains to be considered.
Was the potential liability
of the First Unit transferred to the Second Unit by the 2001
Proclamation or did the liability remain
with the First Unit?
The applicants contend that
the Second Unit was the appropriate entity to have been cited
because the liability of the First
Unit was transferred to the
Second Unit by the 2001 Proclamation. They rely on the
circumstance that the First Unit has been
disestablished by that
Proclamation and emphasise that the First Unit was indeed
substituted by the Second Unit in a case before
the Full Court of
the Eastern Cape.
Twani
25
was however different. In that case the Second Unit applied to be
substituted for the First Unit in appeal proceedings concerning
the
award of costs. There was no dispute in that case about whether
the First Unit or the Second Unit should properly have
been cited.
The First Unit had been cited; it had ceased to exist with its
functions having to be performed by the Second
Unit before the
hearing of the appeal; the Second Unit, at its own instance, was
substituted for the First Unit by the Court
on appeal. It is not
necessary to investigate whether this case was correctly decided.
The respondent argued with
much force before this Court that the disestablishment of the First
Unit could not have resulted
in the creation of an entitlement to
cite the Second Unit. It was pointed out that the approach urged
by the applicants would
be at odds with section 12(2)(c) of the
Interpretation Act which requires the rights and liabilities to
remain unaffected.
They powerfully draw attention to the fact that
a liability transferred from the First Unit to the Second Unit
could not be
said to have remained unaffected as if the 1997
Proclamation had not been repealed.
I agree with the respondent.
In the same way that the President had no power to extinguish the
liabilities that the First Unit
may have incurred, the SIU Act
conferred no power upon the President to transfer the liabilities
of the First Unit to the Second
Unit. They remained the
liabilities of the First Unit.
The Supreme Court of Appeal
was accordingly correct in holding that there was no warrant for
any inference that the liabilities
of the First Unit had been
transferred to the Second Unit.
It follows from all this that
it was appropriate for the applicants in this case to have cited
the head of the First Unit despite
the fact that the First Unit had
been disestablished by necessary implication. The applicants had
to proceed as if the 1997
Proclamation had not been repealed. If
the 1997 Proclamation had not been repealed, they would have had
the right to institute
proceedings against the First Unit and cite
its head as the nominal defendant. It was submitted on behalf of
the respondent
that the liability of the First Unit could be kept
alive only if that Unit had been kept alive. I disagree. The fact
that
the Unit was not in existence mattered not because its head
was cited as nominal defendant only. The true party, the party
that would satisfy the judgment, is the state.
Was the First or Second
Unit cited in the summons as the first defendant?
I have come to the conclusion
that the liabilities of the First Unit have not been extinguished.
As I have already pointed
out, the issue whether the First Unit or
Second Unit was cited in the summons arises only because of the
construction that
has been placed on the 2001 Proclamation. In
other words, it arises directly and only as a result of the
decision in this
judgment on the constitutional matter.
The First Unit is fairly and
squarely cited on the face of the summons itself as being the
Special Investigation Unit established
by the 1997 Proclamation.
This much is conceded by the respondent. However, the respondent
goes on to say that this description
was fatally flawed because the
First Unit no longer existed. That contention is incorrect in the
light of this judgment.
Indeed, the description is not fatally
flawed at all. It is undoubtedly correct.
Contradictorily however,
paragraph 31 of the applicants’ (plaintiffs’)
particulars of claim describes the Special
Investigation Unit as
having been established by another Proclamation (the 1998
Proclamation).
26
This Proclamation did not establish the First Unit and could not
do so because the 1997 Proclamation had already established
it.
The 1998 Proclamation established no other investigation unit
either. It did, however, refer to the 1997 Proclamation
and to the
First Unit. The 1998 Proclamation entrusts the First Unit with the
investigation of the affairs of Tracor. It
must be remembered that
the allegation that the First Unit was charged with the
investigation of Tracor was essential to the
applicants’
claim. The particulars of claim then allege that the Special
Investigation Unit, “took over all the
rights, liabilities
and obligations of its predecessor”, but do not reveal the
identity of the predecessor. Nothing
can be made of this phrase.
The applicants’
particulars also say:
“
First Defendant, upon
its establishment in terms of Proclamation No. R.66 . . . of 30
June, 1998 took over all the rights, liabilities
and obligations of
its predecessor which was established under Proclamation No. R.24 .
. . of 14 March 1997.”
This statement is confusing as
the defendant has been identified in the summons as the Unit
established in terms of the 1997 Proclamation,
and cannot therefore
be its own predecessor. This contradictory and confusing averment
in the particulars of claim no doubt
gave rise to the confusion in
these proceedings that the Second Unit had been sued. However,
there is no mention in the summons
or particulars of the
Proclamation that established the Second Unit, so it does not seem
to me that this can be the proper interpretation
of the pleadings.
Moreover, in dealing with the conduct alleged to give rise to
liability, the particulars of claim refer simply
to the acts of the
first defendant, and not the conduct of the predecessor of the first
defendant. Construed as a whole, therefore,
I am satisfied that the
first defendant as identified in the summons is indeed the First
Unit and not the Second Unit.
I can see no basis for the
suggestion that the Second Unit had been cited. Only the First
Unit had been cited but the wrong
proclamation, a proclamation that
referred to the essential averment of the subject matter of the
investigation of the First
Unit, was named in the particulars of
claim.
Conclusion
The High Court and the Supreme
Court of Appeal have considered this case on the hypothesis that
the Second Unit had been cited.
It was on this basis that the
respondent’s special plea had been upheld by the High Court
and the applicants’
appeal against that decision to the
Supreme Court of Appeal had been dismissed. This premise has been
held to be incorrect.
The special plea should have been dismissed
because the Second Unit had not been cited in the summons or the
particulars of
claim. In the circumstances, the appeal should
succeed and the orders of the High Court and the Supreme Court of
Appeal should
be replaced by an appropriate order. That order
requires the High Court to deal with this matter on the basis that
the First
Unit was at all times cited in the summons and
particulars of claim.
Costs
Matters went awry in the High
Court and in the Supreme Court of Appeal because both parties urged
that the case be decided on
the basis that the Second Unit had been
sued. The parties must take equal responsibility for this in all
the courts that have
had to consider this case. In the
circumstances there should be no order as to costs in the High
Court, in the Supreme Court
of Appeal or in this Court.
Order
The following order is made:
The application for leave
to appeal is granted.
The appeal is upheld.
The orders of the Eastern
Cape High Court upholding the special plea and of the Supreme
Court of Appeal are set aside.
The respondent’s
special plea is dismissed.
The case is referred back
to the Eastern Cape High Court to be dealt with on the basis
that the Special Investigation
Unit established in terms of
Proclamation No. R24 of 14 March 1997 had at all times been
cited in the summons and particulars
of claim.
There will be no order as
to costs in relation to the proceedings before the High Court,
the Supreme Court of Appeal or
this Court.
Langa CJ, Kroon J, Madala J,
Mokgoro J, Nkabinde J, O’Regan J and Van der Westhuizen J
concur in the judgment of Yacoob
J.
For the Applicants: Mr M Tshiki
instructed by Tshiki & Sons Inc.
For the Respondent: Advocate W
Trengove SC, Advocate M Chaskalson and Advocate K Mclean instructed
by Special Investigating Unit.
1
Chagi and Others v Special Investigating Unit
2008 (1) SACR
329
(SCA);
[2008] 2 All SA 8
(SCA)
.
2
Proclamation R118 of 2001, GG 22531, 31 July
2001.
3
In terms of
sections 2(1)(a)
and
3
of the
Special Investigating
Units and Special Tribunals Act 74 of 1996
.
4
According to section 2(2) of the SIU Act the
President may appoint an SIU if there is any alleged—
“
(a) serious maladministration in connection with
the affairs of any State institution;
(b) improper or unlawful conduct by employees of any
State institution;
(c) unlawful appropriation or expenditure of public
money or property;
(d) unlawful, irregular or unapproved acquisitive act,
transaction, measure or practice having a bearing upon State
property;
(e) intentional or negligent loss of public money or
damage to public property;
(f) offence referred to in Part 1 to 4, or section 17,
20 or 21 (in so far as it relates to the aforementioned offences) of
Chapter
2 of the
Prevention and Combating of Corrupt Activities Act,
2004
, and which offences [were] committed in connection with the
affairs of any State institution; or
(g) unlawful or improper conduct by any person which
has caused or may cause serious harm to the interests of the public
or any
category thereof.”
5
In terms of Proclamation R24 of 1997, GG 17854,
14 March 1997.
6
In terms of Proclamation R66 of 1998, GG 19030,
30 June 1998.
7
The SIU Act uses “investigation unit”
and “investigating unit” interchangeably. I use
“investigation
unit” in this judgment.
8
There were four claims altogether.
9
A total of R16,5 million in damages was claimed.
10
On 31 July 2001.
11
Wilmot Mandla Chagi & 29 Others v Special
Investigating Unit and Others
Case No
1062/2001 Eastern Cape High Court, 28 April 2005, unreported.
12
Above n 3.
13
The issue is discussed at [18]-[21] below.
14
33 of 1957.
15
On 2 October 2008.
16
Above [7].
17
Section 167(3)(b) of the Constitution.
18
Below [26].
19
Investigating Directorate: Serious Economic Offences and Others v
Hyundai Motor Distributors (Pty) Ltd and Others: In re Hyundai
Motor
Distributors (Pty) Ltd and Others v Smit NO and Others
[2000] ZACC 12
;
2001 (1) SA 545
(CC);
2000
(2) SACR 349
(CC);
2000 (10) BCLR 1079
(CC) at para 23.
20
Section 34 of the Constitution provides:
“
Everyone has the right to have any dispute that
can be resolved by the application of law decided in a fair public
hearing before
a court or, where appropriate, another independent
and impartial tribunal or forum.”
21
Above n 1 at para 14.
22
Section 2(1) of
Act 20 of 1957.
23
See
Oudebaaskraal
(EDMS) Bpk v Jansen Van Vuuren
2001
(2) SA 806
(SCA) at 811G-H and
R v
Sillas
1959 (4) SA 305
(AD) at 309H.
24
Above [20]-[21].
25
ZR Twani v Special Investigating Unit and Another
Case No
CA234/2000 Eastern Cape High Court, 28 September 2001, unreported.
26
Proclamation R66 of 1998, GG 19030, 30 June 1998.