Brief Summary

Costs — Constitutional litigation — Approach to costs awards — Biowatch Trust, an environmental NGO, sought information from governmental bodies regarding genetically modified organisms and was largely successful in its claim but ordered to pay its own costs and those of Monsanto, which intervened — High Court's costs orders challenged on appeal — Court held that costs awards in constitutional matters should consider the nature of the issues rather than the status of the parties, emphasizing the need for a flexible approach to support public interest litigation — Leave to appeal granted to address the implications of costs orders on constitutional rights and public interest advocacy.

Comprehensive Summary

Summary of Judgment

1. Introduction

The matter concerned an application for leave to appeal and, if granted, an appeal in the Constitutional Court of South Africa in which the dispute was solely about costs in constitutional litigation. The merits of the underlying information-access dispute were not before the Constitutional Court; only the correctness of the costs orders made in earlier courts was in issue.

The applicant was the Trustees for the time being of the Biowatch Trust (Biowatch), an environmental watchdog organisation that sought access to information from state bodies responsible for the regulation of genetically modified organisms. The first to third respondents were organs of state and office-bearers involved in the regulatory framework, namely the Registrar, Genetic Resources, the Executive Council for Genetically Modified Organisms, and the Minister for Agriculture. The fourth respondent, Monsanto South Africa (Pty) Ltd (Monsanto), and two other GMO producers (Stoneville Pedigreed Seed Company and D & PL SA South Africa Inc) intervened in the High Court proceedings to protect alleged confidential commercial information.

The procedural history was central to the costs question. In the High Court, Biowatch obtained substantial relief on the merits against the state respondents, including findings that the Registrar had failed in several respects to comply with constitutional and statutory duties concerning the release of information. Despite this, the High Court made no costs order in Biowatch’s favour against the state, and further ordered Biowatch to pay Monsanto’s costs (while the other interveners did not seek costs). Biowatch appealed on costs only to the Full Court of the North Gauteng High Court, which dismissed the appeal by majority. An initial attempt to obtain direct access to the Constitutional Court was refused as it was not appropriate to bypass the Supreme Court of Appeal. Biowatch then sought special leave to appeal to the Supreme Court of Appeal, which was refused without reasons. Biowatch subsequently returned to the Constitutional Court for leave to appeal.

The general subject matter underlying the dispute was Biowatch’s attempt to obtain information held by the state concerning GMO-related matters, implicating the constitutional rights of access to information and environmental protection. In the Constitutional Court, however, the dispute focused on the proper approach to costs in such constitutional litigation, including the impact of costs orders on public interest litigants and the proper allocation of costs risks where the state fails to discharge regulatory responsibilities affecting competing private interests.

2. Material Facts

It was common cause in substance (as reflected in the High Court’s judgment on the merits, accepted as the platform for the costs inquiry) that Biowatch had made multiple attempts to obtain information from state officials responsible for genetic resources and GMO regulation. These requests preceded litigation and culminated in court proceedings when the information was not provided.

The High Court’s merits judgment (as summarised in the Constitutional Court judgment) established that Biowatch had a clear right to at least some of the information sought; that the Registrar’s failure to grant access to such information constituted a continued infringement of Biowatch’s rights under section 32(1)(a) of the Constitution; and that Biowatch had no alternative remedy to enforce those rights. The High Court also accepted that certain information (or portions of records) could legitimately be refused under the grounds of refusal contained in the Promotion of Access to Information Act 2 of 2000 (PAIA).

Although the High Court was critical of the breadth and lack of precision in some of Biowatch’s requests and in aspects of the notice of motion, it nonetheless declined to non-suit Biowatch on that basis and proceeded to determine the matter, granting Biowatch relief across eight of eleven categories of information requested. The Constitutional Court treated Biowatch’s success in overcoming preliminary objections and obtaining substantial categories of information as a material fact for purposes of applying costs principles.

A further material feature was that Monsanto and other private GMO producers had intervened. The High Court accepted that Biowatch’s approach had “compelled” Monsanto to come to court to protect its interests in confidentiality. However, the Constitutional Court treated it as significant that the underlying case was, in its essence, not litigation to resolve a private dispute between Biowatch and Monsanto, but litigation about whether the state had properly discharged constitutional and statutory obligations in dealing with access to information and confidentiality.

The impugned costs outcomes were, chronologically, that Biowatch—despite being largely successful against the state and obtaining information opposed by Monsanto—was left to pay its own costs and also to pay Monsanto’s costs. This cumulative burden, and its potential wider consequences for constitutional and public interest litigation, formed part of the factual matrix relevant to the interests-of-justice enquiry and to the evaluation of whether the High Court had misdirected itself on costs.

3. Legal Issues

The central legal questions were directed to the proper judicial approach to costs in constitutional litigation and the circumstances in which appellate interference with costs discretion is justified. Although costs are typically discretionary, the Constitutional Court treated the constitutional dimension of such discretion as raising a constitutional issue within its jurisdiction.

The Court identified four related issues concerning costs awards in constitutional litigation. The first issue was whether costs outcomes should be determined by the status of the parties (for example, public interest NGO versus commercial entity) or rather by the nature of the issues and the character of the litigation.

The second issue concerned the general approach to costs in constitutional litigation in proceedings between private parties and the state, particularly the principle that adverse costs orders against unsuccessful litigants may chill the vindication of constitutional rights, balanced against the need to sanction frivolous or abusive litigation.

The third issue concerned constitutional litigation in which the state is sued for failing to fulfil regulatory responsibilities that affect competing private interests, and how costs should be approached where private parties intervene to protect their interests in a state-held regulatory process (such as confidentiality claims).

The fourth issue concerned the role of appellate courts in interfering with costs orders, including the standard for setting aside a costs order as an improper exercise of discretion, and the kinds of misdirection that justify appellate substitution.

These issues involved questions of law (the articulation of general principles applicable to costs in constitutional litigation), questions of application of law to fact (whether the High Court’s reasons justified departing from the ordinary constitutional costs approach), and an evaluative component inherent in the costs discretion and the assessment of whether a misdirection occurred.

4. Court’s Reasoning

The Constitutional Court approached the matter from the premise that costs awards in constitutional litigation are not merely incidental, because they may materially affect access to courts and the enforcement of constitutional rights. The Court affirmed that costs in constitutional matters raise a constitutional issue, and that while courts retain a flexible discretion, it was both possible and desirable to identify general points of departure developed through prior jurisprudence.

On the question of whether costs should depend on party status or issues, the Court rejected an approach that would begin by privileging or disfavoring litigants based on whether they act in the public interest, whether they are indigent, or whether they have substantial resources. The Court emphasised that equal protection under the law requires that parties not be treated as enjoying enhanced or diminished status for costs purposes purely because of their identity or funding model. The appropriate starting point was said to be the nature of the issues and whether the costs order would hinder or promote constitutional justice. At the same time, the Court stressed that public interest or constitutional character does not immunise a litigant from costs sanctions where the litigation is frivolous, vexatious, abusive, or otherwise improper.

In setting out the general approach for suits between private litigants and the state, the Court relied on the principle articulated in Affordable Medicines Trust and Others v Minister of Health and Another that ordinarily, in constitutional litigation, if the state loses it should pay the successful private party’s costs, while if the state wins each party should generally bear its own costs. The Court explained the rationale as including the need to reduce chilling effects on constitutional litigation, the broader public value of constitutional adjudication beyond the immediate parties, and the state’s primary responsibility to ensure that law and conduct are consistent with the Constitution. The Court reiterated that departure from this approach requires carefully articulated and convincing reasons, particularly where the private litigant has achieved substantial success.

The Court then considered cases where constitutional litigation arises in a regulatory setting in which multiple private parties are affected. It reasoned that even though private parties may have opposing interests, the litigation should not be treated as “private-party versus private-party” where the essential question is whether the state has fulfilled constitutional and statutory regulatory obligations. In such contexts, the Court indicated that costs awards should remain guided by the overarching principle of not discouraging constitutional claims. This approach had consequences for the impugned costs order between Biowatch and Monsanto, because Monsanto’s involvement was linked to the state’s failure to perform its initial duty to separate confidential from non-confidential information in the first place.

On the role of appellate courts in costs matters, the Court reaffirmed that costs orders are discretionary and that appellate interference requires “good reason”. Drawing on Giddey NO v JC Barnard and Partners, and the approach to discretionary decisions discussed in South African Broadcasting Corporation Ltd v National Director of Public Prosecutions and Others with reference to Bookworks (Pty) Ltd v Greater Johannesburg Transitional Metropolitan Council and Another, the Court treated the key inquiry as whether the discretion was exercised judicially and on correct principles and facts, and whether there was a misdirection (including a demonstrable blunder or unjustifiable conclusion). Where a court fails to have regard to the constitutional setting in which costs discretion must be exercised, this may amount to a serious misdirection justifying appellate reconsideration.

Applying these principles to the High Court’s refusal to order the state to pay Biowatch’s costs, the Court found that the High Court’s reasons were laconic and did not show that it had properly located the costs decision in the constitutional context, nor that it had properly measured the extent of Biowatch’s success and the chilling effect of depriving a substantially successful constitutional litigant of costs. The Court treated the omission of the constitutional dimension as a serious misdirection, placing the Constitutional Court “at large” to reconsider the costs order.

The Court accepted that Biowatch’s requests were in some respects imprecise and broad, but held that such imprecision did not rise to the level of misconduct justifying departure from the general constitutional costs approach. The High Court had been able to adjudicate the merits thoroughly, Biowatch’s application was not characterised as frivolous or vexatious, and Biowatch had been compelled to litigate by the state’s persistent failure to supply information it was legally obliged to provide. The Court also placed weight on the state’s role as an impartial steward required to balance transparency with lawful confidentiality, especially given the public controversy surrounding GMOs, and noted that rule-of-law considerations reinforced the importance of transparency and manifest fidelity to PAIA and the Constitution.

As to Monsanto’s costs award, the Court reasoned that the matter before the High Court was not truly a dispute between Biowatch and Monsanto, but rather a dispute between Biowatch and the state regarding the state’s handling of access to information and confidentiality. Monsanto was entitled to intervene to protect legitimately confidential information, but the litigation was provoked by the state’s failure to discharge its responsibilities. In this regulatory context affecting competing private interests, the Court stated that the general point of departure should be that the state bears the costs of litigants who have been successful against it, and ordinarily no costs orders should be made against private litigants who became involved. On this basis, the Court found the High Court’s costs order in favour of Monsanto unsustainable, again because the High Court did not properly take account of the constitutional nature of the litigation, the state’s role in spawning the litigation, and the fact that Biowatch obtained crucial information whose disclosure Monsanto had opposed.

In dealing with what further costs orders should follow, the Court did not intervene in the Supreme Court of Appeal costs order because Biowatch had not appealed that order in the Constitutional Court nor sought amendment. The Court nonetheless ordered the state to pay Biowatch’s costs in the Constitutional Court because the state had not opposed the application while also not abandoning the High Court costs order in its favour, thereby compelling Biowatch to seek relief in the Constitutional Court.

5. Outcome and Relief

The Constitutional Court granted leave to appeal and upheld the appeal on costs. It set aside the relevant paragraphs of the Full Court’s order and substituted an order that the first, second, and third respondents were to pay Biowatch’s costs in the High Court.

The Court further ordered that the first, second, and third respondents pay the costs occasioned by Biowatch’s application for leave to appeal to the Constitutional Court, including the costs of two counsel. The Court set aside the High Court’s order that Biowatch pay Monsanto’s costs, and replaced it with the position that no costs order should be made in relation to Monsanto’s participation.

The Court declined to interfere with the costs order made by the Supreme Court of Appeal in the special leave application, on procedural grounds related to the scope of the appeal before the Constitutional Court.

Cases Cited

Ferreira v Levin NO and Others; Vryenhoek and Others v Powell NO and Others [1995] ZACC 2; 1996 (4) BCLR 441 (CC); 1996 (2) SA 621 (CC).

Affordable Medicines Trust and Others v Minister of Health and Another [2005] ZACC 3; 2005 (6) BCLR 529 (CC); 2006 (3) SA 247 (CC).

Motsepe v Commissioner for Inland Revenue (as quoted in Affordable Medicines Trust and Others v Minister of Health and Another [2005] ZACC 3; 2005 (6) BCLR 529 (CC); 2006 (3) SA 247 (CC)).

Barkhuizen v Napier [2007] ZACC 5; 2007 (7) BCLR 691 (CC); 2007 (5) SA 323 (CC).

Campus Law Clinic v Standard Bank of South Africa and the Minister for Justice and Constitutional Development [2006] ZACC 5; 2006 (6) BCLR 669 (CC); 2006 (6) SA 103 (CC).

Giddey NO v JC Barnard and Partners [2006] ZACC 13; 2007 (2) BCLR 125 (CC); 2007 (5) SA 525 (CC).

South African Broadcasting Corporation Ltd v National Director of Public Prosecutions and Others [2006] ZACC 15; 2007 (2) BCLR 167 (CC); 2007 (1) SA 523 (CC).

Bookworks (Pty) Ltd v Greater Johannesburg Transitional Metropolitan Council and Another 1999 (4) SA 799 (T).

Walele v City of Cape Town and Others [2008] ZACC 11; 2008 (11) BCLR 1067 (CC); 2008 (6) SA 129 (CC).

Wildlife and Environmental Society of South Africa v MEC for Economic Affairs, Environment and Tourism, Eastern Cape, and Others 2005 (6) SA 123 (ECD).

Silvermine Valley Coalition v Sybrand van der Spuy Boerderye and Others 2002 (1) SA 478 (CPD).

Fuel Retailers Association of South Africa (Pty) Ltd v Director General, Environmental Management, Department of Agriculture, Conservation and Environment, Mpumalanga Province and Others [2007] ZACC 13; 2007 (10) BCLR 1059 (CC); 2007 (6) SA 4 (CC).

Legislation Cited

Constitution of the Republic of South Africa, 1996 (section 9(1); section 24; section 32; Schedule 2, section 6).

Promotion of Access to Information Act 2 of 2000.

National Environmental Management Act 107 of 1998 (section 31; section 32, including subsections 32(2) and 32(3)).

Genetically Modified Organisms Act 15 of 1997.

Supreme Court Act 59 of 1959 (section 21A).

Companies Act 61 of 1973.

Rules of Court Cited

No specific rules of court were cited in the judgment.

Held

The Constitutional Court held that the award of costs in constitutional litigation raises a constitutional issue and that it is in the interests of justice to entertain an appeal on costs alone where the matter implicates issues of general constitutional importance, including potential chilling effects on constitutional litigation.

It held that the starting point in constitutional costs analysis is the nature of the issues and the character of the litigation, not the identity, status, or resources of the parties. It reaffirmed that in constitutional litigation between a private party and the state, the ordinary approach is that if the private party is substantially successful, the state should pay costs, and if the private party is unsuccessful, each party ordinarily bears its own costs, subject to departures where litigation is frivolous, vexatious, or abusive.

It further held that where the state fails in its constitutional and statutory regulatory obligations in a dispute affecting competing private interests, the costs risk should generally be located at the state, and ordinarily there should be no adverse costs orders between private parties drawn into the litigation by the state’s failure properly to discharge its duties.

On the facts, the High Court’s failure to situate the costs decision in the constitutional context and its inadequate treatment of Biowatch’s substantial success constituted a misdirection justifying appellate interference. The High Court’s costs order against Biowatch in favour of Monsanto was likewise unsustainable and was set aside. The state respondents were ordered to pay Biowatch’s costs in the High Court and in the Constitutional Court proceedings, while no costs order was made concerning Monsanto’s participation.

LEGAL PRINCIPLES

The judgment applied and developed the principle that costs discretion in constitutional matters must be exercised with regard to the advancement of constitutional justice, including the deterrent (“chilling”) effect that adverse costs orders may have on litigants seeking to vindicate constitutional rights.

It reaffirmed that constitutional litigation costs should not be determined by a litigant’s perceived moral worth, public-interest orientation, or financial means. The operative enquiry is whether the litigation raises genuine constitutional issues and whether the litigant’s conduct warrants censure (for example, where the litigation is frivolous, vexatious, or abusive).

It confirmed as a general point of departure, derived from constitutional jurisprudence, that in constitutional litigation between a private party and the state, where the private party succeeds substantially, the state should ordinarily bear the costs; where the private party fails, each party should ordinarily bear its own costs, absent special circumstances justifying departure.

It applied the appellate principle that costs orders, though discretionary, may be interfered with where the discretion was not exercised judicially, including where the court applied wrong legal principles, misapprehended material facts, or committed a serious misdirection such as failing to account for the constitutional setting relevant to costs.

It articulated that where constitutional litigation is triggered by the state’s failure to perform its regulatory role affecting multiple private interests, costs should generally be allocated so that the state bears the costs of successful litigants against it, and there should ordinarily be no costs order between private parties who become involved in the regulatory dispute.

Biowatch Trust v Registrar Genetic Resources and Others (CCT 80/08) [2009] ZACC 14; 2009 (6) SA 232 (CC) ; 2009 (10) BCLR 1014 (CC) (3 June 2009)