Minister for Justice and Constitutional Development v Nyathi and Others (CCT 53/09) [2009] ZACC 29; 2010 (4) BCLR 293 (CC) ; 2010 (4) SA 567 (CC) (9 October 2009)

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Minister for Justice and Constitutional Development v Nyathi and Others (CCT 53/09) [2009] ZACC 29; 2010 (4) BCLR 293 (CC) ; 2010 (4) SA 567 (CC) (9 October 2009)

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CONSTITUTIONAL
COURT OF SOUTH AFRICA
Case
CCT 53/09
[2009]
ZACC 29
In the
matter between:
MINISTER
FOR JUSTICE AND CONSTITUTIONAL DEVELOPMENT
Applicant
and
DINGAAN
HENDRIK NYATHI
Respondent
with
LAW
SOCIETY OF SOUTH AFRICA
Intervening
Party
and
LEGAL
RESOURCES CENTRE
First
Amicus Curiae
FREEDOM
UNDER LAW
Second
Amicus Curiae
AIDS
LAW PROJECT
Third
Amicus Curiae
In
re:
Case
CCT 19/07
DINGAAN
HENDRIK NYATHI
Applicant
and
MEMBER
OF THE EXECUTIVE COUNCIL FOR HEALTH, GAUTENG
First
Respondent
MINISTER
FOR JUSTICE AND CONSTITUTIONAL DEVELOPMENT
Second
Respondent
Heard
on : 12 August 2009
Orders
made on : 1 June 2009 and 31 August 2009
Reasons
for orders and supplementary order delivered on : 9 October 2009
JUDGMENT
MOKGORO
J:
Introduction
This
matter is about the state’s constitutional obligation to pass
legislation within a specific time frame, ensuring the effective

satisfaction of judgment debts sounding in money against the state.
Specifically,
the case concerns an application by the Minister for Justice and
Constitutional Development (the Minister) for an
extension of the
period of suspension of the order of constitutional invalidity made
by this Court on 2 June 2008 in
Nyathi v MEC for Department of
Health
,
Gauteng and Another
1
(
Nyathi I
). In that case,
section 3
of the
State Liability
Act 20 of 1957
, which prohibited the attachment, execution or like
process against the state or any state property for the satisfaction
of judgment
debts sounding in money, was declared to be
unconstitutional for its failure to provide effectively for the
satisfaction of those
judgments.
The
order in
Nyathi I
provided:
“
(1) The
order of constitutional invalidity made by the Pretoria High
Court is confirmed in the following terms:
‘
Section
3
of the
State Liability Act is
declared to be inconsistent with
the Constitution to the extent that it does not allow for
execution or attachment against
the State and that it does not
provide for an express procedure for the satisfaction of
judgment debts.’
The
declaration of invalidity is suspended for a period of 12 months to
allow Parliament to pass legislation that provides for
the
effective enforcement of court orders.
(a)
The
second respondent is required to compile and provide to this Court
on affidavit a list of all unsatisfied court orders
against all
national and provincial state departments, indicating the parties,
the case number and the amounts outstanding,
by no later than 31
July 2008.
Further
directions may be issued by the Chief Justice, as necessary.
The
second respondent is required to provide this court on affidavit
with a plan of the steps it will take to ensure speedy
settlement
of unsatisfied court orders by no later than 31 July 2008.
(5) The
respondents are ordered to pay the applicants’ costs, such
costs to include the costs consequent upon the employment
of two
counsel.”
The
parties
The
Minister for Justice and Constitutional Development is the applicant
in this matter, and the respondent is Mr Dingaan Hendrik
Nyathi,
previously the applicant in
Nyathi I
, who passed away on 4
July 2007. In order that the views of interested and affected
parties could be canvassed before this Court,
directions were issued
by the Chief Justice on 10 June 2009, inviting any party or person
wishing to oppose the application,
to file submissions before 22
June 2009. The response to this invitation was substantial. The
AIDS Law Project (the ALP), the
Legal Resources Centre (the LRC) and
Freedom Under Law (FUL) all applied and were admitted as amici
curiae. In addition the
Law Society of South Africa (the Law
Society) applied to be admitted as an intervening party.
Application
for leave to intervene by the Law Society
On 21
June 2009 the Law Society made an application to this Court for
leave to be admitted as an intervening party in the matter.
It
sought leave to intervene opposing the application on the basis that
their members’ clients would suffer severe prejudice
if the relief
sought by the Minister was granted.
The
decisive criterion in determining whether or not to grant leave to
intervene under Rule 8 of this Court’s Rules
2
is whether it is in the interests of justice to do so. One aspect
of this consideration is whether the applicant has a direct
and
substantial interest in the litigation.
3
The Law Society clearly has a material interest in this matter.
Its members represent the majority of people who normally litigate

against the state. The rights of its members’ clients are
profoundly affected by the absence of effective enforcement of
judgment debts and the state’s delay in providing remedial
legislation. Further considerations which may be of relevance

include the stage of the proceedings during which the application is
made; the attitude of the parties to the main proceedings;
and the
question whether the submissions which the applicant seeks to
advance raise substantially new contentions that may assist
the
Court.
4
Since the Law Society has applied at an early stage, it advances
new contentions which are helpful to the Court, and it has
a direct
and substantial interest in the matter, it is admitted as an
intervening party.
Facts
In the
order of this Court in
Nyathi I
, the declaration of
invalidity was suspended for a period of 12 months to allow
Parliament to pass legislation providing for
the effective
enforcement of court orders. That order also required the Minister
to compile and provide to the Court a list
of all unsatisfied court
orders against all national and provincial departments, by no later
than 31 July 2008.
5
These reports were filed on 31 July 2008, 12 December 2008 and 5
August 2009 respectively.
The
reports detailed, amongst other things, the steps the Department for
Justice and Constitutional Development (the Department)
had taken to
satisfy the outstanding judgment debts against the state. They
describe developments taking place within the department
to ensure
the speedy settlement of judgment debts. In that regard, the
reports gave details of progress made in preparation
of the State
Liability Bill and the Constitution Eighteenth Amendment Bill (the
Bills).
The
State Liability Bill has been in preparation since 2003 and has been
the subject of debate amongst the relevant Portfolio
Committees,
departments and researchers.
6
By May 2007, the Bill had been revised several times. However,
because of a number of objections and amendments by the relevant

departments, it was only tabled before the Cabinet Committee on
Governance and Administration on 3 December 2008. It was then

approved for public comment, subject to consultation with the
Minister for Finance prior to its publication.
Consultation
with the Minister for Finance did not, however, take place
instantaneously. Indeed the communications only commenced
four
months later. Both Bills were subsequently published in an
Extraordinary Government Gazette for public comment only on
1 June
2009, one day before the expiry of the suspension period of this
Court’s order of invalidity in
Nyathi I
. Consequently, on
the same day, the Minister filed an urgent application with this
Court for an order extending the period of
invalidity for 12
months.
7
Pursuant
to that application this Court on 1 June 2009 made an order that the
period of suspension would be extended until 31
August 2009. The
Court also ordered that the remainder of the urgent application for
the variation of the order of 2 June 2008
in
Nyathi I
be
postponed to 12 August 2009 for hearing. This limited extension was
initially granted in order to afford an opportunity for
a full
airing of the issues and for consideration of the interests of the
public.
The
Minister’s submissions for an extension
In his
affidavit, Advocate Simelane, the Director-General in the Department
(the DG), on behalf of the Minister, stated that the
national
elections in April of this year, together with the shorter
Parliamentary session, contributed substantially to the inability
to
pass the envisaged remedial legislation within the stipulated period
of time. The situation had been exacerbated by the need
to engage
other government departments, in particular the National Treasury,
and the “difficult consultations and research
to resolve
conflicting views” that followed. It was also aggravated by the
fact that the team responsible for the Bills was
simultaneously
tasked with a range of other legislative responsibilities, including
work related to fifteen other urgent bills.
The
DG was particularly apprehensive that administrative chaos would
ensue should the extension not be granted. He stated that
the lapse
of the suspension of the declaration of invalidity would render the
administration dysfunctional. The prejudice that
would flow if
essential assets were attached would be wide-ranging with
unimaginable effects on essential services. The machinery
of the
state might come to a halt.
The
Minister submitted that he had shown “good cause” for the
extension to be granted. He argued that there would be little

prejudice to the public as the government had in any case satisfied
the majority of judgment debts which were still outstanding
on 31
July 2008. On balance, the Minister asserted, there would be
greater prejudice to government than to those who still had

outstanding judgment debts, if the extension was refused.
The
DG submitted that there had been “an unrealistic optimism that
remedial legislation would be enacted by 1 June 2009.”
With
hindsight, he conceded that the expectation had been irrational and
idealistic. He averred that it ought to have been
apparent shortly
after this Court’s order on 2 June 2008 that an application for an
extension of the period of the suspension
of invalidity was
inevitable. Despite having realised the folly of his optimism, he
continued wishfully to predict that it was
likely that the Bills
would be introduced in Parliament on 14 October 2009. It was then
submitted that, within the minimum time
frames that Parliament could
employ, the Bills could, in the DG’s estimate, be passed by 1
April 2010. Accordingly, he requested
that the declaration of
invalidity be suspended until 31 May 2010.
A
parallel disillusionment with this earlier optimism was to befall
the Deputy Director-General of Legislative Development in
the
Department, Mr Trevor Rudman, who later stated that the proposed
time-frame was no longer “realistic” or “achievable.”
No
alternative time period was, however, suggested. In written and
oral argument, the Minister subsequently returned to his
original
position, submitting that an extension should be granted until 31
May 2010 to allow Parliament to pass the remedial
legislation. The
Minister could not, however, with certainty predict when the Bills
would be passed into law.
Submissions
by the amici curiae and intervening party
The amici
curiae were, however, not convinced that administrative chaos would
ensue as had been submitted on behalf of the Minister.
Based on the
Minister’s own submissions that only R3,5 million in debt remains
outstanding, the ALP argued that it could not
reasonably be
contended that there is a serious risk of widespread attachment of
state assets, rendering the state unable to
provide essential
services. Instead, it averred that the prejudice to the public, in
particular those whose interests the ALP
served, outweighed any
prejudice the state might suffer.
The
ALP further submitted that the extension of a suspension order in
this instance was not warranted in the light of the factors
provided
in
Ex Parte Minister of Social Development
.
8
To this end, they pointed to the non-compliance with the suspension
order, the inadequate explanation for the delay in enacting
the
legislation, and the indefinite plan proposed by the Minister as
justification for declining to grant an extension. They
also
argued, in view of the lateness of the application, that the urgency
pleaded by the Minister was mostly occasioned by his
own making.
They contended that the Minister had also been ambivalent as to when
the Bills were expected to be passed into law.
The
ALP submitted that it would be appropriate to grant interim relief
to protect constitutional rights, pending the remedial
legislation.
It proposed that the Court grant an order directing the Minister to
designate a fund within one month of this Court’s
order, against
which execution of judgment debts may be levied.
The
LRC made submissions similar to those of the ALP. It made
particular reference to the prejudice to be suffered by indigent

clients and their own inability to recover costs, asserting that the
Minister had failed to provide sufficient explanation for
the
failure to comply with the time limit as ordered by this Court. It
contended that there was insufficient evidence regarding
the
anticipated public prejudice.
The
nub of FUL’s submissions was that, by failing to enact the
relevant legislation timeously, the conduct of the Minister had

infringed the rule of law. To allow for an extension of time, it
submitted, would imply a sanctioning of the continued violation
of
the Constitution which is at odds with the imperatives of a
constitutional democracy and the rule of law. For these reasons
it
contended that the application for an extension be dismissed.
In
oral argument, however, FUL conceded that, if this Court made an
interim order allowing for the effective enforcement of judgment

debts against the state in the interim, it did not matter whether
the extension is granted or not. It argued that an interim
order
should direct the state to designate a fund to which application may
be made by judgment creditors for the satisfaction
of judgment debts
against the state.
Also
urging the dismissal of the application, the Law Society made
submissions similar to those of the amici curiae. In oral
argument,
it pointed to the practical difficulties that judgment creditors
face when seeking to execute judgment debts against
state property.
9
Like the amici curiae, it made helpful submissions regarding
possible formulations of an interim order, if any were to be made.
10
The
applicable law
This is
not the first time that this Court has had to consider, on an urgent
basis, an application by the state for an extension
of this nature.
Indeed this Court was faced with a similar application in
Zondi
II
.
11
That case was a sequel to this Court’s order in
Zondi I
,
12
in which sections 16(1), 29(1), 33, 34 and 37 of the Pound Ordinance
(KwaZulu-Natal),
13
were declared unconstitutional and invalid. At issue was
whether the Court had the power to vary and extend the period of
suspension
of a declaration of invalidity. The Court held:
“
The
power to make an order that is just and equitable is not limited to
the time when the Court declares a statutory provision
inconsistent
with the Constitution and suspends the order of invalidity. During
the period of suspension this Court retains
the power to reconsider
the continued suspension of the declaration of invalidity and the
period of suspension as well as the
conditions of suspension in the
exercise of its power to make an order that is just and equitable.
When the facts on which
the period of suspension was based have
changed or where the full implications of the order were not
previously apparent, there
seems to be no reason both in logic and
principle why this Court should not, before the expiry of the
period of suspension,
have the power to extend the period, if to do
so would be just and equitable.”
14
The
Court found that the determination of what is “just and equitable”
is fact specific, and in view of the principle of finality,
the
power to extend the period of suspension should, as a general
matter, be “very sparingly exercised”.
15
In
a separate concurring judgment in
Ex Parte Minister of Social
Development
,
16
Ngcobo J outlined the principles which guided the Court’s exercise
of the discretion as follows:
“
[T]he
sufficiency of explanation for failure to comply with the original
period of suspension; the potentiality of prejudice
being
sustained if the period of suspension were extended or not
extended; the prospects of complying with the deadline;
the need
to bring litigation to finality; and the need to promote the
constitutional project and prevent chaos.
What
is required is a balancing of all the relevant factors, bearing in
mind that the ultimate goal is to make an order that
is just and
equitable.”
17
(Footnotes omitted.)
The
irony of the facts and circumstances of this case cannot be escaped.
The suspended order of invalidity made in
Nyathi I
was made
specifically with a view to curb non-compliance with court orders
against the state, relating to the payment of judgment
debts and
resulting in prejudice to judgment creditors. Through the state’s
inadequate response to give effect to that order,
this Court is yet
again called upon to consider the extent to which people, due to the
state’s inadequate response, are required
to endure the continued
infringement of their rights implicated in extending the period of
suspension. This application therefore
invites this Court once more
to have regard to the greater constitutional imperatives of the
respect for the rule of law when
determining the issue of compliance
with court orders, particularly, as in this case, in relation to
satisfying judgment debts
against the state. Although the relevant
constitutional imperatives and obligations of the state were
emphasised in the above
decisions,
18
it is necessary to emphasise once more the relevant constitutional
provisions when deciding whether a further extension should
be
granted. It is important to highlight yet again that applications
of this nature must not be resorted to lightly.
19
One
of the fundamental values in the Constitution gives express
recognition to South Africa as a constitutional democracy founded
on
the supremacy of the Constitution and the rule of law.
20
The Constitution also provides that no person or organ of state
shall interfere with the functioning of the courts.
21
It stipulates that organs of state have a duty to assist and
protect the courts to ensure, amongst other imperatives, the dignity

and effectiveness of the courts.
22
Similarly,
the Constitution provides that an order or decision by a court binds
all persons to whom and organs of state to which
it applies.
23
The Constitution further places an obligation upon the public
administration, which encompasses a value based public service,
24
to be accountable.
In
Nyathi I
, Madala J, writing for the Court cautioned:
“
Certain
values in the Constitution have been designated as foundational to
our democracy. This in turn means that as pillar-stones
of this
democracy, they must be observed scrupulously. If these values are
not observed and their precepts not carried out
conscientiously, we
have a recipe for a constitutional crisis of great magnitude. In a
State predicated on a desire to maintain
the rule of law, it is
imperative that one and all should be driven by a moral obligation
to ensure the continued survival
of our democracy. That in my view
means at the very least that there should be strict compliance with
court orders.”
25
(Footnote omitted.)
Thus,
any decision to grant an extension to an order of suspension over a
declaration of invalidity accordingly, must not only
be informed by
the principles illuminated in
Ex Parte Minister of Social
Development
,
26
but must also be rooted in them.
The
summary order of 31 August 2009
Having
given due consideration to the applicable law, this Court on 31
August 2009 issued the following order to operate in the
interim,
stating that reasons would follow in due course:
“
1.
The
period of suspension of invalidity in paragraph 2 of the order
granted in
Nyathi
v MEC for Department of Health, Gauteng and Another
2008 (5) SA 94
(CC), as extended by an order of this Court
granted on 1 June 2009, is further extended until 31 August 2011.
2. The
parties to this case, as well as the Minister for Finance, are
requested to lodge written argument on or before 15
September
2009 on the question of whether an order in the following terms
should be made an order of Court to be operative
during the
period of suspension made in paragraph 1 of this order:
‘
During
the extended period of suspension granted by this Court on 31
August 2009, or until legislation regulating the
matter is
brought into effect, the following process for the enforcement
of court orders against the state sounding in
money shall apply:
If
a final court order against the state for the payment of money is
not satisfied within 30 days of the date of judgment, the
judgment
creditor may serve notice on the State Attorney and the relevant
Accounting Officer in the National or Provincial
Department or the
local government of the intention to attach movable property owned
by the state and used by the department
which is, in effect, the
judgment debtor for the purposes of a sale in execution to satisfy
the judgment debt.
If,
within 14 days after the notice in paragraph (a) of this order has
been served, the judgment debt remains unpaid, the judgment

creditor may apply for a writ of execution against movable property
in terms of Rule 45 of the Uniform Rules of Court or in
terms of
Rule 36 of the Magistrates’ Courts Rules of Court, whichever is
applicable.
The
sheriff of the relevant court shall, pursuant to the writ of
execution, attach movable property owned by the state and used
by
the relevant department.
30
days after the date of the attachment, and in the absence of any
application as contemplated in paragraph (e) of this order,
the
sheriff of the relevant court may sell the attached movable
property in execution of the judgment debt.
Any
affected party may, during the periods referred to in paragraphs
(b) and (d) of this order, apply to the court which granted
the
judgment in question for an order staying the execution
contemplated in paragraph (d) on the ground that it is not in the

interests of justice and good governance to attach and sell in
execution the movable property of the state which has been
attached.
The
duty to establish that it would not be in the interests of justice
and good governance for the property of the state which
has been
attached to be sold in execution rests upon the party seeking the
relief sought in paragraph (e) of this order.’
3. The
parties to this case, as well as the Minister for Finance, may
also submit written argument on or before 15 September
2009
proposing an alternative order for the timeous and effective
enforcement of judgment debts.
4. The
Registrar of this Court is instructed to arrange for service of a
copy of this order, as well as a copy of this
Court’s judgment
in
Nyathi v MEC
for Department of Health, Gauteng and Another
2008 (5) SA 94
(CC) on the Minister for Finance.
5. Costs
are reserved.”
The
order of extension was granted for the reasons that follow.
The
Bills were published for public comment on 1 June 2009. Therefore a
resolution of the constitutional difficulties arising
from the
absence of a legislative mechanism seems in sight. Public responses
are said to be substantial and expensive debates
may ensue,
considering the importance of the issues. It is reasonable to
anticipate a protracted time span before the Bills
are passed given
the complexity of the issues and the number of government
departments and spheres of government involved. Considering
the
power of the Court to craft a just and equitable remedy to govern
the interim period, a longer period of extension than usual
was
warranted. The inevitable need for an interim remedy to protect
both creditors and vital state assets in these circumstances
cannot
be gainsaid. Consequently, a further extension was considered just
and equitable. The period granted was for a further
period of two
years, subject to an interim order regulating the effective
enforcement of judgment debts against the state. The
interim order
was issued in the form of a rule nisi, enabling all parties,
including the Minister for Finance, to comment on
its terms.
The
need for an interim order had been debated in oral argument on 12
August 2009. Both the ALP and FUL agreed that if this Court
were to
grant an interim order that would regulate a procedure under which
judgment creditors could effectively and timeously
have their
judgment debts satisfied, it would make little practical difference
whether the extension was granted or not. There
are two important
reasons why an interim order should be granted. First, an interim
order would be necessary to protect judgment
creditors against the
continued infringement of their rights resulting from the failure to
pass the required remedial legislation
timeously. For those with
sufficient resources and tenacity, and those who can rely on the
invaluable assistance of various
legal aid institutions, the
continuation of the legal status quo may not present a substantial
infringement of their rights.
However, as the amici correctly
submitted, the potential for prejudice to judgment creditors places
a high premium on the fashioning
of an interim order that is
carefully crafted to balance the interests of the state against
those of judgment creditors, particularly
people who lack access to
legal resources.
In
the absence of an appropriately tailored mechanism which in the
interim regulates the satisfaction of judgment debts against
the
state, the rules of both statutory and common law might apply and
there would be no guarantee against the attachment and
execution of
vital state property, affecting essential public service delivery.
As all parties conceded in oral argument, although
the chances of
attachment and execution are slim, the attachment of state assets
such as ambulances and police vehicles should
be strenuously
avoided. However, without a further suspension, coupled with an
interim order to protect judgment creditors’
interests in the
meanwhile, the broader public prejudice may in some instances be
grave.
Submissions
relating to the proposed interim regime in the order of 31 August
2009
Having
granted the extension prayed for by the Minister, this Court in its
order of 31 August 2009 proposed a tailored interim
procedure for
the attachment and execution of state movable assets, to satisfy
judgment debts against the state, sounding in
money. This Court
invited the parties to this application as well as the Minister for
Finance to make written submissions regarding
the proposed interim
order as well as any proposed alternative on or before 15 September
2009. I discuss these submissions in
turn.
Application
for condonation
Both the
Minister and the Minister for Finance filed their written
submissions one day late. This caused no prejudice and given
the
satisfactory explanations tendered it is appropriate to grant
condonation.
The
submissions by the Minister for Finance
The
Minister of Finance presented this Court with a procedure which
allows for a judgment creditor simply to serve the relevant
treasury
with a final judgment order for payment. The amount paid by the
Treasury would then be set off against the budget allocation
of the
relevant department for the current or future financial year under
the relevant vote. These submissions are largely supported
by the
applicant.
The
procedure submitted by the Minister for Finance allows a judgment
creditor, if the department concerned does not pay the judgment
debt
within 30 days from the date of judgment, to serve it on the
relevant treasury, the State Attorney, the accounting officer
of the
national or provincial department, as well as the executive
authority of the department concerned in terms of Rule 4 of
the
Uniform Rules of Court.
27
The judgment order served is to be accompanied by certification of
its validity and finality by the registrar or clerk of the
court.
If 14 days after service the judgment debt remains unpaid, the
relevant treasury shall cause it to be settled, settle
it itself, or
make acceptable arrangements with the judgment creditor for
settlement.
Local
government
A
reservation made by both the ALP and FUL, concerns the inclusion of
an attachment and execution procedure against property of
the local
government in the proposed order. This inclusion, they correctly
point out, is unnecessary, as
section 3
of the
State Liability Act
does
not regulate the execution of judgment debts against local
government. I need say nothing further about this.
Who
may apply for the stay of an execution order?
The
proposed interim order permits “any affected party” to apply for
a stay of execution on the grounds that it is not in
the interests
of justice and “good governance” to attach, remove and sell
state movable property. FUL argues that the term
“affected party”
may be unduly wide in the context of the state as a judgment debtor.
They aver that it would be more appropriate
that the term “a
party having a direct and material interest” be used. I agree.
State property being utilised for public
service delivery may indeed
affect a wide array of people, creating a nearly unlimited class of
affected parties, not directly
affected or prejudiced by the
execution of state assets. It is appropriate to confine the group
of those entitled to apply for
the stay of an execution order to
those who have a direct interest of a material nature. This, of
course, does not affect any
party other than the state who has a
basis in law to prevent the execution.
When
should a stay of an execution order be granted?
FUL also
contend that the term “good governance” connotes a standard of
probity in executive control, and is not to be confused
with the
truly essential requirements of discharging core responsibilities.
They submit that the appropriate standard for the
stay of execution
is whether it would be in the interests of justice and necessary to
prevent disruption to the performance of
an essential public
service. They further contend that the latter test is more specific
and less lenient and would permit sufficient
preservation of
essential state assets, without limiting more than necessary the
ability of judgment creditors to have their
judgment debts
satisfied.
The
test of “good governance” may indeed be elusive. The Local
Government: Municipal Finance Management Act (MFMA)
28
regulates the circumstances in which a financial obligation owed by
a municipality may be suspended or terminated. In determining

whether to terminate or suspend an obligation the court must be
satisfied that “all assets not reasonably necessary to sustain
an
effective administration or to provide the minimum level of basic
municipal services”
29
have been liquidated in terms of an approved financial recovery
plan. It may therefore be better to simply use the test of
“interests of justice”.
Although
the interests of justice test will be determined by a court on the
circumstances of each case, its relative and broad
basis may unduly
immunise state assets from attachment and execution. The
application of the interests of justice test, which
takes into
account considerations similar to those set out in the MFMA, makes
sense. Ordinarily it will be
in the interests of
justice to grant a stay where
the assets to be attached are
reasonably necessary to sustain effective administration or to
provide a minimum level of basic
services. That will be for a court
to decide.
The
ALP submits that paragraph 2(e) of the proposed interim order may
cause undue delay as it is possible that a successful application

for an order staying the execution may be followed by another
application for a stay in the event that the judgment creditor

obtains a second writ of execution in respect of other property.
The imposition of a stay may frustrate a judgment creditor

repeatedly. To avoid this, when considering whether it is in the
interests of justice for a stay to be granted, a court must
assess
whether the party seeking the stay has identified suitable
alternative property that may be attached. Undue litigation
and
further prejudice might indeed be averted in this manner.
Costs
orders in stay applications
Lastly,
the LRC points out that a judgment creditor who defends an
application for a stay of execution, even if successful, may

nonetheless be out of pocket. Accordingly, it submits that the
proposed interim order must provide for costs against an
unsuccessful
applicant on a scale of attorney and client, save for
exceptional circumstances. As appropriate as it may be, especially
where
the state has been dilatory in payment, the issue of costs
will remain in the discretion of the court deciding the matter,
based
on the applicable legal principles on the facts and
circumstances. Therefore the submission cannot prevail.
The
discretion relating to costs should not be fettered. The applicable
legal principles are well settled and, properly construed,
give
sufficient protection against undue costs orders.
30
Specifically, the determination of whether to stay the execution
based on the interests of justice may at times involve difficult

considerations which may not be self evident and require the
determination of the Court. Similarly, instances may occur in which

litigants with malicious or vexatious intent attach vital state
assets. The court seized with the matter should decide whether
a
costs order on a scale of attorney and client is appropriate.
Therefore the submission of the LRC cannot prevail.
Interim
order
The
suggestions of the Minister for Finance are helpful. They provide a
quicker and more accessible avenue for judgment creditors
to have
their judgment orders satisfied, whilst ensuring some degree of
accountability in state functionaries of the relevant
departments.
These are important considerations. A quick and accessible process
goes a long way in mitigating the hardships
of a litigant who might
be in dire need, importantly enhancing access to justice.
However,
the proposal by the Minister for Finance does not make provision for
any remedy should treasury functionaries fail to
pay the judgment
debt within a reasonable time, or at all. The disadvantage of the
Minister’s proposed mechanism is that it
makes no room for likely
systemic difficulties which might affect administrative efficiency.
For these reasons, the Minister’s
proposal should be combined with
the updated attachment and execution procedure embodied in this
Court’s order on 31 August
2009.
31
The
proposal of the Minister for Finance allows for a measure of
accountability which is likely to foster compliance within the

defaulting departments and avoid attachment and execution of state
property. At the same time, it provides a more cost effective
and
expeditious avenue for judgment creditors seeking to enforce
judgment debts. It is hoped that judgment debts will be satisfied

at the first instance and judgment creditors will never need to
resort to the attachment and execution of state assets. To have
to
do so would be unfortunate.
It
is important that the execution procedure must operate with tight
time frames to minimise prejudice to a judgment creditor.
Since the
judgment creditor will already have waited 44 days from the date of
judgment under the treasury payout procedures,
it would not be
necessary to allow for an extensive time period under the subsequent
attachment and execution procedures. Accordingly,
the time-lines of
the attachment procedure must be tightened making the further 30 day
period in the proposed interim order of
31 August 2009
unnecessary. Similarly the proposed waiting periods in the
submissions of the Minister for Finance have
also been curtailed.
The
integration of the payout plan by the Minister of Finance with this
Court’s proposed interim order of 31 August 2009 will
work as
follows: should the judgment debt remain unpaid 30 days after
date of judgment, the judgment creditor may serve
notice on the
relevant officials
32
The relevant treasury shall within 14 days of service of the order
cause the judgment debt to be settled or itself settle the
judgment
debt or make acceptable arrangements with the judgment creditor for
the settlement of the judgment debt. If the debt
remains unpaid
after those 14 days have expired, the judgment creditor may apply to
court to execute against movable property
owned by the state and
used by the relevant department, empowering the sheriff to attach
the property. Once the property has
been attached, parties with a
direct and material interest may apply to court for a stay of
execution on grounds that it is in
the interests of justice for the
execution to be stayed. If no application to that effect is made,
the sheriff may remove and
sell the property in execution of the
judgment debt, 30 days after the attachment. The aggregate time
period from the date of
final judgment until the date of execution
would thus be approximately 75 days. Naturally, these procedures
and time periods
will operate within the applicable statutory
frameworks and provisions, including those of the
Magistrates’
Courts Act 32 of 1944
and the Supreme Court Act 59 of 1959.
The
Minister for Finance submits that a treasury pay-out procedure
should not apply to default judgments granted against the state
by
either the registrar or clerk of the court as “the seriousness of
judgments against the state . . . warrants the attention
of either a
Judge or a Magistrate, and not the Registrar or the Clerk of the
Court.” This proposition does not have a powerful
attraction.
The state will always have the option of applying for rescission of
a default judgment if it has been granted erroneously
or
fraudulently.
33
On the other hand, it is important that judgment creditors are able
to obtain effective relief. Accordingly, I decline to adopt
the
Minister’s suggestion.
The
Minister for Finance also proposes that this Court invite the
provincial treasuries to comment on his submissions. Obtaining
the
views of provincial treasuries for consideration and incorporation
could have been an internal process which should have
fed into the
submissions of the Minister, who speaks on behalf of the Department
of Finance as a whole and the National Treasury.
Stalling the issue
of an interim order to accommodate further submissions will further
delay the fulfilment of the state’s
constitutional obligations and
cause added prejudice to judgment creditors. The need for finality
is important.
Costs
In this
matter, the applicant contended for costs of the application only in
the event that the application was opposed. The
Law Society,
together with the ALP, asked that costs of their applications should
be costs in the cause. The LRC and FUL however
did not seek costs.
Although the applicant has received an extension, it would not be
appropriate to make a costs order against
the Law Society as the
intervening party, since it has raised important constitutional
issues. It is a general rule in this
Court that no costs awards are
made against private litigants who have raised substantial
constitutional issues against the state
even when unsuccessful.
34
In addition, although joining in the litigation as a party, the Law
Society in effect played the part of an amicus. All these
parties
made helpful submissions for which the Court is grateful.
With
regard to the ALP, the rule is that amici curiae are generally not
entitled to costs unless exceptional circumstances exist.
As this
Court held in
Hoffmann v South African Airways
:
35
“
An
amicus
. . . joins in the proceedings to assist the court because of its
expertise on or interest in the matter before the court.
It
chooses the side it wishes to join, unless requested by the court
to urge a particular position. An
amicus
,
regardless of the side it joins, is neither a loser nor a winner
and is generally not entitled to be awarded costs.”
36
I
find no exceptional circumstances in this case that warrant a
departure from this general rule. Accordingly, I make no order
as
to costs.
Order
In the
result, the following order is made:
1. The
application of the Law Society of South Africa to be admitted as
an intervening party is granted.
2. The
applicant’s application for condonation for late filing is
granted.
3. The
following interim order shall apply during the period of
extension in paragraph 1(1) of this Court’s order of 31
August
2009:
If
a final order against a national or provincial department for the
payment of money is not satisfied within thirty (30) days
of the
date of judgment, the judgment creditor may serve the court order
in terms of Rule 4 of the Uniform Rules of Court or
Rule 9 of the
Magistrates’ Court Rules of Court, on the relevant national or
provincial treasury, the State Attorney, the
accounting officer of
the relevant national or provincial department, as well as the
Executive Authority of the Department
concerned;
The
court order served on the officials referred to in paragraph (a) of
this order must be accompanied by a certificate by the
registrar or
clerk of the relevant court, certifying that no appeal, review or
rescission proceedings are pending in respect
thereof;
The
relevant treasury shall within fourteen (14) days of service of the
order, cause the judgment debt to be settled, or itself
settle the
judgment debt, or make acceptable arrangements with the judgment
creditor, for the settlement of the judgment debt;
Should
the relevant treasury fail to cause the judgment debt to be
satisfied, itself settle the debt or make acceptable arrangements

with the
judgment
creditor for the settlement of the judgment debt within the time
period specified in paragraph (c) of this order, the
judgment
creditor may apply for a writ of execution in terms of Rule 45 of
the Uniform Rules of Court or a warrant of execution
in terms of
Rule 36 of the Magistrates’ Courts Rules, against movable
property owned by the state and used by the relevant
department,
whichever is applicable
;
The
sheriff of the relevant court shall, pursuant to the writ of
execution or warrant of execution, attach but not remove the

identified movable property;
In
the absence of any application contemplated in paragraph (g) of
this order, the
sheriff
of the relevant court may after the expiration of thirty (30) days
from the date of attachment, remove and sell the
attached movable
property in execution of the judgment debt; and
A
party having a direct and material interest
may, during the periods referred to in paragraph (f) of this order,
apply to the court which granted the order, for a stay
on grounds
that the execution of the attached assets is not in the interests
of justice
.
5. There
is no order as to costs.
Langa
CJ, Moseneke DCJ, Cameron J, Ngcobo J, Nkabinde J, O’Regan J,
Sachs J, Skweyiya J and Van der Westhuizen J concur in the
judgment
of Mokgoro J.
Counsel
for the Applicant: Advocate NA Cassim SC and Advocate
SK Hassim instructed by the State Attorney,
Pretoria.
Counsel
for the Intervening Party: Advocate CFJ Brand, Advocate A
Granova and Advocate N Ngwala instructed by
Damons Magardie
Richardson (DMR) Attorneys.
Counsel
for the First Amicus Curiae: Advocate R Moultrie instructed
by the Legal Resources Centre.
Counsel
for the Second Amicus Curiae: Advocate K Pillay
instructed by Bowman Gilfillan.
Counsel
for the Third Amicus Curiae: Advocate A Hassim
instructed by the Aids Law Project.
1
[2008] ZACC 8; 2008 (5) SA 94 (CC); 2008 (9) BCLR 865 (CC).
2
Rule 8(1) provides:
“
Any
person entitled to join as a party or liable to be joined as a
party in the proceedings may, on notice to all parties, at
any
stage of the proceedings apply for leave to intervene as a party.”
3
Gory v Kolver NO and Others
[2006] ZACC 20
;
2007 (4) SA 97
(CC);
2007 (3) BCLR 249
(CC) at paras 11-3;
Minister of Public Works
and Others v Kyalami Ridge Environmental Association and Others
(Mukhwevho
Intervening
)
[2001] ZACC 19
;
2001 (3)
SA 1151
(CC);
2001 (7) BCLR 652
(CC) at paras 29-30.
4
Gory v Kolver
above n 3 at para 13.
5
See paragraph 3(a) of the order in
Nyathi I
which required
that the case number, the parties in the cases and the outstanding
amounts should also be included in the report.
6
These included, amongst others, the Department, the National
Treasury, the Department of Education, the Minister for Finance,
the
Cabinet Committee of Governance and Administration, the Portfolio
Committee on Justice and Constitutional Development as
well as
researchers at the University of Cape Town.
7
See
Zondi v MEC, Traditional and Local Government Affairs
,
and Others
[2005] ZACC 18
;
2006 (3) SA 1
(CC);
2006 (3) BCLR 423
(CC) at para 55 (
Zondi II
).
8
Ex Parte Minister of Social Development and Others
[2006]
ZACC 3
;
2006 (4) SA 309
(CC);
2006 (5) BCLR 604
(CC).
See also
Zondi II
above
n 7.
9
These include the costs of storage, security to the sheriff,
sheriffs’ fees as well as the extensive time period required for

demand to be made together with attachment and execution.
10
It made various suggestions in oral argument relating to the
budgetary implications of an order which allows for attachment
against a designated fund. It also made helpful suggestions
relating to service and time limits if this Court’s order were
to
provide for a tailored attachment and execution procedure.
11
Above n 7.
12
Zondi v MEC for Traditional and Local
Government Affairs
[2004] ZACC 19
;
2005 (3)
SA 589
(CC);
2005 (4) BCLR 347
(CC).
13
32 of 1947.
14
Zondi II
above n 7 at para 40.
15
Id at para 47.
16
Above n 8.
17
Id at para 50. The Court also held:
“
An
application for the extension of the period of suspension must be
made within a reasonable time. It must be made in sufficient
time
to allow the matter to be considered by this Court before the
expiry of the period of suspension.
The
explanation for failure to correct the constitutional defect within
the time limit set out in the court order ‘must be
set out fully,
candidly, timeously and in a manner that conforms with the Rules of
the Court.’
It
should not be assumed that an extension of the period will be
granted as a matter of course and in the public interest.
If a
proper case for the extension of the period of suspension is not
made out, an applicant for the extension of the period
of time runs
the risk of the request being refused
.”
(Footnotes omitted.)
18
See
Zondi II
above n 7 and
Ex Parte
Minister of Social Development and Others
above
n 8.
19
See
Zondi II
above n 7 at para 47.
20
Section 1(c) of the Constitution.
21
Section 165(3) of the Constitution. See
Van Rooyen and Others v
The State and Others
(General Council of the Bar of South
Africa Intervening)
[2002] ZACC 8
;
2002 (5) SA 246
(CC);
2002
(8) BCLR 810
(CC) at paras 17-8 and
S v Dodo
[2001] ZACC 16
;
2001 (3) SA 382
(CC);
2001 (5) BCLR 423
(CC) at para 7.
22
Section 165(4). See
Van Rooyen and Others
above n 21.
23
Section 165(5). See
Minister of Home Affairs v Liebenberg
[2001]
ZACC 3
;
2002 (1) SA 33
(CC);
2001 (11) BCLR 1168
(CC) at para 7.
24
In particular the public service policy values of batho pele. See
section 195(1) of the Constitution. See also
Koyabe and Others v
Minister for Home Affairs and Others (Lawyers for Human Rights as
Amicus Curiae)
[2009]
ZACC 23
, Case No CCT 53/08, 25
August 2009, as yet unreported, at para 62 and
Van Der Merwe and
Another v Taylor NO and Others
[2007] ZACC 16
;
2008 (1) SA 1
(CC);
2007 (11) BCLR 1167
(CC) at para 71.
25
Above n 1 at para 80.
26
Above n 8.
27
Rule 4 of the Uniform Rules of Court details the different ways in
which the sheriff of the court may effect service. Equally

applicable, although not mentioned in the submissions of the
Minister for Finance, is Rule 9 of the Magistrates’ Courts Rules

of Court which similarly provides for how service is to be effected
in that court.
28
56 of 2003.
29
Id at sections 154(b) and 155(1)(b).
30
See
Ferreira v Levin NO and Others; Vryenhoek
and Others v Powell NO and Others
[1996]
ZACC 27
;
1996 (2) SA 621
(CC);
1996 (4) BCLR 441
(CC) at para 3
where, in a judgment on costs given separately from the judgment on
the merits, Ackermann J noted that courts
have over the years,
developed a flexible approach to costs proceeding from two basic
principles, the first being that the award
of costs, unless
otherwise enacted, is in the discretion of the presiding judicial
officer, and the second that the successful
party should, as a
general principle, have his or her costs. He continued to note:
“
Without
attempting either comprehensiveness or complete analytical
accuracy, depriving successful parties of their costs can
depend on
circumstances such as, for example, the conduct of the parties, the
conduct of their legal representatives, whether
a party achieves
technical success only, the nature of the litigants and the nature
of the proceedings.” (Footnotes omitted.)
See
also
Biowatch Trust v Registrar, Genetic
Resources and Others
[2009] ZACC 14
, Case No
CCT 80/08, 3 June 2009, as yet unreported, at para 9.
31
This Court’s interim order takes the submissions of the
intervening party and the amici curiae into account.
32
The relevant treasury, the State Attorney, the accounting officer of
the national or provincial department as well as the executive

authority of the department.
33
The seriousness of judgments against the state can indeed not be
gainsaid. For that reason the state must be seen to take them

seriously ensuring that it issues an appearance to defend and acts
within the prescribed time period of the court at all times.
34
Biowatch Trust
above n 30 at paras 21–5;
Affordable
Medicines Trust and Others v Minister of Health and Another
[2005]
ZACC 3
;
2006 (3) SA 247
(CC);
2005 (6) BCLR 529
(CC) at para 138;
Motsepe v Commissioner for Inland Revenue
[1997] ZACC 3
;
1997
(2) SA 898
(CC);
1997 (6) BCLR 692
(CC) at para 30.
35
2000 [ZACC] 17;
2001 (1) SA 1
(CC);
2000 (11) BCLR 1211
(CC).
36
Id at para 63.