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[2012] ZACC 3
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Premier: Limpopo Province v Speaker of the Limpopo Provincial Legislature and Others (CCT 94/10) [2012] ZACC 3; 2012 (4) SA 58 (CC); 2012 (6) BCLR 583 (CC) (22 March 2012)
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CONSTITUTIONAL COURT OF SOUTH AFRICA
Case CCT 94/10
[2012] ZACC 3
In the matter between:
PREMIER: LIMPOPO PROVINCE
…..........................................................
Applicant
and
SPEAKER OF THE LIMPOPO PROVINCIAL
LEGISLATURE
….............................................................................
First
Respondent
SPEAKER OF THE NATIONAL ASSEMBLY
….......................
Second Respondent
CHAIRPERSON OF THE NATIONAL
COUNCIL OF PROVINCES
…........................................................
Third
Respondent
MINISTER FOR FINANCE
….......................................................
Fourth
Respondent
SPEAKER OF THE EASTERN CAPE
PROVINCIAL LEGISLATURE
…...................................................
Fifth
Respondent
SPEAKER OF THE FREE STATE
PROVINCIAL LEGISLATURE
…...................................................
Sixth
Respondent
SPEAKER OF THE GAUTENG
PROVINCIAL LEGISLATURE
…..............................................
Seventh
Respondent
SPEAKER OF THE MPUMALANGA
PROVINCIAL LEGISLATURE
….................................................
Eighth
Respondent
SPEAKER OF THE NORTH WEST
PROVINCIAL LEGISLATURE
…..................................................
Ninth
Respondent
MEMBER OF THE EXECUTIVE COUNCIL
RESPONSIBLE FOR FINANCIAL MATTERS:
EASTERN CAPE PROVINCE
…....................................................
Tenth
Respondent
MEMBER OF THE EXECUTIVE COUNCIL
RESPONSIBLE FOR FINANCIAL MATTERS:
FREE STATE PROVINCE
….....................................................
Eleventh
Respondent
MEMBER OF THE EXECUTIVE COUNCIL
RESPONSIBLE FOR FINANCIAL MATTERS:
GAUTENG PROVINCE
…...........................................................
Twelfth
Respondent
MEMBER OF THE EXECUTIVE COUNCIL
RESPONSIBLE FOR FINANCIAL MATTERS:
MPUMALANGA PROVINCE
….............................................
Thirteenth
Respondent
MEMBER OF THE EXECUTIVE COUNCIL
RESPONSIBLE FOR FINANCIAL MATTERS:
NORTH WEST PROVINCE
…................................................
Fourteenth
Respondent
Heard on : 8 November 2011
Decided on : 22 March 2012
JUDGMENT
KHAMPEPE J:
Introduction
This
matter concerns the constitutionality of five pieces of legislation
that authorise certain provincial legislatures to manage
their
financial affairs. It arises from the decision of this Court on 11
August 2011 in
Premier, Limpopo Province v Speaker of the Limpopo
Provincial Government and Others
1
(
Limpopo I
)
.
In that case, the Premier of Limpopo
Province had referred the Financial Management of the Limpopo
Provincial Legislature Bill
2
(Limpopo Bill) to this Court for a decision on its constitutionality
after expressing doubts about the competence of the Provincial
Legislature to pass a Bill dealing with its own financial
management.
This
Court observed that while Parliament has plenary legislative powers,
the legislative powers of the provinces are circumscribed
and are
set out in section 104 of the Constitution.
3
The financial management of provincial legislatures is a matter that
is listed neither in Schedule 4 nor in Schedule 5. A provincial
legislature may therefore be competent to legislate on its own
financial management only if this is a matter that has been
expressly assigned to it by national legislation or is a matter for
which a provision of the Constitution envisages the enactment
of
provincial legislation.
4
In
Limpopo I
, the majority held, per Ngcobo CJ, that provinces
do not have the authority to pass legislation with respect to their
own financial
management. This was because sections 2(e) and 3 of
the Financial Management of Parliament Act
5
(FMPA) read with Schedule 1 had
not
expressly assigned this
power to them.
6
Nor did any provision in the Constitution “envisage” the
enactment of this legislation.
7
The Limpopo Bill was accordingly declared unconstitutional.
The
Court raised the need to determine the constitutional validity of
similar financial management legislation that had been enacted
by
five other provincial legislatures, namely: the Financial Management
of the Eastern Cape Provincial Legislature Act
8
(Eastern Cape Act); the Financial Management of the Free State
Provincial Legislature Act
9
(Free State Act); the Financial Management of Gauteng Provincial
Legislature Act
10
(Gauteng Act); the Financial Management of Mpumalanga Provincial
Legislature Act
11
(Mpumalanga Act); and the North West Provincial Legislature
Management Act
12
(North West Act) (referred to jointly as the provincial financial
management legislation). The relevant provincial legislatures
had
been invited in
Limpopo I
to express their views on the
constitutionality of the Limpopo Bill and, in the event of a finding
that that Bill was unconstitutional,
on the fate of their own
legislation.
13
The invitation was also extended to avoid the costs associated with
holding a second hearing.
14
None of the parties, however, responded to this invitation.
This
Court held that it nonetheless had the power to reach these statutes
that were substantially similar to the legislation before
it.
15
This power is rooted in the supremacy of the Constitution and the
rule of law as well as the Court’s duty to uphold and
protect
the Constitution.
16
Furthermore, it was in the public interest that certainty be reached
as to the constitutionality of the legislation concerned
without
undue delay.
17
Despite
the fact that none of the provincial legislatures responded to the
initial invitation, this Court granted the provinces
a further
opportunity to be heard because of the rights and obligations that
stand to be affected by a declaration of invalidity.
18
The Speakers of the provincial legislatures responsible for the
legislation, as well as the Members of the Executive Council
(MECs)
responsible for financial matters in each of the provinces
concerned, were accordingly joined and ordered to file papers,
if
any, and to make submissions setting out: (i) why the provincial
legislation enacted by the respective provincial legislatures
should
not be declared unconstitutional; and (ii) if they are found to be
unconstitutional, the appropriate remedy.
19
The Speaker of the National Assembly and the Chairperson of the
National Council of Provinces (NCOP) (jointly referred to as
the
parliamentary representatives), as well as the Minister for Finance
(Minister), were also directed to make submissions, if
any, dealing
with the constitutionality of these pieces of legislation and the
question of remedy.
20
The
essential issues to be determined are the following:
(i) Are
the statutes unconstitutional?
(ii) If the North West Act goes beyond dealing with the financial
management of the Provincial Legislature, are the unconstitutional
provisions capable of being severed from the Act? And;
(iii) If the statutes are found to be unconstitutional, should an
order of invalidity be suspended?
The adoption of the legislation
Before
dealing with each of these issues, it is apposite to sketch briefly
the background to the adoption of the provincial financial
management legislation.
Parliament
and the nine provincial legislatures had long recognised the need to
act as a collective in a coordinated fashion on
matters of common
interest. To this end, a Speakers’ Forum was established.
21
The Secretaries’ Association of the Legislatures of South
Africa (SALSA) was also established as an implementing arm of
the
Speakers’ Forum and is accountable to it.
22
On 17 March 2010, the National Assembly, the NCOP and the nine
provincial legislatures signed a Memorandum of Understanding (MOU).
The manifest purpose of the MOU was to establish a legislative
sector that would facilitate consultation on matters of mutual
interest, although most of the legislation at issue preceded its
adoption.
The
concern that Parliament and the provincial legislatures could not
hold their respective executives to account under the
then-legislative regime led to the development of the Financial
Management of Parliament and Provincial Legislatures Bill.
23
The aim of the Bill was to remove Parliament and the provincial
legislatures from the reach of the Public Finance Management
Act
24
(PFMA) and to regulate them under a separate piece of legislation.
The development of this Bill was overseen by the Speakers’
Forum.
It
soon became apparent that one Bill could not accommodate the nuanced
peculiarities of each provincial legislature. Consequently,
the
provisions dealing with the provincial legislatures were severed
from the Bill and Parliament went on to enact what remained
as the
FMPA.
A
generic Bill was then developed, under the supervision of the
Speakers’ Forum, for all nine provincial legislatures to
customise according to their own needs. After the generic Bill was
finalised at the Sector Legal Advisors Forum, it was endorsed
by the
Speakers’ Forum and the SALSA as the two governing structures
in the Sector. This process culminated in the adoption
of the fifth
to eighth respondents’ Acts.
The
aim of the legislation is evident from the paragraph at the
beginning of each of the Acts, which is substantially the same.
It
refers to the purpose of the legislation and reads as follows:
“
To
regulate the financial management of [the provincial legislature] in
a manner consistent with its status in terms of the Constitution;
to
ensure that all revenue, expenditure, assets and liabilities of [the
provincial legislature] are managed efficiently, effectively
and
transparently; to provide for the responsibilities of persons
entrusted with financial management in [the provincial legislature];
and to provide for matters connected therewith.”
The
first four Acts before us are largely similar
25
as each legislature used a generic template to draft its own
version.
The
North West Act has a different history. The North West had
legislation regulating the general management of its Legislature
from 1997.
26
A decision was taken in 2005 to repeal this earlier legislation as
it had failed effectively to promote good governance. After
this
decision, the Legislature, relying on section 116 of the
Constitution, passed the North West Act. After the development
of
the generic financial management Bill, the North West Legislature
resolved to amend this Act to accommodate certain aspects
of the
Bill which resulted in the passing of the North West Provincial
Legislature Management Amendment Act.
27
Constitutional validity of the legislation
All
of the parties that made submissions to this Court – the
parliamentary representatives, the Minister, and the Speakers
of the
five provincial legislatures concerned – agreed that, save for
the North West Act,
28
the provincial financial management legislation must be declared
unconstitutional, without more, as a result of this Court’s
decision in
Limpopo I
.
In
view of the parties’ attitude, we need not say much on the
issue. It is pellucid that the statutes before us, barring
the North
West Act, are all substantially similar to the Limpopo Bill in
regard to their declared purpose and structure. They
are worded in
almost identical terms and they all seek to regulate the financial
management of the provincial legislatures. They
all represent
adaptations of the generic Bill developed by the Speakers’
Forum. Therefore, it suffices to state that, for
the same reasons
cited in
Limpopo I
, we find these statutes to be
unconstitutional.
Following
this finding, the issue that warrants determination is the
appropriate remedy. This raises two issues: the first is
whether the
unconstitutional provisions in the North West Act are capable of
being severed; and the second is whether the declarations
of
invalidity should be suspended.
Severance
As
pointed out above, the North West Act is different from the other
legislation before us. It covers wider ground and goes beyond
the
financial management of the Legislature, and includes provisions
that regulate the internal arrangements, proceedings and
procedures
of the Legislature. Examples of these provisions include: creating a
Legislature Service, the principal duties of
which are to provide
administrative services to the Executive Authority and other Members
of the Legislature;
29
defining the roles, functions and responsibilities of the Speaker,
30
the Members,
31
and the Secretary;
32
and establishing a framework for the administration of the
Legislature in general.
33
Section 172(1) of the Constitution provides in relevant part:
“
When
deciding a constitutional matter within its power, a court—
(a) must declare that any law or
conduct that is inconsistent with the Constitution is invalid to the
extent of its inconsistency
. . .”.
This
requires us to declare invalid only those parts of a law that are
unconstitutional. We have been urged by the Minister and
the
parliamentary representatives to heed this injunction, in relation
to the North West Act, by severing only those parts of
the Act
dealing with financial management and allowing the rest of the Act
to stand. They highlight a plethora of provisions
that would need to
be struck down as unconstitutional and severed from the Act.
34
The parliamentary representatives further, and rather faintly in my
view, requested the Court to effect amendments to certain
provisions
of the Act in Chapter 13 so as to bring them in line with the
Constitution.
35
I am simply not persuaded by these submissions.
This
Court laid out the test for severance in
Coetzee v Government of
the Republic of South Africa; Matiso and Others v Commanding
Officer, Port Elizabeth Prison, and Others
36
(
Coetzee
):
“
Although
severability in the context of constitutional law may often require
special treatment, in the present case the trite test
can properly be
applied: if the good is not dependent on the bad and can be separated
from it, one gives effect to the good that
remains after the
separation if it still gives effect to the main objective of the
statute. The test has two parts: first, is it
possible to sever the
invalid provisions and, second, if so, is what remains giving effect
to the purpose of the legislative scheme?”
37
(Footnote omitted.)
The
argument for severance in this case runs into several difficulties.
We must assess whether it is in fact possible to sever
the
unconstitutional provisions. For the following fundamental reasons,
the textual surgery we are asked to undertake is so fraught
with
complications that severance is impracticable.
38
The
extent of the requested severance is vast. And what we are required
to sever is not clear.
39
The parties who have made submissions on this issue are not entirely
on the same page as to what should be severed and some of
the
submissions were vague. The vagueness is illustrated by one of the
submissions of the parliamentary representatives that
“some”
of the definitions in section 1 of the North West Act will no longer
find application after the deletions
and amendments. It cannot be
over-emphasised that severance should be reserved for cases where it
is clear from the outset exactly
which parts of the statute need to
be excised to cure the constitutional deficiency.
Even
if it were possible to sever the unconstitutional provisions, the
conclusion that severance is undesirable in this case is
inescapable
when we examine the second leg of the test in order to assess
whether the remainder of the Act would give effect
to the purpose of
the legislative scheme. The paragraph at the beginning of the North
West Act reads as follows:
“
To
provide for the repeal of the North West Provincial Legislature
Service Act 8 of 1997; to provide for the establishment of a
Service
of the Legislature; to clearly define the roles, functions, and
responsibilities of Executive Authority of the Legislature,
Members
of the Legislature, and the Accounting Officer to the Legislature; to
establish a framework for the administration of the
Legislature; to
regulate the financial management of the Legislature in a manner
consistent with its status in terms of the Constitution;
to ensure
that all revenue, expenditure, assets and liabilities of the
Legislature are managed efficiently and effectively; to
define the
responsibilities of officials in the Legislature, and in particular,
persons entrusted with financial management responsibilities
in the
Legislature; and to provide for matters connected therewith.”
The
statute was enacted with a dual purpose – to regulate the
general management of the Provincial Legislature and to regulate
its
financial management. We are asked simply to excise those objects of
the Act that deal with financial management.
40
In my view, this would dramatically alter the purpose for which the
statute was enacted and it cannot be said that what would
remain
would continue to give effect to the purpose of the legislative
scheme.
This
Court has on several occasions, in the context of severance, raised
the concern that the granting of a remedy should not
infringe upon
the doctrine of separation of powers, or usurp the power of the
legislature to legislate.
41
The sheer breadth of the severance that we are asked to undertake
raises this concern, and one practical example will serve to
illustrate the problem clearly. The parliamentary representatives
propose that the references to “financial misconduct”
in
Chapter 13 be amended to refer generally to “misconduct”.
This would amount to drafting an entirely new Chapter
in the Act
“that bears only accidental resemblance to that enacted by
[the legislature].”
42
This new Chapter would govern “misconduct” generally.
This goes far beyond merely curing the Act’s constitutional
deficiency.
Accordingly,
the North West Act must be declared unconstitutional in its
entirety.
Suspension
Ordinarily,
orders of constitutional invalidity will take effect immediately.
However, section 172(1) of the Constitution specifically
empowers
this Court to make any just and equitable order including “an
order suspending the declaration of invalidity for
any period and on
any conditions, to allow the competent authority to correct the
defect.”
43
The
Speakers of the provincial legislatures, the parliamentary
representatives, and the MEC responsible for financial matters
in
Gauteng (Gauteng MEC) posit that any declaration of invalidity
should be suspended. The Minister, however, argues that no
suspension order is necessary and that the legislation should be
declared invalid immediately.
The
Speakers of the provincial legislatures argue that there are
compelling interests of good government that require granting
a
suspension order for 18 months. They provide the following grounds
as justification for a suspension order. If not suspended—
(i) the order would lead to the dissolution of structures created by
the legislation like the audit and advisory committees;
(ii) there will be interruptions and confusion in the audit processes
currently underway;
(iii) the provincial legislatures would be deprived of a tool to deal
with financial misconduct;
(iv) the provincial legislatures are uncertain as to the adequacy of
the PFMA to deal with their financial management; and
(v) there will be an erosion of the doctrine of separation of powers
because the provincial financial management legislation has
achieved
an equitable distribution of funds that ensures optimal oversight of
the provincial executives by the provincial legislatures.
The
parliamentary representatives similarly request that a suspension
order of 18 months be granted in order to allow Parliament
to make
appropriate legislative provision to substitute for the provincial
financial management legislation. While Parliament
had initially
indicated during the challenge to the Limpopo Bill that it would
make an assignment of this power to the provinces,
it stated that
the intention was no longer to make the assignment, but rather to
legislate for the financial management of the
provincial
legislatures itself. Parliament has not, however, decided whether it
will enact a new statute or amend the FMPA. Both
of these options
will require it to make policy choices and will necessitate the
amendment of existing statutes.
The
Gauteng MEC, the only MEC to file an affidavit in this matter,
44
also motivated for a suspension of 18 months to be granted to give
the provincial legislatures and Parliament time to rectify
the
situation. His concern is that, at all times, there should be
measures in place that ensure adherence to the National Treasury
Norms and Standards.
45
He submits that the Gauteng Act currently fulfils this purpose.
Without it, the financial stability of the Legislature would
be
placed at risk and the Legislature would be unable to comply with
the relevant regulatory framework. Failure to adhere to
these
standards could have dire consequences for the provincial
legislature, including the cessation of transfers of funds to
it.
The
Minister by contrast argued that none of the circumstances that
would ordinarily necessitate the suspension of an order of
invalidity were present. He submitted that the PFMA adequately
addresses the financial management of the provincial legislatures
and that a finding of unconstitutionality would not result in a
lacuna but would merely require the provincial legislatures to
regulate their affairs under this statute. He also submitted that he
was the competent authority to remedy the defect, as he
was
responsible for initiating any remedial legislation, and had no
intention of doing so. Any suspension order would therefore
not
achieve the desired outcome of putting in place new legislation to
cure the unconstitutionality.
This
submission was, however, significantly watered down in oral argument
when Counsel for the Minister rightly acknowledged that
the
Minister’s refusal to initiate legislation was not an absolute
bar because Parliament could initiate remedial legislation,
provided
it did not constitute a “Money Bill”.
46
Counsel for the Minister also indicated that the Minister intended
to consult with all relevant parties and explore the range
of
possible alternatives to remedy the defect.
The
first case in which this Court considered the option of suspension
was
Coetzee
,
47
which dealt with the power of suspension under the interim
Constitution.
48
Sachs J gave an indication of when granting a suspension order would
be appropriate:
“
The
words ‘in the interests of justice and good government’
are widely phrased and, in my view, it would not be appropriate,
particularly at this early stage, to attempt a precise definition of
their ambit. They clearly indicate the existence of something
substantially more than the mere inconvenience which will almost
invariably accompany any declaration of invalidity, but do not
go so
far as to require the threat of total breakdown of government. Within
these wide parameters the Court will have to make an
assessment on a
case-by-case basis as to whether more injustice would flow from the
legal vacuum created by rendering the statute
invalid with immediate
effect than would be the case if the measure were kept functional
pending rectification. No hard-and-fast
rules can be applied.”
49
We
are called upon to consider the effect of granting immediate
constitutional relief and the disruption to the administration
of
justice that would result from this.
50
Justice and equity warrant the suspension of the order of
invalidity. There are important factors that inform this conclusion.
A legislative lacuna will result from an immediate invalidation and
this would have a negative impact on the interests of good
government. And all the parties before us indicated that they
require time to consult and formulate a means of remedying the
defect.
This conclusion is buttressed by the fact
that no countervailing considerations of hardship or harm have been
identified by any
of the parties that would result from the
continued operation of the statutes. It is to these factors that I
now turn.
(i) Lacuna
This
Court has cited a resulting lacuna to justify granting a suspension
order on several occasions.
51
Claims that a lacuna would result if an immediate declaration of
invalidity is given will, however, be closely scrutinised and
this
Court has refused a suspension order in cases where the remaining
legislation or regulations adequately deal with a particular
issue.
52
While
the PFMA does in places regulate provincial legislatures, the extent
to which it does so is not comparable with that of
the provincial
statutes. It cannot be said that they cover the same ground such
that the PFMA would fill the gap created by the
immediate
invalidation of the statutes.
53
There
were two further objections raised to the proposition that a
legislative or regulatory lacuna would result:
(i) the PFMA was in force for eight years without any provincial
legislation being enacted; and
(ii) there are provinces without legislation of this kind that are
regulating their financial management affairs.
Neither
of these objections, however, presents an absolute bar to the
finding that a lacuna would result if the statutes were
immediately
invalidated. There is no evidence of how these other provinces
arrange their affairs. The provinces before us have
regulated their
internal financial management under the provincial financial
management legislation and the immediate removal
of the structures
and processes set up under these Acts would undoubtedly, for them,
create a regulatory lacuna which the PFMA
will not adequately fill.
There is in my
view a strong possibility that this lacuna will impact negatively on
the interests of good provincial government.
(ii)
The need for consultation
As
already indicated, counsel for the Minister, in oral argument,
conceded that there is no bar to the introduction of remedial
legislation by Parliament. Parliament has this competency and, more
importantly, has indicated that it has three basic options
open to
it, one of which will be implemented.
54
Counsel
for the Minister further acknowledged that the intention was for all
of the relevant parties to consult so as to develop
a compromise
solution. The background to the adoption of the provincial financial
management legislation, detailed above, shows
that there has been an
ongoing consultative process among the legislatures for quite some
time.
The
Court should therefore allow the parties time to consult, as they
have indicated that they intend to do, without causing any
undue
administrative disruption in the interim
.
(iii) Period of suspension
Various
factors must be taken into account in determining the period of
suspension, including:
the government’s previous
conduct; whether there is any legislation in the pipeline; and the
nature and severity of the
continuing infringement.
55
Here,
the government’s conduct cannot be faulted. The background to
the adoption of the provincial financial management
legislation
indicates that the government has known for some time that the
regime governing the financial management of provincial
legislatures
is problematic. It has tried to address this in several ways –
most recently through the introduction of provincial
legislation –
and it cannot be said to be dragging its heels. Furthermore, while
there is no legislation in the pipeline,
all the parties have agreed
that they will consult in order to reach a compromise solution,
which will inevitably entail the
consideration of several policy
choices and possibly the introduction of new, or the amendment of
old, legislation.
It is
proper for this Court to endorse the unanimous agreement of the
legislatures that 18 months is an appropriate period for
a solution
to be devised.
In
the result, the following order is made:
The
Financial Management of the Eastern Cape Provincial Legislature Act
3 of 2009 is declared inconsistent with the Constitution
and
invalid.
The
Financial Management of the Free State Provincial Legislature Act 6
of 2009 is declared inconsistent with the Constitution
and invalid.
The
Financial Management of the Gauteng Provincial Legislature Act 7 of
2009 is declared inconsistent with the Constitution and
invalid.
The
Financial Management of the Mpumalanga Provincial Legislature Act 3
of 2010 is declared inconsistent with the Constitution
and invalid.
The
North West Provincial Legislature Management Act 3 of 2007 is
declared inconsistent with the Constitution and invalid.
The
declarations of invalidity made in 1-5 are suspended for 18 months
from the date of this judgment.
The
parties are ordered to file a report by Monday 9 September 2013
informing the Court what steps have been taken to remedy the
defect.
There
is no order as to costs.
Mogoeng
CJ, Moseneke DCJ, Cameron J, Froneman J, Jafta J, Nkabinde J,
Skweyiya J, Van der Westhuizen J and Yacoob J concur in the
judgment
of Khampepe J.
For the
Second and Third Respondents: Advocate JC Heunis SC and Advocate GA
Oliver instructed by the State Attorney.
For the
Fourth Respondent: Advocate G Marcus SC and Advocate N
Rajab-Budlender instructed by the State Attorney.
For
the Fifth to Ninth Respondents: Advocate V Maleka SC, Advocate TJB
Bokaba SC and Advocate GS Hinda instructed by Ntanga Kganane
Nkuhlu
Incorporated.
For
the Twelfth Respondent: Advocate T Motau SC and Advocate K Pillay
instructed by the State Attorney.
1
[2011]
ZACC 25
;
2011 (6) SA 396
(CC);
2011 (11)
BCLR 1181
(CC).
2
[A06-2009].
3
Limpopo
I
above n 1 at paras 20-2. Section 104(1) provides:
“
The legislative authority of
a province is vested in its provincial legislature, and confers on
the provincial legislature the
power—
(a) to pass a constitution for its province or to amend
any constitution passed by it in terms of sections 142 and 143;
(b) to pass legislation for its province with regard
to—
(i) any matter within a functional area listed in
Schedule 4;
(ii) any matter within a functional area listed in
Schedule 5;
(iii) any matter outside those functional areas, and
that is expressly assigned to the province by national legislation;
and
(iv) any matter for which a provision of the
Constitution envisages the enactment of provincial legislation; and
(c) to assign any of its legislative powers to a
Municipal Council in that province.”
4
Limpopo
I
above n 1 at para 30.
5
Act
10 of 2009.
6
Limpopo
I
above n 1 at
paras 43-9.
7
Id
at paras 51-9.
8
Act
3 of
2009.
9
Act
6
of
2009.
10
Act
7
of 2009.
11
Act
3 of
2010.
12
Act
3
of 2007.
13
Limpopo
I
above n 1 at para 61.
14
Id.
15
Id
at para 63.
16
Id.
17
Id
at para 64.
18
Id
at para 65.
19
In
relevant part, the order in
Limpopo I
above n 1 at para 68 reads as follows:
“
3. The Speakers of the
following provincial legislatures are hereby joined in these
proceedings as the fifth, sixth, seventh,
eighth and ninth
respondents, respectively:
(a) the Eastern Cape Provincial Legislature;
(b) the Free State Provincial Legislature;
(c) the Gauteng Provincial Legislature;
(d) the Mpumalanga Provincial Legislature; and
(e) the North West Provincial Legislature.
4. The Members of the Executive Council responsible for
financial matters in the following provinces are joined as the
tenth,
eleventh, twelfth, thirteenth and fourteenth respondents,
respectively:
(a) the Eastern Cape;
(b) the Free State;
(c) Gauteng;
(d) Mpumalanga; and
(e) the North West.
5. The fifth to fourteenth respondents must file
affidavits, if any, not later than Friday, 9 September 2011, setting
out:
(a) why the provincial statutes enacted by the
respective provincial legislatures should not be declared
unconstitutional; and
(b) if they are found to be unconstitutional, the
appropriate remedy.
6. The Speaker of the National Assembly, the
Chairperson of the National Council of Provinces and the Minister
for Finance must
file affidavits, if any, not later than Friday 16
September 2011, dealing with the constitutional validity of this
provincial
legislation and the appropriate remedy if the provincial
legislation concerned is found to be unconstitutional.”
20
Id.
21
The
Speakers’ Forum is a voluntary association made up of all the
Speakers and Deputy Speakers of both the national and
provincial
legislatures and the Chairperson and Deputy Chairperson of the NCOP.
22
The
SALSA is a voluntary association made up of the Secretary to
Parliament, his or her Deputy, Secretaries to the National Assembly
and the NCOP, and Secretaries to the provincial legislatures.
23
The
parties directed us to this Bill
but no reference or citation
was provided. We have been unable to locate a gazetted version of
the Bill.
24
Act
1 of 1999.
25
This
legislation provides inter alia for mechanisms controlling the
monitoring of compliance with legislation, oversight and
accountability. It sets out the fiduciary duties of the accounting
officer, disciplinary mechanisms, supply chain management,
planning
and budgeting mechanisms, requirements for the appropriation and
approval of funds, banking and control of bank accounts,
and the
general management of finances.
26
North
West Provincial Legislature Service Act 8 of
1997.
27
Act
5
of 2010.
28
See
[19] to [28] below.
29
Section
5 of the North West Act.
30
Id
at section 6.
31
Id
at section 9.
32
Id
at section 7.
33
See
id at Chapter 5.
34
The
Minister has listed the following for severance: section 2(1)(a) and
(b); section 6(4); section 7(1); section 7(3)(1)(d);
section 8;
section 10; Chapter 6; Chapter 7; Chapter 8; Chapter 9; Chapter 10;
Chapter 11; section 69(1)(b)-(q); the words “financial
or”
in section 69(1)(r); the words “a provision of this Act or”
in section 70(1)(a); section 72(1) and (3);
section 74(2); and
Schedules 2 and 3.
The
parliamentary representatives have listed the following for
severance: section 2(1)(a) and (b); section 6(4); section 7(1);
the
reference to “the financial management of the institution”
in section 7(3)(d); section 8(b) and (c); section
10(1)(c); Chapter
6; Chapter 7; Chapter 8; Chapter 9; Chapter 10; Chapter 11; section
70(1)(b)-(q); the words “financial
or” in section
70(1)(r); the word “financial” from “financial
misconduct” in Chapter 13; all references
after “section
8” in section 73(1)(a)(i); section 73(1)(a)(ii); section
73(1)(c); the reference to “or Auditor-General”
in
section 73(1)(d) and (e); section 73(3); and Schedule 1.
35
See
above n 34.
36
[1995]
ZACC 7
;
1995 (4) SA 631
(CC);
1995 (10) BCLR 1382
(CC).
37
Id
a
t para 16.
38
See
Johannesburg City Council v Chesterfield House
(Pty) Ltd
1952 (3) SA 809
(AD) at
822E.
39
This
was further complicated by the fact that
the
parliamentary representatives made reference to an incorrect version
of the North West Act in their submissions.
40
Section
2(1)(a) and (b) of the North West Act.
41
Malachi
v Cape Dance Academy International (Pty) Ltd and Others
[2010]
ZACC 13
;
2010 (6) SA 1
(CC);
2010 (11) BCLR 1116
(CC) at para 47;
First National Bank of South Africa Ltd v Land and Agricultural
Bank of South Africa and Others; Sheard v Land and Agricultural
Bank
of South Africa and Another
[2000] ZACC 9
;
2000 (3) SA 626
(CC);
2000 (8) BCLR 876
(CC) at para 15;
Case and
Another v Minister of Safety and Security and Others; Curtis v
Minister of Safety and Security and Others
[1996]
ZACC 7
;
1996 (3) SA 617
(CC);
1996 (5) BCLR 609
(CC) (
Case
)
at para 73; and
Coetzee
above n 36 at para 17.
42
Case
above n 41 at para 72.
43
Section
172(1)(b)(ii).
44
The
MEC responsible for Financial Matters in the Eastern Cape filed a
notice to abide.
45
Schedule
1 of the FMPA.
46
Section
77(1) of the Constitution provides:
“
A Bill is a money Bill if it—
(a) appropriates money;
(b) imposes national taxes, levies, duties or
surcharges;
(c) abolishes or reduces, or grants exemptions from,
any national taxes, levies, duties or surcharges; or
(d) authorises direct charges against the National
Revenue Fund, except a Bill envisaged in section 214 authorising
direct charges.”
47
Above
n 36.
48
Constitution
of the Republic of South Africa Act 200 of 1993.
49
Coetzee
above n 36 at para 76. Although this case dealt with section 98(5)
of the interim Constitution, which allowed for an order to
be
granted “in the interests of justice and good government”,
similar considerations apply to assessing whether it
is “just
and equitable” to grant an order.
50
J
and Another v Director General, Department of Home Affairs, and
Others
[2003] ZACC 3
;
2003 (5) SA 621
(CC);
2003 (5) BCLR 463
(CC) at para 21:
“
In such cases, the Court must
consider, on the one hand, the interests of the successful litigant
in obtaining immediate constitutional
relief and, on the other, the
potential disruption of the administration of justice that would be
caused by the lacuna. If the
Court is persuaded upon a consideration
of these conflicting concerns that it is appropriate to suspend the
order made, it will
do so in order to afford the Legislature an
opportunity ‘to correct the defect’. It will also seek
to tailor relief
in the interim to provide temporary constitutional
relief to successful litigants.” (Footnote omitted.)
51
South
African Association of Personal Injury Lawyers v Heath and Others
[2000] ZACC 22
;
2001 (1) SA 883
(CC);
2001 (1) BCLR 77
(CC);
South
African National Defence Union v Minister of Defence and Another
[1999] ZACC 7
;
1999 (4) SA 469
(CC);
1999 (6) BCLR 615
(CC); and
S
v Ntuli
[1995] ZACC 14
;
1996 (1) SA 1207
(CC);
1996 (1) BCLR 141
(CC).
52
See
Case
above n 41 at paras 83-5.
53
The
following observations made in the dissent of Yacoob J in
Limpopo
I
above n 1 indicate that the PFMA
does not adequately cover the internal financial management of the
provincial legislatures:
(i) The PFMA provides detailed measures applicable to
“departments”, “constitutional institutions”,
“public
entities”, and “executive authorities”,
but provincial legislatures do not fall into any of these categories
(para 104).
(ii) While the PFMA does place obligations on the
provincial legislatures, they are minimal. The Limpopo Bill
coalesced with the
provincial legislature’s obligations under
this Act and even helped to ensure compliance with the obligations
implied by
it – for example, the PFMA requires that the
financial statements of the provincial legislature be included in
the provincial
annual consolidated financial statements. This
implies that the provincial legislature prepare its own financial
statements –
something which is provided for in the Limpopo
Bill, but is not provided for in the PFMA or elsewhere (paras
106-11).
(iii) Moreover, the PFMA exempts the provincial
legislature from depositing money received by it into the Provincial
Revenue Fund,
which means it will have money on hand. This
necessarily requires a degree of management and control of, amongst
other things,
accounting officers and banking accounts within the
provincial legislature, which is not provided for in the PFMA or any
other
legislation but was provided for in the Limpopo Bill (para
114).
54
It
will: (a) assign the power to enact legislation concerning the
financial management of provincial legislatures to the provinces;
(b) enact national legislation to regulate the financial management
of the provincial legislatures; or (c) amend the FMPA to
make
provision for the regulation and control of the financial management
of the provincial legislatures.
55
S
v Steyn
[2000] ZACC 24
;
2001 (1) SA 1146
(CC);
2001 (1) BCLR 52
(CC) at para 46 and
Mistry v Interim Medical and Dental Council
of South Africa and Others
[1998] ZACC 10
;
1998 (4) SA 1127
(CC)
at para 37
[1998] ZACC 10
; ;
1998 (7) BCLR 880
(CC) at para 30. See also Bishop
“Remedies” in Woolman et al (eds)
Constitutional Law
of South Africa
2 ed (Juta & Co Ltd., Cape Town 2009) at
9
-
126.