South African Reserve Bank and Another v Shuttleworth and Another (CCT194/14, CCT199/14) [2015] ZACC 17; 2015 (5) SA 146 (CC); 2015 (8) BCLR 959 (CC) (18 June 2015)

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[2015] ZACC 17
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South African Reserve Bank and Another v Shuttleworth and Another (CCT194/14, CCT199/14) [2015] ZACC 17; 2015 (5) SA 146 (CC); 2015 (8) BCLR 959 (CC); 78 SATC 23 (18 June 2015)

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CONSTITUTIONAL
COURT OF SOUTH AFRICA
Cases CCT 194/14 and CCT 199/14
In the matter between:
SOUTH AFRICAN
RESERVE
BANK
First Applicant
MINISTER OF
FINANCE
Second Applicant
and
MARK RICHARD
SHUTTLEWORTH
First Respondent
PRESIDENT OF THE
REPUBLIC OF SOUTH AFRICA
Second Respondent
Neutral citation:
South African Reserve Bank and Another v
Shuttleworth and Another
[2015] ZACC 17
Coram:
Mogoeng CJ, Moseneke DCJ, Cameron J, Froneman J,
Jappie AJ, Khampepe J, Molemela AJ, Nkabinde J,
Theron AJ
and Tshiqi AJ
Judgments:
Moseneke DCJ (majority): [1] to [83]
Froneman J (dissenting): [84] to [124]
Heard on:
3 March 2015
Decided on:
18 June 2015
Summary:
Sections 75 and 77 of the Constitution
— money Bills — difference between taxes and regulatory
charges — dominant
purpose test
Exchange
control system — whether exit charge imposed under regulation
10(1)(c) of Exchange Control Regulations a tax or regulatory
charge —
exit charge a regulatory charge
Exchange
control system —
section 9(4)
of the
Currency and Exchanges Act
9 of 1933
— definition of “calculated to raise revenue”
— “calculated” does not mean “likely”
Exchange
control system — broad discretionary powers of Minister —
necessary for flexible, speedy and expert approach
to exchange
control
ORDER
The following order is
made:
1.
Leave to appeal is granted against the decision of the Supreme Court
of Appeal.
2.
Leave to cross-appeal is granted in relation to whether
section 9(1)
of the
Currency and Exchanges Act 9 of 1933
, and regulation 10(1)(c)
of the Exchange Control Regulations, are constitutionally valid.
3.
Leave to cross-appeal against the decision of the Supreme Court of
Appeal is
otherwise refused.
4.
The main appeal is upheld.
5.
The order of the Supreme Court of Appeal in paragraphs 2(i)-(iii) is
set aside.
6.
Mr Shuttleworth’s application before the North Gauteng High
Court, Pretoria
is dismissed.
7.
The cross-appeal is dismissed.
8.
There is no order as to costs.
JUDGMENT
MOSENEKE DCJ (Mogoeng
CJ, Cameron J, Jappie AJ, Khampepe J, Molemela AJ, Nkabinde J, Theron
AJ and Tshiqi AJ concurring):
Introduction
[1]
This dispute is about taxation.  Not
many people relish paying taxes.  Of taxes, none less than
Thomas Jefferson
[1]
observed:
“
To
compel a man [or woman] to furnish contributions of money for the
propagation of opinions which he [or she] disbelieves . . .
is sinful
and tyrannical.”
[2]
Perhaps
a less cynical and more felicitous posture on the subject is that of
Justice Oliver Wendell Holmes Jr:
[3]
“
I like to pay taxes;
with them, I buy civilization.”
[4]
Whatever one’s
temperament on them may be, taxes seem certain and inconvenient.
Indeed, in
Gone
with the Wind
,
Margaret Mitchell tersely warned: “Death and taxes and
childbirth!  There's never any convenient time for any of
them!”
[5]
[2]
Mr Shuttleworth, a prominent South African
entrepreneur, feels that he has fallen victim to an invalid tax and
wants it set aside
by the courts.  In 2001 he emigrated to the
Isle of Man.  He says he left the country in order to free up
his funds for
investment outside South Africa.  He thought that
the exchange control system of the time was severely restrictive and
rendered
cross-border investments prohibitive.  The Exchange
Control Regulations blocked the transfer of Mr Shuttleworth’s
assets
from the Republic.  The capital amount could not be
transferred without authorisation of the South African Reserve Bank
(Reserve
Bank).  He applied to the Reserve Bank to transfer out
of the Republic approximately R2.5 billion blocked under the exchange

control system.  The Reserve Bank, seemingly acting on a
determination by the Minister of Finance (Minister), imposed an exit

charge of 10% on the capital he wanted exported.
Mr Shuttleworth paid the charge of approximately R250 million.

He was later advised that the exit charge was a tax and had been
imposed in a manner not permitted by the Constitution or the
applicable statute.  Mr Shuttleworth also wanted the exit charge
set aside for another reason.  He argued that the entire

exchange control system, or its specified parts, was at odds with the
Constitution and invalid.
[3]
Before coming to this Court, this contest
had been to the North Gauteng High Court, Pretoria (High Court) and
the Supreme Court
of Appeal.  The High Court held for the
Reserve Bank and the Minister that the exit charge was not a
revenue-raising tax and
had been lawfully imposed.  It did,
however, hold a few and discrete exchange control legislative
provisions to be unconstitutional.
The Supreme Court of Appeal
then held, in the main, for Mr Shuttleworth.  It set aside
the order of the High Court in
its entirety.  It concluded that
the imposition of a charge on Mr Shuttleworth’s transfer
of his blocked assets
out of the Republic was unlawful because it had
not been passed in accordance with the procedure the Constitution
prescribed for
a money Bill.  It directed the Reserve Bank to
repay the amount paid by him, with interest.  In contrast, that
Court
refused to decide whether any of the exchange control
provisions were inconsistent with the Constitution and invalid.
[4]
The Reserve Bank and the Minister felt hard
done by the order of the Supreme Court of Appeal and now seek leave
to appeal against
it (main appeal).  Should this Court grant
leave, Mr Shuttleworth, in turn, has asked for leave to
cross-appeal against
the decision of the Supreme Court of Appeal on
the discrete question of the constitutional validity of the exchange
control legislative
scheme.
[5]
In this Court too, the decisive question is
whether the exit charge, as Mr Shuttleworth contends, was a tax
imposed for the
purpose of raising revenue for the State or, as the
Reserve Bank and Minister submit, a regulatory charge whose main
object was
to disincentivise the export of capital.  If the
charge was a tax – a revenue-raising mechanism – then the
regulation
that authorised the exit charge would be invalid.  This
would be so because the exit charge had not been enacted in
accordance
with prescribed constitutional and statutory strictures.
[6]
Before I wrestle with this core question on
the merits, it may be expedient to narrate background facts, a résumé
of the litigation thus far and then decide whether leave to appeal
should be granted.
Background
[7]
The Great Depression is said to have lasted
a decade, from 1929 to 1939.
[6]
It was reputed to be the deepest and
longest-lasting economic downturn in the history of industrialised
economies.  Although
South Africa was then a developing country,
which it still is, it was not shielded from a deep recession.  Its
currency and
economic conditions, much like those of other countries,
were on a downward slope at the time.  Amidst the depression,
South
African authorities were fearful of diminished direct
investment and capital flight.  They put measures in place to
prevent
the total economic collapse of the country.
[8]
In 1933, Parliament passed the
Currency and
Exchanges Act.
[7
]
Section 9(1)
empowered the President to make
regulations on any matter affecting or related to currency, banking
or exchanges.
[8]
The threat of economic recession and related
capital flight reared its head again after the Sharpeville shootings
of 1960.
[9]
Relying on
section 9(1)
, the President
introduced the Exchange Control Regulations (Regulations).
[10]
Their core provision, amongst others, is
regulation 10(1)(c).  It provides:
“
No
person shall, except with permission granted by the Treasury or by an
authorised dealer and in accordance with such conditions
as the
Treasury or the authorised dealer may impose—
. . .
(c)
enter into any transaction whereby capital or any right to capital is
directly or
indirectly exported from the Republic.”
The Regulations
define “Treasury” as the Minister of Finance.
[11]
In this way,  serve to prohibit the
export of capital from the Republic unless certain conditions imposed
by the Minister are
complied with.
[9]
Following our first democratic elections in
1994, a process of the relaxation of exchange controls commenced.
Ordinarily,
during his annual budget speech before the National
Assembly, the Minister announced, as authorised by regulation
10(1)(c), the
conditions he had imposed in relation to the export of
capital from the Republic.  The Reserve Bank then reduced the
Minister’s
announcement of the conditions into public
circulars.
[12]
[10]
In 2003, the Minister took the view that
our economy had become more resilient, enabling it to withstand
capital outflows.
As part of the progressive relaxation of
exchange controls, he permitted emigrants to unwind and export
blocked assets subject
to specified conditions.
[13]
To this end, the Minister announced:
“
The
following dispensation will apply with immediate effect:
. . .
Holders
of blocked assets wishing to exit more than R750 000 (inclusive
of amounts already exited) must apply to the Exchange
Control
Department of the SA Reserve Bank to do so.  Approval will be
subject to an exiting schedule and an exit charge of
10% of that
amount.”
[14]
[11]
In practice this meant the Regulations
blocked the expatriation of Mr Shuttleworth’s assets from
South Africa.
The aggregate value of his blocked loan account
was just over R4.2 billion.  The Reserve Bank permitted Mr
Shuttleworth to
remit the interest on the blocked loan account at the
prime lending rate plus 2%.
[12]
On 5 March 2008, Mr Shuttleworth applied to
the Reserve Bank for permission to transfer around R1.5 billion from
the blocked loan
account out of South Africa.  The Reserve Bank
policy required that an application to export capital could not be
made directly
to it but rather had to be made through an authorised
dealer.  Mr Shuttleworth instructed Standard Bank, an
authorised
dealer, to make the application in his stead.  The
Reserve Bank granted the application subject to the payment of an
exit
charge amounting to approximately R165 million.
However, there was an error in the calculation of the exit charge,
which
ought to have been 10% of roughly R1.5 billion.  Later,
Mr Shuttleworth was informed that the amount that could be
transferred
out of South Africa was around R1.485 billion.
[13]
Mr Shuttleworth paid the exit charge.  He
explained that he paid the charge in the belief that it was lawfully
due.  In
addition to this payment and the transfer of the funds
out of South Africa, Mr Shuttleworth made donations to several South
African
entities out of the blocked loan account.  By 26 June
2009 the amount in that account had been whittled down to about
R2.5 billion.
[14]
During June 2009, Mr Shuttleworth decided
to transfer his remaining capital out of South Africa.  Ahead of
applying to the
Reserve Bank for permission to do so, he sought
advice on the lawfulness of the exit charge.  He was advised
that it was unlawful.
He framed his application to the Reserve
Bank in a manner that reserved his right to challenge the lawfulness
of the imposition
of the charge.  He complains that his
authorised dealer, Standard Bank, submitted the application without
reserving his rights
as he had instructed.  He only became aware
of this omission when the Reserve Bank approved the application
subject to the
payment of the 10% exit charge, which Standard Bank
had, contrary to Mr Shuttleworth’s instructions, tendered
to pay.
[15]
When Mr Shuttleworth came to know of
the Reserve Bank’s approval of the application, he requested
that it reconsider
its decision to impose the charge.  He paid
the levied amount of just over R250 million under protest pending the
reconsideration
of the decision.  The Reserve Bank refused to
reconsider its decision, stating only that it was bound by the
Regulations.
When invited to disclose the basis for its
decision, the Reserve Bank relied on the Minister’s decision –
made known
in his budget speech of 26 February 2003 and Exchange
Control Circular No. D.375 of the same date – which embodied
the details
of the conditions laid down in the budget speech.  The
relevant part of Circular D.375 read:
“
Emigrant
blocked assets are to be unwound.  Amounts up to R750 000
(inclusive of amounts already exited) will be eligible
for exiting
without charge.  Holders of blocked assets wishing to exit more
than R750 000 (inclusive of amounts already
exited) must apply
to the Exchange Control Department of the . . . Reserve Bank to do
so.  Approval will be subject to an
exiting schedule and an exit
charge of 10 per cent of the amount.”
[15]
High Court
[16]
Mr Shuttleworth was unhappy with the
Reserve Bank’s refusal to reconsider its decision to impose the
exit charge.  He
approached the High Court for relief.
[16]
He argued that the imposition of the exit charge
was unconstitutional.  He further attacked various provisions
underpinning
the exchange control system.  The High Court (per
Legodi J) decided in favour of the state parties (the Reserve Bank,
the
Minister and the President) on the validity of the exit charge.
But it declared certain provisions of the Act invalid and
suspended
the declaration of invalidity.  It made no order as to costs.
[17]
In a comprehensive judgment, the High Court
made a number of crucial holdings that bear repetition because many
of them are revisited
in the cross-appeal.  The High Court held
that the charge was not “calculated to raise revenue” and
therefore
regulation 10(1)(c) was not invalid for failing to comply
with section 9(4) of the Act.
[17]
It analysed the regulation starting with its
heading, “Restriction on Export of Capital”, considered
its purpose of
limiting the adverse consequences of money leaving the
country, and concluded that the charge was a “disincentive”.
[18]
[18]
The High Court then proceeded to evaluate
the constitutional attacks.  It refused to hold all of section 9
or section 9(1)
unconstitutional.
[19]
It did, however, find section 9(3) to be invalid
because it granted seemingly unfettered discretion to the President
to suspend
legislation.
[20]
Furthermore, the Court declared regulations
3(1), 3(3), 3(5), 10(1)(b), 19(1) and certain words in regulation 22
inconsistent with
the Constitution and invalid.  The Court
suspended these declarations of invalidity, with the exception of the
affected part
of regulation 22, so that Parliament might remedy the
defects.
[21]
[19]
Mr Shuttleworth had mounted an attack
against regulation 10(1)(c) on the pointed ground that it was
open-ended and lacked guidelines
on its proper implementation and
thus offended the authority of
Dawood.
[22]
The High Court noted that the “exchange
control system requires a flexible, speedy, and expert approach to
ensure that proper
financial governance prevails”.
[23]
The Court found that an effective exchange control
was in a constant state of flux and demanded the respective expertise
of authorised
dealers and the Reserve Bank in these specialised
areas.  It concluded that it was unsurprising that there would
be no, and
could be no, guidance on the application of regulation
10(1)(c).  Regulation 10(1)(c) was therefore valid.
[20]
In another argument Mr Shuttleworth
criticised the decision to impose the exit charge on the ground that
the Reserve Bank was entitled
to depart from the condition set by the
Minister, and its failure to do so rendered the decision inflexible
and invalid.  The
High Court disagreed.  It took the view
that the Reserve Bank only acted with the authority delegated to it
by the Minister.
It was not open to the Reserve Bank to
“exercise discretion and deviate from policy guideline[s] that
required . . . impos[ition
of] a 10% levy”.
[24]
To do otherwise would be to act contrary to the
powers conferred upon it.  The Court found that because Mr
Shuttleworth had
only challenged the decision of the Reserve Bank,
and had not challenged the decision of the Minister, Mr Shuttleworth
could not
succeed in the argument that he should be repaid his 10%
exit charge.
[21]
Lastly, Mr Shuttleworth impugned the
decision on the ground that it was arrived at through a “closed
door policy”.
Under that policy the Reserve Bank
required applications to externalise capital to be made through
authorised dealers.
The requirement is found in rule 10(a) of
the Orders and Rules under the Exchange Control Regulations.
[25]
The High Court rejected the contention that
the “middle man” approach to the exchange control system
was unconstitutional.
It found that authorised dealers were
reasonably necessary for their expertise and capacity to handle the
bulk of the more-than-10-million
foreign transactions each year.
It found that banks were well-placed to handle the millions of
applications for exporting
capital and it would have been untenable
for the Reserve Bank to deal with each and every one.
[26]
Supreme Court of Appeal
[22]
With leave of the High Court, Mr
Shuttleworth approached the Supreme Court of Appeal on the
constitutional validity of the exit
charge.  The state parties
were also granted leave to cross-appeal against the suspended
declarations of invalidity of the
regulations.
[27]
[23]
The Supreme Court of Appeal held that the
exit charge was a revenue-raising mechanism.  The amount raised
by the exit levy,
approximately R2.9 billion, was paid into the
National Revenue Fund.  The imposition of the exit levy was of
general
application imposed on every amount exported that exceeded
R750 000.  The exit levy fell within “taxes, levies
or duties” as contemplated in sections 75
[28]
and 77(1)
[29]
of the Constitution and was void for failing to
comply with these provisions.
[30]
The Court also found that the charge was beyond
the power permitted by (
ultra vires
)
regulation 10(1)(c).  That regulation, it reasoned, did not
allow the raising of revenue.  And even if it did,
the Minister
and the Reserve Bank did not follow the procedure that section 9(4)
of the Act prescribes for the promulgation
of regulations that raise
revenue.
[31]
[24]
That Court also noted that the Reserve
Bank’s reliance on regulation 10(1)(c) as authority for
the imposition of the
exit charge was contrived given its previous
reliance on the budget speech delivered by the Minister in
Parliament.
[32]
The Court ordered the Reserve Bank to repay
Mr Shuttleworth the exit charge, with interest.
[25]
In overturning the High Court’s
decision in its entirety, the Supreme Court of Appeal criticised the
High Court’s order
because it seemed contradictory in
validating the exit charge whilst also ruling that several
regulations are invalid.  In
another observation, the Supreme
Court of Appeal held that the High Court declared the regulations
invalid in the abstract without
any proper consideration of the
effect of the invalidity on the exchange control regime and the
economy as a whole.
[33]
Leave to appeal
[26]
It is in the interests of justice to grant
the Reserve Bank and the Minister leave to appeal the decision of the
Supreme Court of
Appeal.  The dispute before us engages
constitutional guarantees related to property,
[34]
administrative justice,
[35]
and the procedure for the passing of a money
Bill.
[36]
The regulatory framework authorising the exit
charge was repealed five years ago.  I am nonetheless persuaded
that the dispute
before us is not moot because it raises a live
controversy with practical effect.  This is why: Mr Shuttleworth
claims the
return of a substantial amount of money.  The
Minister and the Reserve Bank want to keep the money.  The
outcome of the
dispute is likely to have consequences for other
potential claimants who may be similarly situated.  And
depending on the
outcome of this dispute, potential claims against
the State may run into billions of rands.
[27]
Put simply, there is nothing moot about
R2.9 billion which, we are told, would be the approximate extent of
the State’s exposure
to potential claims.  And to the
extent that it may be argued that this dispute is moot, that would
relate only to the fact
that the conditions imposed by the Minister
under regulation 10(1)(c) are no longer applicable.  Even if
that argument were
good, this Court has a discretion whether to hear
the matter.  Mootness does not, in and of itself, bar this Court
from hearing
this dispute.  Instead, it is the interests of
justice that dictate whether we should hear the matter.
[37]
[28]
The outcome of the appeal is a matter of
considerable public interest.  Importantly, the main appeal on
the merits carries
reasonable prospects of success.
Merits of the main
appeal
[29]
The resolution of the main appeal hinges on
three questions.  First, was the imposition of the exit charge a
decision of the
Minister or the Reserve Bank?  Second, was the
exit charge a national tax, levy, duty or surcharge under sections 75
and 77(1)(b)
of the Constitution?  And third, was the exit
charge “calculated to raise revenue” as envisaged in
regulation
10(1)(c)
[38]
and section 9(4)
[39]
of the Act?
Was
the exit charge a decision of the Minister or the Reserve Bank?
[30]
The Reserve Bank and the Minister argued
that the imposition of the exit charge was a decision made by the
Minister in terms of
section 9(1)
[40]
of the Act and regulation 10(1)(c) of the
Regulations.  This he did in the course of a budget speech on
26 February 2003.
That budget speech was shortly
thereafter tabled in Parliament and referred to the relevant
Portfolio Committee for consideration
and approval.  In 2009,
the Reserve Bank mechanically implemented the Minister’s
decision, which pre-dated Mr Shuttleworth’s
application to
export currency.  The Reserve Bank had no discretion whether to
impose the exit charge or what its quantum
should be.
[31]
It was accepted by all parties that since
2003 the Reserve Bank has never exercised any discretion by deviating
from the Minister’s
decision.  It consistently imposed the
10% exit charge on every applicant, without variation.  Therefore,
the Reserve
Bank and the Minister argued, it was the decision of the
Minister, and not of the Reserve Bank, that had to be impugned.
Mr Shuttleworth had not challenged the Minister’s decision,
which put paid to his claim for a refund.
[32]
It is correct that on the authority of
Oudekraal
[41]
and
Kirland
[42]
the unchallenged decision of the Minister remained
intact and valid.  The Reserve Bank and the Minister further
argued that
the Supreme Court of Appeal ordered the Reserve Bank to
repay the exit charge because it wrongly held that the Reserve Bank
imposed
the exit charge.  Its order was not a patent error as
Mr Shuttleworth now argues in this Court.
[33]
For his part Mr Shuttleworth contended that
the Reserve Bank made the decision to impose the exit charge.  Its
correspondence
to him repeatedly used the language of “our
decision”.  He also argued that the budget speech did not
amount to
a reviewable decision under the Regulations but rather a
policy decision that was a mere guideline to the Reserve Bank.  He

conceded that it is true that the Reserve Bank had acted consistently
and mechanically in appraising applications for exporting
capital.
But the Reserve Bank, he submitted, was wrong in law because
the conduct offended the tenets of administrative justice
and
Dawood
.
[43]
It had a discretion which it did not
exercise.
[34]
In the face of these arguments, the High
Court held that the decision was of the Minister and that the Reserve
Bank had no discretion
or mandate to refuse to impose or vary the
charge.  Somewhat obliquely, the Supreme Court of Appeal held
differently: the
decision was that of the Reserve Bank.  It
stated that “[i]t is now necessary to consider whether the 10
per cent levy
unlawfully imposed by the Reserve Bank has to be repaid
to Shuttleworth”.
[44]
In all fairness, this remark was
en
passant
and is not supported by any
reasoning why that Court thought the decision was that of the Reserve
Bank and not of the Minister.
It is plain from its reasoning
that the Supreme Court of Appeal decided this dispute solely on the
constitutional question
whether the exit charge had been passed as a
money Bill.
[35]
I have concluded that the decision to
impose a 10% exit charge on everyone who desired to export more that
R750 000 was made
by the Minister.  It took the form of a
narrow policy formulation directed at implementing legislation and
was, unlike a broad
or political policy formulation, subject to
administrative review.  This distinction was made lucidly by
this Court in
Ed-U-College
:
[45]
“
It
should be noted that the distinction drawn in this passage is between
the implementation of legislation, on the one hand, and
the
formulation of policy on the other.  Policy may be formulated by
the executive outside of a legislative framework.
For example,
the executive may determine a policy on road and rail transportation,
or on tertiary education.  The formulation
of such policy
involves a political decision
and
will generally not constitute administrative action
[and is
therefore not reviewable].  However, policy may also be
formulated in a narrower sense where a member of the executive
is
implementing legislation.  The formulation of policy in the
exercise of such powers
may
often constitute administrative action
[and
therefore be reviewable].”
[46]
(Emphasis
added.)
[36]
The Minister exercised his powers in terms
of regulation 10(1)(c) and imposed two conditions: a 10% exit charge
on the export of
all capital that exceeded R750 000; and that
capital exporters be subjected to an exit schedule.  He gave a
general permission
that was subject to fixed conditions.  He
then delegated the power of implementation and administration to the
Reserve Bank
in terms of regulation 22E.
[47]
[37]
Seen this way, the Reserve Bank was only
responsible for mechanically applying the policy decision of the
Minister and had no discretion
when implementing the decision.
The Reserve Bank derived its delegated powers from the wording of the
budget speech of 26
February 2003, as reflected in Exchange Control
Circulars D.375 and D.380, both of which were circulated that same
day.  The
budget speech and the circulars do not offer any
wiggle room for interpretation – the 10% exit charge was to be
charged on
all persons exiting South Africa with capital exceeding
R750 000.  The Reserve Bank could not lawfully depart from
these
narrow and set conditions without dishonouring their mandate
given to them by the Minister under regulation 22E.
[38]
The Minister and the Reserve Bank thought
that if the decision was that of the Minister and not of the Reserve
Bank, that finding
alone would be fatal to Mr Shuttleworth’s
case and dispose of the main appeal in their favour.  This would
be so
because the Minister’s decision would stand as if it was
never challenged.  It is true that, on good authority, the
decision of the Minister or of any public functionary must remain
valid and be adhered to for as long as it has not been successfully

impugned.
[48]
[39]
Even so, I don’t think that a finding
favourable to the Minister and the Reserve Bank on this point is
wholly dispositive
of the appeal.  For present purposes it
matters little who made the decision to impose the exit charge.
Put simply,
the decision of the Minister was impugned also on another
ground and thus remains open to constitutional scrutiny.  The
core
issues remain.  They are two and interrelated.  The
first is whether the charge, levy or tax was of a kind that may be

imposed only after due adherence to the money Bill strictures imposed
by the Constitution.  The second is whether the charge,
levy or
tax was calculated to raise revenue within the meaning of section
9(4) of the Act.  I now peer closely at each.
Was
the exit charge a “money Bill”?
[40]
A Bill before the National Assembly is a
money Bill if it imposes “national taxes, levies, duties or
surcharges”.
[49]
However, the term “money Bill” covers
more than just the raising of taxes, levies, duties or surcharges.
It includes
a Bill that appropriates money,
[50]
or that abolishes, reduces or grants exemptions
from taxes,
[51]
or that authorises direct charges against the
National Revenue Fund.
[52]
A money Bill must be passed by the National
Assembly, and only in the manner required by section 75 of the
Constitution.
[53]
The National Assembly may not initiate or prepare
a money Bill.
[54]
Only the Minister of Finance may.
[55]
And a money Bill must not deal with any other
matter except the prescribed subject matters of a money Bill.
[56]
[41]
The High Court neglected to consider
whether the money Bill provisions should have been complied with in
implementing the exit charge.
It simply found that the exit
charge was not “calculated to raise revenue” and thus
echoed the requirement of
section 9(4) of the Act.  The Supreme
Court of Appeal, on the other hand, held that the money Bill
provisions should have
been complied with.  Its reasoning was
not expansive.  It was limited to seeing the primary purpose of
the exit charge
as raising revenue for the State.  In its words:
“
[T]he
levy raised revenue for the State.  It brought ten per cent of
the value of any capital in excess of R750 000 exported
out of
the country, into the National Revenue Fund.  Whilst in force,
it raised approximately R2.9 billion.  The levy
thus fell within
the category of ‘taxes, levies or duties’ contemplated by
sections 75 and 77 of the Constitution.”
[57]
[42]
A blissful starting point would be to
affirm that the power to tax residents is an incident of, and
subservient to, representative
democracy.  The manner and the
extent to which national taxes are raised and appropriated must yield
to the democratic will
as expressed in law.  It is the people,
through their duly elected representatives, who decide on the taxes
that residents
must bear.  An executive government may not
impose a tax burden or appropriate public money without due and
express consent
of elected public representatives.  That
authority, and indeed duty, is solely within the remit of the
Legislature.
This accords with this Court’s decision in
Fedsure
,
[58]
as well as the Canadian Supreme Court decision in
Eurig Estate
.
[59]
Both cases hold that the primary object of
the limits on how to raise national taxes or appropriate revenue, as
our Constitution
does in relation to a money Bill, is to ensure that
there is “no taxation without representation”.  It
is plain
that in our jurisdiction a decision or law that purports to
impose a tax will be invalid to the extent of its inconsistency with

the limits imposed by the Constitution or other law.
[43]
Our first chore must be to assign meaning
to the undefined words in section 77 of the Constitution: “national
taxes, levies,
duties [and] surcharges”.  Their scope is
plainly limited to charges at the national level.  But the use
of all
four terms must betray a design to cover a wide field of
charges.  However a trawling of our national legislative
instruments
using the terms tax, levy, duty, or surcharge, suggests
that the terms are of wide import and are often used synonymously and
interchangeably.
[60]
The only minor exception is perhaps the term
“surcharge” which seems to be, at least sometimes,
reserved for a charge
in
excess
of a base tariff.
[61]
This means that a literal meaning of any of the
terms is less than useful.  The mere label of a charge as a tax
or levy or
duty or surcharge tells us little about whether it is hit
by the requirements of section 77(1)(b).  We must resort to

the context within which the term is used and the purpose for which
the tax, levy, duty or surcharge has been imposed.
[44]
There is a paucity of domestic judicial
guidance on how one identifies charges that must be laid down only
through a money Bill.
Three cases refer to a money Bill but
none are on point.  In the
First
Certification
case,
[62]
an argument was raised that a Bill that apportions
due monies under the Constitution to provinces could qualify as a
money Bill.
This Court disagreed and held that “bills
determining a Province’s equitable share are not money Bills
and are subject
to the [non-money Bill] procedure”.
[63]
[45]
In
Paper
Manufacturers
,
[64]
the National Assembly was alleged to have failed
to pass money Bill amendment legislation as required by section 77(3)
of the Constitution.
[65]
The Minister of Finance had introduced legislation
to lower rates of duties and rebates on paper and paperboard
products.
The Paper Manufacturers Association attacked the
legislation on the ground that it had not been passed lawfully.
This was
because it, having been a money Bill, had not been passed in
accordance with an envisaged money Bill amendment law which in fact

had not been enacted.
[66]
The Supreme Court of Appeal, in
obiter
,
stated that although Parliament had failed to adopt the procedure for
amending money Bills, this did not mean that all money Bills
amended
without the requisite procedure were inconsistent with the
Constitution and invalid.
[67]
Lastly, the High Court in
Cross-Border
[68]
gave short shrift to the argument that legislation
that permitted the imposition of permit tariffs on transport haulers
amounted
to a money Bill.  The High Court held that “permit
tariffs [were] neither akin to a money Bill or a tax”.
[69]
[46]
The parties before us were in agreement,
and correctly so, that a law, other than a money Bill, may authorise
the executive arm
of government to impose regulatory charges in order
to pursue a legitimate government purpose.  There is a raft of
pre- and
post-Constitution legislation that routinely authorises the
Executive to impose fees, tariffs, levies, duties, charges and
surcharges.
[70]
Section 77(1)(a) of the Constitution, which
provides that a money Bill is any Bill that “appropriates
money”, cannot
be understood to refer to any instance where
revenue is incidentally raised.  This would be an overbroad and
unworkable meaning.
“Appropriates money” must be
understood to refer to the allocation of revenue raised as tax and
not as a regulatory
charge.
[47]
So the recurring question is: how does one
distinguish a regulatory charge from a tax that may be procured only
through a money
Bill?  I look first to foreign jurisprudence.
In the Canadian Supreme Court decisions of
Lawson
[71]
and
Westbank
[72]
,
the Zimbabwean Supreme Court case of
Nyambirai
,
[73]
the Australian case of
Collector
of Customs (NSW)
,
[74]
as well as several cases from the United
States,
[75]
courts have warned that the use of the words fees,
tariffs, levies, duties, charges, or surcharges in a particular
statute is not
conclusive of whether the statute imposes a regulatory
charge or a tax.  Most recently, in
Sebelius
,
[76]
the Supreme Court of the United States considered
whether part of the national health care legislation colloquially
known as
ObamaCare
[77]
constituted a tax.  It said:
“
In
passing on the constitutionality of a tax law, [a court] is concerned
only with its practical operation, not its definition or
the precise
form of descriptive words which may be applied to it”.
[78]
[48]
So, aside from mere labels, the seminal
test is whether the primary or dominant purpose of a statute is to
raise revenue or to regulate
conduct.
[79]
If regulation is the primary purpose of the
revenue raised under the statute, it would be considered a fee or a
charge rather than
a tax.  The opposite is also true.  If
the dominant purpose is to raise revenue then the charge would
ordinarily be a
tax.  There are no bright lines between the two.
Of course, all regulatory charges raise revenue.  Similarly,
“every
tax is in some measure regulatory”.
[80]
That explains the need to consider carefully
the dominant purpose of a statute imposing a fee or a charge or a
tax.  In support
of this basic distinguishing device, judicial
authorities have listed non-exhaustive factors that will tend to
illustrate what
the primary purpose is.
[49]
Since the 1950s, in a small trickle, our
courts have pronounced on whether certain statutes authorised a tax
or regulatory charge.
None of the cases is on all fours.  Most
of the decisions plainly shy away from defining the word “tax”
because it defies precise description outside the context of a
specific statute and its purpose.  For example, Ramsbottom J
in
Permanent Estate and Finance
[81]
declined to define the term “tax” and
rather listed features that would make a tax easily identifiable: (i)
when the
money is paid into a general revenue fund for general
purposes; and (ii) when no specific service is given in return for
payment.
In that case he found the money paid by a township
developer not to be a tax because it would be re-invested in the
infrastructure
of the township, and the power to impose the charge
was reasonably required to carry out the object of that statute.
[82]
[50]
In
Israelsohn
v CIR
,
[83]
a taxpayer complained that a punitive super tax
was not a tax because its purpose was not to raise revenue but to
punish.
The Appellate Division held the measure to be a tax
because it was subject to the general machineries of tax assessment
and collection.
[84]
In
The Master v
I L Back
[85]
the Appellate Division had to decide whether a
charge was a tax or a fee.  It decided that it was a fee because
of the use
of the word “fee” throughout the statute and
because the “obvious and necessary purpose” was to
empower
the Minister to impose a fee for services and facilities he
had to provide.
[86]
[51]
In
Maize
Board
,
[87]
the Court held a levy not to be a tax, in part
because it was not imposed on the public as a whole or on a
substantial part of it.
The revenues were not utilised for
public benefit as only a few would benefit and a large portion of the
revenue was used to defray
administrative costs.
[88]
More recently, in
Gaertner
,
[89]
this Court examined the primary and secondary
purposes of custom and excise duties, concluding that their primary
function is “to
ensure a constant stream of revenue for the
State, with a secondary function of discouraging consumption of
certain products”.
[90]
The Court concluded that although the regulatory
aspect of customs and excise legislation served an important public
purpose, the
statute was “essentially a fiscal piece of
legislation”.
[91]
[52]
None of our cases disavow the obvious need
to identify the dominant object of a statute in order to typify it as
fiscal or regulatory.
Madlanga J says as much in
Gaertner
.
[92]
And earlier cases demonstrate that we must
avoid attaching a fiscal meaning to words like tax or duty or levy
outside of a contextual
and purposive understanding.  There are
open-ended but helpful guidelines on how to determine the dominant
purpose of legislation
that tends to raise revenue for the State.  In
each case the factors must be weighed carefully in order to reach a
correct
outcome.  In the end it boils down to whether the
dominant object of the enactment was to raise revenue to fund the
State
and its public operations or to regulate public conduct by
charging a fee or levy.
[53]
Here we are dealing with exchange control
legislation.  Its avowed purpose was to curb or regulate the
export of capital from
the country.
[93]
The very historic origins of the Act, in 1933,
were in the midst of the 1929 Great Depression, pointing to a
necessity to curb outflows
of capital.  The Regulations were
then passed in the aftermath of the economic crises following the
Sharpeville shootings
in 1960.  The domestic economy had to be
shielded from capital flight.  Regulation 10’s very
heading is “Restriction
on Export of Capital”.  The
measures were introduced and kept to shore up the country’s
balance of payments position.
The plain dominant purpose of the
measure was to regulate and discourage the export of capital and to
protect the domestic economy.
[54]
This dominant purpose may also be gleaned
from the uncontested evidence of the then Director-General of
Treasury, Mr Kganyago.
He explained that the exchange control
system is designed to regulate capital outflows from the country.
The fickle nature
of the international financial environment required
the exchange control system to allow for swift responses to economic
changes.
Exchange control provided a framework for the
repatriation of foreign currency acquired by South African residents
into the South
African banking system.  The controls protected
the South African economy against the ebb and flow of capital.
One of
these controls, which we are here dealing with specifically,
served to prohibit the export of capital from the Republic (unless

certain conditions were complied with).
[55]
The exit charge was not directed at raising
revenue.  The uncontested evidence of the Minister is that the
exit charge was
part of the regulation directed at easing in the
dismantling of exchange controls.  The economy was on a better
footing and
could afford the export of some capital provided it was
not wholesale.  The charge or levy was expected to slow down the
extent
and the frequency of capital externalisation.
[56]
There are other factors that also point
away from revenue-raising.  The charge was imposed on a discrete
portion of the population.
[94]
Only those who had capital to externalise in
excess of R750 000 were to be affected.  Lesser amounts
were shielded from
the exit charge.  And, like an ordinary tax,
the payment was not voluntary.  Whilst there was no evidence of
the actual
or properly estimated costs of the regulatory scheme
related to the revenue raised, there was a close relationship between
the
regulatory charge and the persons being regulated.
[95]
The permission was granted against the payment of
a pre-set fee or charge.  It may be added that the exit fee was
not collected
through the normal machinery of collecting taxes.
[57]
The Supreme Court of Appeal was in error
when it concluded that the dominant purpose of the exit charge was to
raise revenue and
it had to be subjected to the requirements of
section 75 of the Constitution.
Was
the exit charge “calculated to raise revenue”?
[58]
Section 9(4) of the Act prescribes
preconditions for the validity of every regulation that was made
under this section that is “calculated
to raise revenue”
.
In its very words it provides:
“
The
Minister of Finance shall cause a copy of every regulation made under
this section to be laid upon the Table of both Houses
of Parliament
within fourteen days after the first publication thereof in the
Gazette
.
. . and if any such regulation is
calculated
to raise any revenue
, he shall cause to
be attached to the copy so laid upon the Table a statement of the
revenue which he estimates will be raised
thereby during the period
of twelve months after the coming into operation thereof.  Every
such regulation calculated to raise
any revenue shall cease to have
the force of law from a date one month after it has been laid on the
Table unless before that date
it has been approved by resolution of
both Houses of Parliament.”  (Emphasis added.)
[59]
Mr Shuttleworth argues that the exit charge
was calculated to raise revenue and since it did not comply with the
set procedural
pre-conditions of being tabled before Parliament with
estimated earnings attached, it was invalid.  To bolster this
argument
he sought to persuade us that “calculated” must
be read as “likely”
.
On this argument, a regulation under section 9(4)
need not be aimed at raising revenue.  It would be sufficient if
it were
only
likely
to
raise revenue.  Unsurprisingly, the Reserve Bank and the
Minister were adamant that the regulation which authorised the

imposition of the exit charge was not calculated to raise revenue.
They urged us to give “calculated” a meaning
that points
to a deliberate object or purpose to raise revenue.  They argued
that they could not have ascertained or known
beforehand how many
individuals in any one year would apply to take their capital out of
the country, or how much capital would
in fact be exported.
[60]
I have already found that the exit charge
did not have revenue-raising as its primary object.  It was not
calculated to raise
revenue.  It was directed at curbing or
discouraging export of capital.
[96]
I am not persuaded by the submission that
the wider import of the word “likely” is to be preferred
in this instance
over the ordinary meanings of “calculated”,
which include “intended”, “designed”,
“planned”,
or “considered”.
[97]
Section 9(4) of the Act is directed at
allowing Parliament to scrutinise fiscal measures that are planned or
designed to gather
income for the fiscus.  The section is not
directed at every administrative or regulatory levy, charge, fee, or
surcharge
found in ample legislation.
[61]
It is true that during its subsistence the
exit charge generated revenue of approximately R2.9 billion.  In
my view, that
garnering of income by the Treasury was incidental to
the dominant object of regulating and discouraging capital flight.
In
other words, the Minister was not required to follow the
procedure set out in section 9(4) of the Act before imposing an
exit
charge as a condition authorised by regulation 10(1)(c).
[62]
I merely point out that with the advent of
the Constitution, the procedural requirements of section 9(4) have
become anachronistic.
They have been superseded by the
Constitution.  If the exit charge was directed at raising
revenue and therefore was a national
tax, it would be hit by the
formalities for adopting a money Bill.  On the other hand, if
the exit charge was not calculated
to raise revenue and thus was not
akin to a money Bill, it would not have to comply with section 9(4).
Let it suffice to
note that sections 75 and 77 of the Constitution
have superseded the provisions of section 9(4) of the Act.  This
means
that a Bill that is “calculated to raise revenue”
by imposing a national tax must comply with the constitutional
requirements
for a money Bill.
Must
“every national revenue of whatever kind, tax or not”, be
raised only by original legislation
?
[63]
The starting point of the dissenting
judgment by my colleague Froneman J is that national revenue of
whatever kind, tax or not,
may be raised only by original legislation
passed by Parliament.
[98]
Only the manner of its implementation, not
the decision to raise it, may be regulated in delegated
legislation.
[99]
On this premise he concludes that the exit charge
of 10% is unconstitutional and invalid because it has raised revenue
for the national
government and yet it was not directly imposed by
Parliament.
[64]
This point of departure is overbroad.  It
is not consistent with the money Bills scheme of the Constitution nor
with domestic
and comparative judicial authority on imposition of
taxes.  Not every duty, levy, charge or surcharge that raises
national
revenue is a national tax.  Not every law that permits
the raising of national revenue is a money Bill.  That is plain

from the Constitution.  It sets money Bills apart from other
laws and imposes a distinct procedure for their passage.
This
is because there are indeed many other laws that themselves impose,
or authorise the Executive to impose, a myriad of charges
outside the
strictures of money Bill requirements.  In each case, as our and
other courts have often held, the primal question
is: what is the
dominant purpose of the revenue-raising law concerned?  To raise
revenue in order to fund the operations of
the State, or to regulate
behaviour or defray costs or advance another legitimate purpose?  I
have earlier sought to show
that here the charge or levy was expected
to slow down the extent and the frequency of capital
externalisation.  Revenue-raising
was a mere by-product of the
exit charge’s true purpose: regulation of the export of
capital.  The exit charge was therefore
not one which attracts
the definition of “money Bill”.
[65]
The second main plank of the dissent is
about delegation of legislative power.
[100]
It is that Parliament may only delegate
subordinate regulatory authority to the Executive and may not assign
plenary legislative
power to another body.  The
regulation-making power granted to the President in section 9(1) of
the Act effectively assigns
plenary legislative power to the
President.  That is constitutionally impermissible.
[66]
I do not agree that the legislative scheme
here assigns plenary legislative power to the President.  Even
though the Act predates
our constitutional modernism by more than 60
years it does not fall into that pitfall.  Section 9(1), in its
very words, provides
that the President “may make
regulations
in regard to any matter . . . relating to . . .
currency, banking or exchanges”.
[101]
There can hardly be argument that Parliament is
entitled to delegate subordinate legislation, and does so routinely,
in the form
of regulation-making to the Executive.  The
President made regulations and in regulation 10(1)(c) prohibited
the exportation
of capital except “in accordance with such
conditions as the [Minister] . . . may impose”.
[67]
The President has not delegated legislative
power.  His power is to regulate by imposing conditions for
export of capital.
To that end, the Minister set, amongst other
conditions, an exit charge.  The trail from the legislation to
the regulations
and to implementation is there.
[68]
But even if Parliament’s delegation
of regulatory authority to the President here is conspicuously
abundant, I consider that
its exceptional nature is warranted in the
field in which it occurs.  This case requires us to consider the
constitutional
validity of a statute vesting authority on the
President to regulate specifically the export of currency.  We
are not concerned
with the competence of an exercise of that power in
relation to banking or exchanges.  The authority at issue here
was exercised
by the promulgation of regulation 10(1)(c) which
prohibited, except subject to the Minister’s conditions, the
export of capital
from the Republic.
[69]
Capital exports have the capacity to drain
an economy of its lifeblood, and so to impact catastrophically on the
country’s
economic welfare.  The debate about how best to
regulate capital movement, whether by exchange controls, or their
absence,
is not before us.  For present purposes, capital
exports are of such singular concern to the country’s wellbeing
that
the Constitution vests special powers in the Reserve Bank.
It stipulates that the “Reserve Bank is the central bank
of the
Republic”,
[102]
whose primary object is to “protect the
value of the currency in the interest of balanced and sustainable
economic growth
in the Republic”.
[103]
The Constitution requires the Reserve Bank, in
pursuit of this primary object, to perform its functions
independently and without
fear, favour and prejudice, though there
must be regular consultation between the bank and the Executive.
[104]
[70]
That the Constitution affords an express
mandate for protecting the value of the currency demonstrates the
exceptional significance
of the issue.  Currency moves with
lightning speed.  Money has long ceased to be a hand-held
commodity or physical article
of trade for exchange purposes.
The internet and electronic communications enable it to be moved from
and between locations
and jurisdictions almost instantly.  Hence
the need for special regulation.  Hence also the need for
special amplitude
of regulatory power.  The nature of the power
the Act confers on the President to make regulations in regard to
currency is
unusually wide, but its unusual width meets the unusual
circumstance of the subject matter.
[71]
Implicit in the dissent is also that the
power of the Minister to implement the Regulations is impermissibly
wide.  Later,
I deal with this contention in relation to the
dicta
in
Dawood
.
[105]
It bears repetition that the Executive bears
a responsibility to secure a stable currency within a good and
prospering economy.
This duty is sufficiently exceptional, and
paramount, to warrant a broad power that allows the Executive to
respond to the uniquely
dynamic field of exchange control.  The
global financial crisis of 2007 is still fresh in many of our
memories, a testament
to the need for the ability to respond rapidly,
and guard against the potential negative impact of drastic market or
economic changes.
This is particularly true for vulnerable
economies such as ours.  It is on this basis that we recognise
the importance, indeed
the public interest, in permitting the
Executive to impose a limited charge on the export of capital.  To
regard the exit
charge as routine national revenue raising that must
count for tax is to miss a vital feature of this case.
[72]
The main appeal against the decision of the
Supreme Court of Appeal must succeed.
Leave to cross-appeal
[73]
Mr Shuttleworth asks for leave to
cross-appeal in order to impugn the constitutional validity of all or
some of the statutory scheme
that makes up the exchange control
system.  He asserts that he enjoys own and public interest
standing to mount the constitutional
attack.  The state parties
contest the claim that Mr Shuttleworth has standing in the
cross-appeal.  The High Court
held that he had sufficient
personal and public interest standing.
[106]
It reasoned that Mr Shuttleworth grew
up in Cape Town, accumulated the bulk of his wealth in South Africa
and he may perhaps
desire to return to South Africa.
Own
interest standing
[74]
I think that Mr Shuttleworth has own
interest standing in the cross-appeal, or at least those parts that
directly affect him, for
much the same reason that he is entitled to
resist the main appeal directed at upsetting an earlier judgment in
his favour.  The
interest extends to attacking the
constitutional validity of section 9(1) read together with regulation
10(1)(c).  The Minister
drew the power to impose the exit
conditions from these provisions.  If they were found to be
constitutionally offensive,
the exit charge would fall by the wayside
with them.  The Supreme Court of Appeal refused to entertain
even this limited constitutional
attack.  In the view I take,
Mr Shuttleworth has the requisite own interest standing and
should be granted leave to appeal
against the constitutional validity
of section 9(1) and regulation 10(1)(c).  Even though the merit
of the attack may be open
to some doubt, it is arguable.
Public
interest standing
[75]
Mr Shuttleworth also seeks leave to
mount a challenge to the constitutional validity of regulations 3(1),
3(3), 3(5), 10(1)(b),
18, 19(1) and 22.  The Supreme Court of
Appeal refused to entertain the challenge on the ground that it would
not be in the
interests of justice to do so.  It held that if it
were to make an order of invalidity, it would be in the abstract and
without
regard to its implications on people other than
Mr Shuttleworth and other considerations beyond the facts of the
present case.
That Court warned that its order would be without
a proper consideration of its effect on the exchange control regime
and
on the economy as a whole.
[76]
I agree with the Supreme Court of Appeal
that the challenge against the specified regulations would be
academic, hypothetical and
speculative.
[107]
Mr Shuttleworth has not demonstrated
how the claim of constitutional infringements would have a material
bearing on him and
others similarly situated.  He has not
pointed to any practical usefulness of the outcome he contends for.
He has not
placed before the Supreme Court of Appeal or this
Court any factual context within which to evaluate the constitutional
challenge.
This, I should note, is fatal to both aspects of
Mr Shuttleworth’s cross-appeal: the attempt to impugn
specific
provisions as well as the attempt to attack the entire
exchange control system.  Mr Shuttleworth has not shown that, in
the
cross-appeal, he was genuinely acting in the public interest or
that any of the people or groups affected by the exit charge may
not
be able to take up the challenge themselves.  It is needless to
add that the group he seeks to represent, being people
who are
desirous of externalising their wealth, may not be vulnerable or
crave for his intervention.
[77]
It is not in the interests of justice to
grant Mr Shuttleworth leave to cross-appeal against the decision of
the Supreme Court of
Appeal on the broad constitutional attack
against the Regulations.  This means I need not consider the
substance of the constitutional
attack.  Let it suffice to
remark that the specific provisions targeted by Mr Shuttleworth
are well and truly archaic
and may very well be at odds with the
tenets of our Constitution.  The state parties are nudged to
take appropriate steps
to review the provisions in issue.
Merits
of the cross-appeal
[78]
Mr Shuttleworth seeks to impugn
section 9(1) of the Act and regulation 10(1)(c).
Section 9(1) empowers the
President to make regulations on any
matter affecting or related to currency, banking or exchanges.
Relying on section 9(1),
in 1961, the President made,
amongst others, regulation 10(1)(c), which although extracted
above warrants repetition here.
It provides that:
“
[n]o
person shall, except with permission granted by the Treasury or by an
authorised dealer and in accordance with such conditions
as the
Treasury or the authorised dealer may impose—
. . .
(c)
enter into any transaction whereby capital or any right to capital is
directly or
indirectly exported from the Republic.”
[79]
The thrust of the attack is that the
section and regulation give the Minister broad discretionary powers
of the same kind that this
Court criticised in
Dawood.
[108]
That decision warned against broad discretionary
powers that may prejudice those who may be entitled to seek relief
from an adverse
decision arising from an open ended discretion.
We must however recognise that this Court’s treatment in
Dawood
of broad discretionary powers conferred
by legislation was measured and nuanced.  It did not hold all
wide legislative discretion
to be inconsistent with the
constitutional norm and invalid.  Let the judgment speak for
itself:
“
Discretion
plays a crucial role in any legal system.  It permits abstract
and general rules to be applied to specific and particular

circumstances in a fair manner.  The scope of discretionary
powers may vary.
At times, they
will be broad, particularly where the factors relevant to a decision
are so numerous and varied that it is inappropriate
or impossible for
the legislature to identify them in advance
.
Discretionary powers may also be broadly formulated where the
factors relevant to the exercise of discretionary power are

indisputably clear.  A further situation may arise where the
decision-maker is possessed of expertise relevant to the decisions
to
be made.”
[109]
(Emphasis added and footnote omitted.)
[80]
The High Court dismissed the contention and
held, correctly in my view, that South Africa’s “exchange
control system
requires a flexible, speedy and expert approach to
ensure that proper financial governance prevails”.
[110]
That Court stated that the exchange control system
may require a specific set of rules to be in place in specific
circumstances.
[111]
These circumstances can change at any time,
requiring an adaptation of the rules in place.  It stated that
it would be impossible
to lay down rules or set out factors in
advance, and held that regulation 10(1)(c) was valid.  It found
support in the dissertation
of Dr Anthon de Swardt, which stressed
the need for agility and speed in decision-making in order to respond
to domestic and global
currency trends and markets.
[112]
[81]
It would be difficult to find fault with
the reasoning of the High Court.  This is particularly so in
light of the history
and the purpose of the Act, and its exceptional
design in protecting the national currency.  It would be trying
to strike
a balance between providing guidelines while still ensuring
that flexibility and speedy governance are maintained.  The
complexity
of the exchange control system should not be understated.
I am not persuaded that the broad discretion under section 9(1)

and regulation 10(1)(c) offends
Dawood
or the Constitution.
[82]
The cross-appeal must fail.
Order
[83]
The following order is made:
1.
Leave to appeal is granted against the decision of the Supreme Court
of Appeal.
2.
Leave to cross-appeal is granted in relation to whether
section 9(1)
of the
Currency and Exchanges Act 9 of 1933
, and regulation 10(1)(c)
of the Exchange Control Regulations, are constitutionally valid.
3.
Leave to cross-appeal against the decision of the Supreme Court of
Appeal is
otherwise refused.
4.         The main appeal is
upheld.
5.
The order of the Supreme Court of Appeal in paragraphs 2(i)-(iii) is
set aside.
6.
Mr Shuttleworth’s application before the High Court is
dismissed.
7.
The cross-appeal is dismissed.
8.
There is no order as to costs.
FRONEMAN J:
[84]
I have had the pleasure of reading the
judgment of Moseneke DCJ (main judgment).  I agree that leave to
appeal should be granted
to the applicants (the Reserve Bank and the
Minister) and that leave to cross-appeal should be granted to the
first respondent
(Mr Shuttleworth) in relation to the constitutional
validity of section 9(1) of the Currency and Exchanges Act
[113]
(Exchanges Act) and regulation 10(1)(c) of the
Exchange Control Regulations
[114]
(Regulations).  There, unfortunately, our
ways must part.  The appeal should, in my view, be dismissed and
the cross appeal
should succeed to the extent that section 9 of
the Exchanges Act should be declared inconsistent with the
Constitution and invalid.
[85]
Briefly stated, my reasons for disagreement
are these:
(a)
The exit charge of 10% raised revenue for the national government.
(b)
National revenue of whatever kind, tax or not, may only be raised by
original legislation
passed by Parliament.  Only the manner of
its implementation, not the decision to raise it, may be regulated in
delegated
legislation.
(c)
Parliament may only delegate subordinate regulatory authority to the
Executive and may not
assign plenary legislative power to another
body.  The regulation-making power granted to the President in
section 9(1) of
the Exchanges Act effectively assigns plenary
legislative power to the President.  That is constitutionally
impermissible.
(d)
Even if national revenue could be validly raised by delegated
legislation, the power to
do so may not be further sub-delegated.
(e)
If it was nevertheless possible to sub-delegate the power to raise
national revenue, this
power was not sub-delegated to the Minister in
section 9(1) of the Exchanges Act.
(f)
If there was, somehow, still a proper sub-delegation to the Minister,
it could only
be a sub-delegation of the same power, namely to
legislate.  In other words, the Minister could only impose the
exit charge
by way of legislation.  He did not do so.
(g)
For any of the reasons set out in (b) to (f), the Minister’s
imposition of the exit
charge by announcement in Parliament was
constitutionally invalid.
[86]
Before dealing with each of these reasons
more fully I need to state the fundamental concern underlying them
all.
[87]
At first glance Mr Shuttleworth’s
case hardly seems to fit with the more apparent transformational
aspirations of the Constitution.
He is a privileged person who
has generated considerable wealth whilst living here.  Having
acquired that wealth he then chose
to go and live elsewhere and
attempted to take all of his money out of the country.  So what,
then, is wrong with asking him
to leave a relatively small part of
that behind in South Africa through the imposition of the exit
charge?
[88]
The answer is that there is nothing wrong
with it, as long as it is done in accordance with the Constitution.
Quite ironically,
that is where Mr Shuttleworth’s case
meets with the transformation that the Constitution demands: the
eradication of executive
legislation by decree.  The main
judgment vividly describes the historical context that gave rise to
the Exchanges Act and
Regulations.  However, in that exposition,
it is important not to lose sight of the less worthy aims the use of
this method
of regulation, namely executive legislation by decree,
sought to achieve in our former legal landscape.  One
unfortunate example
of this, described by this Court as probably the
“most notorious”,
[115]
was the provision in the Native Administration
Act
[116]
that decreed the then Governor-General to be the
“Supreme Chief” of all so called “natives”.
In
more recent painful memory were the emergency regulations
promulgated in the 1980s that gave wide discretionary powers to the
Executive
to detain people without trial.  Litigation about the
validity of these regulations gave rise to a case that Professor Cora

Hoexter describes as “representing the lowest point of our
pre-democratic jurisprudence”.
[117]
[89]
The Constitution, as discussed below, has
set itself against this kind of executive rule by decree under the
guise of delegated
legislation.  It requires plenary legislation
to be passed by the Legislature, not the Executive.  This
ensures that
the fundamental democratic values of accountability,
responsiveness and openness are realised.  That is part of the
Constitution’s
transformative aim.
[90]
The essential point of difference I have
with the main judgment is that, in my view, only Parliament may
decide to raise national
revenue and may not leave that choice to the
Executive, in this case the Minister.  That is a protection that
both Mr Shuttleworth
and those less affluent than he are equally
entitled to under the law.
[118]
The main judgment does not approach the matter
from this perspective and thus does not consider this to be a
transformational issue.
From my perspective, however, it is.
My general concern is that there should never be a reason for
legislation by executive
decree to be acceptable in one instance, but
not in another.
The exit charge raised
national revenue
[91]
It is common cause that the 10% exit charge
accrued to the national government and was paid into the National
Revenue Fund.
[119]
The exit charge thus raised national revenue.
Only Parliament may
decide to raise national revenue
[92]
Much of the debate in argument centred on
whether the exit charge amounted to a tax, levy, duty or surcharge
for the purpose of
qualifying as a money Bill in terms of section 77
of the Constitution.  The underlying premise appeared to be that
only taxes,
levies, duties or surcharges were capable of raising
national revenue for the government, and this could only be done by
way of
the money Bill procedure under section 77.  The
concomitant implication was that non-tax national revenue need not be
legislated
for by Parliament and may be raised by delegated
legislation or even by a policy decision of the Minister, as the main
judgment
appears to find.  But neither the unarticulated premise
nor its apparent implication withstands scrutiny.
[120]
[93]
I know of no legal basis by which
government may raise national revenue other than by legislation
passed in Parliament.  Money
Bills may not deal with any other
matter except a subordinate matter incidental to the appropriation of
money or the imposition
of taxes, levies, duties or surcharges.
[121]
However, there is no prohibition that regulatory
legislation passed by Parliament may not include provisions raising
revenue through
the imposition of duties, levies, charges,
registration fees or licences.  There are many statutes that do
that.
[122]
The money Bill procedure is thus only applicable
to tax revenue raising legislation.  Legislation that raises
non-tax revenue
need not follow that procedure.  It does not
follow that non-tax revenue may be raised by non-legislative means,
thereby bypassing
Parliament.
[94]
The main judgment considers this departure
point to be “overbroad”.  It does not, however,
refer to any authority
where the decision to raise non-tax revenue
was not done in the enabling legislation itself.  All of the
South African cases
to which it refers relate to legislation that
authorised the raising of revenue of some kind.
[123]
The same applies to every one of the foreign cases
to which reference is made.
[124]
And the “raft of pre- and post-Constitution
legislation that routinely authorises the Executive to impose fees,
tariffs, levies,
duties, charges and surcharges”
[125]
all authorise the raising of the different kinds
of revenue in the legislation itself and do not leave the making of
that original
decision to subordinate legislation.
[126]
A further example of the clear distinction made
between the decision to authorise the raising of non-tax revenue in
the original
legislation and the imposition of other conditions is
the section that formed the subject-matter for the decision of this
Court
in
Affordable Medicines
.
[127]
[95]
So perhaps there is a simpler explanation
than over-broadness for the principle that the decision to raise
revenue of whatever kind,
tax or not, may only be done in original
legislation passed by Parliament.  Judging from past practice,
the principle appears
to have been regarded as obvious.
[96]
In
Fedsure
this Court stated that when a legislature
exercises the power to raise taxes or rates, “it is exercising
a power that under
our Constitution is a power peculiar to elected
legislative bodies”.
[128]
The
Fedsure
statement
should, however, be wider: namely that all revenue raised for the
State must be done under a power “peculiar to
elected bodies”.
[97]
Fedsure
was
not concerned with what is at issue here, namely whether the exit
charge amounts to taxation, but there are sound reasons for
holding
that whenever revenue is raised for the State, be it a tax or not, it
should be done by the Legislature.  In the case
of national
revenue, this means that it must be done by Parliament.
[98]
The first reason is that the Constitution
requires that all money received by the national government must be
paid into the National
Revenue Fund, except money reasonably excluded
by an Act of Parliament.
[129]
No distinction is made between revenue raised as a
tax and revenue that does not amount to taxation.  And, as we
have seen,
the money Bill procedure does not preclude the raising of
other revenue by regulatory parliamentary legislation.
[99]
The second is that the principle of “no
taxation without representation” is not premised on a technical
legal meaning
of “taxation”.  The rationale for the
principle is accountability to the people when the government seeks
to exact
money from them to raise income or revenue for the State.
It matters little to citizens whether the money the State takes
from
them is technically a “tax” or “duty” or
“exit charge”.  What does matter is that
they should
have their democratic say, through elected representatives in
Parliament, in approving the decision to raise revenue
that will
accrue to the State in an open, transparent and accountable way.
The eloquent words in paragraph 42 of the main
judgment are as
applicable to raising non-tax revenue as they are to tax revenue.
We are talking about an estimated R2.9 billion
raised as revenue
for the State by the exit charge.  And if it is accepted that
this charge of 10% was constitutionally valid,
that implies that it
would also have been valid if it was double, treble or even more than
that, all without parliamentary accountability.
That cannot be.
[100]
If the main judgment is correct that
section 9(4) of the Exchanges Act does not authorise the raising of
non-tax revenue, then the
Act contains no authorisation at all to do
so.
[130]
Without that authorisation, there is no
constitutionally valid basis for raising the revenue through
subordinate legislation made
by the Executive.
[101]
If, however, section 9(4) does authorise
raising non-tax revenue, its provisions were not complied with and
the appeal must fail
for that reason.  The main judgment finds
that the procedure envisaged in the section cannot co-exist with the
money Bill
procedure in the Constitution.
[131]
I do not agree.  Regulatory legislation that
authorises the raising of non-tax revenue does not fit the strictures
of a pure
money Bill.  It is salutary and necessary for the
purposes of accountability and open and responsive government that
our democratically
elected representatives should know to what extent
money is to be taken from the people who voted for them.  The
main judgment
may make similar provisions in other existing laws
constitutionally invalid.
Subordinate regulatory
authority or plenary legislative power?
[102]
The Constitution vests national legislative
authority in Parliament.
[132]
The National Assembly may assign any of its
legislative powers, except the power to amend the Constitution, to
any other legislative
body in another sphere of government.
[133]
The Minister is part of the executive arm of
government.
[103]
In
Ynuico
an argument was raised that these constitutional
provisions precluded the delegation of legislative powers to the
Executive, but
the argument was not accepted because the location and
source of the exercise of the legislative power in that case was
delegated
and exercised before the Constitution came into the
picture.
Ynuico
left
open the issue of what the case would be when the power was delegated
before the Constitution came into power “but wielded
later than
that date”.
[134]
That is the kind of situation now before us.
[104]
In respect of the relevant statutory
provision before the Court in
Ynuico
,
Didcott J commented:
“
Section
2(1)(b) and the ensuing notice were products of an era when the reign
of Parliament was subject substantively to no constitutional

discipline or control.  In exercising the sovereignty which it
thus enjoyed Parliament could competently confer on a Minister
or
somebody else whatever legislative powers it chose to assign to him,
including plenary ones, and it did so not infrequently.
Of the
instances that spring to mind the most notorious was probably the
occasion when the Native Administration Act 38 of 1927
appointed the
Governor-General as the ‘Supreme Chief’ of those whom it
called ‘natives’ and equipped him
with a power to
legislate for them which was virtually absolute.  That provision
has become a dead letter by now and will
no doubt be removed from the
statute book in due course.  Still active there, however, are
plenty of others less anachronistic
which authorised the delegation
of legislative power in terms quite as broad as and no less
consequential than the ones of section 2(1)(b).”
[135]
[105]
In
Executive
Council, Western
Cape
Legislature
[136]
this Court (per Chaskalson P) held that
Parliament may delegate subordinate regulatory authority to other
bodies:
“
In
a modern State detailed provisions are often required for the purpose
of implementing and regulating laws and Parliament cannot
be expected
to deal with all such matters itself.  There is nothing in the
Constitution which prohibits Parliament from delegating
subordinate
regulatory authority to other bodies.  The power to do so is
necessary for effective law-making.  It is implicit
in the power
to make laws for the country and I have no doubt that under our
Constitution Parliament can pass legislation delegating
such
legislative functions to other bodies.
There
is, however, a difference between delegating authority to make
subordinate legislation within the framework of a statute under
which
the delegation is made, and assigning plenary legislative power to
another body
”
.
[137]
(Emphasis added.)
[106]
Section 9(1) of the Exchanges Act provides:
“
The
[President] may make regulations in regard to any matter directly or
indirectly relating to or affecting or having any bearing
upon
currency, banking or exchanges.”
[107]
The rest of section 9 extends the
President’s powers.  In terms of section 9(2)(a),
regulations may provide the
President with the power to “apply
any sanctions . . . which he thinks fit to impose, whether civil or
criminal”.
In plain language, that means that the
President may, within his discretion, create law which may include
civil penalties and criminal
offences.
[108]
In terms of section 9(3) the President may
by regulation—
“
suspend
in whole or in part this Act or any other Act of Parliament or any
other law relating to or affecting or having any bearing
upon
currency, banking or exchanges, and any such Act or law which is in
conflict or inconsistent with any such regulation shall
be deemed to
be suspended in so far as it is in conflict or inconsistent with any
such regulation”.
Simply put, that means that
the President may make regulations that suspend not only the
Exchanges Act itself, but any other law
that has anything to do with
currency, banking or exchanges.
[109]
If section 9(4) meant that the President’s
powers to make regulations that raised any revenue were subject to
parliamentary
oversight, it might have allowed for an argument that
his power to do so was regulatory, not plenary.  But the main
judgment
finds that this section applies only to revenue raised as a
tax.  Revenue raised otherwise is thus not subject to
parliamentary
oversight.  The effect of this is that it may be
raised without any national legislative framework as its guide.
It
amounts to the assignment of a plenary legislative power to raise
national revenue as long as the revenue raised does not amount
to
taxation.
[110]
The Regulations may, in terms of section
9(5)(a), provide powers to other persons “to make orders and
rules” for any
of the purposes for which the President may make
regulations under section 9(1).  Section 9(6) sets out the
National Treasury’s
powers to deal with foreign currency
applications by way of electronic devices or documents and has no
bearing on the President’s
power to make regulations under
section 9(1).
[111]
It is difficult to conceive of a more
comprehensive divesting of legislative power from Parliament to the
Executive than what is
contained in section 9 of the Exchanges
Act.
[138]
Take it away and what remains of the Exchanges Act
is a hollow shell.  If the interpretation given to section 9(4)
in the main
judgment is accepted, it means that the President may,
except for raising taxes, in his discretion legislate by way of
regulation
about anything relating to currency, banking or exchanges
without constraint.  That amounts to assigning plenary
legislative
power to him.  The Constitution does not allow that,
no matter how important the regulation of international finance may
be.
[139]
[112]
It is clear that the Exchanges Act provides
no substantive framework within which the President must exercise
these extraordinary
powers.  The only substantive provision in
the Act, apart from section 9, is section 2: it deals with the
repayment of contractual
loans by payment in South Africa’s
legal tender.
[113]
The main judgment refers to a general
statement in
Dawood
that
not all wide legislative discretion is inconsistent with the
constitutional norm and invalid.
[140]
It must be remembered, however, that this general
statement did not save the relevant legislation from constitutional
invalidity
in
Dawood
.
Of particular relevance here is this paragraph:
“
We
must not lose sight of the fact that rights enshrined in the Bill of
Rights must be protected and may not be unjustifiably infringed.
It
is for the Legislature to ensure that, when necessary, guidance is
provided as to when limitation of rights will be justifiable.
It
is therefore not ordinarily sufficient for the Legislature merely to
say that discretionary powers that may be exercised
in a manner that
could limit rights should be read in a manner consistent with the
Constitution in the light of the constitutional
obligations placed on
such officials to respect the Constitution.  Such an approach
would often not promote the spirit, purport
and objects of the Bill
of Rights.  Guidance will often be required to ensure that the
Constitution takes root in the daily
practice of governance.  Where
necessary, such guidance must be given.
Guidance
could be provided either in the legislation itself or, where
appropriate, by a legislative requirement that delegated legislation

be properly enacted by a competent authority.
”
[141]
(Emphasis added.)
And earlier:
“
The
foregoing discussion assists in determining the interpretation of the
relevant provisions that would best ‘promote the
spirit,
purport and objects of the Bill of Rights’.  In the case
of the statutory discretion at hand, there is no provision
in the
text providing guidance as to the circumstances relevant to a refusal
to grant or extend a temporary permit.  I am
satisfied that, in
the absence of such provisions, it would not promote the spirit,
purport and objects of the Bill of Rights for
this Court to try to
identify the circumstances in which the refusal of a temporary permit
to a foreign spouse would be justifiable.
Nor
can we hold in the present case that it is enough to leave it to an
official to determine when it will be justifiable to limit
the right
in the democratic society contemplated by section 36.  Such an
interpretation, of which there is no suggestion in
the Act, would
place an improperly onerous burden on officials, which in the
constitutional scheme should properly be borne by
a competent
legislative authority.
Its
effect is almost inevitably that constitutional rights . . . will be
unjustifiably limited in some cases
.”
[142]
(Emphasis added.)
[114]
In these statements by this Court, lies a
complete answer to the exceptionalism claimed for the legality of the
executive power
to legislate without legal constraint by way of
regulations under section 9(1).  This applies even more strongly
for sub delegating
the power to the Minister to exercise it by
way of policy.
In any event, no
sub-delegation
[115]
If it is assumed, for the purposes of this
part of the judgment, that section 9(1) of the Exchanges Act allows
the President to
decide by way of subordinate legislation that
revenue should be paid into state coffers,
[143]
one then has to find something in the Act, not the
Regulations, that gives the Minister the power to do the same.
There is
nothing.
[116]
There is a common law presumption against
sub-delegation, expressed in the Latin maxim
delegatus
delegare non potest
.
[144]
This maxim is based on the assumption that where
the Legislature has delegated powers and functions to a subordinate
authority,
it intended
that
authority to exercise those powers and functions,
not someone else.
[145]
That presumption is strengthened where “[p]owers
that have far-reaching consequences” like “lawmaking or
‘legislative’”
powers are at stake.
[146]
To make legislation that would normally fall
within the domain of Parliament is certainly far-reaching.
[117]
There is nothing in the Exchanges Act that
authorises sub-delegation of the President’s powers under
section 9(1) to make
legislation by way of regulations.  The
closest it comes to this is in section 9(5)(a), which provides that—
“
[a]ny
regulations made under this section may provide for the empowering of
such persons as may be specified therein to make orders
and rules for
any of the purposes for which the [President] is by this section
authorized to make regulations.”
[118]
Whatever “orders and rules” may
entail, they can only be subordinate to the already subordinate
legislative powers granted
to the President in terms of
section 9(1).  The power to make orders and rules is in
addition to and is circumscribed
under the power to make
regulations.  They cannot be in substitution of or as an
alternative to the President’s powers
under that section.
[119]
The applicants did not rely on any
provision of the Exchanges Act in support of the Minister’s
sub-delegated power to legislate
for the exit charge.  For that
they relied on the Regulations made under the authority of section
9(1) of the Act, more particularly
regulation 10(1)(c):
“
No
person shall, except with permission granted by the Treasury . . .
and in accordance with such conditions as the Treasury . .
. may
impose—
. . .
(c)
enter into any transaction whereby capital or any right to capital is
directly or
indirectly exported from the Republic.”
[120]
But jumping to the regulation itself begs
the question whether the Exchanges Act authorises the sub-delegation
of the kind of legislative
powers granted to the President under
section 9(1) to the Minister.  Before even getting to the
question whether revenue-generating
powers may be granted by a
subordinate delegation in the form of imposing “such conditions
as the Treasury may impose”,
one must ask whether the
sub-delegation is authorised by the provisions of the Act.  And,
as we have seen, it is not.
Sub-delegation of
legislative power into non-legislative power?
[121]
Finally, on the assumption that the
President’s legislative power under section 9(1) could be
validly sub-delegated to
the Minister, did the Minister exercise that
legislative power properly?  The answer, again, is no.  The
Minister exercised
no legislative power and, on the authority of
Dawood
,
that is the only kind of power that he could legitimately have
exercised.
[147]
[122]
Legislation must be contained in a
legislative instrument that must be promulgated before the law
commences its operation.
[148]
No legal instrument containing the details
of the exit charge was ever promulgated or gazetted.
Raising revenue by
policy determination?
[123]
The main judgment finds that the Minister’s
decision took the form of a narrow policy formulation directed at
implementing
legislation and was, unlike a broad or political policy
formulation, subject to administrative review.
[149]
It should be obvious that I do not agree that
revenue may be raised by way of policy formulation, wide or narrow.
And if it
was policy, it was rigid, which makes it susceptible to
review for fettering discretion.
[150]
Conclusion
[124]
For these reasons I would dismiss the
appeal with costs and grant the cross appeal declaring section 9
of the Exchanges Act
constitutionally invalid, with costs, including
the costs of two counsel.
For the First
Applicant:

J J Gauntlett SC, N G D Maritz SC and E Muller instructed by
Knowles Husain Lindsay Inc.
For the Second
Applicant:

P M M Mtshaulana SC, L Gcabashe and S M F Gumede instructed by the
State Attorney.
For the First
Respondent:

G Marcus SC, M Chaskalson SC and K Hofmeyr instructed by Glyn
Marais Inc.
For the Second
Respondent:

L T Sibeko SC and A L Platt instructed by the State Attorney.
[1]
Thomas Jefferson (1743-1826) was the third
President of the United States of America from 1801 to 1809.
One of the first
acts of his administration was the reduction of
taxes, in particular whiskey excises and federal internal taxes.
See for
example Wood
Empire of Liberty:
A History of the Early Republic
,
1789-1815
(Oxford
University Press, Oxford 2009).
[2]
Jefferson “A Bill for Establishing
Religious Freedom” (1779) in Kurland and Lerner (eds)
The
Founders’ Constitution
(University
of Chicago Press, Chicago 1987) at 77.  As to the quote’s
potency, no fewer than ten United States Supreme
Court decisions
cite this quote, the earliest being
Everson
v Board of Education
330 US 1
(1947) at 13 and 28, and most recently
Johanns
v Livestock Marketing Association
[2005] USSC 4016
;
544
US 550
(2005) at 572.
[3]
Justice Holmes (1841-1935) was, to say the least,
a remarkable man: wounded in war, lecturer at Harvard University,
Supreme Court
Justice in 1902, and prolific protector of America’s
First Amendment right to free speech.  See for example Novick
Honourable Justice: The Life of Oliver
Wendell Holmes
(Little, Brown and
Company, Boston 1989) and Frankfurter “Mr. Justice Holmes and
the Constitution: A Review of His Twenty-Five
Years on the Supreme
Court” (1927) 41
Harvard Law
Review
121.
[4]
The origins of this oft-quoted remark are
elusive.  See for example Bittker “Pervasive Judicial
Doctrines in the Construction
of the Internal Revenue Code”
(1978) 21
Howard Law Journal
693
at 697.  That being said, the quote does
appear to at least accurately reflect Justice Holmes’
sentiments, if not
his precise diction.  See for example
Compania General De Tabacos De
Filipinas v Collector of Internal Revenue
275
US 87
(1927) at 100, in which he held that “[t]axes are what
we pay for civilized society”.
[5]
Mitchell
Gone with
the Wind
(Macmillan Publishers, 1936)
at 471.
[6]
See for example Kindleberger
The
World in Depression, 1929-1939
(University
of California Press, Berkley 1986) at 2.
[7]
9 of 1933 (Act).
[8]
Section 9(1) of the Act provides that the
President—
“
may
make regulations in regard to any matter directly or indirectly
relating to or affecting or having any bearing upon currency,

banking or exchanges.”
This case concerns solely
the power to make regulations bearing on currency.  It does not
concern banking or exchanges.
[9]
De Swardt
Exchange
Control in the South African Criminal Law
(LLD
dissertation, University of Pretoria, 1996) (
De
Swardt
) at 18-9.
[10]
Exchange Control Regulations, GN R1111
GG
Extraordinary 123, 1 December 1961.
[11]
Regulation 1 of the Regulations provides:
“‘
Treasury’,
in relation to any matter contemplated in these regulations, means
the Minister of Finance”.
[12]
This is common practice.  As but a few
examples over the last twenty years, these circulars have:
prohibited authorised dealers
from allowing the transfer of funds to
any private or public entity in Iraq (Exchange Control Circular No.
D.7 of 6 April 1995);
permitted authorised dealers to allow
transfers of up to R10 000 to missionaries outside of South
Africa (Exchange Control
Circular D.213 of 1 April 1998); provided
special arrangements for the payment of study costs incurred by
parishioners of the
Church of Scientology (Exchange Control Circular
No 3 of 2005); and prohibited authorised dealers from allowing a
South African
resident to purchase foreign exchange for the purpose
of participating in a lottery organised abroad (Exchange Control
Circular
No 11 of 2010).
[13]
See Exchange Control Circular No. D.375 of 26
February 2003 at [15] below.
[14]
Id.  See also the Minister’s Answering
Affidavit in the High Court at para 61.
[15]
Exchange Control Circular No. D.375 of 26
February 2003.
[16]
Shuttleworth v South African Reserve Bank and
Others
[2013] ZAGPPHC 200;
[2013] 3
All SA 625
(GNP) (High Court judgment).
[17]
Section 9(4) of the Act provides:
“
The
Minister of Finance shall cause a copy of every regulation made
under this section to be laid upon the Table of both Houses
of
Parliament within fourteen days after the first publication thereof
in the
Gazette
.
. . and if any such regulation is calculated to raise any revenue,
he shall cause to be attached to the copy so laid upon the
Table a
statement of the revenue which he estimates will be raised thereby
during the period of twelve months after the coming
into operation
thereof.  Every such regulation calculated to raise revenue
shall cease to have the force of law from a date
one month after it
has been laid on the Table unless before that date it has been
approved by resolution of both Houses of Parliament.”
[18]
High Court judgment at paras 64-9.
[19]
Id
at para 168.
[20]
Id at para 164.  Section 9(3) of the Act provides that the
President—
“may . . .
suspend in whole or in part this Act or any other Act of Parliament
or any other law relating to or affecting
or having any bearing upon
currency, banking or exchanges, and any such Act or law which is in
conflict or inconsistent with
any such regulation shall be deemed to
be suspended in so far as it is in conflict or inconsistent with any
such regulation.”
[21]
High Court judgment at para 175.
[22]
Dawood and Another v Minister of Home Affairs
and Others; Shalabi and Another v Minister of Home Affairs and
Others; Thomas and
Another v Minister of Home Affairs and Others
[2000] ZACC 8
;
2000 (3) SA 936
(CC);
2000 (8)
BCLR 837
(CC) (
Dawood
)
at paras 52-6, where this Court held that it is necessary for
Parliament to provide guidelines where discretionary powers limit

fundamental rights.
[23]
High Court judgment at para 81.
[24]
Id
at para 96.
[25]
Rule 10(a) of the Orders and Rules under the
Exchange Control Regulations, GN R1112, 1 December 1961,
as amended up
to GN R577
GG
30051, 13 July 2007, provides:
“
Persons
who desire information or advice on exchange or currency matters
governed by the regulations or who require approval or
permission in
respect of exchange, currency or gold transactions so governed,
should apply to the Exchange Control through their
bankers in the
Republic or, if they have no such bankers, through one of the banks
referred to in [these Orders and Rules].”
[26]
High Court
judgment at para 49.
[27]
Shuttleworth v South African Reserve Bank and
Others
[2014] ZASCA 157
;
2015 (1) SA
586
(SCA) (Supreme Court of Appeal judgment).
[28]
Section 75 of the Constitution provides:
“
(1)
When the National Assembly passes a Bill other than a Bill to which
the procedure
set out in section 74 and 76 applies, the Bill must be
referred to the National Council of Provinces and dealt with in
accordance
with the following procedure:
(a)
The Council must—
(i)
pass the Bill;
(ii)
pass the Bill subject to amendments proposed by it; or
(iii)
reject the Bill.
(b)
If the Council passes the Bill without proposing amendments, the

Bill must be submitted to the President for assent.
(c)
If the Council rejects the Bill or passes it subject to amendments,

the Assembly must reconsider the Bill, taking into account any
amendment proposed by the Council, and may—
(i)
pass the Bill again, either with or without amendments; or
(ii)
decide not to proceed with the Bill.
(d)
A Bill passed by the Assembly in terms of paragraph (c) must be

submitted to the President for assent.
(2)
When the National Council of Provinces votes on a question in terms

of this section, section 65 does not apply; instead—
(a)
each delegate in a provincial delegation has one vote;
(b)
at least one third of the delegates must be present before a vote

may be taken on the question; and
(c)
the question is decided by a majority of the votes cast, but if

there is an equal number of votes on each side of the question, the
delegate presiding must cast a deciding vote.”
[29]
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.”
[30]
Supreme Court of Appeal judgment at para 31.
[31]
Id at para 29.
[32]
Id at para 32.
[33]
Id at para 36.
[34]
Section 25(1) of the Constitution provides that—
“
[n]o
one may be deprived of property except in terms of law of general
application, and no law may permit arbitrary deprivation
of
property.”
[35]
Section 33(1) of the Constitution provides that—
“
[e]veryone
has the right to administrative action that is lawful, reasonable
and procedurally fair.”
[36]
See section 75 of the Constitution above n 28.
See also section 77(1)(b) of the Constitution above n 29.
[37]
See
Independent
Electoral Commission v Langeberg Municipality
[2001]
ZACC 23
;
2001 (3) SA 925
(CC);
2001 (9) BCLR 883
(CC) at para 11, in
which this Court held that we have “a discretion to decide
issues on appeal even if they no longer
present existing or live
controversies.  That discretion must be exercised according to
what the interests of justice require.”
[38]
See [8] above.
[39]
See above n 17.
[40]
See above n 8.
[41]
Oudekraal Estates (Pty) Ltd v City of Cape
Town and Others
[2004] ZASCA 48
;
[2004] 3 All SA 1
(SCA) (
Oudekraal
).
[42]
MEC for Health, Eastern Cape and Another v
Kirland Investments (Pty) Ltd t/a Eye and Lazer Institute
[2014]
ZACC 6
;
2014 (3) SA 481
(CC);
2014 (5) BCLR 547
(CC) (
Kirland
).
[43]
Dawood
above n
22.
[44]
Supreme Court of Appeal judgment at para 33.
[45]
Permanent Secretary, Department of Education
and Welfare, Eastern Cape and Another v Ed-U-College (PE) (Section
21) Inc
[2000] ZACC 23; 2001 (2) SA 1
(CC); 2001 (2) BCLR 118 (CC).
[46]
Id at para 18.  This accords with what this
Court similarly said in relation to the difference between
formulation of policy,
and implementation of policy, the latter of
which does not improperly venture into the territory of policy
creation.  In
particular, this Court in
Minister
of Defence and Military Veterans v Motau and Others
[2014]
ZACC 18
;
2014 (5) SA 69
(CC);
2014 (8) BCLR 930
(CC) at paras 37-8
held that—
“
[e]xecutive
powers are, in essence, high-policy or broad direction-giving
powers.  The formulation of policy is a paradigm
case of a
function that is executive in nature. . . .  By contrast,
‘[a]dministrative action is . . . the conduct
of the
bureaucracy . . . in carrying out the daily functions of the state’.
. . .  Administrative powers are in this
sense generally
lower-level powers, occurring after the formulation of policy. . .
.  Put differently, the exercise of administrative
powers is
policy brought into effect, rather than its creation.
In
determining the nature of a power, it is helpful to have regard to
how closely the decision is related to the formulation of
policy, on
the one hand, or its application, on the other.  A power that
is more closely related to the formulation of policy
is likely to be
executive in nature and, conversely, one closely related to its
application is likely to be administrative.”
(Footnotes
omitted.)
[47]
Regulation 22E of the Regulations provides:
“(1)
The Minister of Finance may delegate to any person any power or
function
conferred upon the Treasury by any provision of these
regulations or assign to any such person a duty imposed thereunder
to the
Treasury.
(2)
The Treasury shall not be divested of any power or function or duty

delegated to any person under subregulation (1) and may at any time
withdraw or amend any decision taken by any such person in
the
exercise or performance of the power or function or duty in
question.”
[48]
As was held in
Oudekraal
above n 41 at para 26:
“
Until
the Administrator’s approval (and thus the consequences of the
approval) is set aside by a court in proceedings for
judicial review
it exists in fact and it has legal consequences that cannot simply
be overlooked.  The proper functioning
of a modern State would
be considerably compromised if all administrative acts could be
given effect to or ignored depending
upon the view the subject takes
of the validity of the act in question.  No doubt it is for
this reason that our law has
always recognised that even an unlawful
administrative act is capable of producing legally valid
consequences
for so long as the
unlawful act is not set aside
.”
(Emphasis added.)
This approach was then
endorsed by this Court in
Kirland
above n 42 at para 101:
“
The
essential basis of
Oudekraal
was
that invalid administrative action may not simply be ignored, but
may be valid and effectual, and may continue to have legal

consequences, until set aside by proper process.”
[49]
Section 77(1)(b) of the Constitution above n 29.
[50]
Section 77(1)(a) of the Constitution above n 29.
[51]
Section 77(1)(c) of the Constitution above n 29.
[52]
Section 77(1)(d) of the Constitution above n 29.
[53]
See above n 28.
[54]
Section 55(1)(b) of the Constitution provides:
“
In exercising
its legislative power, the National Assembly may . . . initiate or
prepare legislation,
except money
Bills
.”  (Emphasis added.)
[55]
Section 73(2)(a) of the Constitution provides, in
relevant part, that—
“
only the
Cabinet member responsible for national financial matters may
introduce . . . a money Bill”.
[56]
Section 77(2) of the Constitution provides:
“
A
money Bill may not deal with any other matter except—
(a)
a subordinate matter incidental to the appropriation of money;
(b)
the imposition, abolition or reduction of national taxes, levies,

duties or surcharges;
(c)
the granting of exemption from national taxes, levies, duties or

surcharges; or
(d)
the authorisation of direct charges against the National Revenue

Fund.”
[57]
Supreme Court of Appeal judgment at para 31.
[58]
Fedsure Life Assurance Ltd and Others v
Greater Johannesburg Transitional Metropolitan Council and Others
[1998] ZACC 17
;
1999 (1) SA 374
(CC);
1998 (12) BCLR 1458
(CC), particularly paras 44-5.
[59]
Re Eurig Estate
[1998]
2 SCR 565
, particularly para 30.
[60]
For a brief spattering of examples, see: Tax
Administration Act 28 of 2011 (section 1 defines a “tax”
as any “tax,
duty, levy, royalty, fee, contribution, penalty,
interest and any other moneys imposed under a tax Act”);
Municipal Fiscal
Powers and Functions Act 12 of 2007 (section 1
defines a “municipal tax” as “a tax, levy or
duty”); Customs
and Excise Act 91 of 1964 (section 1 defines a
“customs duty” as any duty leviable under that Act, and
“surcharge”
as “any duty leviable under Part 4 of
Schedule 1”); and Estate Duty Act 45 of 1955 (section 2(1)
provides that an
estate duty shall be “charged, levied and
collected” on the estate of every deceased person).
[61]
Section 1
of the
Municipal Fiscal Powers and
Functions Act defines
a “surcharge” as a “charge
in excess of the . . . base tariff”.
[62]
Certification of the Constitution of the Republic of South
Africa, 1996
[1996] ZACC 26; 1996 (4) SA 744 (CC); 1996 (10)
BCLR 1253 (CC).
[63]
Id at para 421.
[64]
Minister of Finance and Another v Paper Manufacturers Association
of South Africa
[2008] ZASCA 86
; 2008 (6) SA 540 (SCA)
(
Paper Manufacturers
).
[65]
Section 77(3) of the Constitution provides:
“
All
money Bills must be considered in accordance with the procedure
established by section 75.  An Act of Parliament
must
provide for a procedure to amend money Bills before Parliament.”
[66]
Soon after the
Paper
Manufacturers
decision, the
Legislature enacted the
Money Bills Amendment Procedure and Related
Matters Act 9 of 2009
, complying with this constitutional
imperative.
[67]
Paper Manufacturers
above
n 64 at para 17.
[68]
Central African Services (Pty) Ltd and Another
v Minister of Transport and Another
[2013]
ZAGPPHC 549 (
Cross-Border
).
This High Court decision, on a separate point, was appealed to this
Court and the decision was handed down with the citation
Cross-Border Road Transport Agency v
Central African Road Services (Pty) Ltd and Another
[2015]
ZACC 12.
This is why the High Court decision has been referred
to as
Cross-Border
.
[69]
Cross-Border
id at para 45.
[70]
See for example Municipal Fiscal Powers and
Functions Act 12 of 2007 (the purpose of which is, in part, “to
provide for
the authorisation of taxes, levies and duties that
municipalities may impose under section 229(1)(b) of the
Constitution”);
Diamond Export Levy Act 15 of 2007 (which in
section 2 imposes a levy, to be paid into the National Revenue Fund,
when anyone
delivers a bill of entry for export of an unpolished
diamond); Skills Development Levies Act 9 of 1999 (which in section
3 requires
employers to pay a levy to the Commissioner for the South
African Revenue Service in certain circumstances); Customs and
Excise
Act 91 of 1964 (which allows the Commissioner for the South
African Revenue Service to levy various customs and excise duties
and surcharges); Estate Duty Act 45 of 1955 (which imposes “an
estate duty upon the estates of deceased persons”,
calculated
in accordance with section 4A); and Transfer Duty Act 40 of 1949
(which permits, in section 2, a levy to be imposed
for the benefit
of the National Revenue Fund when property valued above R600 000
is acquired by way of a transaction).
[71]
Lawson v Interior Tree Fruit and Vegetable
Committee of Direction
[1931] SCR 357
at 362-3.
[72]
Westbank First Nation v British Columbia Hydro
and Power Authority
[1999] 3 SCR 134
(
Westbank
)
at paras 24-8.
[73]
Nyambirai v National Social Security and
Another
1996 (1) SA 636
(ZS);
1995 (9)
BCLR 1221
(ZS) at 642C-J and 643A-C.
[74]
Attorney-General (NSW) v Collector of Customs
(NSW)
[1908] HCA 28
;
(1908) 5 CLR 818
, in which the
High Court of Australia held, at 848-9, that—
“
the
word ‘tax’ and its plural ‘taxes’ are not
words of invariable signification indicating any exercise
whatever
of the power of taxation; they are not infrequently used to denote a
particular species of imposition, in contra-distinction
to duties,
and to duties of various kinds. . . . The word must be looked at in
relation to its surroundings, it must be considered
with respect to
the object of the clause in which it stands, and the results which
would flow from one construction or the other”.
[75]
Rodgers v United States
138
F 2d 992
(6th Cir 1943) at 994;
United
States v Stangland
[1957] USCA7 105
;
242 F 2d 843
(7th Cir 1957) at 848;
South
Carolina ex rel. Tindal v Block
[1983] USCA4 1309
;
717 F
2d 874
(4th Cir 1983) at 887; and
Emerson
College v Boston
391 Mass 415
(1983)
at 424-5.
[76]
National Federation of Independent Businesses
v Sebelius
132 S Ct 2566
(2012)
(
Sebelius
)
at 2595.
[77]
The legislation is properly called the Patient
Protection and Affordable Care Act of 2010.
[78]
Sebelius
above n
76 at 2595, citing
Nelson v Sears,
Roebuck & Co.
312 US 359
(1941) at
363.
[79]
The Canadian Supreme Court, for example, in
Westbank
above
n 72 held, at para 30, that:
“
[a]lthough
in today’s regulatory environment, many charges will have
elements of taxation and elements of regulation, the
central task
for the court is to determine whether the levy’s primary
purpose is, in pith and substance: (1) to tax . .
. (2) to finance
or constitute a regulatory scheme . . . or (3) to charge for
services directly rendered”.
[80]
Sebelius
above n 76 at 2596, citing
Sonzinsky v United
States
[1937] USSC 68
;
300 US 506
(1937) at 513.
[81]
Permanent Estate and Finance Co Ltd v
Johannesburg City Council
1952 (4) SA
249 (W).
[82]
Id at 259.
[83]
Israelsohn v Commissioner for Inland Revenu
e
1952 (3) SA 529 (A).
[84]
Id at 539F-G.
[85]
The Master v I L Back and Co Ltd and Others
1983 (1) SA 986 (A).
[86]
Id at 1002-3.
[87]
Maize Board v Epol (Pty) Ltd
[2008]
ZAKZHC 99; 2009 (3) SA 110 (D).
[88]
Id at para 27.
[89]
Gaertner and Others v Minister of Finance and
Others
[2013] ZACC 38
;
2014 (1) SA 442
(CC);
2014 (1) BCLR 38
(CC) (
Gaertner
).
[90]
Id at para 54.
[91]
Id at para 55.
[92]
Id at paras 54-5.
[93]
De Swardt
above
n 9 at 480-1.
[94]
See for example the Australian decision of
Leake
v Commissioner of Taxation (State)
(1934)
36 WALR 66
at 67, in which it was said that it is a
“distinguishing feature of a tax . . . that it is a compulsory
contribution,
imposed by [government] on, and required from,
the
general body of subjects or citizens
,
as distinguished from isolated levies on individuals”.
(Emphasis added.)
[95]
See
Westbank
above n 72 at para 24, in which the Supreme Court
of Canada held that—
“
[t]he
factors to consider when identifying a regulatory scheme include the
presence of: (1) a complete and detailed code of regulation;
(2) a
specific regulatory purpose which seeks to affect the behaviour of
individuals; (3) actual or properly estimated costs
of the
regulation; and (4)
a relationship
between the regulation and the person being regulated
,
where the person being regulated either causes the need for the
regulation, or benefits from it.”  (Emphasis added.)
See also
620 Connaught
Ltd v Canada (Attorney General)
[2008] 1 SCR 131
at 24-36 (for a
discussion of the four factors outlined in
Westbank
in
distinguishing between regulatory charges and taxes), and
particularly paras 34-6 (for a discussion of the “fourth

criterion . . . a relationship between the regulation and the person
being regulated”).
[96]
See above at [53].
[97]
In support of this interpretation of “calculated”
meaning “likely”, Mr Shuttleworth cites
American
Chewing Products Corporation v American Chicle Company
1948
(2) SA 736
(A) at 741;
The State v
Nokwe and Others
1962 (3) SA 71
(T) at
74; and
Amoils v Johannesburg City
Council
1943 TPD 386
at 389.
However, this is not the ordinary meaning.  The Supreme Court
of Appeal recently said in
AM Moolla
Group Ltd and Others v The Gap Inc and Others
[2004]
ZASCA 112
;
[2005] 3 All SA 101
(SCA) at para 7 that this unusual
interpretation of “calculated” is “especially
confusing . . . because
it has a
special meaning in trademark law
”
only.
(Emphasis added.)
[98]
Dissenting judgment at [85].
[99]
Id.
[100]
Id.  See also [99] to [101].
[101]
Emphasis added.
[102]
Section 223 of the Constitution.
[103]
Section 224(1) of the Constitution.
[104]
Section 224(2) of the Constitution.
[105]
See discussion of
Dawood
below at [79].
[106]
High Court
judgment at para 127-8, citing
Ferreira v Levin NO and Others
[1995] ZACC
13
;
1996 (1) SA 984
(CC);
1996 (1) BCLR 1
(CC) (
Ferreira
).
[107]
See
Ferreira
id
at paras 163-5, and in particular para 199 in which this Court said
that it “deals with situations or problems that have
already
ripened or crystallised, and not with prospective or hypothetical
ones”.
[108]
Dawood
above n
22.
[109]
Id at para 53.
[110]
High Court judgment at para 81.
[111]
Id at para 82.
[112]
Id at paras 14-5.
[113]
9 of 1933.
[114]
GN 1111
GG
45,
1 December 1961.
[115]
Ynuico Limited v Minister of Trade and
Industry and Others
[1996] ZACC 12
;
1996 (3) SA 989
(CC);
1996 (6) BCLR 798
(CC) (
Ynuico
)
at para 7.
[116]
38 of 1927.
[117]
Hoexter
Administrative
Law
2 ed (Juta & Co Ltd, Cape Town
2013) at 270 fn 110, referring to
Staatspresident v
United Democratic Front
1988 (4) SA
830
(A).  See also Haysom and Plasket “The War Against
Law: Judicial Activism and the Appellate Division” (1988) 4
SAJHR
303.
[118]
Compare
Biowatch
Trust v Registrar, Genetic Resources
[2009]
ZACC 14
;
2009 (6) SA 232
(CC);
2009 (1) BCLR 1014
(CC) at para 17.
[119]
At [23] and Supreme Court of Appeal judgment at
paras 31-3.
[120]
The starting point of this judgment (i.e. that
national revenue of whatever kind may only be raised by legislation)
did not form
the main focus of Mr Shuttleworth’s attack.
However, it is a point of law properly raised and causes the parties

no material prejudice as it can be dealt with on the papers.
In
CUSA v Tao Ying Metal Industries and
Others
[2008] ZACC 15
;
2009 (2) SA 204
(CC);
2009 (1) BCLR 1
(CC) at para 68 this Court stated:
“
Where
a point of law is apparent on the papers, but the common approach of
the parties proceeds on a wrong perception of what
the law is, a
court is not only entitled, but is in fact also obliged,
mero
motu
, to raise the point of law and
require the parties to deal therewith.  Otherwise, the result
would be a decision premised
on an incorrect application of the
law.  That would infringe the principle of legality.”
(Footnote omitted.)
[121]
Section 77 of the Constitution reads:
“
(1)
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.
(2)
A money Bill may not deal with any other matter except—
(a)
a subordinate matter incidental to the appropriation of money;
(b)
the imposition, abolition or reduction of national taxes, levies,

duties or surcharges;
(c)
the granting of exemption from national taxes, levies, duties or

surcharges; or
(d)
the authorisation of direct charges against the National Revenue

Fund.
(3)
All money Bills must be considered in accordance with the procedure

established by section 75.  An Act of Parliament must provide
for a procedure to amend money Bills before Parliament.”
[122]
See, among others,
sections 12
,
13
,
23
and
52
of
the
Companies Act 71 of 2008
; section 10 of the Electricity
Regulation Act 4 of 2006;
section 5
of the
Electronic Communications
Act 36 of 2005
; and
section 34
of the
South African Boxing Act 11 of
2001
.
[123]
Most recently, in
Gaertner
and Others v Minister of Finance and Others
[2013]
ZACC 38
;
2014 (1) SA 442
(CC);
2014 (1) BCLR 38
(CC), this Court
discussed the customs and excises imposed by the Customs and Excise
Act 91 of 1964.
Permanent Estate
and Finance Co Ltd v Johannesburg City Council
1952
(4) SA 249
(W) dealt with an ordinance authorising the payment of an
endowment.
Israelsohn v
Commissioner for Inland Revenu
e
1952
(3) SA 529
(A) involved a dispute about taxes imposed by the Income
Tax Act 31 of 1941.
The Master
v I L Back & Co Ltd and Others
1983
(1) SA 986
(A) dealt with section 15(1)(g) of the Companies Act 61
of 1973, which allowed fees to be imposed.  In
Maize
Board v Epol (Pty) Ltd
[2008] ZAKZHC
99
;
2009 (3) SA 110
(D), the Durban and Coast Local Division of the
High Court dealt with the Marketing Act 59 of 1968, which allowed
for the imposition
of levies.
[124]
Westbank First Nation v British Columbia Hydro
and Power Authority
[1999] 3 SCR 134
dealt with whether the indigenous Westbank First Nation could impose
taxes in by-laws, and whether those by-laws were constitutionally

inapplicable to a provincial utility.  In
Rodgers
v United States
138 F 2d 992
(6th Cir
1943), the Sixth Circuit Court of Appeals stated:
“
The
section of the Act in question provides in substance that any farmer
who markets cotton in excess of his farm quota shall
be subject to
penalties measured at a rate per pound.”
A similar situation (i.e.
a penalty imposed by legislation) was before the Seventh Circuit
Court of Appeals in
United States v Stangland
[1957] USCA7 105
;
242 F 2d 843
(7th Cir 1957).
Under examination in
South
Carolina ex rel. Tindal v Block
[1983] USCA4 1309
;
717 F 2d 874
(4th Cir 1983) was
a congressional amendment to the Agriculture Act of 1949 which
allowed the Secretary of the United States
Department of Agriculture
a discretion to deduct 50 cents from the proceeds of commercial milk
sales.  In
Emerson College v Boston
391 Mass 415
(1983)
the city of Boston was authorised to impose a charge for fire
protection in terms of section 30 of chapter 190 of the

Massachusetts General Laws (1982).
More recently, in
National
Federation of Independent Businesses v Sebelius
132 S Ct 2566
(2012), the Supreme Court of the United States of America considered
a “shared responsibility payment” imposed by
the Patient
Protection and Affordable Care Act of 2010 (commonly known as
ObamaCare
).
In
Lawson v Interior
Tree Fruit and Vegetable Committee of Direction
[1931] SCR 357
the Supreme Court of Canada considered a legislative provision which
authorised a Committee of Direction to impose levies on
products for
the purpose of defraying operation expenses (section 10(k) of the
Produce Marketing Act of British Columbia (1926-27)).
Closer to home, in
Nyambirai v National Social Security and Another
1996 (1) SA
636
(ZS);
1995 (9) BCLR 1221
(ZS) the Supreme Court of Zimbabwe
considered a constitutional validity challenge to the imposition of
a pension fund contribution
by legislation.
[125]
At [46].
[126]
The purpose of the Municipality Fiscal Powers and
Functions Act 12 of 2007 referred to in the main judgment is “[t]o
regulate
the exercise by municipalities of their power to impose
surcharges on fees for services provided under section 229(1)(a)
of the Constitution; to provide for the
authorisation of taxes, levies and duties that municipalities may
impose under section
229(1)(b)
of
the Constitution; and to provide for matters connected therewith”.
Clearly the power to impose these charges is
derived from the
Constitution itself, and this Act merely serves to regulate the
exercise of that power.
The
Diamond Export Levy
Act 15 of 2007
does not grant a power to impose a levy but, rather,
imposes the levy itself under
section 2.
Section 3
then sets
out the rate of the levy (which is used in the calculation of the
levy imposed in each case according to the formula
set out in
section 2).
Similarly,
section 3
of the
Skills Development
Levies Act 9 of 1999
imposes a levy on employers.  There is no
power conferred on a functionary.  Section 2(1) of the Estate
Duty Act 45
of 1955 imposes the estate duty, and the manner in which
such duty is to be calculated is dealt with in section 4A of that
Act.
The purpose of the Customs
and Excise Act is “[t]
o provide for the
levying of customs and excise duties and a surcharge; for a fuel
levy, for a Road Accident Fund levy, for an
air passenger tax and an
environmental levy; the prohibition and control of the importation,
export, manufacture or use of certain
goods; and for matters
incidental thereto”.  Again we see the Act authorising
the imposition of the levy by the Commissioner
(in section 2(1),
where the Commissioner is tasked with the administration of the
Act).
Lastly,
section 2(1)
of the
Transfer Duty
Act 40 of 1949
imposes a levy on the transfer of property over a
certain value.  Here, again, the levy is imposed by the Act
itself.  Interestingly,
however, section 2(2) provides:
“
The
Minister of Finance may announce that, with effect from a date
mentioned in that announcement—
(a)
the rate of transfer duty contemplated in subsection (1) will be

reduced to the extent mentioned in the announcement; or
(b)
there will be a change in the provision of this Act that will have

the effect that the acquisition of or the renunciation of any
interest in or restriction upon a certain class of property will
no
longer be subject to transfer duty.”
The Act therefore provides
for changes to take effect by an announcement by the Minister;
however, this is restricted to reductions
in the levy, and does not
include the actual imposition thereof (which is authorised by the
Act) or an increase.
What is lacking in the
current case, in particular in regulation 10(1)(c), is the direct
imposition of the exit charge (such as
we see in the Diamond Levy
Export Act, for example) or the explicit authority to impose the
charge (such as in section 229 of
the Constitution, read with the
Municipality Fiscal Powers and Functions Act).
[127]
Affordable Medicines Trust and Others v
Minister of Health and Another
[2005]
ZACC 3
;
2006 (3) SA 247
(CC);
2005 (6) BCLR 529
(CC) (
Affordable
Medicines
).
Section
22C(1)(a)
of the
Medicines and Related Substances Act 101 of 1965
,
at issue in that case, reads:
“
Subject
to the provisions of this section—
(a)
the Director-General may on application in the prescribed manner
and
on payment of the prescribed fee issue to a medical practitioner,
dentist, nurse or other person registered under the Health

Professions Act, 1974, a licence to compound and dispense medicines,
on the prescribed conditions”.
[128]
Fedsure Life Assurance Ltd and Others v
Greater Johannesburg Transitional Metropolitan Council and Others
[1998] ZACC 17
;
1999 (1) SA 374
(CC);
1998 (12) BCLR 1458
(CC) (
Fedsure
)
at para 45.
[129]
Section 213(1).
[130]
Section 9(4) of the Exchanges Act reads:
“
The
Minister of Finance shall cause a copy of every regulation made
under this section to be laid upon the Table of both Houses
of
Parliament within fourteen days after the first publication thereof
in the
Gazette
,
if Parliament is in ordinary session during the whole of that
period, and if Parliament is not in ordinary session during the

whole of that period, then within fourteen days after the beginning
of the next ordinary session of Parliament; and if any
such
regulation is calculated to raise any revenue, he shall cause to be
attached to the copy so laid upon the Table a statement
of the
revenue which he estimates will be raised thereby during the period
of twelve months after the coming into operation thereof.

Every such regulation calculated to raise any revenue shall cease to
have the force of law from a date one month after it has
been laid
on the Table unless before that date it has been approved by
resolution of both Houses of Parliament.”
[131]
At [62].
[132]
Sections 43 and 44.  Parliament is comprised
of the National Assembly and the National Council of Provinces.
[133]
Section 44(1)(a)(iii) of the Constitution.
[134]
Ynuico
above n
115 at para 5.
[135]
Id at para 7.
[136]
Executive Council, Western Cape Legislature,
and Others v President of the Republic of South Africa and Others
[1995] ZACC 8
;
1995 (4) SA 877
(CC);
1995 (10) BCLR 1289
(CC) (
Executive
Council, Western Cape Legislature
).
[137]
Id at para 51.
[138]
A comparable example is section 3(1) of Public
Safety Act 3 of 1953, now mercifully repealed:
“
The
Governor-General may in any area in which the existence of a state
of emergency has been declared under section
two
,
and for as long as the proclamation declaring the existence of such
emergency remains in force, by proclamation in the
Gazette
,
make such regulations as appear to him to be necessary or expedient
for providing for the safety of the public, or the maintenance
of
public order and for making adequate provision for terminating such
emergency or for dealing with any circumstances which
in his opinion
have arisen or are likely to arise as a result of such emergency.”
Do we really want to
countenance this kind of executive rule by decree again?
[139]
At [68] to [71] the main judgment carves out the
delegation in issue here on the basis of the exceptional nature of
the power
vested in the President to regulate the export of currency
and the need to protect the economy.  In this context, the
legislative
framework in which the Reserve Bank was created and
operates is relevant.  Section 223 of the Constitution provides
that
the central bank of South Africa is the Reserve Bank and that
it will be governed by an Act of Parliament.  Section 225 then

provides:
“
The
powers and functions of the [Reserve Bank] are those customarily
exercised and performed by central banks, which powers and
functions
must be determined by an Act of Parliament and must be exercised or
performed subject to the conditions prescribed
in terms of that
Act.”
The
Act of Parliament envisioned in these sections is the
South African
Reserve Bank Act 90 of 1989
.  The long title provides that the
purpose of the Act is to consolidate all laws relating to the
Reserve Bank and the monetary
system of South Africa.  Section
3 of the Act sets out its primary objective:
“
The
primary objective of the [Reserve] Bank shall be to protect the
value of the currency of the Republic in the interest of balanced

and sustainable economic growth in the Republic.”
What is evident in this
exposition is that although the Constitution explicitly recognises
the importance of protecting the value
of the currency, in order to
fulfil its crucial function in the South African economy, the
Reserve Bank must exercise its powers
in terms of an Act of
Parliament.  Therefore, if there is a policy decision to be
made in this case, it is one that ought
to be made at the level of
the Reserve Bank (to whom this duty of protection was entrusted in
the Constitution) and in terms
of empowering legislation.
Therefore, a carve-out in respect of the Executive does not assist
the applicants.  A policy
decision of the sort envisioned in
the main judgment must still be authorised in an Act of Parliament.
[140]
Dawood and Another v Minister of Home Affairs
and Others; Shalabi and Another v Minister of Home Affairs and
Others; Thomas and
Another v Minister of Home Affairs and Others
[2000] ZACC 8
;
2000 (3) SA 936
(CC);
2000 (8) BCLR 837
(CC) (
Dawood
)
at para 53, referred to at [71] and [79].
[141]
Dawood
id at
para 54.
[142]
Id at para 50.
[143]
It is common cause that the proceeds of the exit
charge had to be paid into the National Revenue Fund as “money
received
by the national government” under section 213(1) of
the Constitution.
[144]
Literally translated, this means that a delegate
cannot delegate.
[145]
AAA Investments (Pty) Ltd v Micro Finance
Regulatory Council and Another
[2006]
ZACC 9
;
2007 (1) SA 343
(CC);
2006 (11) BCLR 1255
(CC) (judgment of
Langa CJ) at para 81;
Minister of Home
Affairs and Others v Watchenuka and Another
[2003]
ZASCA 142
;
2004 (4) SA 326
(SCA) at para 34;
Rudolph
and Another v Commissioner for Inland Revenue and Others
[1997] ZASCA 23
;
1997 (4) SA 391
(SCA) at 396B;
Chairman, Board on Tariffs and Trade,
and Others v Teltron (Pty) Ltd
[1996]
ZASCA 142
;
1997 (2) SA 25
(A) at 34E-F; and
Attorney-General,
O.F.S. v Cyril Anderson Investments (Pty) Ltd
1965
(4) SA 628
(A) at 639C-D.
[146]
Hoexter above n 117 at 270 fns 108-13, in
particular the cases cited therein.
[147]
See [113] and [114].
[148]
See section 13(1) of the Interpretation Act 33 of
1957 and
Foodcorp (Pty) Ltd v Deputy
Director General, Department of Environmental Affairs and Tourism:
Branch Marine and Coastal Management
and Others
[2004]
ZASCA 100
;
2006 (2) SA 191
(SCA) at para 9.
[149]
At [35].
[150]
MEC for Education, Gauteng Province, and
Others v Governing Body, Rivonia Primary School and Others
[2013]
ZACC 34
;
2013 (6) SA 582
(CC);
2013 (12) BCLR 1365
(CC) at paras
54-6 and
National Lotteries Board and
Others v South African Education and Environment Project
[2011]
ZASCA 154
;
2012 (4) SA 504
(SCA) at para 9.