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• The Need For Legislation
• 3.1 Introduction
• 3.2 Lack Of Standing At Common Law
• 3.3 Section 7(4)(b) Of The Constitution, 1993 And The Courts
• 3.4 Lack Of Uniformity And Consistency
• 3.5 Conclusion

CHAPTER 3

THE NEED FOR LEGISLATION

3.1 Introduction

3.1.1 In the Working Paper the Commission recommended that public interest actions and class actions be introduced into South African law by way of an Act of Parliament.^[31] This recommendation went unchallenged. A related question of whether section 7(4)(b) of the Constitution, 1993 on its own adequately provided for class actions and public interest actions was also dealt with in the Working Paper.^[32] The Commission felt that it would also be necessary to introduce class and public interest actions into non-constitutional areas of the law by way of legislation. It was therefore implicit in the Commission’s recommendation that it should not be left only to the courts to develop the necessary principles and guidelines.

3.1.2 We still hold these views and believe there is urgent need for legislation. Except for one (a spokesperson for a corporation),^[33] all respondents agree that a special procedure should be provided for class actions and actions in the public interest. The Financial Services Board formulates the need for legislation of this kind in the following terms:

For consumer groups the benefit of class actions lies in the mass determination of numerous claims that otherwise would not have been adjudicated upon at all, especially in cases where the individual damage is not so large to justify the expense of litigation. Class actions can also eliminate most of the impediments in consumer litigation especially in terms of time, costs and the fear most consumers have of the courts or of litigating against large corporations. It could be said that class litigation provides a far greater amount of security to the individual consumer and the united force of a class presents a much greater threat to a manipulative corporation than any individual action. Class and public interest actions present defendants to such actions with a far greater threat, in terms of adverse publicity as well as the magnitude of the potential liability, than any separate action could pose.

3.1.3 In the Working Paper the Commission recommended that class actions and actions in the public interest be introduced by way of an Act of Parliament and not by way of secondary legislation in the form of rules of the court.^[34] However, the Commission also recommended that a uniform rule of court should complement the legislation.^[35] We did not receive any objections to this proposal.^[36]

3.1.4 Accordingly we recommend:

3.2 Lack of standing at common law

3.2.1 Traditionally only the party who has suffered a legal injury personally may approach the court for relief. This is still the case today. In general, in non-Bill of Rights issues, the litigant must satisfy the court that it has a direct and substantial interest in the subject matter of the litigation.^[37] Frequently it happens that an administrative body or a private organisation acts unlawfully, but no individual or organisation's interest is affected to such an extent that it qualifies as "sufficiently direct and substantial".^[38] This causes delays, prolongs the trial, inevitably increases legal costs, overburdens the judicial system, and generally impedes access to the courts.

3.2.2 The requirement of standing does not act as an effective filter for disputes that are futile, vexatious or otherwise inappropriate for litigation. Such a filter is provided by other laws^[39] and discretions available to the court.^[40]

3.3 Section 7(4)(b) of the Constitution, 1993 and the courts

3.3.1 Section 7(4)(b) of the Constitution, 1993 has, at least for purposes of enforcement of the Bill of Rights,^[41] profoundly changed the concept of legal standing. Chaskalson P, on behalf of the majority of the Constitutional Court, in Ferreira v Levin NO; Vryenhoek v Powell NO^[42] emphasised the amplification of standing that section 7(4)(b) has wrought:^[43]

The category of persons empowered to do so (that is, bring a constitutional matter to a competent court of law) is broader than the category of persons who have hitherto been allowed standing in cases where it is alleged that a right has been infringed or threatened, and to that extent the section demonstrates a broad and not a narrow approach to standing.

3.3.2 Section 38 of the new Constitution, 1996 retains the substance of section 7(4) of the Constitution, 1993 and does not take the matter any further. It reads as follows:

Anyone listed in this section has the right to approach a competent court, alleging that a right in the Bill of Rights has been infringed or threatened, and the court may grant appropriate relief, including a declaration of rights. The persons who may approach a court are -

(a) anyone acting in their own interest;
(b) anyone acting on behalf of another person who cannot act in their own name;
(c) anyone acting as a member of, or in the interest of, a group or class of persons;
(d) anyone acting in the public interest;
(e) an association acting in the interest of its members.

3.3.3 That both the old and new Constitutions provide for class actions and public interest actions in a constitutional context is clear. But it is equally clear that legislation will be necessary to give effect and meaning to these constitutional rights and to broaden the scope to non-Bill of Rights cases.^[44] Professor De Vos supports this contention in the following terms:^[45]

In view of the lack of adequate protection of collective interests under our traditional civil procedure model, the innovation under consideration must be hailed as a major development in the quest for effective access to justice for all in the new South Africa. Since the constitutional provisions only countenance these procedures in the context of the enforcement of the fundamental rights enshrined in the Constitution, the law commission rightly proposed ... that their scope should be extended by means of legislation to include other areas such as consumer and environmental issues.

3.3.4 It is important to realise that a person referred to in section 7(4)(b) of the Constitution, 1993 is accorded the right to apply to courts with jurisdiction to enforce the Bill of Rights^[46] and not any or every court.^[47]

3.3.5 Regrettably, section 7(4)(b) of the Constitution, 1993, (as well as section 38 of the Constitution, 1996) only permits the bringing of representative or class actions in circumstances where a right in the Bill of Rights has been infringed or threatened. These sections did not abolish the requirement of standing in non-Bill of Rights cases or in cases falling outside the realm of the Constitutions.^[48]

3.4 Lack of uniformity and consistency

3.4.1 It is always an option to leave the development of class actions and actions in the public interest to the courts.^[49] However, this development may take place haphazardly or not at all. It is also dangerous as is evident from the lack of uniformity and consistency of approach in the various divisions of the Supreme Court.

3.4.2 In the Contralesa-case,^[50] Pickering J held that the law, as it stands at present, does not permit the bringing of representative or class actions save in those circumstances specified in section 7(4) of the Constitution, 1993. He said:^[51]

In my view the facts of the Ahmadiyya and Natal Fresh Produce Growers' cases supra are analogous to those in the present application and the principles therein stated are applicable to the present matter. It is not alleged that the rights of traditional leaders in rural areas (whatever those rights might be) are being infringed by the proclamations issued by the respondents under the Transition Act because of their membership of Contralesa. Nor is it alleged that Contralesa organises, controls or administers the activities of traditional leaders in the execution of whatever duties may be imposed upon such leaders. ... As in the Ahmadiyya and Natal Fresh Produce Growers' cases supra, therefore, it has, at best, an indirect interest in the subject matter of the litigation. Traditional leaders who are members of Contralesa can claim relief in their own names, but applicant (Contralesa) cannot do so on their behalf by instituting what is in effect a representative action.

In my judgment therefore the applicant does not have locus standi.

3.4.3 The same judge remarked, obiter, in another case^[52] that there was much to be said for the view that in circumstances where the locus standi afforded to persons by section 7 of the Constitution, 1993 was not applicable and when a statute imposed an obligation upon the State to take certain measures to protect the environment in the interests of the public, then a body such as the Wildlife Society should have standing at common law to apply for an order compelling the State to comply with its obligations in terms of such statute.

3.4.4 In order to manoeuvre their application into the Cape of Good Hope Provincial Division of the Supreme Court so as to escape the blocked routes in other divisions, and hoping to clutch on to the straw held out by the Wehmeyer decision,^[53] the applicants in Lifestyle Amusement Centre (Pty) Ltd v The Minister of Justice^[54] “stumbled on to what counsel referred to as a class action in section 7(4)(b)(iv) of the Constitution.” The applicants contended that the “class of interested persons” consisted of some two thousand casino owners. It was further argued that if one of the applicants established jurisdiction it is sufficient to clothe the remaining 1 999 applicants with locus standi. The Court held that the application was an abuse of the process of the Court. The application was accordingly dismissed with costs on a scale as between attorney and client. With regard to the class action the Court found that in order to qualify for the relief claimed, the applicants would have to explain how, why and in what manner they were so entitled.

3.4.5 In Ferreira v Levin NO; Vryenhoek v Powell NO^[55] the Constitutional Court held^[56] that a broad approach should be adopted to the issue of standing in constitutional cases. This is consistent with the mandate given to the Court to uphold the Constitution and serves to ensure that constitutional rights enjoy the full measure of the protection to which they are entitled.

3.4.6 In Port Elizabeth Municipality v Prut NO^[57] the municipality, into which certain areas formerly administered by black local authorities in terms of the Black Local Authorities Act 102 of 1982 had been incorporated, had for several reasons decided to write off R 63 million in outstanding service charges owed by residents of those areas in terms of that Act. The respondents were the administrators of a trust which was the owner of certain immovable property situated within the area administrated by the municipality. During 1994 the municipality had issued summons against the respondents claiming payment of R 9158, 00 in respect of arrear rates levied against the property in terms of the applicable municipal ordinance. The magistrate refused summary judgment and granted the respondents leave to defend the action. In the summary judgment proceedings the respondents raised a defence based on the alleged violation of their fundamental rights in terms of the Constitution, 1993. In particular it was alleged on behalf of the respondents that the recovery by the municipality of arrears levied against it constituted unfair discrimination because the municipality, by failing to write off the debt in a manner similar to the writing off of the amount of more than R 62 million, was unfairly discriminating against it.

3.4.7 For our purposes it is important to highlight the manner in which the court dealt with the issue of standing. The court held:^[58]

The result is that there seems to be no reason for denying the appellant standing, not only because it is acting in its own interest but also because it is acting in the public interest. In this regard it should be noted that it is clearly in the public interest to have clarity on whether the municipality’s decision to write off more than R 62 m discriminates unfairly against other service-charge debtors or ratepayers.

3.4.8 The Eastern Cape Division of the Supreme Court therefore reiterated that courts should be slow to refuse to exercise jurisdiction in terms of section 7(4) of the Constitution, 1993 where the question to be decided is in the public interest and may put an end to similar disputes.^[59] The Court further found that the mere allegation of an infringement of or threat to a right is sufficient to confer standing.

3.4.9 The broad approach of the Constitutional Court was adopted in Beukes v Krugersdorp Transitional Local Council^[60] by the Witwatersrand Local Division of the Supreme Court. In casu, the applicant sought a declaration that the Local Council’s conduct in not levying rates and taxes according to a uniform structure and in levying rates and taxes in two townships in its jurisdiction according to a fixed tariff, conflicted with the equality provisions^[61] of the Bill of Rights and with section 178(2) of the Constitution, 1993. He also sought a declaration that the Local Council was not entitled to claim more than the fixed rate paid by the residents of the townships from him or members of his class.

3.4.10 The applicant litigated in his personal capacity but also claimed to act in terms of section 7(4)(b)(iv) of the Constitution, 1993 as a member of or in the interest of a group or class of persons. The persons on whose behalf the applicant claimed to act appended their names, addresses and telephone numbers to a form at a public meeting. It was headed "List of group to class action" and beneath it appeared: "We, the undersigned, all ratepayers within the municipal area of Krugersdorp, hereby authorise Johannes Petrus Beukes to bring an application on our behalf ...". The signatories numbered some 120 but none attested to his or her details, and none joined in the proceedings as an applicant or deponent.

3.4.11 The Local Council, although conceding that it was no longer essential that a litigant bringing constitutional challenges has a direct and substantial interest in the right which formed the subject of the litigation, contended that it would be contrary to principle and logic not to require that the group or class of persons on whose behalf litigation was brought to have a direct and substantial interest in the litigation and that for that purpose it was essential that the group or class be accurately defined. The Court held that the broad approach adopted to standing by the Constitutional Court was not only appropriate to the Constitutional Court but to all Courts that were called upon to adjudicate constitutional claims and that such approach should be taken not only as to who qualified as having standing under section 7(4)(b) of the Constitution, 1993, but also as to how that standing might be evidenced.^[62]

3.4.12 The Court further held that in the present case the founding papers proceeded explicitly from the averment that the applicant as well as the listed persons lived in 'white areas' and that they were for that reason affected unfairly by the Local Council’s discriminatory policy. From that it seemed to be plain that the group or class of persons as a member of whom and in whose interest the applicant was acting were those ratepayers of Krugersdorp within the Local Council's authority who did not enjoy the benefit of 'flat rate' municipal charges.^[63]

3.4.13 The Court continued:^[64]

It would run counter to the spirit and purport of the interim Constitution to require that persons who identify themselves as members of a group or class as a member of whom and in whose interest a litigant acts, should reiterate with formalistic precision the complaint with which they associated themselves. Even more contrary to that spirit and purport would be to require that they attest to their status or that they put in affidavits joining in the litigation. ... no unnecessary restrictions should be placed on the application of s 7(4)(b)(iv), and ... it should be read so as to avoid obstructions on its invocation ...

3.4.14 The Court accordingly found that the applicant had sufficiently identified the class of persons in whose interest and as a member of whom he acted.

3.5 Conclusion

3.5.1 The Commission welcomes the liberalisation of standing in constitutional litigation. We do not, however, believe that this alone will facilitate the development of class actions and actions in the public interest in non-constitutional litigation. Legislation is necessary to ensure a balance between the opening of the doors of access to justice to the masses and flooding the gates with inappropriate or vexatious litigation.

^[31]See paragraph 6.1 of Working Paper 57.

^[32]Paragraph 1.11 of Working Paper 57. The question equally applies to section 38 of the new Constitution, 1996.

^[33] Mr DL Titlestad, the Manager: Legal Services, Anglo American Corporation.

^[34] See paragraph 6.1 of Working Paper 57.

^[35] See paragraph 6.14 of Working Paper 57.

^[36] See also De Vos 1996 (4) Journal of South African Law 643: “... this reasoning cannot be faulted, especially in the context of the new open and democratic dispensation in South Africa.”

^[37] P E Bosman Transport Works Committee and Others v Piet Bosman Transport (Pty) Ltd 1980 4 SA 801 (T) at 804 B-F. See also Dalrymple v Colonial Treasurer 1910 T.S. 372; United Watch and Diamond Co (Pty) Ltd v Disa Hotels Ltd 1972 4 SA 409 (C) at 415 B; Ahmadiyya AIIL (South Africa) v Muslim Judicial Council (Cape) 1983 4 SA 855 (C); Natal Fresh Produce Growers’ Association v Agroserve (Pty) Ltd 1990 4 SA 749 (N).

^[38] See also Padi v Botha NO 1996 3 SA 732 (W) where it was argued that the parents of two young persons who had been shot dead during police action did not have locus standi to bring an application to review the inquest proceedings.

^[39] Such as the Vexatious Proceedings Act 3 of 1956.

^[40] Such as a punitive cost order. See also Rule 33(8) of the Magistrate Court and Rules 6(15) and 23(2) of the Supreme Court.

^[41] Congress of Traditional Leaders of South Africa v Minister for Local Government, Eastern Cape 1996 2 SA 898 (TkA).

^[42] 1996 1 SA 984 (CC) par 167.

^[43] This approach is also evident in environmental cases. See, for instance, Van Huyssteen NO v Minister of Environmental Affairs and Tourism 1996 1 SA 283 (C) at 301G - 302E; Minister of Health and Welfare v Woodcarb (Pty) Ltd 1996 3 SA 155 (N). See also Wildlife Society v Minister of Environmental Affairs 1996 3 SA 1095 (TkSC) at 1105A-C where Pickering J remarked as followed: “[T]here is also much to be said for the view that, in circumstances where the locus standi afforded persons by s 7 of the Constitution is not applicable and where a statute imposes an obligation upon the State to take certain measures in order to protect the environment in the interests of the public, then a body such as the ... [Wildlife Society], should have locus standi at common law to apply for an order compelling the State to comply with its obligations in terms of such statute.”

^[44]See also Fudge 1987 (25) Osgoode Hall Law Journal 485; Grant 1996 (63) University of Chicago Law Review 239; Safranek 1996 (22) Wisconsin Law Review 263; Welch 1985 (43) University of Toronto Faculty of Law Review 204 on the possibilities of and limits to the use of constitutional litigation.

^[45]1996 (4) Journal of South African Law 641.

^[46]In other words, a competent court.

^[47]S v Saib 1994 2 BCLR 48 (D) at 55C - F; Bate v Regional Magistrate, Randburg 1996 7 BCLR 974 (W) at 984C - I.

^[48]Congress of Traditional Leaders of South Africa v Minister for Local Government, Eastern Cape 1996 2 SA 898 (TkA) at 905 E - H.

^[49]Loots 1987 (104) SALJ 148. See also Roberts v Chairman, Local Road Transportation Board (1) 1980 2 SA 472 (C); Dawnlaan Beleggings (Edms) Bpk v Johannesburg Stock Exchange 1983 3 SA 344 (W).

^[50]Contralesa v Minister for Local Government, Eastern Cape 1996 2 SA 898 (TkSC) at 903 A.

^[51]Contralesa v Minister for Local Government, Eastern Cape 1996 2 SA 898 (TkSC) at 905 E - H.

^[52]Wildlife Society v Minister of Environmental Affairs and Tourism 1996 3 SA 1095 (TkSC) at 1105 A- B.

^[53]Wehmeyer v Lane NO 1994 2 BCLR 14 (C). See also Japaco Investments (Pty) Ltd v Minister of Justice 1995 1 BCLR 113 (C); Cats Entertainment CC v Minister of Justice; Van der Merwe v Minister of Justice; Lucksters CC v Minister of Justice 1995 1 SA 869 (T).

^[54] 1995 1 BCLR 104 (C) at 110 C - D.

^[55] 1996 1 SA 984 (CC) at paras [162] - [164].

^[56] Per Chaskalson P, Mahomed DP, Didcott J, Langa J, Madala J, Mokgoro J, and Trengove AJ concurring. O’Regan J delivered a separate judgment holding that the applicants had standing in terms of section 7(4)(b)(v) of the Constitution, 1993 to challenge the constitutionality of the particular section in the Companies Act, 1973 in the public interest. Kriegler J dissented on the questions of jurisdiction and standing.

^[57] 1996 4 SA 318 (ECD). See also Walker v Stadsraad van Pretoria 1997 3 BCLR 416 (T) and Fedsure Life Assurance Ltd v Greater Johannesburg Transitional Metropolitan Council 1998 6 BCLR 671 (SCA).

^[58] At 325J - 326A.

^[59] Per Melunsky J at 325J.

^[60] 1996 3 SA 467 (W).

^[61] Sections 8(1) and (2) of the Constitution, 1993.

^[62] Per Cameron J at 474D-F.

^[63] At 474F-G.

^[64] At 474G-H/I.