CONSTITUTIONAL COURT OF SOUTH AFRICA
Case CCT 13/99
GERHARDUS FRANCOIS JANSE
VAN
RENSBURG NO First Applicant
OMEGA TRUST POWER MARKETING CC Second
Applicant
versus
MINISTER OF TRADE AND INDUSTRY NO First
Respondent
LOUISE ARLENE TAGER NO Second Respondent
Heard
on : 31 August 2000
Decided on : 29 September 2000
JUDGMENT
GOLDSTONE J:
Introduction
| [1] | These proceedings concern
the constitutionality of two provisions of the Consumer Affairs (Unfair Business
Practices) Act[1] (the Act). The
first is section 7(3) which authorises investigating officers appointed by the
Consumer Affairs Committee[2] (the
Committee) to conduct searches and seizures for the purpose of ensuring that the
terms of the Act are being observed, or to
obtain information relevant to an
investigation launched by the Committee. The second is section 8(5)(a) which
makes provision for
the Minister of Trade and Industry (the Minister), on the
recommendation of the Committee,
to: |
1. stay or prevent, for a period not exceeding six months, any unfair business
practice which is the subject of an investigation;
and
2. attach money or property related to an
investigation.
Both of these procedures are effected
by a notice issued by the Minister.
| [2] | On 26 October 1998, section
7(3) and section 8(5)(a) were declared to be constitutionally invalid by Van
Dijkhorst J in the Transvaal
High
Court.[3] The declaration was ordered
to take effect only from the date of confirmation by this Court. Further relief
claimed by the applicants
in respect of the constitutionality of the whole Act
or alternatively in respect of other provisions of the Act was denied. The
applicants were granted leave to appeal to the Supreme Court of Appeal (the SCA)
against such denial. |
| [3] | On 30 May 2000, when it
became apparent that the applicants had abandoned their appeal, these
confirmation proceedings were set down
and the registrar was requested to bring
directions relating to the hearing to the attention of the applicants and the
respondents.
That was done and the first applicant informed the director of
this Court telephonically on 7 July 2000 that neither he nor the
second
applicant would be participating in the confirmation proceedings. An
undertaking to confirm this in writing was not fulfilled.
In the circumstances
the Minister was the only party who participated in the hearing in this
Court. |
| [4] | Rule 15(1) of the rules of
this Court requires the registrar of a court that has made an order of
constitutional invalidity to lodge
a copy thereof with the registrar of this
Court within 15 days of such order. The registrar of the Transvaal High Court
was under
the impression that, as there was an appeal to the SCA, its registrar
would have the duty of lodging with this Court any order of
constitutional
invalidity that might be made by the SCA. That is clearly incorrect and the
order made in this case should have been
lodged by the registrar of the High
Court within 15 days of the order made by Van Dijkhorst
J. |
| [5] | The provisions for the
lodging of orders of constitutional invalidity with this Court are of
substantial importance. Public interest
dictates that there should be certainty
as to the constitutionality of all legislation, and one of the reasons for the
rule is that
the operation of such orders should not be held in abeyance for
longer than necessary. The registrar of any court that has made
an order of
constitutional invalidity should thus adhere strictly to the provisions of rule
15(1). |
| [6] | On 21 August 2000, ten days
prior to the hearing of this matter, the Law Review Project (the LRP), a
non-profit association which
promotes the free participation by all persons in
the economy, sought leave to be admitted as an amicus curiae and to make
representations in support of the order of constitutional invalidity. The
director of this Court referred the LRP to
the provisions of rule 9 of the rules
of this Court and advised it to seek the consent of the Minister to its
admission as an amicus
curiae.[4] The LRP approached the
state attorney but received no response prior to the hearing of the matter.
When the matter was called,
Mr Tee, on behalf of the LRP, sought leave for its
admission as an amicus despite the failure to comply with the provisions
of rule 9. Had the applicants been represented in the appeal, the leave sought
by the LRP may well have been denied. The fact that the LRP had not been aware
of these proceedings until shortly before 21 August
2000, and the absence of
argument in support of the order of constitutional invalidity, constituted
exceptional circumstances. Moreover,
counsel for the Minister indicated that he
was ready to deal with the arguments of the amicus and did not oppose the
application. We thus agreed to admit the LRP as an amicus curiae and to
hear oral argument from its counsel. |
The
Proceedings in the High Court
| [7] | The first applicant is a
trustee of the second applicant. According to him, the business of the second
applicant is to market the
Omega Trust, an organisation which aims to promote
consumer power by means of collective bargaining. It is not necessary, for the
purposes of this judgment, to consider the method of business adopted by the
second applicant. Suffice it to say that, after conducting
an informal
investigation into the business of the second applicant, the Committee decided
to launch a formal investigation under
section 8(1)(a) of the Act to determine
whether the business of the second applicant constituted what was then called a
“harmful
business
practice”.[5] Thereupon the
applicants launched urgent proceedings in the High Court in which they sought an
order declaring the whole Act or
specific provisions thereof to be
constitutionally invalid. Although the powers of the Committee under sections
7(3) and 8(5) of
the Act had not been used or threatened, the applicants feared
that they would be used against them. The learned judge in the High
Court held
that their fear was reasonable and that they had standing to claim the relief
they sought. After considering the attacks
made by the applicants against the
Act, Van Dijkhorst J held that the provisions of sections 7(3) and 8(5)(a) were
unconstitutional
and invalid. |
The Declaration
of Invalidity in Respect of Section 7(3)
| [8] | Van Dijkhorst J held that
section 7(3) of the Act, as it then read, constituted a clear infringement of
the right to privacy guaranteed
by section 14 of the
Constitution,[6] because it sanctioned
search and seizure without any judicial authorisation. He held further that it
was not saved by the limitation
provisions contained in section 36 of the
Constitution.[7] |
Subsequent
to the judgment of Van Dijkhorst J, the provisions of section 7(3) of the Act
were amended by the Amendment Act.[8]
The primary change introduced by the amendment is that any search or seizure
conducted by an investigating officer in the absence
of the written consent of
the owner or person in charge of the premises now requires a search warrant to
be issued by a magistrate.[9]
| [9] | Counsel for the Minister
submitted that the provisions of the amended section 7(3) were not before the
High Court and that the declaration
of invalidity of the original provision had
become moot. More specifically, he submitted that the High Court was not called
upon
to consider the provisions of section 7(3) as they now read, nor were they
before this Court in these confirmation proceedings.
I agree. This Court has
held that an issue is moot if it does not present an existing or live
controversy; such an issue is not
justiciable.[10] Here we cannot
consider the constitutionality of section 7(3) in its amended form and we should
accordingly express no opinion thereon.
The only persons who could now be
prejudiced by the section as it previously read would be those who might have
been subjected to
a search or seizure executed prior to 14 May 1999, the date of
commencement of the Amendment Act. No such person approached this
Court and
there is nothing before us to suggest that there is anyone in that position. In
any event, if any person has been prejudiced
by any action taken under section
7(3) in its original form, that is a matter that could be considered by an
appropriate court.
The basis on which the applicants approached the High Court
in respect of section 7(3) of the Act has fallen away and the confirmation
of
the order can serve no
purpose.[11] |
| [10] | Mr Tee, however, sought to
persuade us that we should confirm the order of constitutional invalidity of
section 7(3) on a different
basis. He submitted that the High Court erred in
not holding the definition of “harmful business practice”
unconstitutional,
and that this error opened section 7(3) to a constitutional
attack that remained live despite the amendment. This argument is untenable.
The concept and definition of “harmful business practice” have been
replaced with those relating to “unfair business
practice”. The
finding of the High Court in relation to the former is thus also moot. It
follows that we should make no order
in respect of the confirmation proceedings
relating to section 7(3). |
The Declaration of
Invalidity in Respect of Section 8(5)(a)
| [11] | Section 8(5)(a) of the Act
was not amended by the Amendment Act and we are thus called upon to consider
whether the order made in
respect of its constitutionality by the High Court
should be confirmed. In order to appreciate the terms of the section it is
necessary
to locate its provisions in the scheme of the
Act. |
| [12] | Under the Act, the
Committee is charged with investigating what are now called “unfair
business practices”. In terms
of section 8(1) of the Act the Committee
may institute such investigations into an unfair business practice on its own
initiative
and can be obliged to do so by the Minister. Under section 5 the
Committee is given wide powers to summon people to testify for
the purposes of
an investigation and can compel them to produce any book, document or object in
their possession which might relate
to such an investigation. A refusal to
comply with a summons is visited with criminal sanction. I have already
referred to the
search and seizure powers conferred on investigating officers
appointed by the Committee.[12]
Under section 8(4) the Committee is obliged to make known, by notice in the
Government Gazette, any investigation it proposes to
undertake. The notice must
also state that any person affected by such an investigation may make
representations in writing to the
Committee regarding the investigation. A
period of not less than fourteen days must be afforded for the submission of
such representations. |
| [13] | The President is authorised
by section 13(2) of the Act to establish a special court. This court consists
of a president, who is
required to be a judge of a High Court designated by the
Chief Justice, and two other members appointed by the president of the court
from nominees on a list compiled by the Minister after holding interviews.
Under section 13(13)(a) the decision of a special court
is subject to appeal.
The appeal procedures are those applicable to a special income tax
court.[13] |
| [14] | After receiving a report of
an investigation by the Committee the Minister is empowered by section 12 of the
Act to declare the unfair
business practice unlawful by notice in the Government
Gazette, and to direct any person involved in such unfair business practice
to
take such action as the Minister may consider necessary to ensure the
discontinuance or prevention of such practice. The powers
conferred on the
Minister are very wide and include, for example, the power to dissolve any body,
corporate or incorporate.[14] If
money was accepted from consumers, the Minister
may: |
“appoint a curator, with the concurrence of the special court, in order to
realize the assets of the person involved in the
unfair business practice and to
distribute them between the consumers concerned and to take control of and
manage the whole or any
part of the business of such a
person.”[15]
| [15] | I turn now to consider
section 8(5)(a) of the Act: |
“After such a notice relating to an investigation in terms of subsection
(1) (a) has been published and before the relevant
report is submitted to him
the Minister may, on the recommendation of the
committee—
(i) prescribe by notice in the Gazette, for a period specified in the
notice, but not exceeding the period of six months referred to in subsection
(3), such action as in
the opinion of the Minister shall be taken to stay or
prevent any unfair business practice which is the subject of the investigation
and which the Minister has reason to believe exists or may come into
existence;
(ii) by notice in writing or by notice in the
Gazette—
(aa) attach any
money or other property whether movable or immovable which is related to such
investigation and which is held by any
person on account or on behalf of or for
the benefit of a person mentioned in the notice, or of a customer, debtor or
creditor of
the person mentioned in the notice, until a curator referred to in
section 12 (2) takes that money or other property into his possession;
(bb) prohibit a person mentioned in the notice from withdrawing or otherwise
dealing with any money or movable or immovable property
mentioned in the
notice.”
Section 8(7) provides that any person who fails to comply
with a notice under section 8(5) is guilty of an offence. The penalty provided
by section 15 is a fine not exceeding R20 000 or imprisonment for a period not
exceeding two years, or both.
| [16] | Section 13(1) of the Act
confers a right of appeal to the special court upon any person affected by a
notice under section 8(5)(a).
In terms of section 13(5) notice of such an
appeal must be lodged in writing with the Minister who is required to give
notice of
that lodging in the Government Gazette. The president of the special
court then determines the date, time and place for the hearing
of the
appeal.[16] |
| [17] | Van Dijkhorst J held that
section 8(5)(a) is a drastic and absolutely discretionary provision that does
not provide for the application
of the audi alteram partem principle, and
that empowers the Minister to act on untested allegations and a preliminary
opinion. Therefore the judge held that
section 8(5)(a) violates the provisions
of the following sections of the Constitution: section 22 (freedom of trade,
occupation and
profession),[17]
section 25(1) (property),[18] and
section 33 (just administrative
action).[19] During argument in
this Court there was debate as to whether the provisions under consideration
also violated section 34 (access
to
courts)[20] of the Constitution. As
I have come to the conclusion that the provisions of section 8(5)(a) violate
section 33 of the Constitution
it is not necessary to consider whether they are
also inconsistent with the other provisions of the Bill of Rights to which I
have
just referred. |
| [18] | Section 33 of the
Constitution provides: |
“(1) Everyone has the right to administrative action that is lawful,
reasonable and procedurally fair.
(2) Everyone whose rights have been adversely affected by administrative action
has the right to be given written reasons.
(3) National legislation must be enacted to give effect to these rights, and
must—
(a) provide for the review of administrative action by a court or, where
appropriate, an independent and impartial tribunal;
(b) impose a duty on the state to give effect to the rights in subsections (1)
and (2); and
(c) promote an efficient
administration.”
Item 23(1)
of the Sixth Schedule to the Constitution provides that the national legislation
envisaged in section 33(3) of the Constitution
must be enacted within three
years of 4 February 1997, the date on which the Constitution took effect. Item
23(2)(b) provides that
until the legislation envisaged by section 33(3) of the
Constitution has been “enacted”, section 33(1) and (2) must be
regarded to read as follows:
“Every person has the right to—
(a) lawful administrative action where any of their rights or interests is
affected or threatened;
(b) procedurally fair administrative action where any of their rights or
legitimate expectations is affected or threatened;
(c) be furnished with reasons in writing for administrative action which affects
any of their rights or interests unless the reasons
for that action have been
made public; and
(d) administrative action which is justifiable in relation to the reasons given
for it where any of their rights is affected or
threatened.”
| [19] | This matter came before the
High Court during the three-year period referred to in item 23(1) of the Sixth
Schedule and accordingly
the provisions of item 23(2)(b) were applicable then.
In this case the analysis and conclusions which follow would be no different
whether we apply the provisions of section 33(1) of the Constitution as they
read or as they are deemed to read under item 23(2)(b).
Under both, the
provisions of section 8(5)(a) fail to meet the requisites of administrative
action that is “lawful, reasonable
and procedurally fair” on the one
hand, or “lawful” and “procedurally fair” on the other.
Consequently
it is not necessary to decide which of the two provisions is
applicable here. |
| [20] | Counsel for the Minister
submitted that the provisions of section 8(5)(a) must be read subject to the
relevant provisions of the Constitution,
and specifically that the requirements
of procedurally fair administrative action must be read into the section. He
therefore submitted
that: |
1. the Committee is obliged to grant a hearing to persons who would be affected
by a decision to hold an investigation under section
8(1)(a) prior to making a
decision to hold such an investigation;
2. the Committee is obliged to grant a hearing to the affected persons before it
recommends to the Minister that a section 8(5)(a)
notice should be published;
and
3. the Minister is obliged to grant a hearing to persons affected by an order
that the Minister might wish to make under section
8(5)(a) prior to making it
or, if that is impracticable, after it has been
made.
| [21] | In order to evaluate these
submissions it is necessary to consider the purpose of the provisions of section
8(5)(a). Commercial schemes
calculated to take unfair advantage of members of
the public have long been a common feature in many business communities. And
so,
too, have been statutory attempts to curb
them.[21] One of the difficulties
in this branch of the law is that it is necessary to protect the public not only
from unlawful schemes but
also from those that, although lawful, are unfair or
harmful to members of the public. This is especially so in relation to those
members of the public who can least afford to part with their scarce and
hard-earned money. |
| [22] | Section 8(5)(a) was
designed to protect the public by giving the Minister the power to stay business
practices and to attach assets
or prohibit their being dealt with. These powers
ensure that during the period of investigation by the Committee, the persons
subject
to that investigation are prevented from continuing the allegedly unfair
practices, and alienating or hiding assets in order to defeat
prospective claims
by or on behalf of members of the public. The purpose is to protect the
possible victims of any unfair business
practice. By its very nature it must be
an urgent and incisive procedure if it is to have the desired effect. If notice
is given
to the person or persons against whom the section is to operate, the
purpose of the action under the section will more than likely
be frustrated. It
follows that if the section were to be read as requiring the hearings referred
to by counsel for the Minister,
the whole purpose of the provision would be
defeated. The section is accordingly not reasonably capable of the construction
that
the Minister’s counsel seeks to place on
it.[22] |
| [23] | I am prepared to assume in
favour of the Minister that it is reasonably necessary to make provision in the
Act for an urgent procedure
to suspend the allegedly unfair business practice
and to ensure that the property of persons who conduct business in such a way as
to constitute an unfair business practice is not alienated or
hidden.[23] However, the way in
which this has been done in section 8(5)(a) has the following
features: |
1. the Minister is empowered to stay a business practice and attach or freeze
assets merely by giving notice of his or her decision
under section 8(5)(a)(i)
and (ii) to do so;
2. the Minister can take this action immediately after he or she gives the
notice and before the expiry of the 14 day period allowed
by section 8(4) for
any person to make representations to the Committee regarding its proposed
investigation;
3. these actions may be taken without prior warning to persons affected by
them;
4. the Minister may stay or prevent a business practice for a period of up to
six months;
5. the persons who might be affected by action under section 8(5)(a)(ii) include
anyone who possesses property, movable or immovable,
that is related to the
investigation. In other words, the assets of persons who are not even mentioned
in the section 8(5)(a)(ii)
notice may be attached and frozen, and the owners
thereof may be prohibited from dealing freely with the property referred to in
the notice;
6. depending upon the proper interpretation of section 8(5)(a)(i) and (ii), (an
issue not now before us), attachment of property
by the Minister persists for a
period of up to six months or for an indefinite period;
7. ministerial action under either section 8(5)(a)(i) or (ii) may be fatal to
the businesses affected thereby;
8. whilst the powers given to the Minister to stay or prevent an allegedly
unfair business practice, or to attach or freeze assets
are sweeping and
drastic, the legislature has failed to provide sufficient guidance for their
exercise;
9. notice under sections 8(5)(a)(i) or (ii) need not specify any reasons for the
stay or prevention of the allegedly unfair business
practice or the attachment
or freezing of assets;
10. the irreparable harm that is likely to follow upon a notice might not be
averted by an appeal in due course to a special
court.
| [24] | These features must be
weighed against the requirements of administrative
justice.[24] In doing so it must be
appreciated that one of the enduring characteristics of procedural fairness is
its flexibility. The application
of procedural fairness must be considered with
regard to the facts and circumstances of each
case.[25] In modern states it has
become more and more common to grant far-reaching powers to administrative
functionaries.[26] The safeguards
provided by the rules of procedural fairness are thus all the more important,
and are reflected in the Bill of Rights.
Observance of the rules of procedural
fairness ensures that an administrative functionary has an open-mind and a
complete picture
of the facts and circumstances within which the administrative
action is to be taken.[27] In that
way the functionary is more likely to apply his or her mind to the matter in a
fair and regular manner. |
| [25] | Every conferment by the
legislature of an administrative discretion need not mirror the provisions of
the Constitution or the common
law regarding the proper exercise of such powers.
However, as this Court has already held (in the context of a limitations
analysis),
the constitutional obligation on the legislature to promote, protect
and fulfil the rights entrenched in the Bill of Rights entails
that, where a
wide discretion is conferred upon a functionary, guidance should be provided as
to the manner in which those powers
are to be
exercised.[28] The absence of such
guidance, together with the cumulative effect of the other features referred to
in paragraph 23 above, render
the procedure provided in section 8(5)(a) unfair
and a violation of the protection afforded by section
33(1),[29] whichever text is
applicable.[30] |
| [26] | Counsel for the Minister
conceded that if the provisions of section 8(5)(a) were inconsistent with the
Bill of Rights it is not possible
to justify them under the limitation
provisions contained in section 36 of the Constitution. No evidence was placed
before the High
Court to justify the violation and none was placed before this
Court. A case for justification was not established. The order of
constitutional invalidity made by the High Court in respect of section 8(5)(a)
of the Act should thus be confirmed. |
An
Appropriate Order
| [27] | The Minister has requested
that, in the event of this Court confirming the order of invalidity, it should
suspend the effect of the
order and allow the legislature a period of one year
to amend section 8(5)(a). If that is not done, so it was submitted,
unscrupulous
people might well take advantage of the chink in the armour of the
Committee and the Minister, to the detriment of members of the
public. This is
a legitimate concern and will be addressed in the
order. |
| [28] | When deciding a
constitutional matter within its power, this Court has broad remedial discretion
to make a just and equitable
order.[31] In Dawood we made
an order of constitutional invalidity based on a legislative omission to provide
criteria guiding the exercise of a statutory
discretion.[32] This Court
determined that it would be inappropriate in that case to remedy the omission in
the legislation.[33] The order of
invalidity was suspended subject to appropriate conditions pending legislative
remedial action. Here too, the inconsistency
with the Constitution lies in a
legislative omission. As such it cannot be cured by actual or notional
severance.[34] The task of
determining what constitutional procedure should be put in place to enable an
urgent injunctive order to be made where
there is a suspected unfair business
practice is primarily a matter for the legislature and not for this Court. The
legislature
might decide that, as in some other jurisdictions, it should be left
to the courts or special tribunals to consider and make such
orders,[35] or it might wish to
continue to vest that power in the Minister subject to appropriate legislative
guidance. There are a range of
legislative
choices. |
| [29] | In the circumstances of
this case, I agree with counsel for the Minister that it would not be in the
public interest simply to strike
down section 8(5)(a) and create a situation,
until remedial legislation is enacted, in which persons who are under
investigation
for unfair business practices are able to continue those business
practices, or to dissipate or hide assets with impunity. At the
same time it is
inappropriate that the Minister should be able to exercise an unfettered and
unguided discretion in situations so
fraught with potentially irreversible and
prejudicial consequences to business people and others who may be affected. It
would be
more appropriate to adopt the Dawood approach and suspend the
order of invalidity on condition that the Minister exercises the powers under
section 8(5)(a) subject to
the guidance given in the
order. |
| [30] | Before turning to these
appropriate conditions I wish to emphasise that they are not intended to be a
guide to the legislature in
its consideration of legislation to replace the
provisions which have been held to be unconstitutional and invalid. They are
intended
to be no more than a temporary measure applied during the period the
legislature might require to give appropriate consideration
to remedial
legislation. |
| [31] | In other common law
jurisdictions relief is granted by courts or special tribunals applying common
law principles. Over a period
of many years, in situations similar to those
envisioned in section 8(5)(a), our common law has contemplated injunctive
relief.[36] It seems appropriate to
look there for guidance and borrow from it to the extent that it is compatible
with the Constitution and
the purposes of the Act. In doing so we are not, nor
should we be understood to be, attempting in any way to develop or influence
the
common law in relation to interdicts: what follows should not be used as
precedent in that area of the law. |
| [32] | As stated recently by the
SCA: |
“The legal principles governing interim interdicts in this country are
well known. They can be briefly restated. The requisites
are:
(1) a prima facie right;
(2) a well-grounded apprehension of irreparable harm if the relief is not
granted;
(c) that the balance of convenience favours the granting of an interim
interdict; and
(d) that the applicant has no other satisfactory
remedy.”[37]
Similar
requirements have been applied for the grant of interim interdicts restraining
unlawful business
conduct.[38]
| [33] | However, the common law
governing interdicts to restrain the alienation or free use of assets has a
further requirement. In the context
of an application for an ex parte interdict
to restrain the respondents from dissipating or hiding assets, E M Grosskopf JA
referred
with approval to the general requirements for an interim
interdict.[39] He also emphasised
an additional factor to be considered where an interdict is sought to prevent a
respondent from “freely
dealing with his own property to which the
applicant lays no claim.” He held that such an
applicant: |
“[needs to] show a particular state of mind on the part of the respondent,
ie that he is getting rid of the funds, or is likely
to do so, with the
intention of defeating the claims of
creditors.”[40]
| [34] | Having regard to the
approach of the common law, I would suggest that the guidance contained in the
order below in paragraph 36 will,
in the interim, provide adequate protection
against an arbitrary exercise of power to a person against whom action may be
taken under
section 8(5)(a). In particular, the standards are objective and can
therefore be made the subject of review
proceedings. |
| [35] | Given the nature and effect
of the action taken and especially the risk of irreparable harm to a person who
may well be innocent of
any wrong-doing, such action under section 8(5)(a)
should be taken by the Minister with extreme caution. Furthermore, the person
against whom such action has been taken should be placed in a position to
contest the basis upon which it was issued at the earliest
appropriate time. In
order to achieve this end the Minister should be obliged to inform the person
against whom the notice is issued,
in a written statement, of the facts on which
he or she relied to satisfy himself or herself of the factors referred to below
in
paragraph 36. This statement should also advise the recipient that he or she
has the right under section 13(1) of the Act to appeal
the action of the
Minister to the special court or to take it on review to an appropriate court.
The written statement should be
furnished at the same time as the notice is
given under section 8(5)(a). |
The
Order
| [36] | The following order is
made: |
1 No order is made regarding the confirmation proceedings in respect of the
declaration of constitutional invalidity of section 7(3)
of the Consumer Affairs
(Unfair Business Practices) Act 71 of 1988 (the Act).
2 The order of constitutional invalidity in respect of section 8(5)(a) of the
Act is confirmed.
3 The order of constitutional invalidity referred to in paragraph 2 of this
order is suspended for a period of 12 months from the
date of this order to
enable Parliament to correct the defects that have resulted in the declaration
of invalidity.
4.1 Pending the enactment of legislation by Parliament or the expiry of the
period referred to in paragraph 3 of this order, whichever
is the sooner, the
Minister of Trade and Industry (the Minister) may not take action under section
8(5)(a) of the Act unless he or
she:
a has a reasonable suspicion that there exists an unfair business practice
involving the person under investigation;
b has a reasonable apprehension that without such action the public will be
irreparably harmed;
c is satisfied that there is no alternative remedy; and
d is satisfied that, having weighed the foregoing factors, the prospect of harm
to the public if the order were not granted outweighs
the harm to the interests
of the affected person or persons if the order were
granted.
4.2 The Minister may not take action under section 8(5)(a)(ii) unless, in
addition to satisfying the conditions stipulated in paragraph
4.1 of this order,
he or she also has a reasonable suspicion that the person to be interdicted has
or will have the intention to
defeat the claims of the public by concealing or
dissipating assets.
5 At the same time that the notice under either section 8(5)(a) subparagraph (i)
or (ii) of the Act is issued, the Minister must
furnish any person named in the
notice with a written statement containing the facts on which he or she relied
to satisfy himself
or herself of the factors referred to in paragraphs 4.1 and
4.2 of this order. This statement should also advise the recipient that
he or
she has the right under section 13(1) of the Act to appeal the action of the
Minister to the special court or to take it on
review to an appropriate court.
The written statement should be furnished at the same time as the notice is
given under section
8(5)(a).
6 There is no order as to
costs.
Chaskalson P, Langa DP, Ackermann
J, Kriegler J, Mokgoro J, Ngcobo J, O’Regan J, Sachs J, Yacoob J and
Madlanga AJ concur in
the judgment of Goldstone J.
For the respondents: Advocate JL van der Merwe SC and Advocate O Matjila
instructed by the State Attorney, Pretoria.
For the amicus curiae: Advocate NJ Tee instructed by the Law Review
Project.
[1] Act 71 of 1988. The original name
of the Act was the Harmful Business Practices Act. The name was changed by
section 13 of the
Harmful Business Practices Amendment Act 23 of 1999 (the
Amendment Act), as were some of the provisions in the Act, including section
7(3).
[2] The Committee is established by
section 2 of the Act and consists of nine members appointed by the Minister of
Trade and Industry
—
“on the grounds of their special knowledge or experience of consumer
advocacy, economics, industry, commerce or law, taking
into account the need to
ensure equitable representation.”
Prior to the amendment of section 2 by the Amendment Act, the Committee
consisted of between four and seven members who were appointed
by the
Minister—
“on the grounds of their special knowledge of consumer affairs or
knowledge of or experience in economics, industry, commerce,
law or the conduct
of public affairs . . .”
[3] Gerhardus Francois Janse Van
Rensburg NO v Die Minister van Handel en Nywerheid NO (TPD) Case No
22658/98, 22 October 1998, unreported.
[4] In so far as is relevant, rule 9
provides:
“. . . any person interested in any matter before the Court may, with the
written consent of all the parties in the matter
before the Court, given not
later than the time specified in sub-rule (5), be admitted therein as an
amicus curiae upon such terms and conditions and with such rights and
privileges as may be agreed upon in writing with all the parties before the
Court or as may be directed by the President in terms of sub-rule
(3).”
Where the other parties do not consent, the President of the Court may
nonetheless, on application, admit the person as an amicus curiae on such
conditions as he or she may determine.
Sub-rule (6) provides:
“An application to be admitted as an amicus curiae shall
-
(1) briefly describe the interest of the amicus curiae in the
proceedings;
(2) briefly identify the position to be adopted by the amicus curiae in
the proceedings;
(c) set out the submissions to be advanced by the amicus curiae, their
relevance to the proceedings and his or her reasons for believing that the
submissions will be useful to the Court and different
from those of the other
parties.”
Under sub-rule (8), unless otherwise ordered, the amicus curiae may not
advance oral argument.
[5] Since the amendment of the Act by
section 1 of the Amendment Act, it has been called an “unfair business
practice”.
“Unfair business practice” is defined in section 1
of the Act as follows:
“[A]ny business practice which, directly or indirectly, has or is likely
to have the effect
of—
(a) harming the relations between businesses and consumers;
(b) unreasonably prejudicing any consumer;
(c) deceiving any consumer; or
(d) unfairly affecting any
consumer.”
[6] Section 14
provides:
“Everyone has the right to privacy, which includes the right not to
have—
(a) their person or home searched;
(b) their property searched;
(c) their possessions seized; or
(d) the privacy of their communications
infringed.”
[7] Section 36
provides:
“(1) The rights in the Bill of Rights may be limited only in terms of law
of general application to the extent that the limitation
is reasonable and
justifiable in an open and democratic society based on human dignity, equality
and freedom, taking into account
all relevant factors,
including—
(a) the nature of the
right;
(b) the importance of the purpose of the limitation;
(c) the nature and extent of the limitation;
(d) the relation between the limitation and its purpose; and
(e) less restrictive means to achieve the purpose.
(2)__Except as provided in subsection (1) or in any other provision of the
Constitution, no law may limit any right entrenched in
the Bill of
Rights.”
[8] Above n 1.
[9] Section 7(3A) of the Act.
[10] President, Ordinary Court
Martial and Others v Freedom of Expression Institute and Others [1999] ZACC 10; 1999 (4) SA
682 (CC); 1999 (11) BCLR 1219 (CC) at para 8; National Coalition for Gay and
Lesbian Equality and Others v Minister of Home Affairs and Others [1999] ZACC 17; 2000 (2)
SA 1 (CC); 2000 (1) BCLR 39 (CC) at para 21 n 18.
[11] President, Ordinary Court
Martial above n 10 at paras 16-18.
[12] Above para 8.
[13] Under section 86A(2) of the
Income Tax Act 58 of 1962, such an appeal shall
lie:
“(a) to the provincial division of the High Court having jurisdiction in
the area in which the sitting of the special court
was held; or
(b) where the President of the special court has granted leave under subsection
(5), to the Supreme Court of Appeal, without any
intermediate appeal to such
provincial division.”
[14] Section 12(1)(b) of the Act
provides:
“(1) If the Minister, after consideration of a report by the committee in
terms of section 10(1) in relation to an investigation
in terms of section
8(1)(a), is of the opinion that a unfair business practice exists or may come
into existence and is not satisfied
that the unfair business practice is
justified in the public interest, and has not confirmed an arrangement which may
have been made
in terms of section 9(1) or 11(1)(a) in respect of the unfair
business practice, the Minister
may—
(a) . . .
(b) by notice in the Gazette declare the said unfair business practice
to be unlawful, and direct any person who in the opinion of the Minister is
concerned in
the unfair business practice to take such action, including steps
for the dissolution of any body, corporate or unincorporate, or
the severance of
any connection or form of association between two or more persons, including any
such bodies, as the Minister may
consider necessary to ensure the discontinuance
or prevention of the unfair business practice.”
[15] Section 12(1)(d) of the
Act.
[16] Section 13(6) of the Act.
[17] Section 22
provides:
“Every citizen has the right to choose their trade, occupation or
profession freely. The practice of a trade, occupation or
profession may be
regulated by law.”
[18] Section 25(1)
provides:
“No one may be deprived of property except in terms of law of general
application, and no law may permit arbitrary deprivation
of
property.”
[19] Below paras 18-19.
[20] Section 34
provides:
“Everyone has the right to have any dispute that can be resolved by the
application of law decided in a fair public hearing
before a court or, where
appropriate, another independent and impartial tribunal or
forum.”
[21] See, for example, in Australia,
the Trade Practices Act of 1974; in Canada, the Competition Act of 1985; in
India, the Monopolies
and Restrictive Trade Practices Act 54 of 1969; in New
Zealand, the Fair Trading Act of 1986; in the United Kingdom, the Fair Trading
Act of 1973; and in the United States, the Federal Trade Commission Act of 1914
and associated legislation. The first attempt by
the South African parliament
to control unfair business practices is to be found in the Trade Practices Act
76 of 1976. It was replaced
by the Act.
[22] Dzukuda and Others (CC)
Case CCT 23/00, 27 September 2000, as yet unreported, at para 37 and the
authorities there cited.
[23] Chief Lesapo v North West
Agricultural Bank and Another [1999] ZACC 16; 2000 (1) SA 409 (CC); 1999 (12) BCLR 1420 (CC)
at para 27.
[24] Above paras 18-19.
[25] President of the Republic of
South Africa and Others v South African Rugby Football Union and Others 2000
(1) SA 1 (CC); 1999 (10) BCLR 1059 (CC) at para 216.
[26] See Galligan
“Discretionary Powers in the Legal Order: The Exercise of Discretionary
Powers” in Galligan (ed) A Reader on Administrative Law (Oxford
University Press, Oxford 1996) at 274.
[27] Wiechers Administrative Law
(Butterworths, Durban 1985) at 226-7.
[28] 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 (8) BCLR 837 (CC) at paras 42-48.
[29] The powers conferred upon the
Minister by section 12(1) of the Act may also be of concern because they too
confer a wide discretion
without any guidance as to their exercise by the
Minister.
[30] Above paras 18-19.
[31] In terms of section 172(1)(b)
of the Constitution:
“When deciding a constitutional matter within its power, a
court—
(b) may make any order that is just and equitable,
including—
(ii) an order
suspending the declaration of invalidity for any period and on any conditions,
to allow the competent authority to correct
the defect.”
[32] Dawood above n 28 at
para 61.
[33] Id at para 63.
[34] National Coalition for Gay
and Lesbian Equality above n 9 at paras 63-64; Dawood above n 28 at
para 61.
[35] For example, in Australia, the
Trade Practices Act of 1974 establishes an Australian Competition and Consumer
Commission and empowers
the Commission, the requisite Minister, or “any
other person” (including private persons and organisations and even trade
competitors) to obtain an injunction from a Federal Court to prohibit actual or
prospective unfair business conduct. See Taperell
et al Trade Practices and
Consumer Protection: A Commentary on the Trade Practices Act 1974 3ed
(Butterworths, Sydney 1983) at paras 1631-3; and Turner Australian Commercial
Law 22ed (LBC Information Services, Sydney 1999) at 349-52. In Canada, the
Competition Act R.S.C. 1985, c. C-34, as amended, allows
the Director of the
Competition Bureau to conduct preliminary investigations and if appropriate,
apply to the Competition Tribunal
for interim orders. The Tribunal considers
the application with regard to the “principles ordinarily considered by
superior
courts when granting interlocutory or injunctive relief.” See
Flavell and Kent The Canadian Competition Law Handbook (Carswell, Ontario
1997) at 47.
[36] Knox D’Arcy Ltd and
Others v Jamieson and Others [1996] ZASCA 58; 1996 (4) SA 348 (A) at 371G-373H.
[37] Hix Networking Technologies
v System Publishers (Pty) Ltd and Another [1996] ZASCA 107; 1997 (1) SA 391 (A) at 398I-J.
[38] Joubert “Unlawful
Competition” in Joubert et al, The Law of South Africa
(Lawsa) first reissue (Butterworths, Durban 1998) vol 2 at par 399 n
70.
[39] Knox D’Arcy
above n 36 at 361C-F.
[40] Id at 372F-G.
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