Middelburg Municipality v Gertzen

• Jurisdiction: South Africa
• Judge: Innes CJ, Solomon JA, De Villiers Acting JA, AFS Maasdorp Acting AJA and Wessels Acting AJA
• Judgment Date: 14 December 1914
• Citation: 1914 AD 544
• Hearing Date: 22 September 1914
• Court: Appellate Division

Innes, C.J.:

The 85th section of the South Africa Act empowers Provincial Councils to make ordinances "in relation to matters

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coming within" certain classes of subjects detailed under a number of sub-heads, the sixth in order being "Municipal institutions, divisional councils, and other local institutions of a similar nature." Acting under the powers thus conferred the Provincial Council of the Cape passed an Ordinance (No. 10 of 1912) which abolished the general Municipal Act as well as a number of other existing statutes, and dealt in comprehensive fashion with the constitution, powers and duties of municipal bodies. Among other things it provided for the levying of rates upon landed property, and for their recovery. The 155th section after having placed the liability for the payment of rates upon the owner and the occupier, proceeded (sub-sec. 6) to enact as follows:

"In all cases where properties are mortgaged, and the mortgagee receives the rent thereof, and in the case of rents paid to an agent, the rates shall be payable by and recoverable from the mortgagee or agent as the case may be, subject to the deduction by the agent of all sums due to him by way of commission in regard to the rents collected; provided that no such mortgagee or agent shall be liable to pay in rates for any one year more than the amount of rent received by him for that year, in respect of any such property."

The question raised by this appeal relates to the validity of that sub-section in its application to a mortgagee. The plaintiff Municipality sued in the Magistrate's Court for rates due upon an erf in the town of Middelburg owned by one Kruger, but mortgaged to the defendant, who acting under a power of attorney from the owner, had drawn all the rents of the property during the period covered by the claim. The rents thus received were insufficient to satisfy the interest falling due on the bond. The defendant pleaded that all sums collected by him had been set off against larger amounts of interest due, and that section 155 (6) of the Ordinance in so far as it might expose him personally to an action for rates was ultra vires and invalid. This defence was over-ruled by the magistrate, but upheld on appeal by the Provincial Division. The learned Judge-President, on an exhaustive review of prior municipal legislation at the Cape, came to the conclusion that the clause in question was not sanctioned by such legislation, and as it was not essential to good rule and government, and constituted an undue interference with the contractual rights of mortgagors and mortgagees, he held it to he invalid. SEARLE, J., recognised that the test of earlier legislation was by no means conclusive, and considered that the question of reasonableness could

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not be gone into. But he applied a test "apparently adopted" by the Transvaal Court in Germiston Municipality v Angehrn & Piel (1913 TPD p. 135), and which he thus formulated: "Where some principle is introduced which is of wide and far-reaching importance., dealing with some special branch of law not assigned to Provincial Councils, and which is not necessarily connected with the specially assigned subject into which it has been introduced," then the Court should declare the clause introducing the novel principle to be ultra vires. After examining the nature and operation of the disputed clause in the light of prior statutes he came with some hesitation, to the conclusion that the Provincial Council had exceeded its powers by thus interfering between debtor and creditor with the general law of mortgage; and he agreed that the defence of invalidity should be upheld.

A perusal of the carefully reasoned judgments delivered in the Provincial Division illustrates the difficulty of laying down a comprehensive test of validity. An enquiry of this nature must, of course, proceed upon general principles, but it will be wise, as it seems to me, to rest content with a basis of investigation sufficient for the lucidation of the particular case before us, and for present purposes it will be enough to examine the nature of the legislative powers possessed by the Council and the general lines upon which an enquiry into the validity of its ordinances should proceed. Now the Provincial Council is a subordinate body to whom, under the South Africa Act, the right to make ordinances (with the consent of the Governor-General-in-Council) upon certain definite subjects has been entrusted.

The 85th section confers direct jurisdiction tinder a number of enumerated heads; and it provides for an expansion of the list in respect of any subject upon which the Union Parliament may in the future delegate authority to legislate. In accordance with that provision certain matters have been scheduled in the Financial Relations Act, 1913, as falling within the legislative ambit of the Provincial body if and when the Governor-General-in-Council may so decide and proclaim. So that the power to make ordinances may in regard to different subjects flow along different channels. It may come directly from the South Africa Act, or through a special Union statute or (within the limits of the Financial Relations Act) by way of a Government Proclamation. It is obvious, however, that the extent of the legislative authority was intended to

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be the same in each case, and indeed par. 12 (2) of the Financial Relations Act expressly so provides. The correct view would seem to be that such authority is in reality always derived from the South Africa Act, even where it is the result of machinery which, though created by the statute, has been extraneously set in motion. It was held by the Privy Council (Bodge v Rex, 9, A.C., p. 132) that the legislature of Ontario created by the British North America Act (for there had been no such Province previously) and having an exclusive right to make law within a limited area and upon limited subjects, was a body exercising within its jurisdiction not a delegated, but an original, authority. As will be pointed out directly there are important differences between the Canadian constitution and our own, and the Provincial Councils stand in a position of subordination to the Union Parliament, for which the British North America Act affords no parallel. But, as already shown, both bodies derive their powers from the same enactment, and restricted though the authority of our Councils maybe, it is an original authority drawn from the South Africa Act, and not delegated by the Union legislature. The constitutional position thus created is, in some respects, unique; but I entertain no doubt that a Provincial Council is a deliberative legislative body, and that its ordinances duly passed and assented to must be classed under the category of statutes, and not of mere bye-laws or regulations. They have full force of law within the Province, so long as they are not repugnant to an Act of the Union Parliament (see. 86). Indeed, if it were otherwise, the Council would have no right to repeal or even to amend laws passed prior to Union; and the powers conferred upon it by section 85, extensive though they purport to be, would be largely nugatory.

It was probably the intention of the framers of the Act that Parliament should be relieved of the labour of dealing with the matters enumerated in section 85, and that the task of making laws in regard to them should devolve in practice upon the Council alone. But Parliament has not parted with its powers; its authority over the whole domain of legislation remains unimpaired. It may repeal, directly or by implication, any ordinance passed by the Council, and it may by statute deal with any matter falling within the restricted authority of that body. In this respect the relation between Council and Parliament is very different from that which exists between the Provincial and the Dominion legis-

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latures of Canada. The British North America Act enumerated certain subjects in relation to which the exclusive right of making laws was given to the Provincial legislatures. In regard to all, other subjects, general powers of legislation were conferred upon the Dominion Parliament. The result of the creation of two bodies, dividing almost equally between them the field of legislative activity was an ever present danger of intrusion by the one upon the proper domain of the other. Hence the necessity for a careful and rigid examination in each case in which the validity of a Canadian statute is challenged. Under the South Africa Act no question of legislative competition can arise. The power of Parliament is never in doubt; the enquiry in each instance can only be whether the subordinate legislature has exceeded the authority assigned to it. And hence, in deciding upon the validity of a Provincial Ordinance regard must be had to the terms in which the grant of jurisdiction over the relative subject matter has been expressed. In some instances the language used is definite and precise; occasionally it may be so stated as inferentially to prohibit legislation in certain directions. An example of this will be found in Williams v Rex (A.D. 1914, 460), where it was held that an authority to make laws for the regulation of betting implied the absence of authority totally to suppress it. But in other cases a more general description of the subject matter is given, and it is in regard to such cases that difficulties are most apt to arise. No department of human activity is entirely insulated. It ramifies into other departments affecting, and being in turn affected by them. And therefore no general subject matter can be fully regulated without incidentally dealing with matters which, strictly speaking, lie beyond it. Now when legislative jurisdiction is conferred upon a Provincial Council in respect of some special subject matter it follows, in the absence of any indication to the...