Phillips v SA Reserve Bank and Others

• Jurisdiction: South Africa
• Judge: Mthiyane DP, Farlam JA, Majiedt JA, Petse AJA and Ndita AJA
• Judgment Date: 29 March 2012
• Citation: 2013 (6) SA 450 (SCA)
• Docket Number: 221/2011 [2012] ZASCA 38
• Hearing Date: 02 March 2012
• Counsel: M Chaskalson SC (with IA Goodman) for the appellant. M Maritz SC (with W Luderitz SC) for the first respondent. MR Madlanga SC (with N Maimela) for the second respondent. No appearance for the third respondent.
• Court: Supreme Court of Appeal

Farlam JA (Mthiyane DP concurring):

[1] The appellant in this matter instituted proceedings in the North J Gauteng High Court, Pretoria, against the first respondent, the South

Farlam JA (Mthiyane DP concurring)

African Reserve Bank, the second respondent, the Minister of Finance, A and the third respondent, the President of the Republic, in January 2009. The relief he sought was —

(a)

an order reviewing and setting aside a decision by the first respondent, the South African Reserve Bank, not to return certain foreign currency seized from him at Oliver Tambo International Airport on 10 February 2008; and B

(b)

orders declaring that the Exchange Control Regulations promulgated in Government Notice R1111 of 1 December 1961, as amended, alternatively certain provisions in the regulations, are inconsistent with the Constitution and invalid. C

[2] The third respondent, from whom no relief was sought, did not participate in the proceedings.

Judgment of the court a quo

[3] On 1 June 2010, the date on which the application was set down for D hearing, it was postponed sine die by Makgoba J, who ordered the appellant to pay the first and second respondents' wasted costs (including, in the case of both respondents, those occasioned by the employment of two counsel). The learned judge made this order because, in his view, the appellant had not complied with rule 16A of the Uniform Rules of Court. E

[4] Rule 16A(1) reads as follows:

'(1)(a) Any person raising a constitutional issue in an application or action shall give notice thereof to the registrar at the time of filing the relevant affidavit or pleading.

(b) Such notice shall contain a clear and succinct description of the F constitutional issue concerned.

(c) The registrar shall, upon receipt of such notice, forthwith place it on a notice board designated for that purpose.

(d) The notice shall be stamped by the registrar to indicate the date upon which it was placed on the notice board and shall remain on the notice board for a period of 20 days.' G

[5] The court a quo found that there was no indication that the rule 16A notice, which the appellant's attorney had prepared when the application was instituted, was filed, or, if it was filed with the registrar, that it was put on the notice board as required by the rule. H

[6] The learned judge also found that it was the responsibility of the appellant to satisfy himself that the registrar had caused the notice to be put on the notice board, and that the notice which the appellant's attorney had prepared did not adequately set out the basis on which the constitutionality of the Exchange Control Regulations was challenged.

[7] He motivated this part of his judgment as follows: I

'If one were to look at the purported notice which does not in itself comply with the rule in that as Mr Lüderitz [one of the counsel for the first respondent] correctly said or argued no particularities of the constitutional challenge had been set out fully. Much as in a notice of appeal a litigant is expected to set out the grounds of appeal both on J

Farlam JA (Mthiyane DP concurring)

A facts and on law it is likewise in this particular matter that the grounds of constitutional challenge should be succinctly set out for the interested party to know what the case is all about.'

[8] He had earlier referred to what Ackermann J said in Shaik v Minister of Justice and Constitutional Development and Others 2004 (3) SA 599 (CC) B (2004 (1) SACR 105; 2004 (4) BCLR 333; [2003] ZACC 24) para 24, about the purpose of rule 16A. The passage to which he referred reads as follows:

'The purpose of the Rule is to bring to the attention of persons (who may be affected by or have a legitimate interest in the case) the particularity of the constitutional challenge, in order that they may take C steps to protect their interests.'

He proceeded: 'I underline the particularity of the constitutional challenge.'

[9] He proceeded to hold that non-compliance with rule 16(A)(1) D cannot be condoned and that if the appellant wished to proceed with the constitutional challenge the matter would have to be postponed for the rule to be complied with, and that the appellant would have to bear the wasted costs occasioned by the postponement.

E [10] The conclusion that the costs of the postponement had to be borne by the appellant was based on a finding that the postponement had been brought about 'by the conduct of the [appellant] and nobody else and it is only fair that [he] should bear the costs thereof'.

[11] During the proceedings in the court a quo a notice in terms of rule 16A, which bore the registrar's stamp but did not have the case number F written on it, was handed in from the bar. The registrar's stamp indicated that it was filed with the registrar on 28 January 2009.

Facts

[12] The notice reads as follows:

G 'BE PLEASED TO TAKE NOTICE that the applicant herein has raised a constitutional issue in the application filed under the above case number.

TAKE NOTICE FURTHER that the Applicant seeks an order:

1.

Declaring that paragraphs (a), (c) and (d) of Regulation 3(1) of H the Exchange Control Regulations as promulgated by Government Notice R1111 of 1 December 1961 and as amended (the Exchange Control Regulations) are inconsistent with the Constitution and are invalid.

2.

Declaring that all of the provisions of Regulation 3(3) of the Exchange Control Regulations, following the semi colon at the end I of paragraph (b) of that sub-regulation, are inconsistent with the Constitution and invalid.

3.

Declaring that Regulation 3(5) of the Exchange Control Regulations is inconsistent with the Constitution and is invalid.

4.

In the alternative to prayers 1 to 3 above, declaring that the Exchange Control Regulations in their entirety are inconsistent J with the Constitution and are invalid.

Farlam JA (Mthiyane DP concurring)

'AND TAKE NOTICE FURTHER that any interested party in any of the A aforementioned constitutional issues may, with the written consent of all the parties to the proceedings, given by no later than 20 days after filing of the Plaintiff's Affidavit, be admitted therein as amicus curiae, upon such terms and conditions as may be agreed upon in writing by the parties. B

KINDLY forthwith place this notice on the notice board designated for this purpose and ensure that same remains on such notice board for a period of 20 days, whereafter you shall endorse the notice to state on which day the notice was placed on the notice board and, on expiry of the 20 day period, place such endorsed notice in the court file.'

[13] At no stage prior to 17 May 2010 did either the first or the second C respondent raise the contention that rule 16A had not been complied with.

[14] On 17 May 2010 the second respondent filed his heads of argument, in which the following was said: D

'We submit that both the content and the context of the challenge address a constitutional issue. In the circumstances the applicant ought to have issued the required Rule 16A notice, putting all participating parties, and any prospective parties with an interest in the legislation that is challenged herein, on terms regarding the orders that it seeks. Its failure to do so has compromised its ability to proceed with the E constitutional challenge to the legislation.'

[15] By this time it was, of course, too late for the appellant to comply with the rule before the date on which the application was set down for hearing. F

[16] At some stage after 8 April 2010 when the appellant's attorney met with the first respondent's attorney to reach agreement on the index and record for the high court hearing, the court file was misplaced in the registrar's office. The appellant's attorney has reconstructed the record in the main application but he had not retained a copy of the bundle of G additional non-contentious documents, which included the original rule 16A notice, and so was only able to produce the copy of the notice to which I have referred.

[17] When the case was called before the court a quo both the first and the second respondent argued that rule 16A had not been complied with H and that the appellant was left, as counsel for the first respondent put it —

'with a choice of either abandoning [his] constitutional challenge or seeking a postponement of the hearing of the application'.

Counsel for the first respondent went on to submit that whatever course I he adopted the appellant should 'be held responsible for the wasted costs occasioned by his failure to comply with the rules of court'. Counsel for the second respondent did not go so far as regards costs because it was only in the event of the appellant's choosing to ask for a postponement that they submitted that the appellant should tender the respondents' costs. J

Farlam JA (Mthiyane DP concurring)

Application for leave to appeal A

[18] The appellant applied for leave to appeal against the costs order to the full bench of the North Gauteng High Court. Because he was seeking leave to appeal against a costs order he set out in the founding affidavit filed on his behalf the exceptional circumstances which indicated why, in B his submission, it was in the interests of justice for leave to appeal to be granted against the costs order: see s 21A(3) of the Supreme Court Act 59 of 1959, as amended.

[19] Makgoba J refused the application for leave to appeal with costs, including those occasioned by the employment of two counsel by both C first and second respondents.

[20] In his judgment refusing leave, Makgoba J held that his decision that rule 16A had not been complied with was a ruling which was not a final order, that his costs order had not been given in what he called 'proceedings . . . wholly of a constitutional nature' (so that the general ...