Premier, Limpopo Province v Speaker of the Limpopo Provincial Government and Others

• Jurisdiction: South Africa
• Judge: Ngcobo CJ, Moseneke DCJ, Cameron J, Froneman J, Jafta J, Khampepe J, Mogoeng J, Nkabinde J, Van der Westhuizen J, Yacoob J and Mthiyane AJ
• Judgment Date: 11 August 2011
• Docket Number: CCT 94/10
• Hearing Date: 24 February 2011
• Counsel: BR Tokota SC (with ZZ Matebese) for the applicant. SM Lebala SC (with LA Mmusi and EM Mere) for the first respondent. JC Heunis SC (with GA Oliver) for the second and third respondents. G Marcus SC (with N Rajab-Budlender) for the fourth respondent.
• Court: Constitutional Court

Ngcobo CJ (Moseneke DCJ, Froneman J, Jafta J, Khampepe J, Mogoeng J, Mthiyane AJ, Nkabinde J and Van der Westhuizen J B concurred):

Introduction

[1] This application, which has been referred to us by the Premier of the Limpopo Province (Premier) pursuant to the provisions of s 121 of the C Constitution, concerns the authority of provincial legislatures to pass legislation dealing with their own financial management. [1] Provincial legislatures have authority to pass legislation with regard to the functional areas listed in Schedules 4 and 5 to the Constitution. [2] In addition to the functional areas listed in these Schedules, they also have the power D to pass legislation with regard to any matter 'that is expressly assigned to [them] by national legislation', [3] or 'any matter for which a provision of the Constitution envisages the enactment of provincial legislation'. [4]

[2] The question presented in these proceedings is whether the provincial legislature of Limpopo (provincial legislature) has the authority to enact legislation dealing with its own financial management. It arises out E of the Financial Management of the Limpopo Provincial Legislature Bill, 2009 [5] (Bill), which was passed by the provincial legislature, but which the Premier has declined to assent to and sign.

Background

F [3] On 24 November 2009 the provincial legislature passed the Bill, and on 8 December 2009 submitted it to the Premier for his assent and signature. The Premier had reservations concerning the competence of the provincial legislature to pass the Bill. On 8 January 2010 he referred the Bill to the provincial legislature for reconsideration in the light of his reservations. [6] On 25 February 2010 the provincial legislature referred G the Bill back to the Premier. It indicated that it had reconsidered the Bill in the light of the Premier's reservations and was of the view that the Bill was constitutional.

[4] Acting under s 121(2)(b) of the Constitution, the Premier referred the Bill to this court for a decision on its constitutionality. H Section 121 provides:

'(1) The Premier of a province must either assent to and sign a Bill passed by the provincial legislature in terms of this Chapter or, if the

Ngcobo CJ (Moseneke DCJ, Froneman J, Jafta J, Khampepe J, Mogoeng J, Mthiyane AJ, Nkabinde J and Van der Westhuizen J Concurred)

Premier has reservations about the constitutionality of the Bill, refer it A back to the legislature for reconsideration.

(2) If, after reconsideration, a Bill fully accommodates the Premier's reservations, the Premier must assent to and sign the Bill; if not, the Premier must either —

(a)

assent to and sign the Bill; or B

(b)

refer it to the Constitutional Court for a decision on its constitutionality.

(3) If the Constitutional Court decides that the Bill is constitutional, the Premier must assent to and sign it.'

[5] The Speaker of the National Assembly, the Chairperson of the C National Council of Provinces (together referred to as Parliament) and the Minister for Finance filed affidavits contending that the Bill is unconstitutional. [7] They contend that the provisions of s 3 of the Financial Management of Parliament Act [8] (FMPA), read with Schedule 1 thereto, do not expressly assign the power to pass legislation dealing with the financial management of the provincial legislatures. D They also submit that provincial legislatures have no competence to pass legislation dealing with their own financial management. The Speaker of the Limpopo Provincial Legislature filed an affidavit maintaining that the provincial legislature has the competence to regulate its own financial management and that the Bill is therefore constitutional. E

Ngcobo CJ (Moseneke DCJ, Froneman J, Jafta J, Khampepe J, Mogoeng J, Mthiyane AJ, Nkabinde J and Van der Westhuizen J Concurred)

A [6] The affidavits filed on behalf of Parliament [9] and the provincial legislature [10] were late. Condonation is sought in each case. We consider that it is in the interests of justice to grant condonation in respect of each application. In reaching this conclusion we have had regard to: the absence of prejudice to, and opposition by, other parties; and the B minimal period of delay involved in each case, as well as the explanations therefor. More importantly, the questions presented in this case are of considerable importance to Parliament and the provincial legislature and it is undesirable to consider these questions without their participation.

The Bill C

[7] The stated purpose of the Bill, as set out in its long title, is —

'(t)o regulate the financial management of the legislature in a manner consistent with its status in terms of the Constitution; to ensure that all revenue, expenditure, assets and liabilities of the legislature are managed efficiently, effectively and transparently; to provide for the responsibilities D of persons entrusted with financial management in the legislature; and to provide for matters connected therewith'.

[8] Save for a reference in the long title of the FMPA to 'financial management norms and standards for provincial legislatures', [11] the purpose of the Bill is drafted in terms identical to that of the FMPA, which regulates the financial management of Parliament. In addition, the substantive provisions of the Bill are drafted in terms substantially similar to those contained in the FMPA. It is therefore plain from its declared E purpose, as well as from its substantive provisions, that the Bill regulates the financial management of the provincial legislature.

F [9] What are the Premier's reservations about the Bill?

The Premier's reservations

[10] The Premier's reservations about the constitutionality of the Bill are contained in his letter of 8 January 2010 referring the Bill to the G provincial legislature for reconsideration. The letter reads as follows:

Ngcobo CJ (Moseneke DCJ, Froneman J, Jafta J, Khampepe J, Mogoeng J, Mthiyane AJ, Nkabinde J and Van der Westhuizen J Concurred)

'1.

BACKGROUND A

The Limpopo Provincial Legislature referred the above-mentioned Bill to the Premier to assent to and sign in terms of section 121 of the Constitution of the Republic of South Africa, 1996 (hereinafter referred to as ''the Constitution''). The Premier has reservations regarding the constitutionality of the Bill, as explained in B paragraph 2, and therefore refers the Bill back to the Legislature for reconsideration in terms of section 121(1) of the Constitution.

2.

LEGAL ANALYSIS

2.1

A Provincial legislature derives its power to pass legislation from section 104 of the Constitution.

a.

Section 104(1)(b) provides —

The legislative authority of a province is vested in its C provincial legislature and confers on the provincial legislature the power —

(a)

. . . .

(b)

to pass legislation for its province with regard to —

(i)

any matter within a functional area listed in Schedule 4; D

(ii)

any matter within a functional area listed in Schedule 5;

(iii)

any matter outside those functional areas, and that is expressly assigned to the province by national legislation; E

(iv)

any matter for which a provision of the Constitution envisages the enactment of provincial legislation; and

(c)

to assign any of its legislative powers to a Municipal Council in that province.

b.

Section 104(5) provides — F

A provincial legislature may recommend to the National Assembly legislation concerning any matter outside the authority of that legislature or in respect of which an Act of Parliament prevails over a provincial law.

2.2

A scrutiny of Schedules 4 and 5 of the Constitution reveals that neither of the Schedules confers powers on a provincial G legislature to legislate in respect of financial management of legislatures. In order to have the power to legislate on financial matters that power must be expressly assigned to the province by national legislation or it must be a matter for which a provision of the Constitution envisages the enactment of provincial legislation. The question arises whether H section 3 of the Financial Management of Parliament Act, 2009 (Act No 10 of 2009) assigns the power in question to a provincial legislature. Section 3 provides that provincial legislatures must adhere to the norms and standards for financial management set out in Schedule 1. In our view the wording used in section 3 read with Schedule 1 which provides I Legislation enacted by a provincial legislature to regulate its financial management must promote accountable, transparent and sound financial management . . . the Financial Management of Parliament Act, 2009 does not assign a power, at best it can be argued that it is assumed in the wording that the province has the relevant power. J

Ngcobo CJ (Moseneke DCJ, Froneman J, Jafta J, Khampepe J, Mogoeng J, Mthiyane AJ, Nkabinde J and Van der Westhuizen J Concurred)

2.3

A Chapter 13, sections 213 to 222 of the Constitution provides for financial matters. This chapter of the Constitution provides for national legislation that must be enacted by parliament to provide for measures to ensure both transparency and expenditure control. It provides that national treasury must enforce compliance of the legislation.

2.4

B National legislation that provides for the measures outlined in the Constitution was passed in the form of the Public Finance Management Act, 1999 (Act No 1 of 1999) [hereinafter referred to as the PFMA]. The PFMA is applicable to provincial legislatures and this is confirmed in section 3(1) of the Act that provides —

"(1) (d)

C This Act, to the extent indicated in the Act, applies to a provincial legislature, subject to subsection (2).

(2)

To the extent that a provision of this Act applies to a provincial legislature, any...