Democratic Alliance v President of the Republic of South Africa and Others (21424/2020) [2020] ZAGPPHC 326 (29 July 2020)

IN THE HIGH COURT OF SOUTH AFRICA

GAUTENG DIVISION, PRETORIA

REPORTABLE: YES OF INTEREST TO OTHER JUDGES: YES REVISED: YES

CASE NO: 21424/2020 In the matter between: DEMOCRATIC ALLIANCE Applicant and PRESIDENT OF THE REPUBLIC OF SOUTH AFIRCA First Respondent MINISTER OF CO-OPERATIVE GOVERNANCE AND TRADITIONAL AFFAIRS Second Respondent THE MINISTER OF SMALL BUSINESS DEVELOPMENT Third Respondent DIRECTOR GENERAL: DEPARTMENT OF SMALL BUSINESS DEVELOPMENT Fourth Respondent MINISTER OF TRADE AND INDUSTRY ECONOMIC FREEDOM FIGHTERS Fifth Respondent Intervening Party COMMISSION FOR GENDER EQUALITY Amicus Curiae

JUDGMENT: APPLICATION FOR LEAVE TO APPEAL

THE COURT

Introduction

[1] On 19 June 2020 this Court ordered that the criteria which third and fourth respondents employed for determining which persons or entities are entitled to receive finds under the Debt Finance Scheme and the Business Growth Resilience Fund be reviewed and set aside and thus declared unlawful. Of relevance to this application for leave to appeal are the following two paragraphs of this order:

‘3. In the reformulation of criteria to be employed in the distribution of funds and the either the Debt Finance Scheme or the Business Growth Resilience Fund, the Minister must take into account race, gender, youth and disability.

4. There is no award as to costs.’

[2] The applicant seeks leave to appeal to the Supreme Court of Appeal against paragraphs 3 and 4 of the order. There is no appeal by any respondent against the balance of the order.

[3] In terms of s 17 (1) (a) of the Superior Courts Act 10 of 2013 ,leave to appeal may only be granted when;

(i) the appeal would have a reasonable prospect of success; or

(ii) there is some other compelling reason why the appeal should be heard, including conflicting judgments on the matter under consideration. (our emphasis)

[4] The test as now set out in s 17 constitutes a more formidable threshold over which an applicant must engage than was the case. Previously the test was whether there was a reasonable prospect that another court might come to a different conclusion. See, for example, Van Heerden v Cronwright and others 1985 (2) SA 342 (T) at 343 H. The fact that the Superior Courts Act now employs the word “would” as opposed to “might” serves to emphasise this point. As the Supreme Court of Appeal said in Smith v S 2012 (1) SACR 567 (SCA) at para 7;

‘More is required to be established than that there is a mere possibility of success, that the case is arguable on appeal or that the case cannot be categorised as hopeless. There must in other words be a sound, rational basis for the conclusion that there are prospects of success on appeal.’

[5] This dictum serves to emphasis a vital point: Leave to appeal is not simply for the taking. A balance between the rights of the party which was successful before the court a quo and the rights of the losing party seeking leave to appeal need to be established so that the absence of a realistic chance of succeeding on appeal dictates that the balance must be struck in favour of the party which was initially successful.

[6] The second basis upon which leave should be granted is that there is a compelling reason, that is apart from the existence of conflicting judgments on the matter under consideration which require clarification from a higher court. In essence the compelling reason is whether the case raises issues of significant public importance. See Zuma v Democratic Alliance 2018 (1) SA 200 SCA at para 57. But even here caution must be exercised. As Wallis JA said in Minister of Justice and Constitutional

Development v Southern African Litigation Centre 2016 (3) SA 317 (SCA) at para 24;

‘That is not to say that merely because the High Court determines the issue of public importance it must grant leave to appeal. The merits of the appeal remain vitally important and will often be decisive.’( our emphasis)

The basis of the applicant’s case

[7] Stripped to its essentials, the applicant’s submission is that there is a reasonable prospect that another court would find that the third respondent (the Minister) is not obliged to have regard to the impugned criteria of race, gender, youth and disability when she distributes disaster relief out of the two funds. In short, the appeal focussed on the wording employed in paragraph 3 of the order namely that the Minister “must” have regard to race, gender, youth and disability. In addition, the applicant contends that the relief sought by it was directed at an entirely different question, namely whether it was permissible for the Minister to have regard to the impugned criteria when distributing disaster relief. None of the respondents had applied for an order that the Minister was obligated to have regard to these criteria; hence the Court should have refrained from including para 3 in the order that it granted.

[8] The applicant’s case is that nothing within the provisions that the Disaster Management Act 57 of 2002 (the Disaster Act) permits the consideration of race, gender, age and disability in the taking of decisions to distribute Disaster Relief. Applicant contends that the Disaster Act empowers a State to take action in order to address need caused by disaster. On the face of its text, the Disaster Act does not obligate the State to address historical discrimination that is unrelated to the disaster.

While applicant conceded that there are some provisions in the Disaster Act that refer to women, the aged, youth and persons with disabilities (see ss 25 (1)(c) (vii), 38 (1)(c) (vii), 39 (1)(c) (vii), 52 (1)(c) (vii) and 53 (1)(c) (vii)) of the Act), none of these provisions, in the view of applicant , impose an obligation on the Minister to have regard to women, the aged, youth and persons with disabilities when distributing disaster relief. Applicant contends further that the provision which she expressly invokes for the distribution of disaster relief, being s 54 of the Act, does not refer to women, age or disability and in no way does the Disaster Act refer to race.

[9] Applicant then turned to an examination as to whether the Republic of South Africa Constitution 108 of 1996 imposes such an obligation upon the Minister. In particular, Mr Cockrell who appeared on behalf of the applicant together with Mr Bishop and Mr Tsele referred to s 9 (2) of the Constitution which provides that affirmative action measures may be taken. In Mr Cockrell’s view this provision did not impose an obligation on the State to apply affirmative action

measures nor an obligation upon the Minister to determine the distribution of funds on the basis of the impugned criteria. In addition he submitted that s 39 (2) could not justify the conclusion that the impugned criteria had to be taken into account when interpreting the Disaster Act’s provisions which empowered the Minister to distribute disaster relief.

THE MERITS ARGUMENT

[10] Turning to whether the question of race was part of the dispute which confronted this Court, it bears emphasising that the applicant raised it squarely in its replying affidavit, when it stated ‘the respondents did not explain why they have chosen in respect of these funds to distribute on the basis of gender, age and disability but not race or BBBEE status nor do they provide any assurance that they will not in the future discriminate on the basis of race or BBBEE status. As a result the question of race was placed before the Court and was comprehensively debated by counsel, particularly in the light of the intervention of the EFF and the submissions that were made on its behalf.

[11] The determination that the Minister was required to take account of the impugned criteria was based on the provisions of the Disaster Act. The definition of disaster as defined in s1, inter alia contains the following : ‘of a magnitude that exceeds the abilities of those affected by the disaster to cope with its effects using only their own resources.’ Furthermore, s1 includes a definition of vulnerability : ‘the degree to which an individual household, a community or area may be adversely affected by a disaster’. Section 27 (2) (n) provides for the Minister to make regulations concerning ‘other steps that may be necessary to prevent an escalation of a disaster or to alleviate, contain and minimise the effects of the disaster.’ Section 56 which provides for guiding principles for the funding of post disaster recovery and rehabilitation refers to the magnitude and severity of the disaster, the financial capacity of the victims of the disaster and their accessibility to commercial insurance.’(s56(4)(f)).

[12] There are additional sections of the Disaster Act that have relevance to the interpretative task that confronted this Court. S7(2) provides that the National Disaster Management Framework must reflect a proportionate emphasis on disasters of different kinds, severity and magnitude that occur or may occur in South Africa, place emphasis on measures that reduce the vulnerability of disaster prone areas, community and households. Section 20 (1)(ii) tasks the National Centre with the development of means of assessing the vulnerability of communities and households of disasters that may occur in order that government may respond accordingly.

[13] The task of this Court was to provide a coherent interpretation to the applicable provisions of the Disaster Act. The Court was confronted with two options: applicant’s interpretation in which the words are given their literal meaning shorn of context and in particular, the social and economic reality of South Africa which courts are obliged to take into account in the context of our transformative constitutional enterprise particularly when interpreting a statute, where words used in the statute do require interpretive work. The court is then required to have recourse to the spirit, purport and objects of the Bill of Rights in terms of s 39 (2) of the Constitution. That, as we noted in the principal judgement, meant that the court was to be guided by the normative framework of the Bill of Rights read as a whole. Flowing from the idea of the constitutional vision of a South Africa where all who live in the country enjoy a life in which

their dignity is respected, they are treated with due consideration of the principle of substantive equality and their freedom is thus maximised. Within such a framework it is incumbent upon a court to give the words employed in a statute a meaning which resonates with the daily reality of South African life. Something of this kind was expressed, albeit in the minority

judgment, by Justice Sachs in Volks v Robinson [2005] ZACC 2; 2005 (5) BCLR 446 (CC)at para162

‘This Court has on numerous occasions stressed the importance of recognising patterns of systemic disadvantage in our society when

endeavouring to achieve substantive and not just formal inequality. The need to take account of this context is as important in the area of gender as it is in connection with race and it is frequently more difficult to do so because of its hidden nature.’

[14] Neither in its heads nor in argument before this Court did applicant provide a cogent reason to why s 39 (2) of the Constitution should not play a role in the interpretive process. The only response was a submission that Parliament did not include these impugned criteria and it was thus not for a court to rewrite legislation. It is correct that courts must be wary of determining cases on the basis of legislation that the court would have preferred to have been written. But this is not such a situation, this is a case where the words of the Disaster Act include ‘need’ and ‘vulnerability’ which must be interpreted .To give a meaning to these words as they appear in the various sections of the Disaster Act to which we have referred, without taking account of the obvious fissures in our society and thus ignore or elide over them

is to approach South Africa in a colour blind fashion which effectively to run counter to the normative framework of the Constitution to this extent .

[15] In crisp terms: the Constitution enjoins fundamental social and economic redress after 300 years of colonial and apartheid rule. There is .in our view therefore no prospect that another court would apply a literal interpretation to the Disaster Act and gloss over the context in which the Act must be interpreted. To do so is to live in a world totally divorced from the racism and sexism that continues to divide our country and where those most in need and most in vulnerable conditions happen to be black.

[16] The only other submission made to counter this conclusion was that, when people are in equal need as a result of a disaster, the spirit, purport and objects of the Bill of Rights would require that the Minister should be at large to adopt the view that all those in need should be assisted equally without regard to race, gender, age or disability. In the view of the applicant, paragraph 3 of the order will foreclose the Minister from adopting such a view and therefore the order was inconsistent with the spirit, purport and objects of the Bill of Rights.

[17] Such a conclusion is dependent upon the regulations that the Minister promulgates after an exercise of her discretion. It may well be that having taken account of race, gender, age or disability, the Minister concludes that the cohort of people most in need of the designated funds are such that race, gender, age or disability should play no or an insignificant role in the calibration of the criteria to be employed in the distribution of such funds. But that is not an issue that can be decided at this point, for the applicant has jumped the proverbial gun and launched this application for leave to appeal

without waiting for the Minister to react by way of a fresh set of regulations.

[18] In short the fact that the Minister must take the impugned criteria into account does not produce an inevitable result A legal evaluation would require a careful assessment of the new regulations in the light of the context in which they were promulgated. Speculative kinds of argument raised in this connection by the applicant do not take its case any further.

Are there compelling reasons to grant leave?

[19] Mr Cockrell argued that there were compelling reasons why the appeal should be heard that is in terms of s 17 (1) (a) (ii) of the Superior Courts Act. Assuming away for the moment the dictum cited above of Wallis JA in the Southern African Litigation Centre case, supra, namely that the merits of the appeal remain vitally important and will often be decisive, the question arises as to whether the ratio decidendi of this court is likely to determine not only the distribution of funds for all manner of relief schemes in respect of the Covid 19 pandemic.

[20] Mr Cockrell noted that the ratio of this Court would bind all courts in Gauteng and may also bind all other divisions of the High Court subsequent to the enactment of the Superior Courts Act. In this connection he cited an article by Malcolm Wallis “Whose decisis must we stare?” (2018) 135 SALJ1. There is no need to engage in the interesting issues raised by Judge Wallis, writing in an extra curial capacity. There is a binding ratio in that, at the very least, the judgement of this court is binding on all courts in Gauteng.

[21] But what is the compelling reason which was raised? It cannot be that there is a contradictory judgment for there is none. The argument of the existence of a compelling reason dissolves upon a careful examination of Mr Cockrell’s submissions. He submitted that the real issue was that this Court had ordered that the Minister “must” take account of impugned criteria, whereas there would not have been such a difficulty if the court had merely said that the Minister “may” take account of the impugned criteria. What this effectively means is that if the Minister decided to exercise a discretion to take account of the impugned criteria (given the use of the word’ may’) and assuming that the criteria were rationally calibrated to the purpose of the funds, there would be no objection thereto. The difference therefore between the outcome of the ‘may’ and the ‘must’ in these circumstances poses its own question as to where the compelling importance might lie. As we have indicated earlier, absent regulations which would show the extent to which the Minister attributes importance to the various impugned criteria in the regulations so promulgated, it is impossible to evaluate whether these regulations would pass legal muster. In short, there is nothing of such compelling importance in the judgment granted by this Court to justify the conclusion that there is a compelling reason to grant leave to appeal.

[22] There was in addition an application for leave to appeal against paragraph 4, that is the costs order. It was contended that as the applicant had been substantially successful in that, the Minister’s decision to distribute funds without clearly stated criteria had been reviewed and set aside. Being successful in this regard, applicant was entitled to its costs. However, the main relief which was and initially sought by the applicant as justified in its founding affidavit was abandoned

after the answering affidavit was filed. Applicant therefore only obtained a limited form of relief Given that the balance of the case argued raised a series of constitutional questions, this court deemed it inappropriate to make an award as to costs. There does not appear that on its own, any basis which would justify another court having to reconsider this question.

[23] For all of these reasons therefore, the application for leave to appeal is dismissed with costs, including the costs of two counsel.

Mlambo JP

Davis JP

Molefe J

Date of hearing: 23 July 2020

Date of judgment: 29 July 2020

Appearances:

Counsel for the Applicant: Adv. A Cockrell SC

Michael Bishop

Michael Tsele

Instructing Attorneys: Minde Schapiro Smith Inc.

Counsel for the Respondents: Adv. Kameshni Pillay SC

Trudy Moshodi

Michael Dafel

Instructing Attorneys:

The State Attorney

Counsel for the Intervening Party: Adv. Ngcutaitobi SC

Cingase Tabata

Kameel Premhid

Mluleki Marongo

Instructing Attorneys: Ian Levitt Attorneys

Counsel for the Amicus Curiae:

Adv. Reghana Tulk, Adv. Yanela Ntloko, Adv. Nomonde Nyembe

Instructing Attorneys:

Mtshabe Attorneys