Fair-Trade Independent Tobacco Association v President of the Republic of South Africa and Another (21688/2020) [2020] ZAGPPHC 311 (24 July 2020)

IN THE HIGH COURT OF SOUTH AFRICA

GAUTENG DIVISION PRETORIA

(1) REPORTABLE: YES

(2) OF INTEREST TO OTHER JUDGES: YES (3) REVISED: YES

24 July 2020

CASE NO: 21688/2020

In the matter between:

FAIR-TRADE INDEPENDENT TOBACCO

APPLICANT

ASSOCIATION

and

PRESIDENT OF THE REPUBLIC OF FIRST RESPONDENT

SOUTH AFRICA

MINISTER OF CO-OPERATIVE GOVERNANCE

SECOND RESPONDENT

AND TRADITIONAL AFFAIRS

JUDGMENT: APPLICATION FOR LEAVE TO APPEAL

THE COURT

INTRODUCTION

[1] The Applicant (FITA) seeks leave to appeal the judgment and order of this Court handed down on 26 June 2020. Leave is sought to appeal to the Supreme Court of Appeal (SCA) on the grounds embodied in its notice of application for leave to appeal dated 3 July 2020. Leave to appeal is sought in terms of section 17(1)(a)(ii) and section 17(1)(a)(i) of the Superior Courts Act[1] (Superior Courts Act). FITA relies on a number of grounds which we refer to later.

[2] Section 17(1) of the Superior Courts Act provides that leave to appeal may only be granted where the Judge or Judges concerned are of the opinion that —

“(a) (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”

[3] The primary case made out in support of the application is that this matter is one of significant public interest and national importance. It is asserted that it raises novel legal questions concerning the threshold requirements for the exercise of executive power by the Minister in terms of the Disaster Management Act (the Act).[2] As such FITA contends that leave to appeal in terms of section 17(1)(a)(ii) to the SCA should therefore be granted.

[4] As to the section 17(1)(a)(i) test, in The Mont Chevaux Trust (IT2012/28) v Tina Goosen & 18 Others, the Land Claims Court, per Bertelsmann J, outlined how the Superior Courts Act had raised the bar for granting leave to appeal —

"It is clear that the threshold for granting leave to appeal against a judgment of a High Court has been

raised in the new Act. The former test whether leave to appeal should be granted was a reasonable prospect that another court might come to a different conclusion, see Van Heerden v Cronwright & Others 1985 (2) SA 342 (T) at 343H. The use of the word "would" in the new statute indicates a measure of certainty that another court will differ from the court whose judgment is sought to be appealed against."[3]

This was confirmed in Acting National Director of Public Prosecutions and Others v Democratic Alliance In Re: Democratic Alliance v Acting National Director of Public Prosecutions and Others.[4]

[5] The SCA in Smith v S, per Plasket AJA, had occasion to consider what constituted reasonable prospects of success in section 17(1)(a)(i) and held:

"What the test of reasonable prospects of success postulates is a dispassionate decision, based on the facts and the law that a court of appeal could reasonably arrive at a conclusion different to that of the trial court. In order to succeed, therefore, the appellant must convince this court on proper grounds that he has prospects of success on appeal and that those prospects are not remote but have a realistic chance of succeeding. 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]

[6] As such, in considering the application for leave to appeal, it is crucial for this Court to remain cognizant of the higher threshold that needs to be met before leave to appeal may be granted. There must exist more than just a mere possibility that another court, the SCA in this instance, will, not might, find differently on both facts and law. It is against this background that we consider the most pivotal grounds of appeal.

GROUNDS ON WHICH LEAVE TO APPEAL IS SOUGHT

Costs

[7] The first ground relates to the issue of costs. FITA argues that the Court erred in making an adverse costs order against it given that counsel for the respondents specifically stated in argument that it would not seek costs against it. FITA also relies on the Constitutional Court’s finding in Biowatch Trust v Registrar, Genetic Resources and Others[6] in contending that given that the application was brought in the public interest, an adverse costs order should not have been made

against it.

[8] It is a basic rule of our law that an award of costs is in the discretion of the Court and such discretion must be exercised judicially.[7] In Kruger Bros & Wasserman v Ruskin Innes CJ held that:

“the rule of our law is that all costs – unless expressly otherwise enacted – are in the discretion of the Judge. His discretion must be judicially exercised, but it cannot be challenged, taken alone and apart from the main order, without his permission.”[8]

[9] It is a trite principle that in the ordinary courts, the general rule is that “costs follow the result.”[9] Equally trite is the principle that a court has a discretion whether to allow the fees for the employment of more than one counsel. In Motaung v Makubela and Another NNO; Motaung v Mothiba NO,[10] the court quoted the following passage from Koekemoer v Parity Insurance Company Ltd and Another[11] with approval:

“The enquiry in any specific case is whether, in all the circumstances, the expenses incurred in the employment of more than one counsel were “necessary for the proper attainment of justice or for defending the rights of the parties,” and were not incurred through “over-caution, negligence or mistake”. If it was a wise and reasonable precaution to employ more than one counsel, the costs incurred in doing so are allowable as between party and party. But they are not allowable if such employment was merely luxurious.”

It is instructive that the Constitutional Court, considering the discretion of the High Court on the issue of costs, stated in Hotz and Others v University of Cape Town[12] that —

“A cautious approach is, therefore, required. A court of appeal may have a different view on whether the costs award was just and equitable. However, it should be careful not to substitute its own view for that of the High Court because it may, in certain circumstances be inappropriate to interfere with the High Court’s exercise of discretion.”

[10] With regard to the so-called Biowatch principle, the Constitutional Court found that as a general rule, in constitutional litigation, an unsuccessful litigant in proceedings

against the State ought not to be ordered to pay costs. Thus, the principle is that in litigation between the State and a party seeking to assert a constitutional right, ordinarily, if the government loses, it should pay the costs of the other side and if the government wins, each party should pay its own costs. In Harrielall v University of KwaZulu-Natal,[13] the Constitutional Court per Jafta J restated the principles underlying the Biowatch rule:

“In Biowatch this Court laid down a general rule relating to costs in constitutional matters. That rule applies in every constitutional matter involving organs of State. The rule seeks to shield unsuccessful litigants from the obligation of paying costs to the State. The underlying principle is to prevent the chilling effect that adverse costs orders might have on litigants seeking to assert constitutional rights.

However, the rule is not a licence for litigants to institute frivolous or vexatious proceedings against the State. The operation of its shield is restricted to genuine constitutional matters. Even then, if a litigant is guilty of unacceptable behaviour in relation to how litigation is conducted, it may be ordered to pay costs. This means that there are exceptions to the rule which justify a departure from it. In Affordable Medicines this Court laid down exceptions to the rule. Ngcobo J said:

‘There may be circumstances that justify departure from this rule such as where the litigation is frivolous or vexatious. There may be conduct on the part of the litigant that deserves censure by the Court which may influence the Court to order an unsuccessful litigant to pay costs.’”[14]

[11] In Biowatch itself, Sachs J held that —

“Equal protection under the law required that costs awards not be dependent on whether the parties are acting in their own interests or in the public interest. Nor should they be determined by whether the parties were financially well-endowed or indigent. The primary consideration in regard to costs in constitutional litigation had to be the way in which a costs order would hinder or promote the advancement of constitutional justice. The ability to finance the litigation was not a relevant consideration in making a costs order. The general rule in constitutional litigation was that an unsuccessful litigant ought not to be ordered to pay costs to the State. That should not be departed from simply because of a perceived ability of the unsuccessful litigant to pay. Conversely, a party should not get a privileged status simply because it was acting in the public interest or happened to be indigent. It should be held to the same standards of conduct as any other party, particularly if it had had legal representation. This meant it should not be immunised from appropriate sanctions if its conduct had been vexatious, frivolous, professionally unbecoming or in any other similar way abusive of the processes of the Court.”[15]

[12] Having regard to the above, we are not persuaded that another Court will find that this Court erred in ruling on costs as it did. Not only was this Court acting within the boundaries of its discretion in granting the adverse costs order as it did, the matter does not fall within the ambit of Biowatch. It should be remembered that FITA conceded during oral argument that this was not a constitutional matter. This concession to us is dispositive of this ground. In Biowatch, the applicant was acting in the public interest and in so doing, sought to vindicate a constitutional right. This is not the case in this application. In this application it is quite evident that FITA is in fact not acting in the public interest as it alleges but is in reality actually acting on behalf of its members who are all tobacco products sellers who have a substantial interest in ensuring that the application succeeds. Having regard to the nature of public interest litigation, litigants bringing an application in the public’s interest in terms of section 38(d) of the Constitution should not have as much of a substantive and financial interest in the outcome of the matter as FITA does in this one. A vested interest in the matter — both financially and otherwise — clearly taints the legitimacy of the claim that the matter is in fact being brought solely in the public’s interest.[16] Furthermore, even if FITA as a private litigant is litigating to ventilate issues of public importance, this is not enough to shield it from an adverse costs order as noted by Sachs J in Biowatch. A constitutionally discernable right must be sought to be vindicated against the State in order for the Biowatch principle to apply.

Regulations 27 and 45 are ultra vires

[13] The second ground of the application for leave to appeal is based on the question whether regulations 27 and 45 are ultra vires. FITA argues that the Court erred in its approach to testing whether the executive action in question was rational or rationally connected with the purpose for which the regulations may be promulgated in terms of section 27 of the Act. FITA contends that the Court erred in finding that the interpretation of “necessary” in terms of section 27(2) and (3) of the Act should be interpreted to mean “reasonably necessary” as opposed to “strictly/ absolutely necessary”. FITA reiterates its reliance on the Constitutional Court’s judgment in Pheko and Others v Ekurhuleni Metropolitan Municipality[17] (Pheko), considered in our judgment. FITA further repeats its argument that the medical literature relied on by the second respondent (the Minister) was not supportive of the ban imposed on the sale of cigarettes and related tobacco products.

[14] There is no merit in the argument underpinning this ground. Reliance on Pheko by FITA, as we pointed out in our judgment, is misplaced.[18] FITA persists with its contention that the Constitutional Court in Pheko concluded that “necessary must be interpreted narrowly within the context of the Act as a whole.” However, a reading of Pheko, especially at paragraph 37 thereof, makes it clear that it is section 55, not the entire Act, that the Constitutional Court says must be interpreted narrowly.[19] Moreover, as discussed in our judgment, it is instructive that both sections 27 and 55 refer to differing levels of states of disaster — one national and the other one local. It is therefore evident, in our view, that the legislature drafted the Act in this manner for a reason: that different principles should apply when dealing with a local state of disaster versus when dealing with a national state of disaster. Pheko was decided in the context of a local state of disaster that concerned evictions, demolitions of homes and the right to housing hence the applicability and relevance of section 55. Given that the present matter concerns a national state of disaster, section 27 is applicable and Pheko is therefore distinguishable, as we said, on the facts and therefore cannot be relied upon. Moreover, as was pointed out in this Court’s judgment, it would not be logical for the Minister to meet a higher threshold in exercising the powers under section 27(2) as contended by FITA. The reasoning in the Court’s judgment is clear: in the face of a global pandemic that has resulted in the demise of hundreds of thousands of people worldwide, it stands to reason that the Minister had to act promptly and swiftly in order to meet her constitutionally mandated duty to save lives and provide adequate healthcare services. FITA has not shown in what respects another court would differ from this Court’s judgment that a requirement that the Minister had to meet the highest possible threshold of “strictly/ absolutely necessary” before being able to act would clearly undermine and derail the Minister’s efforts in honoring the constitutional duties owed to the Republic.

Medical evidence

[15] As to the argument reliant on the medical evidence, the judgment illustrates in extensive detail how the Minister forged a link between the medical literature she relied upon and the harmful effects of tobacco use which could result in increased COVID-19 progression amongst smokers. The Minister, in our view, persuasively demonstrated that the medical literature that she relied upon established a firm basis upon which to impose the ban in order to save lives and prevent a strain on the country’s healthcare system. It is acknowledged in the judgment that, although no study as yet exists demonstrating a conclusive link between smoking and COVID-19 progression, the studies and literature considered by the Minister nonetheless provided her with a sufficient basis to demonstrate a rational connection between smoking and COVID-19 progression to justify the means adopted by her, namely, the ban.

[16] FITA also seems to have misunderstood the essence of the duty imposed on the Minister and the rationale underlying her actions. As pointed out in the judgment, it should be evident that it was never the Minister’s objective to ensure that each and every smoker in the Republic ceased smoking. The Minister’s objective was to contain the spread of the virus and, in so doing, alleviate the pressure on the already strained healthcare system. Imposing the ban was simply one of the means adopted by her to achieve this end. FITA in turn contends that the true inquiry here is the question whether evidence exists indicating that stopping the sale of tobacco products for a limited period of time will have any impact on the fight against the spread of the virus. This was not the question before the Court. Although an argument can be made that perhaps the means adopted by the Minister have done little to contain the spread of the virus, a rational connection nonetheless still exists between those very means and the end sought to be achieved especially in light of the available medical literature on the link between smoking and COVID-19 progression.

Illicit trade of tobacco products

[17] The argument made by FITA in this regard seemingly speaks to the reasonableness of the ban imposed by the Minister. In sum, FITA argues that the fact that smokers are still able to procure and secure an ongoing supply of cigarettes and tobacco products is indicative of the ineffectiveness of the ban and is destructive of the ban’s rationality. This argument, however, loses sight of the fact that ensuring that the supply of cigarettes ceased in its entirety was never the objective of the Minister. Rather, in imposing the ban, the Minster sought to contain the virus and in so doing, save lives and alleviate the strain on the healthcare system.

[18] The enquiry for rationality, as pointed out in the Court’s judgment, is not concerned with the effectiveness of the means chosen. Rather, it is concerned with whether the means chosen were capable of achieving the stated purpose. Ensuring that every single smoker ceased smoking was never the objective. The object was to ensure that the virus was contained and that lives were saved. Imposing the ban was merely a means to achieve this objective. Given the stated objective, the fact that cigarettes and other tobacco products can still be procured illegally notwithstanding the ban cannot be said to be fatal to the rationality of the ban. Moreover, the means chosen may not be perfect, but they remain nonetheless capable of achieving the stated objective. FITA’s argument is also wanting of any factual evidence justifying its contention that tobacco products sold on the illicit market necessarily contain harmful substances and additives. FITA only went so far as arguing in its heads of argument that the illicit tobacco products “most likely” contained harmful substances and additives. This is not sufficient to draw this Court into make a finding on this submission.

Audi Alteram Partem

[19] FITA contends that the Court erred in accepting that the decision to impose the ban on the sale of all tobacco products came after careful consideration of not only the public comments and submissions received but relevant medical literature. For the reasons outlined in the judgment, FITA’s contention in this regard is misplaced: Not only did the Minister not have any general obligation to consult the public in the exercise of her executive powers, argument was presented by counsel for the Minister indicating how the Minister did in fact consult with the public notwithstanding not bearing a duty to do so.

Essential goods

[20] On this ground, FITA attempts to argue that cigarettes and tobacco products, due to their addictive nature, ought to have been considered to constitute essential goods. As already discussed at length in the judgment, cigarettes and tobacco products by their very nature cannot be considered life-sustaining or necessary for basic functionality regardless of their addictive nature.

Other considerations

[21] There is nothing of substance raised by FITA on this ground other than rehashing its arguments that were rejected by this Court.

CONCLUSION

[22] As is clear from the aforegoing exposition of FITA’s grounds, and bearing in mind what the questions of law before this Court were, our view is that on both legs of the section 17 inquiry, FITA has come short. Not only has FITA failed to show that the appeal bears reasonable prospects of success, FITA has in turn failed to show that some compelling reason exists why the appeal should be heard. Not only are the issues raised by FITA settled law, the arguments proffered by FITA regarding the national importance of the matter are, in our view, not sufficient to arrive at a finding that compelling reasons exist to grant leave. Moreover, reliance on the judgment in Beadica 231 CC v Sale’s Hire CC[20] is, in this instance, misplaced given that that matter concerned an application for special leave to appeal to the SCA.

[23] Although we have dealt with the meaning of “necessary” within the contemplation of section 27 of the Act, it is important to point out that, ultimately, the overarching basis upon which the matter was argued was on the rationality question, not whether the threshold requirement for “necessary” in terms of section 27 of the Act was met by the Minister. It appears to us that FITA’s argument is, as set out in its heads of argument, that the matter is one of national importance and that it raises novel questions of law which requires an appeal court to reconsider the matter. This is a classical shifting of the goalposts by FITA and must be rejected. The application raises nothing novel. The legal issues that arise in this matter have already been settled by our courts and the only conclusion we can reach is to disallow the application.

ORDER

[24] In the circumstances, an order is granted dismissing the application for leave to appeal, with costs, including the costs occasioned by the employment of three counsel.

MLAMBO JP

MOLEFE J

BASSON J

Date of hearing: 15 July 2020

Date of judgment: 24 July 2020

APPEARANCES

Counsel for the Applicant: A Subel SC; B Edwards and N Makhaye instructed by Morgan Law Inc C/O Hamel Attorneys 329 Braam Pretorius Street Magalieskruin Pretoria Ref: R Merrifield/ag/FT001

Counsel for the Respondents: MTK Moerane SC; NH Maenetjie SC; IS Cloete and MY Salukazana instructed by The State Attorney SALU Building 316 Thabo Sehume Street Pretoria REF: A Wasserman/Z71

[1] 10 of 2013.

[2] 57 of 2002.

[3] 2014 JDR 2325 (LCC) at para 6.

[4] [2016] ZAGPPHC 489 at para 25.

[5] 2012 (1) SACR 567 (SCA) at para 7. See also MEC for Health, Eastern Cape v Mkhitha and Another [2016] ZASCA 176 at para 17.

[6] 2009 (6) SA 232 (CC).

[7] See Ferreira v Levin and Others; Vryenhoek & Others v Powell NO & Others [1996] ZACC 27; 1996 (2) SA 621 (CC); and Motaung v Mukubela & Another NNO; Motaung v Mothiba NO 1975 (1) SA 618 (O) at 631A.

[8] 1918 AD 63 at 69. See also Graham v Odendaal 1972 (2) SA 611 (A) 616; Mouton v Die Mynwerkersunie 1977 (1) SA 119 (A); Claude Neon Lights (SA) Ltd v Peroglou 1977 (1) SA 575 (C); Christies Fish Supplies (Pty) Ltd v Ornelas Fishing Co (Pty) Ltd 1978 (3) SA 431 (C); Lornadawn Investments (Pty) Ltd v Minister van Landbou 1980 (2) SA 1 (A); Bowman v Howe 1980 (2) SA 226 (W); Steynberg v Labuschagne [1998] 3 All SA 384 (O) 390; Intercontinental Exports (Pty) Ltd v Fowles 1999 (2) SA 1045 (SCA) 1055F–G; Coetzee v National Commissioner of Police 2011 (2) SA 227 (GNP) 259. See also Weare v Ndebele [2008] ZACC 20; 2009 (1) SA 600 (CC) 623, [2008] JOL 22751 (CC), 2009 2009 (4) BCLR 370 (CC) (discretion of court in constitutional law context).

[8] 1918 AD 63 at 69.

See also Graham v Odendaal 1972 (2) SA 611 (A) 616; Mouton v Die Mynwerkersunie 1977 (1) SA 119 (A); Claude Neon Lights (SA) Ltd v Peroglou 1977 (1) SA 575 (C); Christies Fish Supplies (Pty) Ltd v Ornelas Fishing Co (Pty) Ltd 1978 (3) SA 431 (C); Lornadawn Investments (Pty) Ltd v Minister van Landbou 1980 (2) SA 1 (A); Bowman v Howe 1980 (2) SA 226 (W); Steynberg v Labuschagne [1998] 3 All SA 384 (O) 390; Intercontinental Exports (Pty) Ltd v Fowles 1999 (2) SA 1045 (SCA) 1055F–G; Coetzee v National Commissioner of Police 2011 (2) SA 227 (GNP) 259. See also Weare v Ndebele [2008] ZACC 20; 2009 (1) SA 600 (CC) 623, [2008] JOL 22751 (CC), 2009 2009 (4) BCLR 370 (CC) (discretion of court in constitutional law context).

[9] Khumalo and Another v Twin City Developers (Pty) Ltd and Others [2017] ZASCA 143.

[10] 1975 (1) SA 618 (O) at 631A.

[11] 1964 (4) SA 138 (T) at 144F - 145.

[12] 2018 (1) SA 369 (CC) at para 28.

[13] 2018 (1) BCLR 12 (CC).

[14] Id at paras 11-2.

[15] Biowatch supra at paras 16-8.

[16] See Lawyers for Human Rights and Another v Minister of Home Affairs and Another 2004 (7) BCLR 775 (CC).

[17] 2012 (2) SA 598 (CC)

[18] Pheko and Others v Ekurhuleni Metropolitan Municipality 2012 (2) SA 598 (CC).

[19] Argument can even be made that given that the Constitutional Court said that only section 55 must be interpreted narrowly, inference

can be made that the rest of the Act can be interpreted widely.

[20] [2020] ZASCA 76.