Cross-Border Road Transport Agency v Central African Road Services (Pty) Limited and Another

In March 2011, the Minister of Transport promulgated amendment Regulations under the Cross-Border Road Transport Act that substantially increased permit fees payable by cross-border road transport operators. Central African Road Services (Pty) Ltd and Deernam (Pty) Ltd challenged the Regulations in the North Gauteng High Court. On 15 February 2013, Makgoka J found the Regulations invalid on various grounds: (a) they were only published in English, contrary to section 6(3)(a) of the Constitution; (b) procedural fairness was violated; (c) proper consultation did not take place; and (d) the Agency's board failed to apply its mind. The court suspended the order of invalidity for six months to enable republication and public comment. The Minister failed to promulgate valid regulations within the suspension period and did not apply for an extension. After the suspension period lapsed on 14 August 2013, Road Services sought declaratory relief regarding the retrospective effect of the invalidity. Heaton-Nicholls J granted an order on 1 November 2013 stating that the declaration of invalidity came into operation with full retrospective effect. The Agency unsuccessfully sought leave to appeal to the Supreme Court of Appeal and then approached the Constitutional Court.

• What are the principles governing the operation of orders of constitutional invalidity that are suspended where the suspension period has lapsed without enactment of remedial legislation?
• What is the default position regarding retrospectivity of declarations of constitutional invalidity?
• How should courts interpret orders of constitutional invalidity - particularly when silent on retrospectivity?
• Does a court have the power to vary a final order of constitutional invalidity after the suspension period has lapsed?
• Can a second court limit the retrospective effect of an order of constitutional invalidity issued by an earlier court after the suspension period has expired?

1. Leave to appeal is granted. 2. Leave to file a replying affidavit is refused. 3. The appeal is dismissed with costs. The effect of this order is that the declaration of constitutional invalidity of the 2011 Regulations operates with full retrospective effect from 31 March 2011 (when they were promulgated) as of 15 August 2013 (when the suspension period expired).

The binding legal principles established are: (1) Under the Constitution, a declaration of constitutional invalidity has retrospective effect as the default position, unless a court exercises its power under section 172(1)(b)(i) to limit such retrospectivity. (2) Where a court order declaring constitutional invalidity is silent on the question of retrospectivity, the default position of full retrospective effect applies. Such silence should not be construed as judicial inadvertence but as a decision not to moderate the default position. (3) Orders of constitutional invalidity must be interpreted according to their terms and context together with the judgment as a whole. (4) The powers under section 172(1)(b) to suspend declarations of invalidity or limit retrospectivity must be exercised at the time of the original declaration and cannot be exercised disjunctively at different times. (5) Once a suspension period expires without remedial legislation being enacted, courts lose the power to extend the suspension or to limit retrospectivity, as doing so would amount to reviving an invalid law, which would offend the separation of powers principle and constitutional supremacy. (6) A second court has no power to limit the retrospective effect of a declaration of invalidity after the suspension period has lapsed.

The Court made several non-binding observations: (1) While not deciding the point definitively, the Court assumed that in an appropriate case a court might have inherent power under section 173 to subsequently vary the retrospective effect of a declaration of invalidity, but emphasized this would only be exercised sparingly in compelling circumstances - which were not present in this case. (2) The Court noted that it would have been preferable for Heaton-Nicholls J to have analyzed the judgment of Makgoka J more thoroughly to contextualise the order, though the ultimate conclusion was correct. (3) The Court commented that the Agency's financial difficulties, while unfortunate, were brought about by its own actions and any remedy would be better provided by the Executive or Legislature rather than the courts. (4) The Court observed that it is undesirable for parties to raise new issues for the first time in the Constitutional Court, as apex courts benefit from proper ventilation of issues in lower courts. (5) The Court noted that foreign law on retrospectivity must be approached with caution given South Africa's unique constitutional provisions expressly granting courts power to limit retrospectivity for any reason that is "just and equitable".

This case is highly significant for establishing the principles governing retrospectivity of declarations of constitutional invalidity in South African law. It definitively confirms that: (1) retrospective invalidity is the default position under the Constitution; (2) silence in a court order on retrospectivity means full retrospective effect applies; (3) courts must exercise powers under section 172(1)(b) at the time of the original declaration, not subsequently; (4) once a suspension period expires without remedial legislation, courts lose power to extend suspension or limit retrospectivity as doing so would amount to reviving invalid law; and (5) the powers in section 172(1)(a) and (b) cannot be exercised disjunctively at different times. The judgment provides important clarity on the temporal limits of judicial power in constitutional matters and reinforces the principles of constitutional supremacy and separation of powers. It also establishes interpretive principles for construing orders of constitutional invalidity by requiring consideration of terms, context, and the judgment as a whole.