G Rudolph and Glynn Rudolph & Co (Pty) Ltd v Commissioner for Inland Revenue and Others NNO

In October 1993, officials of the Commissioner for Inland Revenue, acting under written authorizations issued by Mr. Prinsloo, searched the first appellant's home and seized various documents. On 22 April 1994, the respondents used the same authorizations to search the second appellant's business premises in Johannesburg and seized a large number of documents, which they locked in a store room. On 26 April 1994, the first appellant was given an opportunity to copy some documents under supervision, but late that afternoon it was intimated that the documents would be removed. Due to the lateness of the hour and other practical considerations, the documents were again locked in the store room with the respondent retaining the key. The next day, 27 April 1994, the interim Constitution came into operation. The appellants launched an urgent application challenging the validity of the authorizations issued under section 74(3) of the Income Tax Act 58 of 1962, alternatively declaring section 74(3) and the authorizations or their execution unconstitutional. The application failed in the Witwatersrand Local Division and was appealed to the Appellate Division, which referred several questions to the Constitutional Court regarding constitutional validity and jurisdiction.

• Whether section 74(3) of the Income Tax Act 58 of 1962 is contrary to the provisions of Chapter 3 of the interim Constitution
• Whether the interim Constitution applies retroactively to acts completed before it came into force
• When a 'seizure' is deemed to be completed for purposes of constitutional protection against searches and seizures
• Whether the Appellate Division has jurisdiction to adjudicate common law grounds of administrative invalidity where constitutional rights might be implicated, or whether such matters fall within the exclusive jurisdiction of the Constitutional Court
• The proper approach to costs in constitutional litigation

The Constitutional Court answered the four referred questions: (a) the constitutionality of section 74(3) was irrelevant because the Constitution did not apply; (b) the Appellate Division had jurisdiction to determine the common law grounds of invalidity; (c) the Appellate Division could dispose of the appeal according to its own powers and procedures; (d) the Constitutional Court had no jurisdiction over the common law grounds of invalidity in this case. No order was made as to costs in the Constitutional Court.

The binding principles established are: (1) The interim Constitution does not operate retroactively to invalidate acts that were lawful when performed before the Constitution came into force. Conduct unlawful before the Constitution does not become lawful by reason of Chapter 3, and conduct lawful before does not become unlawful. (2) 'Seizure' for purposes of section 13 of the interim Constitution (protection against searches and seizures) is completed when there is effective deprivation of the owner's possession, control, and use of the property in question. This is determined by the circumstances of each case and does not require physical removal; locking documents away with the seizing party retaining the key constitutes completed seizure. (3) Where the Constitution does not apply to a dispute, courts other than the Constitutional Court have jurisdiction to determine common law administrative law challenges, even if those challenges might hypothetically have implicated constitutional rights had the Constitution applied.

The Court expressly declined to express any view on what the position would have been regarding the Appellate Division's jurisdiction had the interim Constitution actually applied to the case. This suggests the jurisdictional relationship between the Constitutional Court and other courts in cases involving both constitutional and common law administrative grounds remained an open question. The Court also observed that the concession by the respondents regarding the common law grounds could not be construed as a concession of fact only that would definitively dispose of the appeal, as it was unclear whether the Appellate Division would have made its referral regardless of the parties' contentions. The Court noted the possibility that principles regarding costs developed by the Supreme Court might need to be adapted, possibly substantially, on a case-by-case basis for constitutional litigation.

This case is significant for establishing key principles regarding the temporal application of the interim Constitution. It confirmed that Chapter 3 rights do not apply retroactively to render unlawful what was lawful before the Constitution came into force. The judgment clarified the meaning of 'seizure' in constitutional and statutory contexts as effective deprivation of possession and control. It also addressed important jurisdictional questions about the relationship between the Constitutional Court and other courts, particularly regarding administrative law challenges that might implicate constitutional rights. The case demonstrates the Court's early approach to defining its own jurisdiction and the boundaries between constitutional and common law remedies. The flexible approach to costs in constitutional litigation, recognizing that all parties may err on novel constitutional questions, was also reinforced.