Minister of Finance and Another v Paper Manufacturers Association of South Africa

The Minister of Finance gave notice in February 2007 of his intention to submit a Taxation Laws Amendment Bill, 2007 to Parliament. The Bill contained clause 66(1) which sought to prevent the lapsing of amendments made to Schedules 1, 4, and other schedules of the Customs and Excise Act 91 of 1964. These amendments had been made by the Minister of Finance in July 2006 pursuant to section 48(1)(b) and section 75(15) of the Act, which empowered the Minister to amend tariff schedules by notice in the Government Gazette following recommendations from the International Trade Administration Commission (ITAC). Under section 48(6) and section 75(16), such ministerial amendments automatically lapse at the end of the next calendar year unless Parliament provides otherwise. The specific amendments in question (GN R 691 and R 692) had abolished or lowered rates of duty and rebates on paper and paperboard products at the request of the Printing Industries Federation (the Printers). The Paper Manufacturers Association (the Manufacturers), whose members produce paper locally, objected as the changes made their prices less competitive. The Manufacturers had lodged a review application in the Pretoria High Court challenging the underlying ITAC report. They then applied for an interim interdict to prevent the Minister from introducing the Bill to Parliament, arguing that if the Bill was adopted their review application would become moot as legislation cannot be reviewed as administrative action.

• Whether the High Court had jurisdiction to issue an interdict preventing the Minister from submitting a Bill to Parliament
• Whether the proposed legislation would retrospectively validate allegedly invalid administrative action and thereby oust the court's review jurisdiction
• Whether the interpretation of the proposed Bill was retrospective or prospective in effect
• Whether the failure to comply with section 77(3) of the Constitution regarding procedures for money Bills rendered the legislative process unconstitutional
• Whether the applicants had established a clear right to the interdict sought
• Whether the separation of powers doctrine limited judicial intervention in the legislative process

1. The appeal was upheld with costs, including the costs of two counsel. 2. The order of the court below was set aside and replaced with an order dismissing the application with costs, such costs to include the costs of two counsel.

The binding legal principles established are: (1) High Courts do not have jurisdiction under the Constitution to prevent a Minister from submitting a Bill to Parliament by way of interdict. Only the Constitutional Court may pronounce on the constitutionality of a Bill, and only in the circumstances provided for in section 79 of the Constitution (presidential referral). Section 172(2) empowers High Courts to declare Acts of Parliament constitutionally invalid (subject to Constitutional Court confirmation) but does not extend to Bills. (2) Legislation enacted under section 48(6) of the Customs and Excise Act to prevent the lapsing of ministerial amendments to tariff schedules operates prospectively from the date it would otherwise have lapsed, not retrospectively. Such legislation does not validate the ministerial notice ex tunc or oust the courts' jurisdiction to review the underlying administrative action. (3) An ITAC report constitutes a jurisdictional fact for the validity of subsequent ministerial notices and legislation made pursuant to recommendations in that report. An invalid ITAC report invalidates subsequent legislative action pro tanto, and Parliament's adoption of legislation preventing lapsing does not cure defects in the underlying administrative process. (4) Courts will not intervene in the legislative process before its completion except in exceptional circumstances where an aggrieved person cannot be afforded substantial relief once the process is completed because the underlying conduct would have achieved its object. This is not such an exceptional case where the remedy of reviewing the underlying administrative action remains available after enactment.

The Court made several obiter observations: (1) Harms ADP expressed diffidence about whether the 'test' for pre-enactment intervention formulated by the Constitutional Court in Doctors for Life International (derived from the Privy Council decision in Bahamas District of the Methodist Church) represents a rule of universal application, noting it must be read in the specific context of that case where the applicant body corporate would have been dissolved by the legislation. (2) The Court noted that the failure of Parliament to adopt legislation envisaged in the Constitution (such as procedures for amending money Bills under section 77(3)) does not necessarily mean that everything done under existing procedures is unconstitutional, particularly given the transitional provisions in Schedule 6 of the Constitution. (3) The Court observed that if a minister acts irrationally in submitting legislation, this does not make the legislation itself unconstitutional - rather, it is the content of legislation that determines whether it is irrational. (4) Harms ADP distinguished various Commonwealth cases (Canadian references, Cormack v Cope, Rediffusion) relied upon for the proposition that courts can intervene in the legislative process, finding them inapplicable due to specific constitutional features or legislative reference procedures in those jurisdictions. (5) The Court noted that the answer to questions about judicial intervention in the legislative process should be sought in the South African Constitution itself, not through application of foreign constitutions or judgments dealing with different constitutional frameworks.

This case is significant in South African constitutional and administrative law for several reasons: (1) It clarifies the limited jurisdiction of High Courts to intervene in the legislative process, distinguishing between the constitutional validity of Bills (which only the Constitutional Court can pronounce upon under section 79) and Acts of Parliament (which High Courts can declare invalid subject to Constitutional Court confirmation under section 172(2)). (2) It reinforces the separation of powers doctrine and the principle of judicial restraint in interfering with parliamentary processes. (3) It establishes that legislation preventing the lapsing of ministerial amendments under the Customs and Excise Act operates prospectively, not retrospectively, and therefore does not oust the courts' jurisdiction to review the underlying administrative action. (4) It confirms that where an ITAC report is a jurisdictional fact for subsequent ministerial and legislative action, the invalidity of that report would invalidate subsequent steps in the legislative chain, meaning judicial review remains available even after parliamentary ratification. (5) It provides important guidance on when courts may intervene before completion of the legislative process, adopting a restrictive approach that requires exceptional circumstances and cases where substantial relief would be unavailable after enactment. (6) The judgment demonstrates that compliance with the Constitution requires parliamentary legislation to fulfill certain preconditions, and failure to comply affects the validity of resultant legislation. The case has important implications for challenges to tariff legislation and the review of ITAC decisions.