The applicants were employees of the Transkei Agricultural Corporation Limited (Tracor). In 1997, a Special Investigating Unit (the First Unit) was established by Proclamation R24 of 1997 under the Special Investigating Units and Special Tribunals Act. In June 1998, the First Unit was commissioned to investigate the affairs of Tracor. During the investigation (August 1998 to August 1999), the applicants alleged that representatives of the First Unit unlawfully defamed them in summonses alleging fraud and theft, and unlawfully caused the freezing of their banking accounts. On 31 July 2001, Proclamation R118 (the 2001 Proclamation) was issued, which repealed the 1997 Proclamation and established a new Special Investigating Unit (the Second Unit). On 15 August 2001, the applicants issued summons claiming R16.5 million in damages for delict arising from the conduct of the First Unit. The Second Unit defended the proceedings throughout, arguing it was not liable for the conduct of the First Unit because the 2001 Proclamation had not transferred the liabilities of the First Unit to it.
Leave to appeal was granted. The appeal was upheld. The orders of the Eastern Cape High Court upholding the special plea and of the Supreme Court of Appeal were set aside. The respondent's special plea was dismissed. The case was referred back to the Eastern Cape High Court to be dealt with on the basis that the First Unit had at all times been cited in the summons and particulars of claim. There was no order as to costs in relation to the proceedings before the High Court, the Supreme Court of Appeal or this Court.
When a proclamation establishing a special investigating unit is repealed and a new unit is established, the liabilities incurred by the first unit as a result of the unlawful conduct of its representatives are not extinguished. Section 13 of the Special Investigating Units and Special Tribunals Act establishes that investigation units are juristic persons and confirms their liability for the conduct of their members. This liability cannot be extinguished by presidential proclamation. Section 12(2)(c) of the Interpretation Act 33 of 1957 provides that where a law repeals another law, unless a contrary intention appears, the repeal does not affect any right, privilege, obligation or liability acquired, accrued or incurred under the repealed law. In the absence of a contrary intention, the liabilities of the first unit remain unaffected and proceedings may be instituted as if the repealing proclamation had not been passed. The President has no power under the SIU Act to transfer the liabilities of one investigation unit to another. The head of the investigation unit concerned must be cited as nominal defendant pursuant to section 13(2) of the SIU Act read with section 2 of the State Liability Act; the Minister of Justice cannot be cited in such cases.
The Court observed that both parties in this case urged that it be decided on the basis that the Second Unit had been sued, and that they must take equal responsibility for the confusion that resulted in the High Court and Supreme Court of Appeal. The Court noted that if the respondent's interpretation were correct, no entity would be liable for damages suffered as a result of unlawful conduct by the First Unit, which would plainly conflict with section 34 of the Constitution. The Court commented that any provision in the 2001 Proclamation that had the effect of extinguishing all liability occasioned by unlawful conduct of representatives of the First Unit would have been wholly incompetent. The Court also noted that it was not necessary to investigate whether the Full Court decision in Twani was correctly decided, as that case dealt with different circumstances involving substitution of parties in appeal proceedings.
This case is of significant importance in South African law as it establishes crucial principles regarding state liability when statutory entities are disestablished and replaced. It affirms that the President cannot, through proclamation, extinguish liabilities that have been established by statute. The judgment protects the constitutional right of access to courts under section 34 by ensuring that when state entities are replaced, liabilities for unlawful conduct do not simply disappear. The case provides important guidance on the interpretation of section 12(2)(c) of the Interpretation Act, confirming that rights and liabilities acquired or incurred under a repealed law remain unaffected unless there is a clear contrary intention. It also clarifies the proper procedure for suing special investigating units and the limited role of the State Liability Act in such cases. The judgment prevents the state from avoiding liability for unlawful conduct by merely reorganizing its administrative structures.
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