National Credit Regulator v Getbucks (Pty) Ltd

SCA in dealing with a collateral reactive challenge pointed out that the National Credit Act grants the Minister the power to promulgate regulations but this was done the day before the Act came into effect on 1 June 2006 which meant it was done before being empowered to do so and without the provisions of s 14 of the Interpretation Act the Minister could not have done so because the power to do so had not yet arisen but s14 of the Interpretation Act provides it was competent to promulgate the regulation on 31 May 2006 regardless of whether it was made under s 171 or under s 11. ‘But for the provisions of s 14 of the Interpretation Act, there would have been a vacuum with the repealed legislation no longer operative and the Act lacking regulations to administer it. Section 14 accordingly allows for a smooth transition where this is necessary’.

Essence

In disallowing appeal SCA confirmed high court correctly recognised challenge as being a reactive, defensive, or collateral one and that  regulation could not be used.

Decision

(SCA 140/2020) [2021] ZASCA 28 (26 March 2021)

Order:

Disallowed appeal against judgment of N Davis J in high court with costs.

Judges

Gorven AJA (Petse AP, Zondi and Mbatha JJA and Weiner AJA concurring)

Heard: 2 March 2021
Delivered: 26 March 2021

Reasons

“[26] It is clear that the application in question sought to raise a reactive challenge. It was therefore not a review application, whether under PAJA or the common law. The NCR correctly did not press this line of argument during the hearing. As such, it is not necessary to determine whether the promulgation of the regulations in question was administrative or legislative in character. The issue is one of legality. If the regulation does not pass muster, the reactive challenge need not be to administrative action but to any invalid act:

‘These provisions imply that a local government may only act within the powers lawfully conferred upon it. There is nothing startling in this proposition – it is a fundamental principle of the rule of law, recognised widely, that the exercise of public power is only legitimate where lawful. The rule of law – to the extent at least that it expresses this principle of legality – is generally understood to be a fundamental principle of constitutional law.’

[27] It seems to me to be in the nature of this kind of collateral, or reactive, challenge that it cannot be time-barred as with an attempt to review administrative action. This is because the person raising the reactive challenge might only be subjected to the coercive action by an organ of the state based on the impugned provisions a considerable period of time after they came into effect. That is precisely the situation in the present matter. It cannot be said, accordingly, that the application should have been dismissed due to the time which had passed since the regulation was made.”

Quotations from judgment

Note: Footnotes omitted and emphasis added

 

Court summary

“Validity – Regulation 44 under the National Credit Act 34 of 2005 – invocation of defensive challenge to deregistration proceedings – period allowed for comment on proposed regulation inadequate – promulgation of regulation non-compliant with National Credit Act – appellant not entitled to rely on regulation in proceedings brought to deregister first respondent.”