By Duncan Wild on 15 November 2014

This matter relates to the 2011 Cross Border Transport Amendment Regulations (“the Regulations“) promulgated by the Cross Border Road Transport Agency (“CBRTA”) which purported to increase the permit fees payable by cross border road transport operators by 250%. In February 2013, the High Court declared the regulations invalid subject to six month period of suspension to allow the regulations to be amended. The suspension period expired and no changes were made to the regulations, and so the High Court declared the regulations invalid with retrospective effect. The CBRTA then appealed.

The CBRTA is financed by imposing fees on raised on operators in the cross border passenger and freight transportation industries. The latest of permit tariffs, being the subject matter of this application, are contained in the regulations which came into operation on 1 April 2011 in terms of Government Notice No. R284, published on 31 March 2011 in the Government Gazette No. 34268.

Two of the cross border road operators, Central African Roads Services (Pty) Ltd (“CARS”) and Deernam (Pty) Ltd brought a challenge to the regulations relying on five grounds for the contention of invalidity of the regulations. First, that the regulations and the draft amendment regulations that preceded them, were initially published only in English, and not in two official languages as required by section 6(3) of the Constitution. Second, that they constitute procedurally unfair administrative action, alternatively unreasonable administrative action in that they increased the permit fees substantially without any phasing in period and without adequate notice to cross border road hauliers. Third, that the reasoning underlying the increase in permit fees was never publicly disclosed in advance of promulgation of the regulations and accordingly it was not possible for stakeholders meaningfully to influence the contents of the regulations through the notice and comment process. Fourth, that the consultation process between the Minister of Transport and the CBRTA was vitiated by the exclusion of a board member when the regulations were considered for consultation with the Minister. Fifth, that they overburden road hauliers and carriers in order to cross-subsidise cross border passenger carriers, allegedly in contravention of section 9 of the Constitution.

On 15 February 2013 Makgoka J gave an order declaring the regulations constitutionally invalid on the basis that the procedure leading up to publication of the regulations was not fair. The High Court either did not consider it necessary to go into the other grounds of challenge, or found they had been rectified. The invalidity was postponed for a period of 6 months to enable CBRTA to republish the regulations and to receive public comment. The CBRTA did nothing during the 6 month period. In the May 2014 the Minister of Transport published new regulations.

CARS brought an application for a declarator seeking an order that as the six month period had elapse the regulations were invalid.  The High Court granted an order on 1 November 2013 that the 6 month period referred to in Makgoka J’s order lapsed at midnight on 14 August 2013 and accordingly the order of invalidity came into operation with full retrospective effect at midnight on 14 August 2013.

CBRTA sought leave to appeal against this order from the High Court on two basis. The first is that the High Court erred in finding that the order of invalidity operated with full retrospective effect. Instead it was argued the effective date of invalidity was 15 August 2013. In argument it was submitted that the court had no jurisdiction to interpret the order of Makgoka J which was clear and unambiguous. The second ground was that by refusing CBRTA a postponement in which to file an opposing affidavit to Part B, they were precluded from advancing ways in which the effect of the invalidity could be ameliorated.

The High Court dismissed the application for leave to appeal, and the CBRTA appealed to the Constitutional Court.