REPUBLIC OF SOUTH AFRICA

THE SUPREME COURT OF APPEAL
OF SOUTH AFRICA

Reportable
Case Number :  521 / 03

In the matter between

DISTCOR EXPORT PARTNERS
FIRST APPELLANT
DISTCOR YACHT EXPORTERS
SECOND APPELLANT

and

THE DIRECTOR-GENERAL OF THE
DEPARTMENT OF TRADE AND INDUSTRY
RESPONDENT

Coram :
HARMS and CONRADIE  JJA, COMRIE, JAFTA and PATEL AJJA

Date of hearing :
5 NOVEMBER 2004

Date of delivery :
23 MARCH 2005

SUMMARY

Claim for damages by Department of Trade and Industry – director-general of
department suing as nominal plaintiff  in action – appellants contending that procedure
incompetent – held that not only political head of department empowered to sue –
appeal dismissed

___________________________________________________________________________

REASONS FOR ORDER

CONRADIE  JA
[1] These are the reasons for an order handed down on 30 November 2004
dismissing with the costs of two counsel an appeal brought, with his leave,
against McLaren J’s dismissal of the appellants’ special plea that the
respondent, as plaintiff in the court below, lacked locus standi in iudicio to
institute proceedings against the appellants for delictual damages or
alternatively for unjustified enrichment. The claims arose from payments made
by the Department of Trade and Industry (the Department) to the appellants in
1992 and 1994 in respect of benefits under the General Export Incentive
Scheme (GEIS).1 Since upholding the special plea would have put an end to the
respondent’s claims against the appellants, the parties agreed, and the court
below ruled, that the plea be dealt with as a distinct issue.

[2] The first argument on behalf of the appellants was that the State, like
other entities having legal personality, may only institute action in its own name
and may not do so in the name of one of its officials.

[3] In the chapter on State Liability by Cilliers and D’Oliveira in Lawsa (vol
25 1st re-issue p 188 para 239) the State is described as ‘a diffuse public law
entity’. It nonetheless has juristic personality. Judicial affirmation that it is a

1 The background to GEIS is set out in Dilokong Chrome Mines (Edms) Bpk v Direkteur-Generaal,
Departement van Handel en Nywerheid 1992 (4) SA 1 (A).

legal persona is to be found in Die Spoorbond and Another v South African
Railways 2 where Watermeyer CJ said;
‘The Governor-General -in -Council (whom I shall call the Crown and who is also sometimes
referred to as the Government of the Union) is regarded in law as a legal persona, with a
perennial existence, and as such, a legal persona distinct from the individual human beings or
group of persons who from time to time hold office as Governor-General and as members of
the Executive Council …’
The State is, however, not a corporation:
‘The executive power of the Union was vested in the Governor-General acting with the
advice of the Executive Council, known as the Governor-General-in-Council or commonly
simply as the Government of the Union. Although this Government is described by writers as
being an organ of the State, nevertheless it would be incorrect to draw an analogy with the
law relating to companies and the relationship between a company and its board of
directors.’3
These remarks by Vieyra J echo those of Schreiner JA in the Spoorbond case at
1011):
‘It is no doubt convenient for certain purposes to treat the Crown as a corporation or artificial
person. But it is obviously a very different kind of person from the rest of the persons, natural
and artificial, that make up the community.’
[4] The appellants’ argument by analogy to companies and their directors is
not valid. The rule that has always governed litigation by corporations is that
they are artificial persons and that, since generally no one may sue as agent for

2 1946 AD 999 at 1005.
3 Die Regering van die Republiek van Suid-Afrika v SANTAM Versekeringsmaatskappy Bpk 1964 (1) SA 546
(W) at 547E-F.

another,4 a director cannot sue on behalf of a company. Where the political or
administrative head of a government department sues or is sued the litigation is
conducted nomine officii. The head is not regarded as the agent of the
department but as the embodiment of the department.

[5] There is no statutory provision on how the State may initiate proceedings.
There is one, however, providing how the State may be brought before the
courts. It appears in s 2 of the State Liability Act 20 of 1957 which provides in
ss (1) that ‘ … the Minister of the department concerned may be cited as
nominal defendant or respondent.’ The sub-section does not oblige a litigant to
sue a minister.5 It was intended to facilitate actions against the State by making
it possible to sue the political head of a department instead of the State in its
own name. It did not introduce an inviolable rule. A plaintiff may still choose to
sue the government of the Republic of South Africa6 and this has since 1957
often occurred.

[6] Although proceedings may, as commonly happens,7 be commenced in the
name of the Government of the Republic of South Africa,  the government may
also sue through a nominal plaintiff or applicant, usually the ministerial head of

4 Standard General Insurance Co Ltd v Eli Lilly (SA) (Pty) Ltd 1996 (1) SA 382 (W).
5 Marais v Government of the Union of South Africa 1911 TPD 127 at 132; the provision has remained
unchanged since the Crown Liabilities Act 1 of  1910. Where appropriate the term ‘Minister’ includes a member
of the executive council of a province.
6 There is an interesting discussion by Baxter in an article ‘”The State” and other basic Terms in Public Law’
(1982 99 SALJ 212 at 222 and 228) on recognition by the courts of the government – the executive arm of the
State – as a legal persona.

a department. According to the appellants the latter practice is so inflexible that
it precludes the administrative head of a department from instituting action on
behalf of a department of State. In my view the practice is more relaxed.8 It is a
matter of authority. Since a minister as political head of a department has the
overall control of and responsibility for the department and is the ultimate
decision-maker, the authorization for an action instituted by a minister can
hardly be impugned. His or her external authority, by which I mean the
authorization to the state attorney to institute an action, might still be challenged
although such cases must be very rare. Where a Minister sues as nominal
plaintiff, as the embodiment of her department, the potentially more
troublesome issue of internal, intra-departmental, authority is eliminated.
Particulars of claim alleging that an administrative head of a department sues on
behalf of the government may elicit a puzzled request for further particulars on
the scope of his authority but if authority can be satisfactorily established that is
the end of the matter.

[7] The issue before us, considered by the parties and by the court below to
be one of locus standi, is not really that.  A nominal plaintiff does not sue for
his or her own account and the question of whether such a plaintiff has a
sufficient interest in the proceedings (the essential locus standi enquiry)

8 For a recent case in which a director-general’s authority to counterclaim was, at least tacitly, accepted see The
Director-General: Department of Trade and Industry and Another v Shurlock International (Pty) Ltd 2005 (2)
SA 1 (SCA).

obviously does not arise.9 Such a plaintiff is there (only) to put someone else’s
case before the court: the question is whether or not he has the authority to do
so.

[8] The flexibility of the practice in this regard is illustrated by the range of
officials who have, without demur, been allowed to sue on behalf of
departments or sub-departments. Usually where the nominal plaintiff (or
applicant) has not been a minister that role has been taken by the head of a
specialized unit within a department such as the Registrar of Deeds or the
Registrars of Companies, Close Corporations, Banks, Insurance or Pension
Funds.10  Unlike the Commissioner for Inland Revenue,11 or the Master,12 these
officials are not, in the statutes setting up their sub-departments, given express
authority to institute or defend proceedings. It is evidently considered that their
authority goes with the job and no one has ever thought of denying them the
right to institute or defend legal proceedings.

[9] Where a director-general has been brought in as a litigant it has often
been because his decision was under attack on review.13 In other cases the

9 See the full discussion of the topic by Rogers AJ in Financial Services Board and Another v De Wet NO and
Others 2002 (3) SA 525 (C) from para [141].
10  In Pepcor Retirement Fund and Another v Financial Services Board and Another 2003 (6) SA 38 (SCA) the
Registrar of Pension Funds was held to have locus standi to apply to review his own decision to grant approval
for the restructuring of a pension fund. In the specialized field of intellectual property there are of course the
registrars of patents, trade marks and designs who enjoy considerable autonomy in litigation and are cited as
defendants or respondents.
11 Empowered by s 91 of the Income Tax Act 58 of 1962 and by s 94 of the Customs and Excise Act 91 of
1964.
12 Administration of Estates Act 66 of 1965, s 96.
13 Cf Dilokong Chrome Mines (Edms) Bpk v Direkteur-Generaal, Departement van Handel en Nywerheid 1992
(4) SA (A); South African Co-operative Citrus Exchange Ltd v Director-General: Trade and Industry and

director-general was required to perform a specific act like signing a title deed14
or documents sought by a litigant were in his possession.15 May he also nomine
officii claim damages suffered by the department of which he is the
administrative head? The answer is that although it may be unusual for a
director-general to do so, it is not impermissible.

[10] It seems to me that the decision to adopt this unusual procedure might
have been influenced by the notion (mentioned above) of the top official of a
specialist unit being empowered to sue in respect of matters specially entrusted
to his authority and discretion. As appears from paragraph 3.11 of the GEIS
Guidelines the respondent was in complete charge of the scheme and all
responsibility with regard to its implementation and all discretion with regard to
the recovery of money wrongly claimed from the scheme rested with him alone:
‘The decision by the Director-General as to the eligibility of any product for benefits under
the General Export Incentive Scheme as well as the determination of the amounts of the
incentives will be final and conclusive. Nothing in this document shall be construed as an
offer open to acceptance constituting any contractual or in fact any other obligation or any
enforceable right against the Department. The Director-General may at any time conduct a
full-scale investigation to verify any information furnished by a claimant. If the Director-
General is satisfied that the claim was based on false information or that the claimant has

Another 1997 (3) SA 236 (SCA); Jayiya v MEC for Welfare, Eastern Cape, and Another 2004 (2) SA 611
(SCA) decided that if a member of the executive council in charge of a department is sued, it is not necessary to
join the director-general of the department.
14 Khumalo v Director-General of Co-operation and Development and Others 1991 (1) SA 158 (A). 14 Le Roux
v Direkteur-Generaal van Handel en Nywerheid 1997 (4) SA 174 (T).

15 Le Roux v Direkteur-Generaal van Handel en Nywerheid 1997 (4) SA 174 (T).

furnished misleading information, he may disallow the claim and recover the full amount
paid out to the claimant. Interest on bona fide overpayments will be levied at the rate
prescribed in terms of section 1(2) of Act No. 55 of 1975.’

[11] I do not mean to suggest that authorization such as that appearing in
paragraph 3.11 of the Guidelines was a sine qua non. I merely indulge in
speculation on what the motivation for an unusual, but not impermissible,
procedure might have been.

These are the reasons for the order given.

J H  CONRADIE
JUDGE OF APPEAL
CONCURRING:
HARMS  JA
COMRIE  AJA
JAFTA  AJA
PATEL  AJA