JUDGEMENT IN MVC’S APPEAL OF COSTS ORDER REAFFIRMS CRUCIAL BIOWATCH PRINCIPLES
In May 2024, right before the most consequential elections since democracy, a legislative misstep by Parliament and the President resulted in a lacuna being created in our party funding legislation. When the President signed the Electoral Matters Amendment Act, Act 14 of 2024 (EMAA) into force, it repealed the (then) limits of the R100,000 disclosure threshold, and the R15m maximum donation in the Political Funding Act (PFA). The immediate impact was that legally, political parties had no obligation to disclose any donations, and there was no maximum limit on donations – a party funding free-for-all.
Before the EMAA became operational, MVC had warned the President and Parliament that the manner in which they were amending the PFA, without simultaneously setting the disclosure threshold and the annual limit, would create a lacuna – a legal gap. But our warnings were ignored, and so for 100 days the two key limits in our political funding legislation did not exist. Without these two limits in place, the key provisions aimed at providing transparency and limiting the ability of private interests to buy influence no longer existed.
Forced to turn to the courts for relief, we approached the Western Cape High Court in May 2024 on an urgent basis. We argued that ‘without established financial thresholds, there is an ongoing risk of unregulated and undisclosed funding’ and that ‘the situation necessitates prompt intervention to maintain transparency and accountability in political financing’. We were ultimately successful in our application, and the limits were reinstated in August 2024. Surprisingly, however, the process ultimately led to a costs order against MVC.
MVC appealed the costs order. Judgement was handed down on 25 May 2026, and we were successful in our appeal. The Court set aside the costs order granted against MVC from the 2024 proceedings. This alone would not be that interesting, but the judgment is significant because the Court reaffirmed the application of the Biowatch principle in constitutional litigation.
SIGNIFICANCE OF BIOWATCH
Biowatch South Africa in an NGO that focuses on environmental justice. In 2000, Biowatch used the Promotion of Access to Information Act (PAIA), to request information from the National Department of Agriculture regarding genetically modified organisms (GMOs).
After years of inadequate responses from the State, Biowatch launched legal proceedings and was successful in its bid to access the information it sought. Despite this victory, the Pretoria High Court (now the North Gauteng High Court) imposed a costs order on Biowatch. The NGO was ordered to pay the legal costs of Monsanto (now part of Bayer), the agrochemical and agricultural biotechnology giant. Additionally, it was ordered to pay the legal costs of the appeal for the Minister of Agriculture, the Registrar of Genetic Resources, and the Executive Council for GMOs.
Costs of this nature, that can amount to millions of rands, can cripple an NGO, forcing it to shut down or limit its work. Biowatch appealed the costs order and in 2009, the Constitutional Court ruled that the decision to impose costs had been a misdirection from the lower court.
The precedent set, known as the Biowatch principle, is explained in MVC’s 2026 judgment:
‘The Constitutional court in Biowatch recognised that adverse costs orders in constitutional litigation may deter litigants from approaching courts to vindicate constitutional rights and hold the state accountable. The Constitutional Court accordingly held that successful private litigants in constitutional matters should ordinarily recover their costs from the state, while unsuccessful litigants ought not ordinarily to be mulcted in costs unless their conduct is frivolous, vexatious or manifestly inappropriate’.
One can imagine the financial risk associated with taking the State or big business to court, entities that have limitless coffers. The absence of this protection would have a chilling effect on our constitutional democracy. Individuals and organisations seeking to uphold and assert constitutional rights and provisions would think twice before litigating – not because of the merits or strengths of their case – but because of the fear that the process may bankrupt them.
In our case, the Court accepted that MVC’s litigation was genuine constitutional litigation, responsibly pursued in the public interest, and that there was no finding that the litigation was frivolous, vexatious or abusive. It also reaffirmed the principal that costs should be assessed holistically, taking account of substantial success.
The successful appeal of the costs order has no consequence for the PFA, which we continue to challenge in the courts. What is of importance is the reinforcement of the Biowatch principle, an outcome that should give continued comfort to future litigants embarking on good faith constitutional litigation.
