ESTOPPEL AND LEGITIMATE EXPECTATION: CAN THE PUBLIC TRUST THE STATE?
South Africa is proud of its Constitution, which protects people’s rights and limits what the government can do. There are legal rules meant to support fairness, such as estoppel and legitimate expectation. However, these rules can sometimes put ordinary people at risk without them realising it. Because of this, people should be careful about trusting what government officials say unless they first get legal advice.
Estoppel is a legal rule that applies mostly between private people or businesses. It means that if one person makes a false statement and another person relies on it and suffers harm, the person who made the statement can be held responsible. They cannot later deny what they said to avoid liability.
In the past, it was much harder to use this rule against the government. Even if the government made a promise, it could later change its mind if the law allowed it to exercise discretion. This means that even if someone relied on what the government said and suffered harm, the government might not be held responsible.
In addition, if the government made a promise that was actually unlawful, people are generally not allowed to rely on it. Allowing that would go against the rule of law, because it would effectively make an illegal act acceptable.
To deal with this problem, the idea of “legitimate expectation” developed. This allows people to hold the government accountable when it creates a reasonable expectation through its promises or usual practices. However, this rule also does not apply if the government’s promise was unlawful.
These rules can lead to unfair results. For example, in one case, a government department entered into lease agreements without following the proper legal process. When the other party tried to enforce the agreements, the court refused, because enforcing them would have gone against the law. As a result, the private company suffered losses even though it relied on the government’s actions.
In South Africa, the “legitimate expectation” rule is also limited. Courts usually only use it to make sure procedures are fair, not to force the government to keep its substantive promises. It is still unclear whether courts will expand this in future.
There have been arguments that estoppel should sometimes apply even when the government acted unlawfully, especially to protect individuals from unfair harm. However, South African courts have mostly not accepted this idea.
Even laws that seem to protect people can be difficult to rely on. For example, section 44(11A) of the Customs and Excise Act 91 of 1964 provides that the South African Revenue Services (“SARS”) cannot claim underpayment of duties where the amount paid to them by the taxpayer was in accordance with a practice generally prevailing. But proving that such a practice exists is very difficult and requires strong evidence of consistent behaviour across the Commissioner’s offices.
In summary, relying on what the government says can be risky. People should always seek legal advice before acting on such statements to avoid suffering unnecessary losses.
