THE SUPREME COURT OF APPEAL OF SOUTH AFRICA
JUDGMENT
Reportable
Case no: 574/2022


In the matter between:
NATIONAL STUDENT FINANCIAL
AID SCHEME APPELLANT
and
SAMANTHA LETTIE MOLOI FIRST RESPONDENT
LINDA MAKHAZA SECOND RESPONDENT
KEABETSWE MOTAUNG THIRD RESPONDENT
THE UNIVERSITY OF THE
WITWATERSRAND FOURTH RESPONDENT
THE MINISTER OF THE
DEPARTMENT OF HIGHER
EDUCATION AND TRAINING FIFTH RESPONDENT

Neutral citation: National Student Financial Aid Scheme v Moloi and Others
(574/2022) [2024] ZASCA 66 (03 May 2024)
Coram: DAMBUZA ADP and HUGHES, MABINDLA -
BOQWANA, GOOSEN and MOLEFE JJA
Heard: 9 May 2023
Delivered: 3 May 2024

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Summary: Administrative Law – determination of eligibility criteria for
a u niversity bursary scheme by the National Student Financial Aid Scheme
(NSFAS) in consultation with the Minister of the Department of Higher
Education in terms of s 4(b) of the National Financial Aid Scheme Act No 56 of
1999 – exclusion of second qualification (postgraduate) Bachelor of Laws (LLB)
degree – decision to exclude the degree constituted policy formulation and
therefore executive action – decision rationally connected to the purpose for
which power was given – consultation with Universities South Africa and the
South African Union of Students satisfied the procedural fairness requirement –
legitimate expectation for funding under the NSFAS guidelines not established.

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ORDER

On appeal from: Gauteng Division of the High Court, Pretoria (Kollapen J,
sitting as court of first instance):
1 The appeal is upheld with no order as to costs.
2 The order of the high court is set aside and replaced with the following:
‘The application is dismissed with no order as to costs’.

JUDGMENT

Dambuza ADP (Hughes, Mabindla-Boqwana, Goosen and Molefe JJA
concurring)

Introduction
[1] The first appellant, the National Student Financial Aid Scheme (NSFAS)
appeals against an order of the Gauteng Division of the High Court, Pretoria (high
court) in terms of which its decision to discontinue the funding of the Bachelor
of Laws (LLB) degree, as a second university qualification, was reviewed and set
aside. The appeal is with the leave of this Court.

The facts
[2] NSFAS is the principal body charged with the function of management of
a bursary sche me established in terms of the National Student Financial Aid
Scheme Act 56 of 1999 (the NSFAS Act or the Act) . It is a juristic person
established in terms of s 2 of the Act. Its objective is ‘to provide financial aid to
eligible students who meet the criteria for admission to a higher education

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programme’. It manages the financial aid scheme in terms of guidelines issued
by it, in consultation with the second appellant, the Minister of National
Department of Higher Education and Training (the Minister) in terms of s 4(b) of
the Act. The guidelines are updated and published annually. They are approved
by the national C abinet after inputs from th e national government departments
which are vested with policy formulation and budget allocation for students.

[3] The first edition of the guidelines was implemented in 2019 . Although
prior to 201 9 NSFAS facilitated student funding, the bursary scheme und er
consideration was only introduced in 2018. The Minister supervises the
administration of the scheme.

[4] On 11 March 2021 , the Minister released a media statement in which he
announced changes to the 2020 guidelines for the bursary scheme. The changes
were driven by a shortfall in the budget allocated to the bursary s cheme for the
2021 academic year. The result was that NSFAS was not able to commit to
funding students in the same manner as before. It did not have a budget to support
all its commitments. The Minister explained in the media statement that NSFAS
could only commit to funding all returning benef iciaries of the scheme. It was
unable to confirm funding for new university students. He advised that t he
guidelines for the 2021 universi ty funding criteria would be published
accordingly.

[5] The Minister gave a number of reasons for the budget shortfall. Most
significant was the COVID-19 pandemic . During the lockdown period , the
scheme had to continue paying student allowance s even when universities were
closed. The academic year had to be extended without allocation of additional
funds for the extended academic period. There was also an increase in the number
of students qualif ying for funding as a result of job losses b y their previous

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funders because of the COVID-19 pandemic. On the other hand, prior to the onset
of the pandemic, National Treasury had started to implement budget cuts across
government departments as a result of relentless deterioration in the economy.

[6] On 11 March 2021, the Minister released a further media statement in
which he advised that Cabinet had approved reprioritisation of the Department of
Higher Education and Training ( DHET) budget to ensure that ‘all deserving –
NSFAS qualifying students’ would receive funding. The good news was that, in
addition to funding continuing students who met the qualifying criteria, NSFAS
would also be funding new students who qualified for the bursary scheme . The
Minister emphasised that NSFAS funding was primarily provided fo r students
registered for a first undergraduate qualification, although in the past the scheme
had been extended to ‘some limited second qualifications in key areas’. In 2021
there would be no funding for new entrants in second or postgraduate
qualifications, as these qualifications were the responsibility of the National
Research Foundation. However , students that were already registered
(continuing) for postgraduate degrees would still be funded if they met the
qualifying criteria.

[7] The 2021 guidelines were published on 28 March 2021. They were
effective from 26 March 2021. The y amended the 20 20 guidelines in certain
respects, particularly with regard to criteria for eligibility for funding under the
scheme. The effect of the amendments was that for 2021 no funding would be
allowed for second or postgraduate university qualifications.

[8] The first to third respondents, who were studying at the University of the
Witwatersrand (Wits University or Wits) at the time, brought an application
before the high court, challenging the defunding of the postgraduate LLB
(pursued as a second qualification ) under the 2021 guidelines. There were two

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pathways by which to attain an LLB degree at Wits University at the t ime of
institution of the proceedings. The first was a two -year postgraduate stream ,
which was available on completion of a BA (Law) Degree . The second was a
three-year postgraduate stream, which was available on completion of any other
undergraduate degree. Wits University did not offer the third stream LLB which
was available at other universities, namely, the four-year LLB which was on offer
to matriculants as an undergraduate programme.1

[9] The first to third respondents were all enrolled for postgraduate LLB at
Wits University. Prior to registering for the two-year LLB programme, the first
respondent, Ms Samantha Moloi, had been studying for a BA (Law) degree at the
same University, from 2018. After completing the BA (Law) degree, in 2020, she
proceeded to register for the two -year LLB degree at the start of the 2021
academic year. She did so without applying to NSFAS for funding for the LLB
degree. She believed, as she stated in her founding affidavit, that she would be
automatically funded by the scheme, given that, that was the only avenue through
which to attain LLB at Wits University at the time. Her belief stemmed from the
2020 guidelines in terms of which the LLB degree was one of the exceptions from
the rule excluding postgraduate qualifications from NSFAS funding. She only
learnt in March 2021 that the postgraduate LLB had been defunded.

[10] The third respondent Mr Keabetswe Motaung was in the same position as
Ms Moloi, except that he was in the first year of the three-year programme when
the 2021 guidelines were published. The second respondent Ms Linda Makhaza
was in the second year of the three -year LLB studies in 2021. Despite ha ving
been approved for NSFAS funding with effect from 2020 she was advised by the

1 It appears that the availability of the four year LLB Degree changed annually.

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University that NSFAS was not funding her for 2021, and that she would have to
refund all the fees that had been paid by the scheme on her behalf, from 2020.

[11] The three respondents contended that they had a legitimate expectation
that NSFAS would fund their LLB studies, as the degree was a ‘professional
requirement’ for employment as lawyers. They argued that, if it were not for the
2021 guidelines, they would all be eligible for NSFAS funding as they were under
the 2020 guidelines; they had registered for the LLB degree on the basis of the
guidelines that were in place at the start of the 2021 academic year. They sought
an order that the decisions by the Minister and NSFAS, reflected in the media
statements and the 2021 guidelines, be reviewed and set aside , in as far as they
provided for the defunding of postgraduate qualifications.

[12] The legal basis for the respondents’ challenge was two pronged. The
application was brought under s 6 of the Promotion of Administrative Justice Act
3 of 2000 (PAJA) and under the principle of legality. Under PAJA they contended
that the approval of the revised eligibility criter ia by the NSFAS Board on
11 March 2021, and the Minister’s concurrence in th ose criteria on 26 March
2021, in terms of s 4(b) of the NSFAS Act , were administrative actions. They
maintained that the Minister and the NSFAS Board: (a) failed to act in a
procedurally fair manner in that the y never afforded the affected students an
opportunity to make representations prior to the decision being made ; (b) made
the decision for an ulterior motive; (c) failed to consider relevant factors; (d) made
decisions which were not rationally connected to the purpose for which power
was given under s 4 (b) of the Act ; and ( e) made decisions which were so
unreasonable that no reasonable person could have made them.

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The contested guidelines (criteria for eligibility for funding under the NSFAS
bursary scheme)
[13] The structure and content of the annual guidelines was more or less the
same every year. In each year, changes were made to a limited number of clauses.
In terms of the general provisions, the scheme afforded financial support to
academically deserving students from poor and working -class backgrounds, to
obtain their first undergraduate qualification. A student who was a recipient of a
social grant from the South African Social S ecurity Agency (SASSA)
automatically met the financial criteria and was eligible for a bursary. Once a
student applied for funding to NSFAS, they automatically accepted the terms and
conditions of the NSFAS Bursary Agreement (NBA) . A student w ould only
receive funding once they met all the criteria . Approved funded programmes at
universities were all undergraduate ‘whole qualifications ’2. Postgraduate
qualifications were generally not funded.

[14] In addition to the general rule excluding postgraduate studies from funding,
each edition of the guidelines contained exc eptions to the exc lusion. The 2020
edition excluded from the general rule, the postgraduate Certificate in Education
(PGCE), the Postgraduate Diploma in Accounting, and the LLB degree. Certain
Bachelor of Technology (BTech) programmes that are required for registration
with a professional body as a chartered accountant also formed part of the
exceptions. In 2021, other than students completing postgraduate qualifications,
the only other exception was students who had obtained a Higher Certificate and
were to register for a Diploma or Degree’.


2 In terms of s 1 (definitions section) of the National Qualifications Framework Act, 2008, a “part qualification”
means an assessed unit of learning that is registered as part of a qualification. A “qualification” means a registered

national qualification. Other than these definitions Clause 6.1.1 of the 2020 guidelines (see para 15 below) defines
‘whole qualifications’ as degrees, diplomas, and higher certificate programmes offered by public universities.

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[15] To illustrate the amendments made to the 2020 guidelines, I first set out
the relevant clauses in those guidelines. Clauses 5 and 6 of the 2020 guidelines
regulated the ‘[q]ualifying criteria for the DHET bursary scheme’. In the relevant
parts they provided that:
‘5.7 A student can only be funded for one qualification at one institution at any one time.
5.11 Students who have already studied at a university or obtained a prior university
qualification do not qualify as FTEN [First Time Entry] students even if they are entering the
first year of a new programme. Students starting a university qualification for the first time, but
who have already achieved a TVET qualification may qualify as university FTEN students.3
5.12 In general a university student is el igible for funding for only one undergraduate
qualification. There are a few exceptions where a second undergraduate qualification would be
supported, such as those students who have obtained a Higher Certificate and go on to a
Diploma or a Degree.
6. Scope of the DHET Bursary for university students
6.1 Approved funded programmes for university students
6.1.1 Approved funded programmes at universities are all undergraduate whole
qualifications, ie degree, diploma or higher certificate programmes, offered by a public
university.
6.1.2 Additional courses that are not core requirements of a whole qualification are not
funded. Occasional programmes are not funded.
6.1.3 The only cases where a second qualification is funded are where it is a professional
requirement for employment. The Postgraduate Certificate in Education (PGCE) is
funded. In addition certain Bachelor of Technology (BTech) programmes are funded
where there is a professional requiremen t for completion – a separate list of funded
BTech programmes is provided.
6.1.4 In general postgraduate qualifications, including Postgraduate diplomas, honours
degrees, masters and PhD degrees are not funded. The only postgraduate qualifications

degrees, masters and PhD degrees are not funded. The only postgraduate qualifications
funded a re Postgraduate Diploma in Accounting [(certain PGDA)] and LLB as
indicated in the NSFAS funded qualifications list.’

[16] In the 2021 guidelines the respective clauses read as follows:

3 Clauses 5 and 6 of the 2020 guidelines.

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‘5.7 NSFAS may re-assess the financial eligibility of any students at any point whilst funded
by NSFAS and reserves the right to withdraw funding if the student no longer meets the
financial eligibility criteria.
. . .
5.13 Students who have already studied at a university or obtained a prior university
qualification do not qualify as FTEN (first time entry) students even if they are entering the
first year of a new programme. Students starting a university qualification for the first time, but
who have already achieved a TVET qualification may qualify as a university FTEN student.
5.14 A university student is eligible for funding for only one undergraduate qualification.
There is one exception which is those students who have obtained a Higher Certificate and go
on to a Diploma or Degree’.
. . .
6. Scope of the DHET Bursary for university students
6.1 Approved funded programmes for university students
Clauses 6.1 and 6.2 read the same as in the 2020 guidelines. Clause 6.1.3 provided
that:
‘Postgraduate qualifications, including postgraduate certificates, postgraduate diplomas ,
honours degrees, Masters and PhD degrees are not funded, except in the case of continuing
academically eligible students from 2010 completing their qualifications’. (Emphasis added)
There was no clause 6.1.4 in the 2021 guidelines’.

[17] The effect of clause 6.1.3 of the 2021 guidelines was to defund all
postgraduate qualifications, including those that had been exceptions to the
disqualifying rule under 6.1.3 and 6.1.4 of the 2020 guidelines. This affected the
three student respondents. In addition, Ms Makhaza was also disqualified under
the provision for re -assessment of financial eligibility , clause 5.7 of the 2021
guidelines.

The high court judgment
[18] The high court traversed the historical context of the two, three and four
year LLB programmes, as set out in the 2014 Higher Education Qualifications

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Sub-Framework Policy (HEQSF) 4 and the 2018 Report on the National Review
of LLB Programmes in South Africa (2018 report). It highlighted the importance
of locating the LLB programme ‘in its proper context’, and found that to consider
it as a postgraduate qualification, as NSFAS and the Minister did in clause 6.1.3
of the 2021 guidelines, ignored the historical imbalances in our education system.
The reasoning ignored the need to ensure that those who leave university do so
with a professional or career qualification, the court found. Furthermore, the use
of ‘qualification’ was an irrational ‘narrowing of focus’ which detracted from the
status of the LLB ‘programme’ in terms of the grading of the HEQSF.

[19] The high court , also found that the eligibility criteria (and guidelines)
constituted implementation of policy because they were ‘the nuts and bolts of the
funding framework’, which the Act contemplated. The decision to approve them
was an administrative decision. T he Minister had an obligation to consult
prospective LLB students as a group of persons who were likely to be affected by
the amen dments to the 2020 guidelines. Consultation with Universities South
Africa5 (USAF) and South African Union of Students (SAUS) organisations fell
short of comp liance with the requirement of procedural fairness under s 6 of
PAJA. Consequently, the decision to exclude the postgraduate LLB programme
from funding was irrational and inconsistent with the objectives of NSFAS, to
support deserving students.



4 A ‘single qualifications framework’ policy document issued by the Council on Higher Education (CHE) in
terms of the National Qualifications Act 2008 (NQF) ‘for the establishment of a single qualifications framework
for higher education to facilitate the development of a single national co-ordinated higher education system . . . to

enable the articulation of programmes and the transfer of students between programmes and higher education
institutions as envisaged in White Paper 3, A programme for the transformation of Higher Education (1997)’.
See Government Notice No 36116 published dated 17 October 2014.
5 An umbrella body of the 26 public universities in South Africa. Each institution pays an annual membership
fee. The cumulative fees fund operations of the institution. The Vice -Chancellors, as accounting officers of the
respective individual institutions constitute the institution’s Board of Directors. https://usaf.ac.za as at 27 April
2024.

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On appeal
[20] NSFAS contended, as a starting point, that the high court misdirected itself
in relation to the factual basis of its decision. None of the student respondents met
the eligibility criteria for further financial aid from it, NSFAS contended.
Furthermore, the high court misconstrued the premise for the development of the
eligibility criteria and guidelines, which was statutory policy-formulation of the
same character as the input and acquiescence to the guidelines by National
Treasury, the Minister of Finance and the National Cabinet. All of them were
exercising their executive powers when approving the budget reprioritisation and
the eligibility criteria. Consequently, the provisions of PAJA were not applicable
to their decisions, because the determination of the eligibility criteria and funding
allocation was a polycentric exercise of executive power. The Minister also
contended that the order of the high court was an encroachment on the executive
powers and functions of the national cabinet , and on the NSFAS and Treasury
policy formulation and budget allocation powers.

[21] The appellants highlighted that Ms Moloi was not registered for LLB when
the 2021 exclusion came into effect. Neither had she applied for NSFAS funding
for her 2021 studies. Her allegation about automatic funding was placed in
dispute.6 Similarly, Mr Motaung did not meet the criteria for funding under th e
2021 guidelines.

[22] They argued that Ms Makhaza, already a holder of a National Diploma in
Public A dministration and a n Honours degree in that discipline , also did not
qualify for NSFAS funding under the 2021 guidelines . She was not a first-time
entry student. Her household income was higher than the threshold required for

6 It is not necessary to make a determination of the nature envisaged under the Plascon-Evans rule or determined

the correctness of the factual premise on which the high court made its findings in this case because , the main
issue is the constitutional validity of the eligibility criteria and the relevant portions in the 2021 guideline s.

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eligibility under the scheme. Consequently, she did not meet the NSFAS financial
eligibility and approved study programme criteria. Further, she had applied to
register for a Master of Arts in development studies at the University of Zululand
and had submitted her dissertation proposal for that degree . She had not been
funded by NSF AS when she studied for the first two qualifications. There was
therefore no basis for legitimate expectation for funding for an LLB degree.

Discussion
Mootness
[23] At the hearing of the appeal, submissions were made on whether an order
granted by this Court would have a practical effect because the 2022 and 2023
guidelines had since been issued. Although all the parties agreed that further
guidelines had since been issued, there was disagreement on whether an order of
this Court on this appeal would be of any practical effect. The order granted by
the high court was in the following terms:
‘1 NSFAS decision and the Minister’s concurrent decision, taken in terms of section 4(b)
of the NSFAS Act, to discontinue NSFAS funding of the second undergraduate and certain
postgraduate qualifications are reviewed and set aside only to the extent that they relate to the
LLB programmes and
2 NSFAS and DHET’s subsequent decision to discontinue the funding of second
undergraduate degrees and certain postgraduate qualifications are reviewed and set aside only
to the extent that they relate to the LLB programmes reflected in the amendment in the 2021
guidelines.’7

[24] Paragraph 1 of the order appears to be a self -standing order of general
application. It is not necessarily limited to the eligibility criteria decision as it
appears in the 2021 guidelines. In this sense , that part of the order is not time
bound. It may impact on guidelines that the Minister and NSFAS might determine
in the future. I do not, however, make a firm finding in this regard, but recognise

7 There was also an order of costs in favour of the respondents.

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the uncertainty that might arise. In the circumstances, I agree with the submission
on behalf of the Minister that the interests of justice would best be served by
determination of the appeal.

An exercise of executive power or an administrative action?
[25] Given that our courts have affirmed the requirement of procedural fairness
in respect of the exercise of public power (with a few exceptions) it seems to me
that it may not be strictly necessary to determine whether the decision complained
of in this case is an executive or administrative action. This is so because the main
basis for the challenge to the eligibility criteria was failure to afford the
respondents opportunity to make representations prior to determining the criteria.
Moreover, the reasoning of the high court seemed to straddle both the legality and
PAJA review grounds. Nevertheless, for clarity and completeness, I explain why,
in my view, the de termination of the 2021 eligibility criteria wa s an executive
action. In doing so I refer to the determination of the eligibility criteria by NSFAS
and the Minister’s acquiescence thereto, including their incorporation in the
guidelines as one decision, in alignment with the provisions of s 4(b) the Act –
the source of the power exercised.

[26] The courts have cautioned that the distinction between an executive and
administrative action can be elusive.8 In Grey’s Marine Hout Bay (Pty) Ltd and
Others v Minister of Public Works and Others 9 this Court explained the challenge
as follows:
‘What constitutes administrative action – the exercise of the administrative powers of the state
– has always eluded complete definition. The cumbersome 10 definition of that term in PAJA

8 Minister of Defence and Military Veterans v Motau and Others 2014 ZACC 18; 2014 (5) SA (CC); 2014 (8)
BCLR 930 (CC).
9 Grey’s Marine Hout Bay (Pty) Ltd and Others v Minister of Public Works and Others [2005] ZASCA 43;

[2005] 3 All SA 33 (SCA); 2005 (6) SA 313 (SCA); 2005 (10) BCLR 93 (SCA) (13 May 2005).
10 The definition of ‘administrative action’ in s 1 of PAJA is made particularly cumbersome by its incorporation
of a number of terms that are themselves defined and often overlap.

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serves not so much to attribute meaning to the term as to limit its meaning by surrounding it
within a palisade of qualifications’.

[27] This Court then suggested the following approach to determining whether
a particular act is an administrative action:
‘[24] Whether particular conduct constitutes administrative action depends primarily on the
nature of the power that is being exercised rather than upon the identity of the person who does
so. Features of administrative action (conduct of ‘an administrative nature’) that have emerged
from the construction that has been placed on s 33 of the Constitution are that it does not extend
to the exercise of legislative powers by deliberative elected legislative bodies, nor to the
ordinary exercise of judicial powers, nor to the formulation of policy or the initiation of
legislation by the executive, nor to the exercise of original powers conferred upon the President
as head of state. Administrative action is rat her, in general terms, the conduct of the
bureaucracy (whoever the bureaucratic functionary might be) in carrying out the daily
functions of the state which necessarily involves the application of policy, usually after its
translation into law, with direct and immediate consequences for individuals or groups of
individuals.
[25] The law reports are replete with examples of conduct of that kind. But the exercise of
public power generally occurs as a continuum with no bright line marking the transition from
one form to another and it is in that transitional area in particular that
‘‘[d]ifficult boundaries may have to be drawn in deciding what should and what should not be
characterised as administrative action for the purposes of s 33’’.
In making that determination
‘[a] series of considerations may be relevant to deciding on which side of the line a particular
action falls. The source of the power, though not necessarily decisive, is a relevant factor. So,

too, is the nature of the power, its subject matter , whether it involves the exercise of a public
duty and how closely it is related on the one hand to policy matters, which are not
administrative, and on the other to the implementation of legislation, which is. While the
subject-matter of a power is not r elevant to determine whether constitutional review is
appropriate, it is relevant to determine whether the exercise of the power constitutes
administrative action for the purposes of s 33.’11 (footnotes omitted)

11 Greys Marine fn 7 paras 24 and 25.

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[28] Section 1 of the Promotion of Administrative Justice Act 3 of 2000 (PAJA)
defines an administrative action as:
‘(i) . . . any decision taken, or failure to take a decision, by-
(a) An organ of state, when-
(i) Exercising a power in terms of the Constitution or a provincial constitution;
(ii) Exercising a public power or performing a public function in terms of
any legislation; or
(b) a natural or juristic person, other than an organ of state, when exercising a public
power or performing a public functioning terms of an empowering provision,
(c) Which adversely affects the rights of any person and which has a direct, external
legal effect, but does not include-
(d) (aa) the executive powers or functions of the National Executive , including the
powers or functions referred to in sections 79 (1) and (4), 84 (2) (a), (b), (c), (d),
(f), (g), (h), (i) and (k), 85 (2) (b), (c), (d) and (e), 91 (2), (3), (4) and (5), 92(3),
93, 97, 98, 99 and 100 of the Constitution . . .’ . (Emphasis added)
The exclusion of executive powers and functions of the National Executive under
ss (1)(d) is of particular significance in this instance. It immediately becomes
apparent that th e decision under consideration was an exercise of executive
powers and therefore did not fall under PAJA.

[29] The submission on behalf of NSFAS and the Minister , that the impugned
decision was an exercise of executive authority, finds additional support in the
provisions of s 4( b) of the Act and in the objectives of the guidelines . T he
objectives of the guidelines were: (1) to provide a framework for the
implementation of the bursary scheme for 2021, and to delineate the roles and
responsibilities of all implementing partners and bursary recipients; (2) to outline
the scope and detail of the scheme, and the processes necessary to give effect to
the student funding provided by NSFAS to deserving students in university
education; and (3) to outline high -level rules applicable to the bu rsary
programme.

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[30] In providing the framework for implementation of the bursary scheme, the
guidelines we re regulatory in nature. They constitute d the organisational
structure, a protocol or a set of rules that would guide and control the
implementation and administration of the bursary scheme. The determination of
the guidelines, including the eligibility criteria, was not a day-to-day, bureaucratic
implementation of policy or legislation.

[31] It was submitted on behalf of the student respondents that the
determination of the eligibility criteria constituted a separate decision from the
determination of the guidelines. The proper approach, however, is to consider the
eligibility criteria within the scheme of the guidelines, comprehensively. An
examination of the eligibility criteria in isolation is inconsistent with the
established approach to interpretation, analysis and comprehension of legal
documents in this country.12 For example, in determining the qualifying criteria
for eligibility for funding, in clause 5 the guidelines set the parameters with
respect to citizenship of potential be neficiaries; financial thresholds to be met
(financial qualification criteria); allowances to be given to different categories of
students, the scope of university qualifications to be funded ; and the role and
responsibilities of universities in the administration of the scheme . The
determination of the criteria i s a specified function of NSFAS (in consultation
with the Minister), under s 4(b) of the Act. Under s 4 , NSFAS performs the
following functions:
‘Functions of NSFAS. - The functions of NSFAS are-
(a) to allocate funds for loans and bursaries to eligible students;
(b) to develop criteria and conditions for the granting of loans and bursaries to eligible
students in consultation with the Minister;
(c) to raise funds as contemplated in section 14 (1);

12 See for example, Airports Company South Africa v Big Five Duty Free (Pty) Limits and Others [2018] ZACC
33; 2019 (2) BCLR 165 (CC); 2019 (5) SA 1 (CC).

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(d) to recover loans;
(e) to maintain and analyse a database and undertake research for the better utilisation of
financial resources;
(f) to advise the Minister on matters relating to student financial aid; and
(g) to perform other functions assigned to it by this Act or by the Minister.’

[32] Indeed, under s 4 some of the functions performed by the NSFAS entail
what may be regarded as bureaucratic day -to-day administration of the bursary
scheme. The se include allocation of funds for loans and bursaries to eligible
students, recovery of loans, and maintenance of a database. These functions are
allocated to NSFAS alone. However, the function that is allocated under s 4(b) is
executed together with the Minister. The exercise of the power conferred under s
4(b) requires a wide discretion . It entails consultations with other government
departments, more particularly, the Minister of Finance who controls the
government budget. Together with National Treasury , NSFAS considers and
weighs the state of government financial circumstances at a particular time
against the objective of assisting students from poor and working class families
to attain a university qualification . A policy determination is then made on the
range of beneficiaries to whom the bursary will be offered in given circumstances.
In this instance, following adverse economic developments, the budget allocation
to the Department had to be re -prioritised, and Cabinet had to consider and
approve these changes. These steps are not mere administration of legislation.

[33] The respondents’ contention that the exercise of power only entailed
limited implementation of developed criteria and conditions for the granti ng of
loans and bursaries is untenable. The balancing process undertaken in
determining the regulatory structure and content of the guidelines demonstrates
that the exercise of power was not mere administrative implementation of
legislation.

19


[34] Similarly untenable is the argument that consideration of budgetary
constraints must be excluded from the determination of the nature of the power
exercised in this instance, because it falls under s 14(2)(c) of the Act and thus
outside the realm of s 4(b). Determination of use of allocated budget was a crucial
aspect of the impugned decision . In fact , budget consideration is always a
component of policy determination. And, as the Constitutional Court put it in
National Treasury and Others v Urban Tolling Alliance and Others (Road
Freight Association as applicant for leave to intervene)(OUTA): 13
‘[67] . . . the duty to determine how public resources are to be drawn upon and re -ordered
lies in the heartland of Executive Government function and domain. What is more, absent any
proof of unlawfulness or fraud or corruption, the power and prerogative to formulate and
implement policy on how to finance public projects reside s in the exclusive domain of the
National Executive subject to budgetary appropriations by Parliament.
[68] Another consideration is that the collection and ordering of public resources inevitably
calls for policy-laden poly-centric decision making. Courts are not always well suited to make
decisions of that order’.

[35] Consequently, on a comprehensive consideration of the nature of the power
conferred in terms of s 4 (b) of the NSFAS Act , the impugned decision was an
exercise of executive power.

Rationality
[36] It is a trite principle of A dministrative Law that public power must be
sourced in the law and the Constitution .14 Courts must review the exercise of
public power to ensure compliance with this principle. The principle of legality

13 National Treasury and Others v Urban Tolling Alliance and Others (Road Freight Association as applicant
for leave to intervene) 2012 (11) BCLR 1148 (CC).

for leave to intervene) 2012 (11) BCLR 1148 (CC).
14 Masethla v The President of the Republic of South Africa 2008 (1) BCLR 1 (CC); (2008) (1) SA 566 (CC)
para 77-81.

20

requires that exercise of executive power must be rationally related to the purpose
for which it is conferred.

[37] Much of the respondents’ case, in contending that the decision of NSFAS
and the Minister was irrationa l, revolved around the use of the word
‘qualification’ with reference to the LLB programme in the impugned guidelines,
as opposed to a study ‘programme’. In terms of the HEQSF ‘qualification’ means,
‘the formal recognition and certification of learning achievement aw arded by a
credited institution’. ‘[P]rogramme’ means ‘the purposeful and structured set of
learning experiences that lead to a qualification’. In terms of s 1 of the National
Qualifications Framework Act, 2008, ‘qualification’ means a registered national
qualification’.

[38] As stated, the high court found that the ‘narrowing of focus’ and reference,
in the 2021 guidelines , to LLB as a ‘qualification’ was procedurally and
‘substantively’ irrational. Furthermore, there was no rational justi fication for
permitting financial support for the undergraduate LLB study programme and
none for postgraduate degrees. The high court also considered irrational the
defunding of LLB in the context of disadvantaged students who did not meet the
four-year (mainstream LLB ) admission requirement s, especially when Wits
University did not offer the four -year undergraduate LLB. The court was of the
view that the failure to fund the second qualification LLB , undermined the
objective of bridging the socio-economic gap which underpinned the decision to
promote attainment of an LLB degree by previously disadvantaged students.

[39] First, it is not only in the impugned guidelines that the LLB degree was
referred to as a qualification. It was similarly referred to in the 2020 guidelines.
Furthermore the reference to postgraduate ‘qualifications’ in the 2021 guidelines,
was not only in respect of the LLB degree. In clause 6.1.3, the term w as used in

21

respect of ‘postgraduate certificates, postgraduate diplomas, honours degrees,
masters, and PhD degrees . . .’. In my view, the term was chosen for its inclusive
quality, to refer, collectively, to different types of postgraduate qualifications.

[40] There was no dispute about the increased need for funding which NSFAS
and the Minister had to provide for in 2021. The distinction between the two and
three-year LLB programmes, on one hand, and the four-year LLB, on the other,
was obviously based on the fact that the former were second qualifications
whereas the latter was a first undergraduate higher education qualification. In this
context, the 2021 guidelines were adopted for a legitimate government purpose,
which was the funding of the first undergraduate degree for each student, given
the prevailing financial constraints, to enable NSFAS to fund as many
beneficiaries as possible . The fact that this Court or a different member of the
executive might have dealt differently with the challenge of decreased budget is
not a valid basis to interfere with the revised eligibility criteria. In Albutt v Centre
for the Study of Violence and Reconciliation15 the Constitutional Court held that:
‘Courts may not interfere with means selected simply because they do not like them, or because
there are other more appropriate means that could have been selected. But where the decision
is challenged on the grounds of rationality, courts are obliged to examine the means selected
to determine whether they are rationally related to the objective sought to be achieved. What
must be stressed is that the purpose of the enquiry is to determine not whether there are other
means that could have been used, but whether the means selected are rationally related to the
objective sought to be achieved. And if objectively speaking they are not, they fall short of the
standard demanded by the Constitution’.

Was the exclusion of the second degree LLB unreasonable?

Was the exclusion of the second degree LLB unreasonable?
[41] Reasonableness is a proportionality assessment as envisaged in s 36 of the
Constitution that provides for limitation of rights in terms of a law of general
application, to the extent that the limitation is reasonable . Our courts have

15 Ibid para 51.

22

preferred the rationality test over reasonableness, as a measure for legality of
executive action. In Soobramoney v Minister of Health (Kwazulu -Natal)16 the
Constitutional Court rejected Mr Soobramoney’s claim for an order that the state
render to him life-saving dialysis on the basis that the right to emergency medical
treatment was not available in respect of chronic medical conditions, even if they
were life threatening. Within the context of the right of access to healthcare
services guaranteed in s 27 of the Constitution, and the challenge of an under -
resourced healthcare system, t he Court found that the requirements set by the
State for eligibility free renal dialysis medical treatment had not been shown to
be unreasonable.17

[42] Two years later, in New National Party v Government of the Republic of
South Africa18 the Constitutional Court clarified its approach as follows:
‘Decisions as to reasonableness of statutory provision are ordinarily matters within the
exclusive competence of Parliament. This is a fundamental doctrine of separation of powers
and to the role of Courts in a democratic society. Courts do not review provisions of Acts of
Parliament on the grounds that they are reasonable. They will do so only if they are satisfied
that the legislation is not rationally connected to a legitimate government purpose. In such
circumstances the review is competent because the legislation is arbitrary . . . Reasonableness
will only become relevant if it is established that the scheme, though rational, has the effect of
infringing the right of citizens to vote. The question would then arise whether limitation is
justifiable under the provi sions of s 36 of the Constitution and it is only as part of this s 36
inquiry that reasonableness becomes relevant. It follows that it is only at that stage that the
question of reasonableness has to be considered.’

16 Soobramoney v Minister of Health (KwaZulu-Natal) [1997] ZACC 17; 1998 (1) SA 765 (CC); 1997 (12)
BCLR1696.
17 The requirements were that a patient be curable within a short period of time and that s/he be eligible for a
kidney transplant. Mr Soobramoney’s kidneys had failed and his condition had been diagnosed as irreversible
18 New National Party v Government of the Republic of South Africa and Others 1999 (3) SA 191 (CC); 1999
(5) BCLR 489 (CC) at para 24.

23

[43] However, in The Government of the Republic of South Africa v
Grootboom19 the Constitutional Court was more forthright in its application of
reasonableness as a test for rationality of executive action. The Court held that in
determining whether the State’s housing programme was reasonable, a court had
to consider whether the programme was capable of facilitating the right of access
to adequate housing, and whether it was reasonably implemented. The Court held
that reasonableness had to be understood within the context of the Bill of Rights,
and the requirement that everyone be treated with care, concern and dignity. The
Court found that because the State’s housing programme made no provision for
people in Mrs Grootboom’s position of homelessness and extreme desperation, it
was unreasonable and unconstitutional.

[44] In this case , the language of s 29(1) (b) of the Constitution incorporates
reasonableness as a measure for adequacy of the action taken by the State to make
further education accessible. The section provides that ‘everyone has the right to
further education, which the State, through reasonable measures , must make
progressively available and accessible’. (Emphasis added).

[45] Accordingly, i n this case , an assessment of the reasonableness of the
impugned executive action is required for two independent reasons. First, because
of the limitation of the constitutionally guaranteed right to further education, and
secondly, because of the express reasonableness standard set in s 29 of the
Constitution. The reasonableness inquiry is determined in the context described
in the evidence. I have already referred to it. In addition, as directed in clause 1.1
of the 2021 guidelines NSFAS considered that the aim of providing the b ursary
funding was to assist poor and working-class students across the board. Within
that context the amendments to the eligibility criteria had to maintain the general

19 The Government of the Republic of South Africa v Grootboom; [2000] ZACC 19; 2001 (1) SA 46 (CC); 2000
(11) 1169 (CC).

24

approach that funding was for first-time entry students. Funding had to be
maintained despite the challenges resulting f rom the ongoing effects of the
COVID-19 pandemic, the pre -existing decline in the state of the country’s
economy, and the increased number of impecunious students. Within this context,
it seems to me that the extent of the limitation of the s 29(1) (b) constitutional
right, although seemingly harsh on those affected , was reasonable . The
prioritisation of first time entry students at the expense of those who required a
second qualification was not a disproportionate measure.

Legitimate expectation
[46] The respondents argue that the 2020 LLB exception was not the first one.
Before the introduction of the 2019 guidelines, LLB was funded by NSFAS. They
refer to responses given by NSFAS to frequently asked questions ( FAQ) which
were published in 2018. The published document indicated that ‘NSFAS only
accepts postgraduate applications for the following postgraduate qualifications .
. . LLB’. (Emphasis supplied). The contention is that when the respondents
commenced their BA degrees NSFAS was f unding LLB post graduate degrees,
hence the legitimate expectation on their part.

[47] The doctrine of legitimate expectation usually arises in r elation to
procedural fairness. The principle gained recognition in our law in Administrator,
Transvaal and Others v Traub and Others 20 where Corbett CJ held that a
legitimate expectation may arise where an express promise had been made by a
relevant authority or a where regular (well-established) practice had arisen which
a claimant reasonably expected to continue. The test is objective and
determination of whether an expectation, in the legal sense, exists, is made on a
case-by-case basis.

20 Administrator of Transvaal and Others v Traub and Others (4/88) [1989] ZASCA 90; [1989] 4 All SA 924
(A).

25


[48] Although limited instances of substantive expectation have been
recognised in this country, 21 generally the courts are reluctant to afford such
relief, being wary of fettering discretion of state authorities.22 This case is a good
example of why caution is required . In circumstances where NSFAS and the
Minister had to ensure that the promise of a higher education qualification
remains a sustained reality to an increased number of students, despite depleted
financial resources, substantive expectation would be an improper consideration.
Undue interference with powers assigned to the executive as an incident of
legitimate government business must be avoided. As much as financial hardships
which confront students pursuing second qualifications was real and the negative
effects had to be understood, the courts could not tamper with the discretion of
the executive to prioritise first time entry to higher education institutions, unless
such discretion wa s exercises in a manner that offended the law and the
Constitution.

[49] In any event, I am not satisfied that the respondents demonstrated that there
was a well-established practice of funding of the second degree LLB programme.
Given that the response to the FAQs was omitted from the 2019 guidelines it
cannot be said that NSFAS made an unambiguous representation that the
respondents could rely on , or that a well-established practice of funding the
postgraduate LLB was established. The response to the FAQs only went as far as
to ind icate that applications for L LB funding are accepted. There wa s no
specification as to whether this was in reference to the undergraduate or
postgraduate LLB. Indeed it could be argued that the language of clause 6.1.4 in
the 2020 guideline s did not stipulate that the funding of the postgraduate LLB

21 See for example Quinella Trading (Pty) Ltd v Minister of Rural Development 2020 (4) SA 215 (T) ; Ampofo v

MEC for Education, Arts Culture Sports and Recreation, Northern Province 2002 (2) SA 215 (T).
22 Hoexter, Administrative Law, 3rd ed, at 427.

26

was a speci al, once–off allowance. However, the clause had to be considered
together with the repeated principle in the guidelines, that generally, the bursary
scheme was aimed at assisting first time entry students.

Procedural fairness
[50] Section 33 of the Constitution guarantees to everyone a right of
administrative action that is lawful, reasonable, and procedurally fair. Executive
decisions are excluded from review under PAJA. Nevertheless, our courts
recognise that exercise of executive authority must comply with the law and the
Constitution. Consequently, although in Masethla23 the Constitutional Court held
that procedural fairness is not a requirement for the exercise of executive power.
the Court has now refined its articulation of the principle. In Albutt the
Constitutional Court recognised the right of victi ms of criminal conduct to be
heard in Presidential pardon proceedings held under s 84 (2) (j) of the
Constitution.

[51] In essence, the Constitutional Court in Albutt considered that when the
President announced the special dispensation process he had outlined its
objectives, the criteria, and the principles that would guide the decision making
process.24 It considered that the process outlined by the P resident to Parliament
recognised that victim participation in line with the principles and the values of
the T ruth and Reconciliation Commission was the only rational means to
contribute towards national reconciliation and unity. Consequently, the
subsequent disregard of such principle without any explanation was irrational.
However, the Constitutional Court emphasised that its findings in Albutt were
confined to the circumstances of that case; particularly the fact that the crimes in
question were committed with a political motive and the purpose of the pardons

23 See fn 14 above.
24 At 55. The objectives in that case included nation-building and national reconciliation.

27

was to promote national reconciliation and unity. It emphasised that its judgment
in that case did not decide the question whether victims of other categ ories of
applications for pardon are entitled to be heard.

[52] The case-by-case approach to determination of compliance with the
procedural fairness requirement in executive action, and the nature and extent of
procedures adopted by public administrators has continued in recent judgments
of both this Court and the Constitutional Court. In Motau,25 the Constitutional
Court found that the Minister had been obliged to follow due process in
terminating the respondents’ positions on the Board of Armscor, as required by
the Companies Act 71 of 2008. The Court added that procedural fairness
obligations might attach independently of a statutory obligation, by virtue of the
principle of legality. Other instances in which the Constitutional Court affirmed
the requirement of procedural fairness include Democratic Alliance v President
of the Republic of South Africa (also known as Simelane).26 In this case , the
President had ignored the evidence of Mr Simelane’s dishonesty when he
appointed him as the National Director of Public Prosecutions. Based on the
principle of procedural irrationality the Constitutional Court held that the
appointment was irrational and unconstitutional.

[53] The requirement of procedural fairness in exercise of executive authority
bears broadly similar features to the parameters set out in PAJA for procedural
fairness. Section 4 of PAJA prescribes that administrative action must be
procedurally fair and that consideration must be given to whether a public inquiry,
a notice and comment process, or both processes should be held, or whether a
different procedure should be followed , to give effect to the right to a just

25 See fn 7 supra.
26 Democratic Alliance v President of the Republic of South Africa and Others [2012] ZACC 24; 2012 (12)

BCLR 1297 (CC); 20133 (1) SA 248.

28

administrative action.27 In terms of s 4 (4) an administrator may depart from the
stipulated requirements of procedural fairness if it is reasonable and justifiable to
do so.

[54] The factors relevant for the determination of whether such departure is
justifiable include the objectives of the empowering provision, the nature and
purpose of, and the need to take the administrative action, the likely effect of the
administrative action, the urgency of taking the administrative action, and the
need to promote efficient administration and good governance.28 The similarities
in the regulation of procedural fairness in administrative and the Courts’
recognition of the procedural fairness imperative in executive decisions, all stem
from the constitutional ground rule that procedural or process fairness is a
requirement in all exercise of public power. Reasonable and justifiable departure
from the fundamental rule is acceptable. Whether or not departure from the rule
is reasonable and justifiable is determined on a case-by-case basis.

[55] Despite these similarities in approach to determination of legality in the
exercise of public power, the distinction between procedural fairness under PAJA
and procedural irrationality remains part of our law. In Law Society South Africa
v President of the Republic of South Africa and Others .29 The Constitutional
Court explained the difference as follows:
‘Procedural fairness has to do with affording a party likely to be disadvantaged by the outcome
the opportunity to be properly represented and fairly heard before an adverse decision is
rendered. Not so with procedural irrationality. The latter is about tes ting whether, or ensuring
that, there is a rational connection between the exercise of power in relation to both process
and the decision itself and the purpose sought to be achieved through the exercise of that power.
I do not think that distinction is of relevance in this instance.

I do not think that distinction is of relevance in this instance.

27 Section 4(1)(a)-(e) of PAJA.
28 Section 4 (4) (b).
29 Law Society South Africa v President of the Republic of South Africa and Others [2018] ZACC 51; 2019 (3)
BCLR 329 (CC); 2019 (3) SA 30 (CC).

29


[56] In this case, the Minister consulted with the representatives of USAFand
SAUS. No notification was sent out to the general student community inviting
representations on the anticipated changes to the 2020 guidelines.

[57] The procedure adopted must be evaluated against the circumstances which
precipitated the changes to the eligibility criteria. By all accounts , alarm bells
started ringing during July 2020, when NSFAS wrote to the Department advising
that there was a likelihood of increase in the number of funded NSFAS students
in the 2021 academic year. On 22 September, NSFAS again wrote to the CEO of
the Department advising of capacity and budgetary constraints. At that time ,
NSFAS was under administ ration. The Administrator described the entity as
being in a state of ‘dysfunction and maladministration’.

[58] At a meeting held on 14 October 2020 between officials the Department
and the NSFAS executive committee the funding requirement policy impacts
were presented, and possible cost cutting measures were explored. It is not clear
what exact measures were investigated at that stage. It was only in January 2021
that a version of the NSFAS eligibility Criteria Policy Statement (dated 21
January 2021) was finalised. The intention was that the policy statement was to
be the blueprint for assessment of financial and academic eligibility criteria for
funding of first-time entry students and continuing students.

[59] From the Minister’s first media statement, dated 8 March 2021, there was
likelihood that even the first-time entry students were at risk of not being funded.
It was only on 10 March 2021 that reprioritisation of the Department’s budget
was approved by National Cabinet. The second media statement, published on
11 March 2021, gives the impression that it was only on the previous day that the
details on how, exactly, the scope of 2021 funding scheme would be structured.

30

It would have been impractical, in those circumstances, to afford the general
student body opportunity to make representations, given that it was already past
the usual start of the academic year and the determination of beneficiaries that
still had to be done.

[60] There is no evidence from the SAUS or USAF as to how the information
was shared with the rest of the students . However, in circumstances where the
ultimate policy impact of the budgetary constraints was only established in early
March 2021 , timeous invitation for representations from potentially affected
students was unattainable. Consultation with SAUS and USAF constituted
reasonable and justifiable form of compliance with the requirement of procedural
fairness. Consultation with student representative bodies is an acceptable form of
communicating with students , although this is usually combined with notices
published on University notice boards and websites. In my view, considering all
those factors, the high court erred in setting aside the decision by the Minister and
NSFAS to redirect the funding in the manner explained above. It must also be
emphasised that, even without change in policy, the current respondents had not
met the criteria as indicated.

[61] In the result , the appeal mus t succeed. Given that the respondents were
asserting their constitutional rights to further education as provided in s 29 of the
Constitution, there will be no costs order against them. I make the following
order:
1 The appeal is upheld with no order as to costs.
2 The order of the high court is set aside and replaced with the following
order:
‘The application is dismissed with no order as to costs’.

31

___________________
N DAMBUZA
ACTING DEPUTY PRESIDENT

32





Appearances:

For the first appellant: FJ Nalane SC with L Makapela
Instructed by: Werksmans Attorneys, Johannesburg
Symington & De Kok Attorneys,
Bloemfontein.

For the first to third respondents: H Rajah with N Chesi-Buthelezi and N
Khooe
Instructed by: Webber Wentzel, Johannesburg
Webbers, Bloemfontein.

For the fifth respondent: M I Thabede with N Seme
Instructed by: State Attorney, Pretoria
State Attorney, Bloemfontein.