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[2010] ZASCA 115
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MEC for Social Development v Mdodisa (578/09) [2010] ZASCA 115; 2010 (6) SA 415 (SCA) ; [2011] 2 All SA 150 (SCA) (22 September 2010)
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THE SUPREME COURT OF APPEAL OF
SOUTH AFRICA
JUDGMENT
Case no: 578/09
MEMBER OF THE EXECUTIVE COUNCIL FOR
......................................................
Appellant
SOCIAL DEVELOPMENT
and
EUNICE
MDODISA
.................................................................................................
Respondent
______________________________________________________________
Neutral citation:
MEC for
Social Development v Mdodisa
(578/09)
[2010] ZASCA 115
(22 September 2010)
CORAM:
Navsa, Ponnan, Shongwe and Leach JJA and K Pillay AJA
HEARD:
9 September 2010
DELIVERED:
22 September 2010
SUMMARY: Summary termination of
disability grant ─ procedurally unfair ─ orders of court
below not precluding the Member
of the Executive Council responsible
for payment of social grants from terminating a disability grant for
valid reason.
______________________________________________________________
______________________________________________________________
ORDER
______________________________________________________________
On appeal from:
Eastern Cape
High Court (Mthatha) (Miller J sitting as court of first instance).
The appeal is dismissed with costs
including the costs of two counsel.
______________________________________________________________
JUDGMENT
______________________________________________________________
NAVSA JA (PONNAN, SHONGWE AND LEACH
JJA AND K PILLAY AJA concurring)
[1] This appeal, with the leave of the
court below, is a tale of mal-administration and wasteful litigation.
The appellant is the
Member of the Executive Council, Department of
Social Development of the Eastern Cape, who has been cited in these
proceedings
in his capacity as the provincial head of the department
that is responsible for the payment of social grants in that
province.
The respondent is Ms Eunice Mdodisa, a quinqagenarian, who
resides at Ncambedlana farm, Mthatha, in the Eastern Province. I
shall
for convenience refer to the appellant as the MEC and to the
respondent as M.
[2] M has been treated since 2001 for
what she alleges to be chronic asthma. She claimed that this illness
has prevented her from
being gainfully employed and that its
disabling effect persists to this day. In 2002 M applied for a
disability grant in terms
of s 3 of the then applicable Social
Assistance Act 59 of 1992 (the 1992 Act). She was awarded a temporary
grant which lapsed on
31 October 2002.
[3] In 2003 a subsequent application
for a disability grant received no official response. In 2005 she
applied anew and a disability
grant was apparently approved. She
insisted that she received no documentation which described the
nature and duration of the grant
but was paid when she called at a
local pay point in December 2005 to enquire about her application. In
a supplementary affidavit
she stated that she was made to believe
that this grant was permanent, subject only to annual review. M
received monthly payments
from December 2005 until April 2007. In May
2007 payments were stopped abruptly. Upon presenting herself at the
pay point during
that month she was told by officials there that
there was no money for her. They handed her a slip which, inter alia,
stated the
following: ‘CLIENT INFORMATION NOT IN PAY FILE’.
[4] In consequence, M instructed an
attorney to launch an application in the Mthatha High Court for an
order declaring the action
of the MEC, in terminating her grant, to
be unlawful and setting it aside. M had also sought payment of the
arrears due to her
from the time that payments ceased and a further
order that the respondent continue paying her the monthly grant.
[5] M contended
that the action of the MEC in terminating her grant, without notice
to her and without providing her with an opportunity
of being heard,
was in breach of her right to fair administrative procedure in terms
of s 3(2) of the Promotion of Administrative
Justice Act 3 of
2000 (PAJA).
1
[6] The deponent to
the affidavit filed in support of the MEC’s opposition to the
application is Ms Mandisa Mpunzi, who described
herself as the
appellant’s senior manager in the Eastern Cape, operating out
of an office in East London. The first point
taken by Ms Mpunzi was
that M’s claim for payment of arrears, being a ‘debt’
within the meaning of s 3 of the
Institution of Legal Proceedings
Against Certain Organs of State Act 40 of 2002, had to be preceded by
a written notice in terms
of the provisions of that Act and that her
failure to give such notice precluded her from proceeding against the
MEC. A person
who intends to institute legal proceedings against an
organ of state for the recovery of a ‘debt’ is obliged to
give
notice of such intended proceedings within a stipulated time
limit.
2
Thankfully, that
point was not persisted in.
[7] In respect of the merits of M’s
complaint that she was the victim of administrative action that was
procedurally unfair,
Ms Mpunzi’s affidavit is singularly
unenlightening, contradictory and confusing. The narrative in the
paragraphs that follow
is my best attempt at making sense of a
garbled and non-sequential account of events.
[8] Ms Mpunzi took the view that the
termination of M’s disability grant was reasonable,
procedurally fair and lawful. She
sketched the following background.
The very first grant awarded to M, in 2002, was temporary and was
terminated on 31 October of
that year. Insofar as the termination of
the presently relevant grant is concerned she stated that it had been
intended as a temporary
grant of 12 month, duration to commence in
November 2004 and conclude in October 2005.
[9] The disability grant was in the
amount of R740 per month. According to Ms Mpunzi the monthly amounts
remained uncollected for
a year. A total of R8 880 was thus due to M
for that 12 month period. This amount was collected by M in December
2005. Notwithstanding
Ms Mpunzi’s protestations that this was a
temporary grant for a year, a further amount of R740 was paid to M in
December
2005, in addition to the hitherto uncollected amounts. It
was not disputed that payments continued from December 2005 until
April
2007 and that payment of the disability grant suddenly stopped
in May 2007. Ms Mpunzi’s explanation for the termination of
the
grant is that the payments that had been made beyond the 12 month
period had been made ‘erroneously’. The basis
for the
error is not provided. Nor are we told when or how the department had
first come to realise that an error had been made.
[10] According to Ms Mpunzi, when it
was realised on behalf of the MEC that M had received payments
‘erroneously’, a
letter was written to her in December
2006, informing her of this fact. Yet bafflingly, the letter informed
M that payment would
cease in March 2007. That letter was allegedly
sent by registered post. No proof of receipt by M was provided. In
any event, payment
continued beyond March 2007. M received her last
payment in April 2007.
[11] To confuse matters even further,
Ms Mpunzi, in support of her contention that M always knew that the
grant she received from
2005 was temporary, alleged that on 4 October
2005 a letter had been handed to M at her local pay point informing
her that her
application for a disability grant had been approved
with effect from 10 November 2004. A copy of the letter
allegedly despatched
to M indicates that the first payment was due in
November 2005. The letter indicated that M’s disability is of a
temporary
nature that would only last for 12 months. There was no
affidavit by the official who allegedly handed the letter to M
confirming
that fact, nor was any proof provided of receipt by her.
[12] As if that was not confusing
enough, Ms Mpunzi alleged that a letter had been sent to M advising
her that her application for
a disability grant, made in June 2005,
had been rejected. In this regard, a copy of an undated letter was
attached to Ms Mpunzi’s
affidavit. The reason given in the
letter for the rejection of the application is as follows:
‘
Asthma
and hypertension can be well controlled on regular medication,
causing little, if any permanent functional impairment.’
It is instructive that Ms Mpunzi does
not say when or how this letter was dispatched. Once again no proof
of receipt was provided.
[13] Incredibly, yet another letter,
dated 24 August 2005, was alleged by Ms Mpunzi to have been sent
to M, informing her that
her application for a disability grant was
unsuccessful. That letter states that a medical assessment indicated
that M did not
qualify for a grant. This letter and the letter
referred to in the preceding paragraph contain a postal address for
M. Similarly,
no proof of dispatch or receipt of this letter was
provided by Ms Mpunzi.
[14] Following on this remarkable
story of administrative mayhem, the deponent on behalf of the
respondent, even more remarkably,
stated the following:
‘
The
applicant ought to be grateful . . . that respondent has not asked
her to repay the money that was not due to her.’
[15] For completeness it is necessary
to record that when M applied for her disability grant in 2005, the
Social Assistance Act
59 of 1992 was the prevailing regulating
statute, but that it has subsequently been repealed. Section 3(a) of
that Act provided
that any person shall be entitled to an appropriate
social grant if she satisfies the Director-General that she is
disabled. The
Social Assistance Act 13 of 2004 was assented to on 5
June 2004 with 1 April 2006 being the date of commencement. It
repealed the
earlier Act. Section 33(2) of the latter Act provides
that any notice issued, any grant awarded or any moneys paid, under
the earlier
Act, is deemed to have been issued, made or paid under
its corresponding provisions. The statutory change has no substantive
effect
on the present case.
[16] The court below (Miller J) held
that M’s belief that the grant was permanent was well-founded
in that she had received
29 monthly payments. Miller J correctly took
into account the MEC’s failure to provide proof of receipt by M
of the letter
allegedly informing her in October 2005 that the grant
was a temporary one. He rightly held against the MEC that there was
no explanation
why this letter would have been sent one year after
the grant had allegedly been approved. The court below cannot be
faulted for
questioning why payments commenced in December 2005,
which was after the date when payment was to have terminated, namely,
October
2005.
[17] It was initially contended on
behalf of the MEC, that since a temporary disability grant lapses by
effluxion of time, a recipient
like M cannot insist that fair
administrative procedure be followed before it expires or even
thereafter. Regulation 24(1)(c) of
the Regulations promulgated under
the 1992 Act provides that a social grant, which includes a
disability grant, lapses when the
period of temporary disability has
lapsed. Regulation 2(3), in effect, provides that a temporary grant
will continue for a continuous
period of six months or for a
continuous period of not more than 12 months. Regulation 25(1)
provides that the Director-General
shall, if he or she approves an
application for a social grant, inform the applicant in writing of
such approval and the date on
which approval was granted. Such letter
should also, if applicable, inform the applicant that the grant is of
a temporary nature
and also when it will lapse. The letter should
inform the applicant of the right to reapply after the lapsing and of
the right
to appeal.
[18] The court below said the
following concerning temporary grants:
‘
A
temporary grant lapses by operation of law as it is subject to a
resolutive condition. Such lapsing is therefore not brought about
by
an administrative action and is therefore not subject to review.
However, the decision to make a grant a temporary grant is
administrative action and once that decision was made the applicant
then had the right to receive notification of the decision
and to
make representations through an appeal procedure. She was denied
these rights.’
In this regard the court relied on
Mpofu v MEC Department of Welfare and Population Studies, Gauteng
& another
WLD 2848/99 (unreported) and on an article by N de
Villiers entitled ‘Social Grants and the Promotion of
Administrative Justice
Act’
(2002 18
SAJHR
338).
The
court below concluded that the MEC was not entitled to evoke the
automatic lapsing provisions of Regulation 24 referred to
above and
declared the MEC’s decision to terminate the grant to be
invalid and of no force and effect. The court below ordered
the MEC
to pay M’s costs. It made further orders the relevance of which
is dealt with below.
[19] In my view, the reasoning of the
court below in relation to temporary grants, referred to in the
preceding paragraph, is not
contentious but is not entirely relevant.
It is clear that one cannot confidently deduce from what was stated
by Ms Mpunzi
that any of the actions contemplated in s 3(2)(b)
of PAJA to give effect to procedurally fair administrative action
were taken
by anyone in the MEC’s department, either in
relation to the initial decision concerning the nature and duration
of the grant
or in respect of its termination. On the contrary, one
is constrained to accept M’s assertion, as the court below did,
that
she received no communication from the department indicating the
nature and duration of the grant and that she was made to believe
that the grant was a permanent one subject only to annual statutory
review. It is equally clear that there was no communication
about its
termination nor was an opportunity provided to M to make
representations before the grant was terminated.
[20] Having regard to what is set out
in the preceding paragraph and the generally chaotic manner in which
the disability grant
in question was administered, counsel for the
MEC properly conceded that the court below correctly declared the
decision to terminate
the grant to be invalid and of no force and
effect. In the light of that concession we enquired from counsel why
the MEC persisted
in the appeal. Counsel submitted that the MEC was
concerned about the effect of the further orders of the court below.
It was contended
that those orders could be construed as a permanent
prohibition against any termination of the disability grant. It was
submitted
that the MEC was justifiably concerned about whether M’s
asthma was such as to have a permanently disabling effect and might
be minded to take steps to terminate the grant lawfully. It was
submitted that the further orders precluded such action. This is
a
startling submission as scrutiny of the orders in question will
reveal.
[21] The further orders of the court
below are as follows:
‘
2.
The respondent is ordered to re-instate the applicant’s
disability grant within a period of three weeks from the date of
this
order, such re-instatement to be with effect from the date of the
termination of payments of the applicant’s disability
grant,
that is 31 April 2007.
3. It is declared that
applicant is entitled to payment of all arrears owing under her
disability grant from 01 May 2007 to date.
4. The respondent is
ordered to pay the applicant all unpaid moneys owed to her as a
result of the unlawful termination of the payments
of her disability
grant, together with interest thereon at the legal rate.’
[22] If the court below had issued
only the declaration of invalidity the result would ineluctably be
what is set out in the orders
referred to in the preceding paragraph.
I am unable to see why they would militate against a termination of
the disability grant
on the basis of a legally sustainable reason.
If, for example, M’s asthma is shown to be treatable so that
there is no functional
impairment and the MEC employs appropriate
procedures I can see no reason why the orders set out in the
preceding paragraphs would
be a bar. But there really could have been
no valid objection to those orders. They were consequential upon and
ancilliary to the
declaration of invalidity. Once it was found that
the termination was invalid, it followed that M was entitled to have
her grant
reinstated with retrospective effect to the date of the
unlawful termination. Those orders which flow quite logically from
the
primary relief, as I have sought to show, do no more than put
those aspects beyond dispute. They may well have been superfluous
but
in issuing them Miller J wisely put paid to any further litigation.
[23] The department for which the MEC
is responsible has behaved peculiarly, both in relation to the manner
in which the disability
grant was dealt with and in the litigation
that followed. The present appeal was as unnecessary and
unmeritorious as the preceding
litigation. Both, it must be added, at
huge cost to the South African taxpayer, with no prospect, as the
MEC’s counsel conceded,
of ever recovering any of those costs
from a lay litigant who was asserting her right to fair
administrative action.
[24] For the reasons set out above the
following order is made:
The appeal is dismissed with costs
including the costs of two counsel.
_________________
M S NAVSA
JUDGE OF APPEAL
APPEARANCES:
For
Appellant: V S Notshe SC
N
R Mtshabe
Instructed
by
S
Z Jojo Attorneys Mthatha
State
Attorney Bloemfontein
For
Respondent: S M Mbenenge SC
A
M da Silva
Instructed
by
Voyi-Nyobole
Attorneys Mthatha
Bokwa Attorneys Bloemfontein
1
The
relevant parts of s 3(2)(b) read:
‘
In
order to give effect to the right to procedurally fair
administrative action, an administrator . . . must give a person
referred
to in subsection (1)─
(i)
adequate notice of the nature and purpose of the proposed
administrative action;
(ii)
a reasonable opportunity to make representations;
(iii)
a clear statement of the administrative action;
(iv)
adequate notice of any right of review or internal appeal, where
applicable; and
(v)
adequate notice of the right to request reasons in terms of section
5.’
2
See
ss 1 and 3 of that Act.