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[2017] ZACC 20
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Black Sash Trust v Minister of Social Development and Others (Freedom Under Law NPC Intervening) (CCT48/17) [2017] ZACC 20; 2017 (9) BCLR 1089 (CC) (15 June 2017)
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Heads of arguments
CONSTITUTIONAL
COURT OF SOUTH AFRICA
Case CCT
48/17
In the matter
between:
BLACK
SASH
TRUST
Applicant
FREEDOM
UNDER LAW
NPC
Intervening
Party
and
MINISTER
OF SOCIAL
DEVELOPMENT
First
Respondent
CHIEF
EXECUTIVE OFFICER OF THE
SOUTH
AFRICAN SOCIAL SECURITY
AGENCY
Second
Respondent
SOUTH
AFRICAN SOCIAL SECURITY
AGENCY
Third
Respondent
MINISTER
OF
FINANCE
Fourth
Respondent
NATIONAL
TREASURY
Fifth
Respondent
CASH
PAYMASTER SERVICES (PTY)
LIMITED
Sixth
Respondent
INFORMATION
REGULATOR
Seventh
Respondent
BATHABILE OLIVE
DLAMINI
Eighth
Respondent
and
CORRUPTION WATCH
(NPC)
RF
First
Amicus Curiae
SOUTH AFRICAN
POST OFFICE SOC LIMITED
Second
Amicus Curiae
Neutral citation:
[2017] ZACC 20
Coram:
Mogoeng CJ, Nkabinde ADCJ, Cameron J, Froneman J, Jafta J, Khampepe
J, Madlanga J, Mhlantla J, Mojapelo AJ, Pretorius AJ, and Zondo
J
Judgment:
Froneman J (unanimous)
Decided on:
15 June 2017
Summary:
Joinder
— personal liability of state officials — disputed facts
on affidavit before this Court — section 38 of
the Superior
Courts Act
ORDER
The following order
is made:
1. The Minister is joined as a party to the proceedings in her
personal capacity.
2. The parties must, within 14 days from the date of this judgment,
report to this Court whether they have agreed to a process
in terms
of
section 38
of the
Superior Courts Act 10 of 2013
in order to
determine the issues relating to the Minister’s role and
responsibility in the establishment and functioning
of the work
streams referred to in the affidavits filed by the Minister, Mr
Magwaza and Mr Dangor.
3. Failing agreement the Court will issue directions determining the
process.
JUDGMENT
FRONEMAN J (Mogoeng
CJ, Nkabinde ADCJ, Cameron J, Jafta J, Khampepe J, Madlanga J,
Mhlantla J, Mojapelo AJ, Pretorius AJ and Zondo
J concurring):
Introduction
[1] In the
main judgment
[1]
the first respondent (Minister) was called upon to show cause on
affidavit why she should not be joined to the proceedings in her
personal capacity and why she should not be ordered to pay the costs
of the application out of her own pocket. She filed
an
affidavit. In the main she sought to place the blame for what
went wrong on officials from the third respondent (SASSA)
and the
Department of Social Development (Department).
[2] Two of
these officials, the current Chief Executive Officer of SASSA
(Mr Magwaza) and the erstwhile Director-General
of the
Department (Mr Dangor), then sought and were granted leave to file
affidavits to defend themselves. The thrust of
their affidavits
is that the Minister had established parallel decision-making and
communications processes that bypassed SASSA
and Department
officials. The Minister said little, if anything, of this in
her own affidavit.
[3] Before
dealing with the contents of the affidavits it is, however, necessary
to determine whether our law allows for a
state official to be
personally joined as a party in a matter involving the performance of
official duties and to be personally
mulcted in costs in relation to
the performance of those duties and in the conduct of litigation in
relation thereto.
Joinder
[4] Joinder is
the easier issue to resolve. If the possibility of a personal
costs order against a state official exists,
it stands to good reason
that she must be made aware of the risk and should be given an
opportunity to advance reasons why the
order should not be granted.
Joinder as a formal party to the proceedings and knowledge of
the basis from which the risk
of the personal costs order may arise
is one way – and the safest – to achieve this.
[2]
Personal costs
orders
[5] The
common-law rules for granting a personal costs order against persons
acting in a representative capacity were based
on what this Court in
Swartbooi
described as conduct that was “motivated by
malice or amount[ed] to improper conduct”.
[3]
In many cases the formulation of Innes CJ in
Vermaak’s
Executor
,
[4]
that the representative’s “conduct in connection with the
litigation in question must have been
mala fide
, negligent or
unreasonable”, has been followed.
[5]
[6] When
public officials were guilty of acting in
mala fides
(bad
faith), courts have in the past made personal costs orders against
them. Costs orders have been given against judicial
officers
where they have acted in bad faith. In
Regional Magistrate
Van Winsen AJ held that it “is the existence of
mala
fides
on the part of the judicial officer that introduces the
risk of an order of costs
de bonis propriis
being given
against him”.
[6]
A similar approach was taken in
Moeca
[7]
in which an order to pay costs
de bonis propriis
(from
his or her own pocket) was made against an administrative official.
He had handled this enquiry so badly and had made
an order so
inappropriate that the Court held that, on the assumption that
mala
fides
must be shown, that it had.
[8]
[7] These
rules are now buttressed by the Constitution. Accountability
and responsiveness are founding values of our
democracy.
[9]
All organs of state must provide effective and accountable
government.
[10]
The basic values and principles governing public administration
include: the promotion and maintenance of a high standard
of
professional ethics; the promotion of efficient, economic and
effective use of resources; public administration must be
development-orientated;
people’s needs must be responded to;
public administration must be accountable; and transparency must be
fostered by providing
the public with timely, accessible and accurate
information.
[11]
Cabinet members are responsible for the powers and functions of
the executive assigned to them by the President
[12]
and they must act in accordance with the Constitution.
[13]
All constitutional obligations must be performed diligently and
without delay.
[14]
[8] The
question of what would constitute improper conduct can be answered
with reference to two linked issues: institutional
competence and
constitutional obligations. From an institutional perspective,
public officials occupying certain positions
would be expected to act
in a certain manner because of their expertise and dedication to that
position.
[15]
Where specific constitutional and statutory obligations exist
the proper foundation for personal costs orders may lie in
the
vindication of the Constitution,
[16]
but in most cases there will be an overlap.
[17]
[9] Within
that constitutional context the tests of bad faith and gross
negligence in connection with the litigation, applied
on a case by
case basis, remain well founded. These tests are also
applicable when a public official’s conduct of his
or her
duties, or the conduct of litigation, may give rise to a costs order.
The affidavits
[10] The Minister
seeks to explain her conduct as not being wilful and does not address
any other degree of possible irregularity
on her part. She
identifies and deals with eight aspects of the main judgment that are
said to require an answer from her.
Underlying all of them is
her understanding of the factual background, which she sets out in
her affidavit. The important
part is, of course, what
transpired after this Court discharged its supervisory order on 25
November 2015.
[11] In September
2014 the Minister personally appointed a Ministerial Advisory
Committee (Ministerial Committee) to advise her
on the best way to
give effect to the promise made to the Court that SASSA would perform
the payment of social grants after 31
March 2017. The
Ministerial Committee’s final recommendations were made in a
report dated 31 October 2014
“in terms of which the
Committee identified the creation of work streams designed to
focus on specific deliverables
to ensure that SASSA would meet the
court imposed deadline”.
[18]
The involvement of these “work streams” will become
a crucial and disputed part of what happened next.
[12] The Minister is
rather coy about her personal involvement in the process. She
refers to the minutes of the SASSA Executive
Committee up to
April 2016 to indicate what progress was being made. She
states that during April 2016, in preparation
for this deadline,
she met with SASSA officials and the government printing works
regarding the printing of beneficiary cards.
Notwithstanding
this, however, it was clear to SASSA officials that, based on their
progress at that stage, SASSA would not
be able to meet the 1 April
2017 deadline. They obtained legal advice to approach this
Court to request directions as to
whether it wished to resume its
supervisory jurisdiction. That legal opinion was received by
the project manager of the work
streams on 10 June 2016, but the
Minister says she never saw it “until after October 2016”.
[13] There is no
indication in the Minister’s affidavit what, if anything, she
did to keep up to date with progress between
April and October 2016.
On her version she did not do anything because she “assumed
that the existing reporting chain
and communication channels were
working and that [she] would be informed if anything of consequence
arose”. On her
version this was never done, despite SASSA
officials becoming aware in April 2016 that the deadline could not be
met; that legal
opinion suggested seeking further directions from
this Court; and that the work streams were formally appointed in June
2016.
[14] Her affidavit
contains more detail of what she did after October 2016. It
apparently became clearer that the deadline
would not be met, but
again this came to her attention only towards the end of October
2016. On 1 November 2016 Mr Magwaza
officially commenced
as the new Chief Executive Officer (CEO) of SASSA. In
December 2016 she urged him to report to
this Court that SASSA
would not be able to pay the grants, but he refused to file an
affidavit in December 2016 and indicated that
he needed more time and
that he would rather report to the Court in January 2017. Despite
this, she continued to explore
further possibilities “and
remained conscious that the approach to the Court may require
deviation as well as a defined alternative
to the November 2015
plan”.
[15] On 22 February
2017 the Minister informed Parliament that SASSA would not make an
application to this Court, but would report
to this Court before
31 March 2017 in relation to the state of affairs at SASSA.
Before any report, Mr Magwaza,
without consulting her,
instituted an application on 28 February 2017 in this Court
requesting its assistance in ensuring
that Cash Paymaster Services
(Pty) Limited (CPS) could continue making payment of the grants after
1 April 2017 for a further period
of one year. She instructed
that the application be withdrawn. Black Sash Trust instituted
proceedings on 28 February 2017.
[16] The Minister
also urges the Court to take into account the “turnover of
leadership at SASSA between 2012 and 2016”.
In May 2016
the then CEO stepped down and an acting appointment was made until 31
October 2016, before Mr Magwaza took
over. His failure “to
engage comprehensively” with her during this critical time
contributed, in the Minister’s
view, to the delays in
implementation.
[17] Enter Mr
Magwaza himself, with leave of the Court to join the fray.
[19]
He starts off with something the Minister did not deal with in
her affidavit, namely her personal decision to appoint work
streams
and work stream leaders. In support of the allegation a letter
from her to the previous CEO, dated 9 July 2015, was
attached to his
affidavit.
[20]
From this letter it appears that the Minister appointed
individuals as part of the work streams and that they reported
directly
to her, and not to the executive board of SASSA. Mr
Magwaza asserts that the process to implement SASSA’s plan to
pay
the social grants itself “was derailed once the Minister
directed SASSA to appoint the work streams in accordance with her
directive set out in her letter of 9 July 2015”. He
also directly disputes other aspects of the Minister’s
affidavit.
[18] Mr Magwaza said
that he called upon Mr Dangor to file an affidavit to assist the
Court in coming to a “just and equitable
decision”. Mr
Dangor’s affidavit confirms that the work streams differed from
the governance protocol “insofar
as it by-passed the SASSA
executive committee including the acting CEO by giving Ms Mvulane
[project manager] and the independent
consultants direct access to
the Minister. This created parallel reporting structures”.
[19] After setting
out a fairly detailed version of the events between October 2016 and
March 2017, Mr Dangor states:
“
These processes serve to
confirm that Mr Magwaza cannot be blamed for non compliance with
filing a document with the Constitutional
Court as suggested in the
Minister’s affidavit. It further serves to strengthen the
views that Mr. Magwaza, others
and I held that the parallel
decision-making structures in the form of work streams may have
been deliberate to ensure a continued
relationship with CPS under
conditions favourable to CPS, through a self-created emergency.”
Mr Dangor’s
affidavit also refers to other instances showing that the Minister
must have been aware of the inability of SASSA
to comply with the 31
March 2017 deadline earlier than October 2016.
[20] These are
serious allegations. If it is correct that the Minister
appointed the members of the work streams and that
they reported
directly to her in contravention of governance protocol, then her
failure to disclose this to the Court bears strongly
on whether she
has acted in good faith or not. For the moment, however, the
allegations stand untested. That raises
the question: how must
the affidavit evidence before us be approached in determining whether
a personal costs order against the
Minister is justified?
Approach to
undisputed and disputed allegations
[21] This Court
cannot make an order adverse to the Minister on the basis of
allegations that are untested and which she has not
had an
opportunity to challenge. It was argued in written submissions,
however, that her own undisputed version is in itself
sufficient to
conclude that she acted in bad faith or, at the very least, in
flagrant disregard of her statutory and constitutional
obligations.
[22] There may be
merit in these submissions, but it is not advisable to dispose of the
matter piecemeal. The issue of the
Minister’s conduct
surrounding the work streams needs to be resolved before coming
to a final decision. The question
whether a Cabinet member may
have acted in bad faith when called upon to explain her conduct to
this Court cannot be left alone.
It must be resolved.
[23] In order to do
that the parties will be given an opportunity to agree to a process
under
section 38
of the
Superior Courts Act
[21
]
to resolve the issue, failing which the Court will determine the
process to be followed.
[22]
Order
[24] The following
order is made:
1. The Minister is joined as a party to the proceedings in her
personal capacity.
2. The parties must, within 14 days of this judgment, report to this
Court whether they have agreed to a process in terms of
section 38
of
the
Superior Courts Act 10 of 2013
in order to determine the issues
relating to the Minister’s role and responsibility in the
establishment and functioning
of the work streams referred to in the
affidavits filed by the Minister, Mr Magwaza and Mr Dangor.
3. Failing agreement the Court will issue directions determining the
process.
For the Applicant:
G
Budlender SC, G Snyman and Z Ngwenya instructed by the Centre
for Applied Legal Studies
For the Intervening
party:
D Unterhalter SC, A Coutsoudis and X Hilita
instructed by Nortons Incorporated
For the First
Respondent:
IAM Semenya SC and S Kazee instructed
by Harris Nupen Molebatsi Incorporated
For the First Amicus
Curiae:
S Budlender, L Kelly and K Van Heerden
instructed by Van Hulsteyns Attorneys
[1]
Black Sash Trust v Minister of Social Development
[2017] ZACC
8; 2017 (5) BCLR 543 (CC).
[2]
Pheko v Ekurhuleni Metropolitan Municipality (No 2)
[2015]
ZACC 10
;
2015 (5) SA 600
(CC);
2015 (6) BCLR 711
(CC) at paras 14-5
and
Member of the Executive Council for Health, Gauteng v Lushaba
[2016] ZACC 16
;
2016 (8) BCLR 1069
(CC);
2017 (1) SA 106
(CC) at
paras 18-9. See also
Home Sites (Pty) Ltd v Senekal
1948 (3) SA 514
(A) and
Occupiers of Erf 101, 102, 104 and 112,
Short Retreat Pietermaritzburg v Daisy Dear Investments (Pty) Ltd
[2009] ZASCA 80
;
2010 (4) BCLR 355
(SCA) at paras 11-2.
[3]
Swartbooi v Brink
[2003] ZACC 25
;
2006 (1) SA 203
(CC);
2003
(5) BCLR 502
(CC) at para 7.
[4]
Vermaak’s Executor v Vermaak’s Heirs
1909 TS 679
at 691.
[5]
See, for example,
Retief v Du Preez t/a Ardu Transport
[2005]
ZAGPHC 84
;
Baphalane ba Ramokoka Community v Minister of
Agriculture and Land Affairs
[2010] ZALCC 29
;
Brown v
Papadatis And Another NNO
2009 (3) SA 542
(C) at 545J-546D; and
Blom v Brown
[2011] ZASCA 54; [2011] 3 All SA 223 (SCA).
[6]
Regional Magistrate Du Preez v Walker
1976 (4) SA 849
(A) at
853H (
Regional Magistrate
). See also
Credex Finance
(Pty) Ltd v Kuhn
1977 (3) SA 482
(N) at 485D-C and 485G-486A.
[7]
Moeca v Addisionele Kommissaris, Bloemfontein
1981 (2) SA 357
(O).
[8]
Id at 366B-C.
[9]
Section 1(d) of the Constitution reads:
“The Republic of South Africa is one, sovereign, democratic
state founded on the following values:
. . .
(d) Universal adult suffrage, a national common voters roll, regular
elections, and a multi-party system of democratic government
to
ensure accountability, responsiveness and openness.”
[10]
Section 41(1)(c) of the Constitution.
[11]
Section 195(1) of the Constitution, in relevant part, reads:
“Public administration must be governed by the democratic
values and principles enshrined in the Constitution, including
the
following principles:
(a) A high standard of professional ethics must be promoted and
maintained.
(b) Efficient, economic and effective use of resources must be
promoted.
(c) . . .
(d) Services must be provided impartially, fairly, equitably and
without bias.
(e) . . .
(f) Public administration must be accountable.
(g) Transparency must be fostered by providing the public with
timely, accessible and accurate information.”
[12]
Section 92(2) of the Constitution.
[13]
Section 92(3)(a) of the Constitution.
[14]
Section 237 of the Constitution.
[15]
MEC for the Department of Welfare v Kate
[2006] ZASCA 49
;
2006 (4) SA 478
(SCA);
[2006] 2 All SA 455
(SCA) at paras 3 and 6.
[16]
Compare Plasket “Protecting the Public Purse: Appropriate
Relief and Costs Orders Against Officials” (2000)
SALJ
151.
[17]
For example, state officials who act in a “high-handed manner”
or who “play the victim in litigation”
might be held
personally liable, and this would not necessarily or always be
linked to a “flagrant disregard of constitutional
norms”.
See
Gauteng Gambling Board v MEC for Economic Development
[2013] ZASCA 13
; 2013 (5) SA (SCA) at para 54.
[18]
It is to be noted that the Court did not impose this deadline –
it accepted the assurance from SASSA that it would be able
take over
the payments of social grants by the date indicated by SASSA.
[19]
The Chief Justice issued the following directions, dated 5 April
2017:
“1. The Chief Executive Officer of the South African Social
Security Agency, Mr Thokazani Magwaza, may, if so advised,
file an
affidavit in response to the First Respondent’s affidavit,
dated 29 March 2017, by 12h00 on Friday, 7 April 2017.
2. All parties may, if so advised, file written submissions of no
longer than ten pages by 15h00 on Wednesday, 12 April 2017,
on the
issues of joinder of the Minister in her personal capacity and her
personal liability for the costs of the application.
3. Further directions may be issued.”
[20]
This letter reads:
“Dear Ms Petersen
IMPLEMENTATION OF THE RECOMMENDATIONS OF THE [MINISTERIAL]
ADVISORY COMMITTEE ON THE FUTURE PAYMENT [SYSTEM] OF SOCIAL GRANTS
FOR SOUTH AFRICA
The above subject matters refers.
As you are aware, the last meeting of the Ministerial Advisory
Committee (Committee) held jointly with the Executive Management
of
SASSA on 21 May 2015 agreed to proceed with the implementation of
the recommendations of the Committee as set out in the document
entitled:
Final Report and Recommendations for Way Forward,
dated
December 2014.
As you will recall, it was agreed in the aforementioned meeting that
to expedite the implementation of the Committee’s
recommendations, we must establish various work streams that will
focus on key aspects.
Given the foregoing and the challenges confronting the Agency on all
fronts, including but not limited to the Constitutional
Court
processes, I am of the firm view that critical steps for the
implementation of the Committee’s recommendations without
any
further delays.
I have decided that in order to roll out implementation process
diligently, we need to retain the collective knowledge and
institutional memory of the key members of the Committee.
Given their knowledge and expertise, these members will lead the
work streams and work jointly with you and the SASSA Executive
Management team so as to ensure that the various work streams
are
adequately resourced to executive (sic) their respective mandates in
a speedy manner without any disruption, and to minimise
delays in
the implementation of the third recommendations.
To this end, I have decided to retain the services of the following
individuals who were part of the Committee for the implementation
of
the third recommendations: Mr Andile Nyonyha (Team Leader), Mr Tim
Suzuki (Legal), Ms Tankiso Parkies (Social Benefits), Mr
Sizwe Shezi
(Economic Development) and Mr Patrick Monyeki (Information
Communication Technology). Although tis panel will
account
directly to me during the implementation process, I request SASSA
appoints hosts, provide resources and compensates the
panel on
behalf of the Department, subject to the applicable laws.
I envisage that the implementation will take place over a 3-year
period, and as such the aforesaid individuals must be appointed
for
the duration of that period. This process must be actioned
with immediate effect so as to enable the panel to immediately
assume the task at hand.
I trust that all is in order and I [a]wait your immediate response
to the issues raised in this letter.
Yours sincerely
Ms BO Dlamini, MP
Minister of Social Development
Date 09.07.15”
[21]
10 of 2013.
[22]
Section 38 of the Superior Courts Act reads:
“(1) The Constitutional Court and, in any civil proceedings,
any Division may, with the consent of the parties, refer―
(a) any matter which requires extensive examination of documents or
a scientific, technical or local investigation which in the
opinion
of the court cannot be conveniently conducted by it; or
(b) any matter which relates wholly or in part to accounts; or
(c) any other matter arising in such proceedings,
for enquiry and report to a referee appointed by the parties, and
the court may adopt the report of any such referee, either
wholly or
in part, and either with or without modifications, or may remit such
report for further enquiry or report or consideration
by such
referee, or make such other order in regard thereto as may be
necessary or desirable.
(2) Any such report or any part thereof which is adopted by the
court may adopt the report of any such referee, either wholly
or in
part, and either with or without modifications, shall have effect as
if it were a finding by the court in the proceedings
in question.
(3) Any such referee shall for the purpose of such enquiry have such
powers and must conduct the enquiry in such manner as may
be
prescribed by a special order of the court or by the rules of the
court.
(4) For the purpose of procuring the attendance of any witness
(including any witness detained in custody under any law) and
the
production of any document or thing before a referee, an enquiry
under this section shall be deemed to be civil proceedings.
(5) (a) Any person summoned to attend as a witness or to produce any
document or thing
before a referee and who, without sufficient cause―
(i) fails to attend at the time and place specified;
(ii) fails to remain in attendance until the conclusion of the
enquiry or until he or she is excused by the referee from further
attendance;
(iii) refuses to take an oath or to make an affirmation as a
witness; or
(iv) having taken an oath or made an affirmation, fails to—
(aa) answer fully and satisfactorily any question put to him or her;
or
(bb) produce any document or thing in his or her possession or
custody, or under his or her control, which he or she was summoned
to produce,
is guilty of an offence and liable on conviction to a fine or to
imprisonment for a period not exceeding three months.
(b) Any person who, after having taken an oath or having made an
affirmation ,gives false evidence before a referee at an enquiry,
knowing such evidence to be false or not knowing or believing it to
be true, is guilty of an offence and liable on conviction
to the
penalties prescribed by law for perjury.
(6) Any referee is entitled to such remuneration as may be
prescribed by the rules or, if not such remuneration has been so
prescribed, as the court may determine and to any reasonable
expenditure incurred by him or her for the purposes of the enquiry,
and any such remuneration and expenditure must be taxed by the
taxing master of the court and shall be costs in the cause.”