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[2018] ZACC 36
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Black Sash Trust v Minister of Social Development and Others (Freedom Under Law Intervening) (CCT48/17) [2018] ZACC 36; 2018 (12) BCLR 1472 (CC) (27 September 2018)
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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
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:
Black Sash Trust (Freedom Under Law Intervening) v Minister of
Social Development and Others
[2018] ZACC 36
Coram:
Mogoeng CJ, Zondo DCJ, Basson AJ, Cameron J, Dlodlo AJ, Froneman J,
Goliath AJ, Khampepe J, Mhlantla J, Petse AJ and Theron J.
Judgments:
Froneman J (unanimous)
Decided on:
27 September 2018
Summary:
Costs
of suit
¾
Personal liability
¾
Minister liable for costs — Gross negligence
ORDER
The following order
is made:
1. The first, second
and third respondents are to pay 80% of the costs of Black Sash
Trust and Freedom Under Law in the application,
including the costs
of two counsel.
2. Ms Bathabile
Olive Dlamini (Minister Dlamini) is, in her personal capacity,
ordered to pay 20% of the costs of Black Sash Trust
and Freedom Under
Law in the application, including the costs of two counsel.
3. The Registrar of
this Court is directed to forward a copy of the Inquiry Report
in terms of
section 38
of the
Superior Courts Act 10 of 2013
:
Referee: B M Ngoepe JP and this judgment to the National Director of
Public Prosecutions, to consider whether Minister Dlamini
lied under
oath and, if so, whether she should be prosecuted for perjury.
JUDGMENT
FRONEMAN J (Mogoeng
CJ, Zondo DCJ, Basson AJ, Cameron J, Dlodlo AJ, Goliath AJ,
Khampepe J, Mhlantla J, Petse AJ and Theron
J concurring):
Introduction
[1]
This judgment deals with the issue of costs left open in
Black
Sash 1
.
[1]
In that judgment costs were reserved and the then Minister of
Social Development (Minister Dlamini) was called upon to show
cause
on affidavit as to why she should not be joined to the proceedings in
her personal capacity and why she should not pay the
costs of the
application out of her own pocket.
[2]
In response, affidavits were filed that raised conflicts of
fact in relation to an alleged parallel process of responsibility
initiated by Minister Dlamini.
[2]
Following upon this,
the Court in
Black Sash 2
,
[3]
ordered that Minister Dlamini be joined in her personal capacity and
that the parties report to this Court on whether they agreed
to a
process in terms of
section 38
of the
Superior Courts Act
[4
]
to determine the issues relating to Minister Dlamini’s role and
responsibility in establishing the parallel decision-making
and
communication processes.
The parties agreed on a referee
and retired Judge President Ngoepe (Ngoepe JP) was appointed to
conduct the fact finding inquiry.
[5]
[3]
The Inquiry was to investigate:
“(a) Whether [Minister Dlamini] sought the appointment of
individuals to lead ‘work streams’ who would report
directly to her, as set out in the letter, annexure “A”
to the affidavit of Mr Magwaza filed in relation to the personal
costs issue.
(b) If these individuals were appointed, the following information is
required:
(i)
When they were appointed;
(ii)
Whether they reported directly to the Minister;
(iii)
Full details of the dates and content of their reports to the first
respondent in relation to the objectives stated in the
third
respondent’s (SASSA) report filed with the Court on 5 November
2015; and
(iv)
The reason why the Minister [Dlamini] did not disclose to this Court
that these individuals were appointed at her instance
and that they
had to report directly to her.”
[6]
Ngoepe JP’s
findings
[4]
A full investigation took place and the
Inquiry Report in terms of
section 38
of the
Superior Courts
Act 10 of 2013
: Referee: B M Ngoepe JP
(Inquiry
Report) by Ngoepe JP was delivered to this Court.
The
Inquiry Report was released to the public and the parties were
invited to file submissions on whether, in light of the Report,
Minister Dlamini ought to be liable for costs out of her own pocket.
[5]
Ngoepe JP found that:
(a)
Minister
Dlamini did appoint individuals to lead parallel work streams as per
the letter dated 9 July 2015 and did so with immediate
effect.
These individuals would account directly to her during the
implementation process. During the inquiry the answer
to this
question was common cause.
(b)
And
that:
(i)
After receiving the Minister Dlamini’s letter of 9 July 2015
directing her to appoint work streams and their leaders,
Ms Virginia
Petersen (then CEO) set the process in motion and further letters to
the individuals identified by the Minister
herself were written on 11
May 2016.
[7]
(ii) They reported directly to the Minister, through Ms Mvulane, who
was the project manager.
(iii)
The individuals appointed did not file any written reports on their
duties, but reported directly to the Minister.
[6]
In relation to the last question, namely
“
[t]he reason why [Minister Dlamini] did not disclose to
this Court that these individuals were appointed at her instance and
that
they had to report directly to her,” the report was
diplomatic but nevertheless damning. In essence it found that
Minister
Dlamini had failed to make full disclosure to this Court. It
is necessary to quote it in full:
“14.1 The Minister’s answer to the question is the
following: She did not understand the Court’s request as asking
of her to give an overview of the work during 2016. She says
her focus was on what she understood the call to be, namely,
why she
should not be made to pay the applicant’s costs personally.
She denies that the reason she did not disclose
the appointment
of the individuals to work streams, and that they reported to her,
was because she was responsible for the crisis
experienced in March
2017. It is also submitted for the Minister that this question
is predicated on the premise that the
work streams reported to the
Minister and not to SASSA. This aspect has already been dealt
with above: the work streams did
report directly to the Minister and
not to SASSA, which was why Mr Magwaza, the CEO, complained; as did
Mr Dangor.
14.2 To answer the question ‘why’, I have to, inevitably,
consider the Minister’s explanation for the non-disclosure
of
the information in question. Her explanation is unconvincing
and therefore falls to be rejected: The appointment
of work
streams and their role was central to the whole exercise of meeting
the deadline. Therefore, in dealing with any
aspect relating to
the crisis, it is difficult to understand how the Minister could
justifiably leave out the issue of the appointment
of work streams,
their role, who appointed them, when and to whom they reported;
especially when she was the one who had instructed
that they be
appointed, identified specific individuals to be appointed and
ordered that they report to her directly. Add
to that the fact
that Ms Mvulane reported to her regularly about her activities.
14.3 Back to the question ‘why’: In contesting the
Minister’s reasons for the non-disclosure, her opponents came
up with a variety of reasons; for example, fear of loss of office,
fear of loss of standing in the public’s eye and within
own
party, protecting the government and own political party, reluctance
to take the blame for the crisis and of course fear of
being
personally mulcted in costs. Mr Semenya argued that all these
were mere conjecture. He argued that the Minister
furnished the
inquiry with a certain set of facts, which constituted her
explanation. Those facts, he argued, could not be
contrasted
with mere conjecture. Therefore, he argued, in the event the
Minister’s explanation fell away, I would be
left with no
answer to the question ‘
why
’; under those
circumstances, he argued, I should declare myself unable to tell the
reason for the non-disclosure, and report
[same to] the Court. I
disagree. I have been asked ‘
to enquire and report on
’
. . . the ‘
reason why the Minister did not disclose.
’
The Inquiry’s mandate can’t simply be restricted to
recording the explanation given. To complete
the mandate ‘
to
enquire and report
,’ I must look into the soundness or
otherwise of the reason given. If it is good, I so report. If
it is not, I don’t
just stop there; I must, on the evidence I
took the trouble to listen to, establish the real reason for the
non-disclosure if that
is possible, and report accordingly. I
therefore proceed to deal with what appears to be the reason why the
Minister did
not disclose the information in question.
14.4 There were two things, and two things only, which the Minister
was called upon by the Court to fend off: being joined in her
personal capacity, and, that happening, being mulcted in costs in her
personal capacity. The reason for not giving the information
in
question can therefore only be related to these two things. In
contrast, all other conceivable reasons, conjectures etc,
fear of the
two is therefore not something sucked from the thumb. We now
know that the Minister has already been joined in
her personal
capacity; but at the time she made the affidavit which did not
disclose the information sought, this was of course
not yet the case.
Fear of being joined must therefore be factored in.
14.5 The two issues were the only ones the Minister was answering to.
On the face of it, the information not disclosed was
inimical
to the Minister’s case in fending them off; the fear of them as
the reason for the non-disclosure therefore commends
itself more
readily to mind than any other reason. That then, to me, is
‘
the reason why the Minister did not disclose
. . .
that
these individuals were appointed at her instance and that they had to
report directly to her
’.”
Submissions in
this Court
[7]
Minister Dlamini did not directly
address
the contents of the Inquiry Report and the adverse findings made
against her. She
submitted that to hold her personally
liable for the costs of suit would constitute a breach of the
separation of powers principle.
She submitted further that this
Court lacks the authority to hold a cabinet minister to account by
ordering her or him to pay costs
out of her or his pocket.
[8]
Black Sash Trust submitted that Minister Dlamini’s
actions amounted to bad faith. This was on the basis of five
factors
arising out of the findings of the report, all of which
relate to the Minister’s failure to disclose the truth relating
to
her interference with governance in relation to the work streams,
despite filing affidavits under oath with this Court.
[9]
Freedom Under Law submitted similarly, that the non-disclosure
by Minister Dlamini evinces her bad faith.
Discussion and
analysis
[10]
Minister Dlamini’s argument that a personal costs order
against her would offend the separation of powers has no merit.
[8]
When courts make costs orders they do not make judgments on the
political accountability of public officials. They
do so only
in relation to how the rights of people are affected by the conduct
of a public official who is not open, transparent
and accountable and
how that impacts on the responsibility to a court by those involved
in the litigation. And as explained
in
Black Sash 2
, the
common-law rules for holding public officials personally responsible
for costs are now buttressed by the Constitution:
“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.”
[9]
[11]
This Court explained the serious import of the factual dispute
about the alleged parallel process:
“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.”
[10]
[12]
The Inquiry Report’s finding that the Minister’s
failure to disclose this information was her fear of being joined in
her personal capacity and being mulcted personally in costs has not
been, and cannot, be faulted.
[11]
The inference that she did not act in good faith in doing so is
irresistible. At best for her, her conduct was reckless
and
grossly negligent. All that is sufficient reason for a personal
costs order.
[13]
This conclusion is a serious and sad one, especially in the
context of the provision of social grants to the most needy in our
society.
But if it is not to happen again, consequences must
follow.
[14]
It has been a sorry saga and it is proper that Minister
Dlamini must, in her personal capacity, bear a portion of the costs.
It
would account for her degree of culpability in misleading
the Court
-
conduct which is deserving of
censure by this Court as a mark of displeasure
-
more so since she held a position of responsibility as a member of
the Executive. Her conduct is inimical to the values
underpinning the Constitution that she undertook to uphold when she
took up office.
[15]
The report by Ngoepe JP revealed that the Minister misled the
Court to protect herself from the consequences of her behaviour. She
allowed a parallel process to occur knowing that she withheld
information that would lead to her being held personally liable for
the social grants disaster. The office which she occupied
demands a greater commitment to ethical behaviour and requires
a high
commitment to public service.
[12]
The Department of Social Development (Department) is as much
responsible for the realisation of rights outlined in the
Constitution
as this Court and she used her position as Minister of
the Department to place herself between constitutionally enshrined
rights
and those entitled to them.
[16]
It is difficult to determine the proper extent of the personal
costs order. The determination is a discretionary one. We
have to consider Minister Dlamini’s personal responsibility,
arising from the parallel process she set in motion, and her
shielding this truth from the Court, against the fact that ordinarily
state officials do not bear personal responsibility for the
good
faith performance of their official functions. It is a novel
matter to hold a cabinet minister personally responsible
for the
costs of litigation. In the circumstances it will be
appropriate to order that she must pay 20% of the taxed costs.
These costs exclude the costs of the Ngoepe JP Inquiry as the parties
agreed that the remuneration and reasonable expenditure of
the
referee would be borne by SASSA.
[17]
A last and unedifying matter remains. The Inquiry
Report’s findings suggest very strongly that some of Minister
Dlamini’s
evidence under oath in the affidavits before this
Court and orally before the Inquiry was false. The Registrar of
this Court
must be directed to forward a copy of the Inquiry Report
and this judgment to the National Director of Public Prosecutions, to
consider whether Minister Dlamini lied under oath and, if so, whether
she should be prosecuted for perjury.
Order
[18]
In the result the following order is made:
1. The first, second and third respondents are to pay 80% of the
costs of Black Sash Trust and Freedom Under Law in the application,
including the costs of two counsel.
2. Ms Bathabile Olive Dlamini (Minister Dlamini) is, in her personal
capacity, ordered to pay 20% of the costs of Black Sash Trust
and
Freedom Under Law in the application, including the costs of two
counsel.
3. The Registrar of this Court is directed to forward a copy of the
Inquiry Report in terms of
section 38
of the
Superior Courts Act 10
of 2013
: Referee: B M Ngoepe JP and this judgment to the National
Director of Public Prosecutions, to consider whether Minister Dlamini
lied under oath and, if so, whether she should be prosecuted for
perjury.
For the Applicant: G
M Budlender SC, G Snyman and Z Ngwenya instructed by Centre for
Applied Legal Studies
For the Intervening
party: S Yacoob, A Coutsoudis, X Hilita and M Finn instructed by
Nortons Inc
For the Eighth
Respondent: V Ngalwana SC and F Karachi instructed by Dlamini
Attorneys
[1]
Black Sash Trust v Minister of Social Development
[2017] ZACC
8
;
2017 (3) SA 335
(CC);
2017 (5) BCLR 543
(CC) (
Black Sash 1
).
[2]
Id at para 76 the following order was made:
“13. The Minister is called upon to show cause on affidavit on
or before Friday 31 March 2017 why
¾
13.1 she should not be joined in her personal capacity; and
13.2 she should not pay costs of the application from her own
pocket.
14. Costs are reserved until conclusion of these proceedings.”
[3]
Black Sash Trust v Minister of Social Development
[2017] ZACC
20
;
2017 (9) BCLR 1089
(CC) (
Black Sash 2
) at para 24 the
following order was 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.”
[4]
10 of 2013. One of the objects of the
Superior Courts Act is
to rationalise the law pertaining to Superior Courts (which includes
the Constitutional Court) and to bring their administration
and
structure within the transformative imperatives of the
Constitution. Section 38 of the Superior Courts Act provides:
(1) The Constitutional Court and, in any civil proceedings, any
Division may, with the consent of the parties, refer
¾
(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, whether 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
¾
(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
¾
(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 no 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.”
[5]
Order of this Court dated 2 August 2017.
[6]
Id.
[7]
See Inquiry Report at para 9 at 13-4.
[8]
South Africa Social Security Agency v Minister of Social
Development
[2018] ZACC 26
at para 38.
[9]
Black Sash 2
above n 3 at para 9.
[10]
Id at para 20.
[11]
See
section 38(2)
of the
Superior Courts Act above
n 4.
[12]
Section 195 of the Constitution sets out the basic values and
principles governing public administration. It is given effect
to by Public Administration Management Act 11 of 2014 (pending
proclamation of commencement) which states that its objectives
are
amongst others to “promote a high standard of professional
ethics in the public administration” and to “facilitate
the eradication and prevention of unethical practices in the public
administration”. Chapter 2 of the Act lays down
the
basic values and principles governing public administration, all of
which have been disregarded by Minister Dlamini in respect
of this
matter.