Minister’s personal liability: Further to the judgment granted on 17 March 2017 and in a unanimous judgment concerning the personal liability of the Minister the Constitutional Court today made the following order:
- “The Minister is joined as a party to the proceedings in her personal capacity.
- 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.
- Failing agreement the Court will issue directions determining the process.”
Black Sash Trust v Minister of Social Development (Freedom Under Law NPC Intervening) (CCT48/17) [2017] ZACC 20 (15 June 2017) per Froneman J (Mogoeng CJ, Nkabinde ADCJ, Cameron J, Jafta J, Khampepe J, Madlanga J, Mhlantla J, Mojapelo AJ, Pretorius AJ, and Zondo J concurring).
Excerpts without footnotes
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. All organs of state must provide effective and accountable government. 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]