Constitutional Court orders that former Minister, Bathabile Dlamini, is liable for 20% of the costs in the SASSA matter

3 October 2018|In Competition Briefs eBriefs Nortons Inc News NortonsInc

Constitutional Court orders that former Minister, Bathabile Dlamini, is liable for 20% of the costs in the SASSA matter

In 2012, the South African Social Security Agency (“SASSA”) contracted Cash Paymaster Services (Pty) Limited (“CPS”) to pay social grants on its behalf.  The Constitutional Court declared that contract to be invalid and the order of invalidity was suspended. On 5 November 2015, SASSA filed a report with the Constitutional Court stating that it would not award a new contract, but intended to take over the payment function of social grants from 1 April 2017, when the suspension of invalidity would lapse. The Constitutional Court then discharged its supervisory role in the matter.  Between February and March 2017, it became evident that SASSA would not be in a position to take over the payment function on 1 April 2017 and that a new contract between SASSA and CPS would be the only way to ensure that millions of grant beneficiaries received their social grants on 1 April 2017. The Court in Black Sash 11 ordered that the declaration of invalidity would be further suspended for a 12-month period from 1 April 2017.  Costs were reserved and the former Minister of Social Development, Bathabile Dlamini (“former Minister”), was called upon to provide reasons on affidavit as to why she should not be made party to the proceedings in her personal capacity and why she should not be held liable to pay costs of the application in her personal capacity.

The Constitutional Court in Black Sash 22 ordered that the former Minister be joined in her personal capacity.  A fact-finding inquiry in terms of section 38 of the Superior Courts Act took place and the Inquiry Report by retired Judge President Ngoepe was delivered to the Constitutional Court.  The Inquiry Report held the following:

  1. the former Minister did appoint individuals to lead parallel work streams;
  2. those individuals reported directly to the former Minister through the project manager; and
  3. the reason the former Minister did not disclose the information was that she was afraid that she would be blamed for the crisis and that a personal cost order would be awarded against her.

The former Minister argued that holding her personally liable for the costs of suit of the proceedings would constitute a breach of the separation of powers principle, in that the courts lack authority to hold a Cabinet Minister to account by ordering her/him to pay costs out of her/his own pocket.
Freedom Under Law NPC (“FUL”) was granted leave to intervene in the proceedings, and argued that the former Minister’s actions amounted to bad faith.  FUL’s argument was based on the former Minister’s failure to disclose the truth about her interference with the governance of the work streams, despite filing affidavits under oath with the Constitutional Court.

On 27 September 2018, the Constitutional Court, in a unanimous judgment written by Froneman J, held that the former Minister’s argument on the separation of powers was ill-conceived.  The Court reasoned that when courts make personal cost orders, they do not make judgments on the political accountability of public officials, but rather, on how the rights of people are affected by the public official’s conduct that is not open, transparent and accountable.

The Court found that the former Minister’s role in creating the parallel work streams, and the subsequent withholding of that information from the Court, demonstrates bad faith and at best, reckless and grossly negligent conduct, both of which warrant a personal costs order against her.

In determining the amount that the former Minister was to be ordered to pay, the Court had to weigh up the former Minister’s personal role arising from the parallel process she set in motion and her shielding of the truth from the Court, against the fact that in normal situations, state officials do not bear personal responsibility for the good faith performance of their official functions.  

The Court held that it is novel to hold Cabinet Ministers personally responsible for costs and that 20% of the costs would be appropriate.  The remaining 80% would be paid by the first, second and third respondents, being the Minister of Social Development, the Chief Executive Officer of the South African Social Security Agency and the South African Social Security Agency respectively.

Finally, the Constitutional Court held that the Inquiry Report strongly suggested that the former Minister lied under oath and as such, the Court directed the Registrar to forward a copy of the Inquiry Report to the National Director of Public Prosecutions to determine whether to prosecute the former Minister for perjury.

Nortons Inc. acted for Freedom Under Law.

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 Black Sash Trust v Minister of Social Development [2017] ZACC 20; 2017 (9) BCLR 1089 (CC) (Black Sash 2).