S.Africa: Cons Court – when can an official (SARS and others) be held personally liable for damages?

Black Sash Trust (Freedom Under Law Intervening) v Minister of Social Development and Others (Corruption Watch (NPC) RF and South African Post Office Soc Limited as Amici Curiae)

Case Number:
CCT48/17C
Citations:
[2018] ZACC 36
Judge:
Froneman J
Judgment Date:
27 September 2018
Case History:
This judgment deals with the issue of costs left open in Black Sash Trust v Minister of Social Development and Others (Freedom Under Law NPC Intervening) (CCT48/17) [2017] ZACC 8; 2017 (5) BCLR 543 (CC); 2017 (3) SA 335 (CC) (17 March 2017) (Black Sash 1). See also the earlier related Constitutional Court judgments: 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) (Black Sash 2) and South African Social Security Agency and Another v Minister of Social Development and Others (CCT48/17) [2018] ZACC 26 (30 August 2018).
Synopsis:
Costs of suit – Personal liability – Minister liable for costs — Gross negligence
Judgment:

Full judgment

BLACK SASH TRUST (FREEDOM UNDER LAW INTERVENING) V MINISTER OF SOCIAL DEVELOPMENT AND OTHERS (CORRUPTION WATCH (NPC) RF AND SOUTH AFRICAN POST OFFICE SOC LIMITED AS AMICI CURIAE) CCT48/17C

Case CCT 48/17
[2018] ZACC 36
Judgement Date: 27 September 2018

Post Judgment Media Summary  

The following explanatory note is provided to assist the media in reporting this case and is not binding on the Constitutional Court or any member of the Court.

On 27 September 2018 at 11h30 the Constitutional Court handed down a judgment which dealt with the issue of costs left open in Black Sash 1. Costs were reserved and the former Minister of Social Development (Minister Dlamini) was called upon to provide reasons on affidavit why she should not be made party to the proceedings in her personal capacity and why she should not pay the costs of the application out her own pocket.

Affidavits were filled in the Constitutional Court that raised conflicts of facts in relation to an alleged parallel process of responsibility initiated by Minister Dlamini. The parties agreed on a referee and retired Judge President Ngoepe (Ngoepe JP) was appointed to conduct the fact finding inquiry. A full investigation took place and the Inquiry Report by Ngoepe JP was delivered to the Constitutional Court. Ngoepe JP found, among other things, that: (i) Minister Dlamini did appoint individuals to lead parallel work streams; (ii) those individuals reported directly to Minister Dlamini, through Ms Mvulane, who was the project manager; and (iii) the reason Minister Dlamini did not disclose this 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 Inquiry Report was released to the public and the parties were invited to make submissions to the Constitutional Court on whether, in light of the Inquiry Report, Minister Dlamini ought to be liable for costs out of her pocket.

Minister Dlamini argued that holding her personally liable to pay the costs of the proceedings would constitute a breach of the separation of powers principle, namely that the Constitutional Court lacks the authority to hold a Minister to account by ordering her or him to pay costs out of her or his pocket.

Freedom Under Law was granted leave to intervene, and like Black Sash Trust, argued that Minister Dlamini’s actions amounted to bad faith. Their argument was based on Minister Dlamini’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.

The Constitutional Court in a unanimous judgment written by Froneman J (Mogoeng CJ, Zondo DCJ, Basson AJ, Cameron J, Dlodlo AJ, Goliath AJ, Khampepe J, Mhlantla J, Petse AJ and Theron J concurring) held that Minister Dlamini’s argument on separation of powers was ill-conceived. Froneman J reasoned that when courts make personal orders they do not make judgments on the political accountability of public officials but rather on how the rights of people are affected by public official conduct that is not open, transparent and accountable and its impact on the responsibility to the Court by those involved in the litigation. Froneman J found that Minister Dlamini’s role in creating the parallel work streams and the subsequent withholding of that information from this Court demonstrates bad faith behaviour and at best reckless and grossly negligent conduct, both of which warrant a personal costs order against her.

In determining the amount that Minister Dlamini was to be mulct with Froneman J said that the Court had to weigh up the Minister’s personal role arising from the parallel process she set in motion and her shielding this 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. Froneman J held that it is novel to hold cabinet members personally responsible for costs and that 20 percent of the costs would be appropriate. The remaining 80 percent to be paid by the first, second and third respondents.

The judgment also found that the Inquiry Report suggested strongly that Minister Dlamini lied under oath. This 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 Minister for perjury.

The Full judgment  here.

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