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Case CCT 48/17 
[2018] ZACC 26
Hearing Date: 06 March  2018

Judgement Date: 30 August 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.

Today the Constitutional Court handed down a judgment which sets out the Court’s reasons for the order issued on 23 March 2018. Pursuant to that order, the applicants had sought an extension of the suspension of a declaration of invalidity which had been granted by this Court on 17 March 2017. The South African Social Security Agency (SASSA) sought to have the 12-month suspension period extended for an additional 6 months. This extension followed on from the original order of this Court granted on 17 April 2014 which had found that the contract between Cash Paymaster Services (Pty) Ltd (CPS) and SASSA was constitutionally invalid.

On 6 February 2018, SASSA lodged this application, requesting the Court to entertain it as a matter of urgency and grant an extension of the suspension of the declaration of invalidity for six months. The requested extension was limited to that part of the contract which dealt with the provision of the cash payment service. In the affidavit deposed to by its acting CEO, SASSA told the Court that the request for the extension was necessary because the service that forms the subject-matter of the extension had then been recently put out to tender. A further extension would enable SASSA to finalise the tender process and appoint a new service provider to replace CPS. SASSA delayed the advertising of the tender. SASSA submitted that the decision to call for tenders was taken in September 2017, after it had realised that the South African Post Office (SAPO) lacked the capacity to provide the relevant service. Despite this Court having ordered on 7 November 2017 that SASSA must develop a “contingency plan if a seamless transition on 1 April 2018” was not attainable, SASSA did not mention the plan in its application for extension. A report filed with this Court on 9 March 2018 contained a contingency plan to arrest the situation in the event of this Court declining to extend the suspension further. Therefore, not only was the so-called urgency self-created, there are further disturbing features in this case. It is disconcerting that SASSA did not only lack candour but had gone further to suppress information material to the determination of the matter. The issue of the contingency plan was so important to the scheme of things that it could hardly have been left out from SASSA’s papers because of an innocent oversight.

In a unanimous judgment written by Jafta J, the Court held that the extension of a declaration of invalidity is not for the asking. A proper case justifying the extension must be made out. This is so because the effect of suspending the operation of a declaration of invalidity is to keep alive conduct that has been declared invalid. In the resent instance,a contract that was declared invalid because the process leading up to its conclusion was inconsistent with the values enshrined in the Constitution, continued to operate as if it was valid. This Court further reasoned that despite having been initially afforded a period of three years, SASSA has failed to remedy the defect before the expiry of the original period of suspension. This Court was placed in a difficult position last year in March 2017 when it was asked to extend further the period of suspension.

Furthermore, the explanation provided by SASSA for why a further extension must be granted was inadequate. It was neither honest nor complete. With regard to SAPO’s incapacity to provide the cash payment service, SASSA’s affidavit did not tell the Court why SAPO, which was also an organ of state, was not capacitated instead of opting for inviting tenders from third parties to provide that service.

While factors like finality of litigation, sufficiency of explanation and prospects of compliance with the deadline warranted refusal to grant a further suspension, there were other factors which strongly supported the granting of the extension requested. What emerged from this balancing exercise was that it would be just and equitable to grant a further extension of the suspension of the invalidity order so as to avoid the serious prejudice which millions of poor people could have suffered.

 In the order of 23 March 2018, the question of costs was reserved for determination at a later date. It is now settled that public officials who are acting in a representative capacity may be ordered to pay costs out of their own pockets, under specified circumstances. Personal liability for costs would, for example, arise where a public official is guilty of bad faith or gross negligence in conducting litigation. As stated the urgency relied on was self-created and the explanation for the delay in approaching this Court was not satisfactory. But the unsatisfactory explanation does not amount to gross negligence or bad faith which would warrant a personal costs order. This Court concludes that what remains for determination is whether SASSA and its CEO in her official capacity should pay costs of the application. Were it not for the fact that the refusal to extend the period of suspension would have severely prejudiced innocent grant recipients, the application could have been dismissed. Consequently, the applicants must bear the costs of the application.

The Full judgment  here.