27 July 2016 by and Dispute Resolution Alert

Courts order errant state officials to pay legal costs out of their own pockets

The Constitution guarantees everyone the right to just administrative action that is lawful, reasonable and procedurally fair. To give effect to those principles, the Promotion of Administrative Justice Act, No 3 of 2000 (PAJA) was enacted to lay down rules and principles that apply to and bind all levels of government (national, provincial and local). PAJA applies to organs of state when exercising, among other things, a public power of performing a public function in terms of any legislation. PAJA also empowers the courts to scrutinise the lawfulness, reasonableness and procedural fairness of administrative action taken by public officials.

In recent judgments handed down by superior courts, judges have done a great deal in scrutinising the conduct of various state officials alleged to have abused their power in exercising public functions. Seemingly our courts have become increasingly impatient towards state officials who frustrate members of the public in their attempts to enforce their constitutional rights by holding officials accountable to the principles underlying just administrative action. This is most evident in review proceedings involving tender irregularities where procurement processes are ignored or circumvented. Notably, it is often the taxpayers who are left to pick up the tab from such behaviour, and the courts are no longer prepared to condone it.

The Supreme Court of Appeal (SCA) dealt with this issue in the matter of Gauteng Gambling Board and Another v MEC for Economic Development, Gauteng 2013 (5) SA 24 (SCA) 27 May 2013.

The appeal was launched by the Gauteng Gambling Board (Board) following the termination of the membership of all members of the Board by the MEC for Economic Development Gauteng (MEC). The MEC dissolved the Board, ostensibly on the basis that they had unanimously decided against complying with her instruction to relocate the Board’s offices to a central hub in Johannesburg’s central business district, in which her Department and associated statutory organs are housed. A further complaint was that the MEC terminated their membership because they had refused to obey her earlier instruction to accommodate, in a building owned by the Board, the offices of a commercial entity alleged to be owned by her. The appellants contended that the MEC had no power to dissolve the Board for the reasons given by her or on any other basis.

The SCA showed displeasure towards the manner in which the MEC behaved, over and above the manner in which she terminated the membership of the entire board, and in particular, her conduct after the litigation was launched. The court took umbrage to the MEC’s responses to the Board’s challenge describing her as indignant and playing the victim. The court stated that she adopted this attitude while acting in flagrant disregard to constitutional norms and noted that:

Our present constitutional order is such that the State should be a model of compliance. It and other litigants have a duty not to frustrate the enforcement by the courts of constitutional rights.

The court found that the special costs order, namely, on the attorney and client scale, sought by the Board was justified, but added that it was time for courts to seriously consider holding officials who behave in the highhanded manner such as the MEC, personally liable for costs incurred. This, the court stated, might have “a sobering effect on truant public office bearers”.

The Constitutional Court also recently dealt with similar behaviour in the matter of MEC for Health, Gauteng v Lushaba [2015] ZACC 16 23 June 2015, in which the MEC was ordered by the High Court to pay the costs of the action on a punitive scale. In addition, and unusually, the High Court held various state officials (not part of the proceedings) personally liable for the costs of the action on a punitive scale jointly and severally with the MEC.

In this matter Lushaba instituted a damages claim in the High Court, arising from medical negligence at the hands of officials in the employ of the MEC. The MEC defended the action. The High Court found that the defence advanced by the MEC was devoid of any merit and held the MEC liable for Lushaba’s damages. The court was also critical of the manner in which the MEC’s defence was presented, and queried the decision taken by the MEC to defend the action and how the decision was taken.

Although the Constitutional Court held that the High Court was not competent to hold state officials personally liable for costs of an action to which they were not a party, it agreed with the findings made by the High Court insofar as the accountability of state officials in exercising public power was concerned.

It is clear that there is a trend slowly being adopted by the courts in holding to book those state officials who frustrate the principles of just administrative action enshrined by the Constitution. These long awaited new developments pave the way for litigants who are forced to look to our courts to enforce their constitutional rights to be recompensed for the inevitable financial prejudice.

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