Sassa and its former CEO to pay costs for extension of invalid CPS contract
The Constitutional Court on Thursday held that former social development minister Bathabile Dlamini should not be held personally liable to pay costs for an application to extend an invalid cash grant payments contract.
The apex court ruled in February that‚ for a period of six months from April 1‚ the South African Social Security Agency (Sassa) and Cash Paymaster Services (CPS) were under an obligation to ensure payments were made to social grant beneficiaries who are paid in cash. The court also said a declaration of invalidity of the contract between Sassa and CPS‚ in relation to these cash payments‚ was suspended for six months from April 1 2018.
Dlamini and then acting CEO of Sassa‚ Pearl Bhengu‚ were ordered to indicate why they should not be held personally liable to pay the legal costs of the application for an extension.
Bhengu had approached the Constitutional Court on an urgent basis in February 2018‚ asking it to extend the invalid grant payments contract between Sassa and CPS for a further six months. The requested extension was limited to the part of the contract dealing with the provision of cash payments‚ affecting about 2.8-million grant recipients.
The reason for an extension was that Sassa had not concluded a tender process to select a new provider for the cash payment service.
In giving reasons for the order handed down in February‚ the Constitutional Court said on Thursday that the question arising in respect of Dlamini and Bhengu was whether they had acted in bad faith or were grossly negligent in conducting the litigation.
In a unanimous judgment, Justice Chris Jafta said it was evident that Dlamini did not apply an effective supervisory role‚ particularly after it had come to her attention that Sassa had failed to comply with previous orders.
Jafta said that although the minister revealed that she deferred to an inter-ministerial committee on comprehensive social security — established to ensure compliance with court orders — it was clear that the duty to give direction was imposed on the minister.
"But the minister’s deference to the committee was mistaken. That is not sufficient to conclude that it constitutes bad faith or gross negligence‚" Jafta said, who also confirmed that Bhengu‚ who was appointed in July 2017‚ should not pay costs in her personal capacity.
Jafta said her unsatisfactory explanation as to why Sassa could not comply with the court order fell short of gross negligence or bad faith‚ which would warrant a personal costs order. Jafta did, however, order Sassa and Bhengu‚ in her official capacity‚ to pay the costs of the application for the extension of the invalid contract.
The contract between Sassa and CPS was first declared invalid in March 2013 but the court suspended its order until March 31 2017 to enable Sassa to award a new tender. In February 2017‚ it emerged that Sassa would not be able to provide the services‚ prompting the court to extend the invalid contract for another year and require Sassa to explain how they planned to ensure the payment of social grants from April 1 2018.