Florence (Dodgen) v Government of the Republic of South Africa and Another (LCC148/2008) [2013] ZALCC 11 (4 June 2013)

IN THE LAND CLAIMS COURT OF SOUTH AFRICA

HELD AT CAPE TOWN

Case No.: LCC148/2008

Heard on 24 May 2013

In the matter of:

ISABEL FLORENCE (NEE DODGEN) ..................................................................Applicant

and

THE GOVERNMENT OF THE REPUBLIC

OF SOUTH AFRICA ......................................................................................First Respondent

CHIEF LAND CLAIMS COMMISSIONER ..............................................Second Respondent

JUDGMENT: 4 JUNE 2013

MEER J.

Introduction

[1] The applicant applies on an urgent basis to review and set aside the decision of the second respondent, the Chief Land Claims

Commissioner, to reject her application for further funding for legal representation in terms of Section 29 (4) of the Restitution of Land Rights Act No 22 of 1994 (“the Restitution Act”). She seeks the funding of R266,000.00 (two hundred and sixty six thousand rand) to prosecute her pending appeal in the Supreme Court of Appeal and if necessary to appeal further to the Constitutional Court. The applicant has already received funds for legal representation in the sum of R944,500.00 (nine hundred and forty four thousand five hundred rand) from the second respondent under Section 29 (4) of the Restitution Act, which, but for R28,780.00 (twenty eight thousand seven hundred and eighty rand), she has expended to prosecute her claim for restitution of rights in land before this Court. An award of Rl,649,691.00 (one million six hundred and forty nine thousand, six hundred and ninety one rand) has already been paid to her as equitable redress for dispossession of rights in land (“the award”), as a consequence of the prosecution of her restitution claim.

[2] The appeal for which she seeks further funding is against inter alia the quantum of the award. Applicant’s stance is that she is entitled to an award of approximately R4million and takes issue with the use of the Consumer Price Index accepted by this Court for calculating her lesser award.

[3] It is the applicant’s stance that the second respondent's decision to reject her application for further funding on appeal was contrary to Section 6 of the Promotion of Administrative Justice Act No 3 of 2000 (PAJA) in that it was excessively unreasonable, not rationally connected to the information before the second respondent, was materially influenced by an error of law, was not authorised by the empowering statutes and was taken because of irrelevant factors. The second respondent disputes this to be the case.

[4] The second respondent contends that the decision rejecting the application for funding was lawful, reasonable and rational and

consequently

does not offend against the provisions of section 6 of PAJA as alleged. The applicant’s grounds of review, she submits, cannot sustain the relief sought. The applicant, it is averred, is not entitled to further state funding on a proper interpretation of Section 29 (4) of the Restitution Act and the decision rejecting same was properly taken.

Statutory Framework: Section 29 (4) of the Restitution Act, guidelines thereunder, and Section 34 of the Constitution

[5] Section 29 of the Restitution Act provides as follows:

“29. Intervention to proceedings before Court, right to appear and legal representation. - (1) Any interested person, including an

organisation, may apply to the Court for leave to intervene as a party to any proceedings before the Court.

(2) The State shall have the right to intervene as a party to all proceedings before the Court.

(3) Any party appearing before the Court may do so in person or may be represented by an advocate or attorney.

(4) Where a party cannot afford to pay for legal representation itself, the Chief Land Claims Commissioner may take steps to arrange legal representation for such party, either through the State legal aid system or, if necessary, at the expense of the Commission.”

[6] Section 34 of the Constitution provides that:

“Everyone has the right to have any dispute that can be resolved by the application of law decided in a fair public hearing before a Court or, where appropriate, another independent and impartial tribunal or forum. "

Section 29 (4) of the Restitution Act gives effect to Section 34 of the Constitution but with a limitation, reasonable in my view, based on affordability.

[7] The guidelines employed by the second respondent in the implementation of Section 29 (4) of the Restitution Act state inter alia:

“This document seeks to provide guidelines for the provision of legal assistance for indigent persons at the expense of the Commission

Other relevant excerpts from the guidelines are as follows:

“ENTITLEMENT TO ASSISTANCE IN TERMS OF S 29(4)

Section 29(4) seeks to address the plight of a “party” that “cannot afford to pay for legal representation itself’.

It gives the CLCC a discretion to arrange legal representation or if necessary at the expense of the Commission, It follows therefore that requests for assistance in terms of section 29 (4) can be forwarded to the LAB for its consideration in terms of its policies (such as the impact litigation policy). In exceptional circumstances and where, in the discretion of the CLCC, it is necessary for a party to have legal representation the CLCC can determine that the costs for such representation be at the cost of the Commission.

It follows therefore that, if a person falls within the confines of the definition of party, such a person may be considered as a beneficiary of section 29(4), should that person prove to be indigent.

Criteria

Whether the relief sought against or by the party requesting assistance is found in the Restitution Act;

Prospects of success (objective test to be applied);

Whether the party requesting assistance has sufficient disposable capital or assets which may be used to finance the required representation. In determining this, the CLCC will be guided by the means test applied from time to time by the LAB;

Any other factor that may be considered by the CLCC.

Despite the aforegoing, assistance will not be rendered if the CLCC is satisfied that the applicant has sufficient disposable capital or assets which may be utilized to raise sufficient finance to pay for required legal assistance by him/her.

The CLCC may, however, also consider an application of any person who does not qualify in terms of the LAB means test but, who subjectively

judged, is indigent and who deserves sympathetic consideration on the grounds of exceptional or other circumstances.”

Background Facts

[8] A claim for restitution of rights in land was lodged by the applicant’s late husband as a result of the forced sale of

their family home, Erf 44408 Cape Town, Rondebosch, under the Group Areas Act No 41 of 1950. Mr Florence died before the claim was finalised and was substituted by the applicant as claimant.

[9] The applicant did not have the financial means to prosecute her claim. She was however fortunate enough to be represented at no cost by the Legal Resources Centre, the well known non-profit Public Interest Law Firm. For additional funding to pay for counsel and expert witnesses, the applicant applied to the second respondent in terms of Section 29 (4) of the Restitution Act. Such funding was awarded to her by orders of this Court on two occasions. On 4 September 2009 the second respondent was ordered to fund the

applicant in an amount of R359 000,00 (three hundred and fifty nine thousand rand), and on 31 March 2011 an order for further funding in the sum of R576 000,00 (five hundred and seventy six thousand rand) plus R9 000,00 (nine thousand rand) for counsel’s fees was granted. The latter order, granted by agreement, provided that nothing contained in the agreement prevented the applicant from applying for further funding to complete the trial or appeal the outcome of the judgment.

[10] The trial proceeded and on 5 June 2012 this Court determined that the applicant was entitled to restitution of rights in land in the form of equitable redress by way of compensation. A sum of Rl, 498 890.00 (one million four hundred and ninety eight thousand, eight hundred and ninety rand) was awarded to the applicant, which was determined to be the escalation of her historical financial loss of R30 513.00 (thirty thousand five hundred and thirteen rand), to current monetary value, employing the Consumer Price Index. On 25 April 2013 the award of Rl,649,691.00 (one million six hundred and forty nine thousand, six hundred and ninety one rand), comprising the sum of R 1,498 890.00 (one million four hundred and ninety eight thousand, eight hundred and ninety rand) plus interest of Rl 50,810.00 (one hundred and fifty thousand, eight hundred and ten rand) was paid to the applicant’s attorneys, which sum she has accepted.

[11] The applicant is appealing:

11.1. This Court's use of the Consumer Price Index as the appropriate method to convert historical financial loss to current monetary

value;

11.2. The order not to burden the state with the costs of erecting a memorial plaque on the dispossessed land; and

11.3. The decision not to make a costs order.

[12] In February 2013 the applicant directed a further application for funding to the second respondent for legal representation for her appeal to the Supreme Court of Appeal. This time she applied for an amount of R266 ,000.00 (two hundred and sixty six thousand rand) to cover counsel’s disbursements to finalise the appeal. The applicant currently has R28,780.00 (twenty eight thousand seven hundred and eighty rand) remaining of the funding already received from the second respondent.

[13] The decision of the second respondent to reject the application for further funding was conveyed to the applicant in an email by Mr Isaac Peter, Deputy Director, Restitution Litigation Directorate, on 13 February 2013. The relevant part of the email states as follows:

“I must from the onset advise that this matter was discussed extensively with the CLCC, who after our interrogation of the issues it transpired that you intend to go to the SCA, her opinion is that as the commission we accepted the decision of the LCC, are ready to comply with same.

The Regional Land Claims Commissioner and the Chief Land Claims Commissioner, have indicated in writing to your demands within the

stipulated period that they are ready to make payment in terms of the LCC judgment. However my colleagues and our attorneys in Cape Town have since advised that your office refused to accept the money to be paid either to your trust account or your client directly.

In light of the above in line with our S29(4) guidelines, the Chief Land Claims Commissioner is of the view that your client fails to meet our means test and as such if we were to pay your client any further fees, same would need to be recovered on your client current award, which your office is delaying its transfer.

We would appreciate your opinion on the above, and hope you understand our predicament in light of a volume of request we are dealing with for other claimants who are still pursuing their through the Land Claims Court.”

[14] A letter in response from the applicant's attorneys dated 4 March 2013 stated that the reasons furnished did not justify the refusal of the funding application. The letter called upon the second respondent to reconsider her decision, failing which the applicant would apply for a review thereof. There was no response from the second respondent and the applicant launched this application on 13 March 2013. Thereafter, despite attempts, the parties were unable to arrive at a settlement.

Explanation for the decision as furnished in the Second Respondent’s answering affidavit Affordability

[15] In explaining her decision to reject the application for further funding the second respondent in her answering affidavit stated that the criterion used to determine eligibility for legal representation at State expense under Section 29(4) is “affordability”. As Chief Land Claims Commissioner she has a discretion to determine who qualifies for funding. In deciding that the applicant did not meet the Commission's means test (as conveyed in the letter informing the applicant of her decision not to grant funding), the second respondent said that she took consideration of the following:

15.1. The applicant has achieved her Constitutional Right to equitable redress in the form of financial compensation in the amount of R1 498 890,00 (one million four hundred and ninety eight thousand, eight hundred and ninety rand) plus interest. The applicant requires R266 000,00 (two hundred and sixty six thousand rand ) to fund her appeal. This amount represents a fraction of the entire judgment award plus interest of R1 649 691,00 (one million six hundred and forty nine thousand six hundred and ninety one rand) which is available to her. A large portion of the costs the applicant has applied for can be funded by the interest component (R150, 810.00) to the award. Should the applicant succeed on appeal, the costs thereof may be recoverable. It is not so, as alleged by the applicant, that a determination of her financial means to fund her appeal effectively places her award on the line. In these circumstances and upon a contextual interpretation of the Restitution Act, Section 29 (4) does not apply to the applicant. She is not entitled in law to further state funding.

15.2. The award confers on the applicant the means to afford her own legal representation to prosecute her appeal to the Supreme Court of Appeal and beyond if necessary. Her right to access the courts will not be denied.

15.3. The state has funded the applicant’s litigation, having paid R915 000,00 (nine hundred and fifteen thousand rand) towards her legal costs, and does not seek to recover this amount. The applicant's attorneys have availed their services at no cost to her.

[16] The second respondent's affidavit goes on to state that it is disingeneous to argue, as does the applicant, that taking into

account the availability of the judgment award, means that claimants in general will be forced to sacrifice a large portion, if not their entire award, in order to appeal. She points out that it is uncommon for a person who has achieved equitable redress in the form of financial compensation to appeal the decision.

[17] The second respondent states further that she has exercised her discretion pertaining to the applicant’s right to further

funding reasonably. She adds that she has maintained a just and equitable balance between the public interest and the interests of indigent claimants who seek to prosecute their claims in the Land Claims Court. This approach she contends will certainly release the financial burden on the public purse to make funding available to such claimants. In the circumstances, contends the second respondent, it is entirely reasonable to take the award into account in considering the applicant’s ability to afford her own legal representation.

New reasons for the decision furnished in the Second Respondents affidavit and in heads of argument

[18] In her answering affidavit the second respondent provided the following new reasons for rejecting the application to fund legal

representation on appeal. As is evident these reasons are not mentioned in the letter of 13 February 2013 in which her decision not to grant further funding was conveyed to the applicant.

18.1. The nature of the applicant’s appeal does not seek to achieve a right to restitution as specified at Section 25 (7) of the Constitution. Instead, it challenges the Land Claims Court’s interpretation of the provisions of the Restitution Act, in particular, Sections 33 (eC) and 35. The relief sought is ancillary to the redress achieved;

18.2. The applicant’s prospects of success on appeal are slim. In Farjas (Pty) Ltd v Minister of Agriculture and Land Affairs and 0thers[20\?>} 1 All SA 381 (SCA), the Supreme Court of Appeal rejected the use of an investment factor to convert historical loss into current monetary value, preferring instead the use of the Consumer Price Index as an appropriate conversion factor, finding that such would lead to a just

and equitable result.

[19] A further new reason for the rejection of funding was presented in heads of argument by Mr Joseph on behalf of the respondents. He submitted that a contextual interpretation of Section 29 (4) of the Restitution Act, read with Sections 29 (1), (2), (3) and the definition of “the Court”, permits state funding for litigation in the Land Claims Court only, and not to the Supreme

Court of Appeal and further.

Argument

[20] Mr Bishop for the applicants argued, correctly in my view, that the introduction of new reasons by the second respondent, additional to the reasons furnished in the letter of February 2013, was not permissible.

This is indeed so. For, as was said in National Lotteries Board v South African Education and Environment Project [2012] 1 All SA 451 (SCA) at paragraph 27 by Cachalia JA,

“The duty to give reasons for an administrative decision is a central element of the constitutional duty to act fairly. And the failure to give reasons, which includes proper or adequate reasons, should ordinarily render the disputed decision reviewable. In England the courts have said that such a decision would ordinarily be void and cannot be validated by different reasons given afterwards - even if they show that the original decision may have been justified. For in truth the later reasons are not the true reasons for the decision, but rather an ex post facto rationalization of a bad decision. Whether or not our law also demands the same approach as the English courts do is not a matter I need strictly decide.”

Cachalia JA referred at paragraph 24 to Jicama 17 (Pty) Ltd v West Coast District Municipality 2006 (1) SA 116 (C) where at 121E-122C, Cleaver J said:

.. it is not open to the first respondent to raise the other defences raised for the first time in its answering papers. The applicant has come to court in order to deal with the reason which was conveyed to it as being the basis on which the decision to cancel the tender had been made. The reason why the first respondent should not now be allowed to supplement the basis on which its previous decision was taken is eloquently set out in a judgment of the Court of Appeal in R v Westminster City Council, Ex parte Ermakov, viz: . .. . ”

“[T]he purpose of reasons is to inform the parties why they have won or lost and enable them to assess whether they have any ground for challenging an adverse decision. To permit wholesale amendment or reversal of the stated reasons is inimical to this purpose. Moreover, not only does it encourage a sloppy approach by the decision-maker, but it gives rise to potential practical difficulties. ...[I]n many cases it might be ... suggested that the alleged true reasons were in fact second thoughts designed to remedy an otherwise fatal error exposed by the judicial review proceedings. That would lead to application to cross-examine and possibly for further discovery, both of which are, while permissible in judicial review proceedings, generally regarded as inappropriate. Hearings would be made longer and more expensive.”

[21] In keeping with the above decisions it is therefore not open to the second respondent to proffer new reasons for her decision, reasons that were not initially provided but raised for the first time in her answering affidavit and heads of argument. For such later reasons are tantamount to an ex post facto rationalisation of her decision, and cannot be permitted. The applicant came to Court to challenge the reason for the decision furnished in the letter of February 2013, namely that in line with the Section 29 (4) guidelines she fails to meet the means test. The reasonableness or otherwise of the second respondent's decision must accordingly be determined in relation to this stated reason.

Is the second respondent's decision to rclect funding on the basis that the applicant failed to meet the Commission’s means test reviewable under PAJA?

[22] A pre-condition for obtaining legal funding under Section 29 (4) of the Restitution Act is lack of affordability to pay for legal representation. Section 29 (4) makes provision in that instance for legal representation to be made through the State Legal Aid system or, if necessary, at the expense of the Commission. The Commission's Guidelines which, as appears below, are used to implement Section 29 (4) similarly state that a person may be considered as a beneficiary of Section 29 (4) should that person prove to be indigent. In Smit v Mutual and Federal Insurance Co Ltd 1998 (4) SA 626 (C) at 632D-E it was said “to be indigent - means to be in extreme need or want whereas to be poor - means having few things or nothing”.

In keeping with the pre-condition of affordability at section 29 (4), one of the criteria specified in the guidelines for the second

respondent to take into account in exercising her discretion, is whether the party requesting assistance has sufficient disposable

capital to finance the required representation. As submitted by Mr Joseph for the respondents the applicant, who is now in possession of the award of Rl, 649,691.00 (one million six hundred and forty nine thousand, six hundred and ninety one rand), is neither indigent nor poor. This is an objective fact and the second respondent's conclusion that the applicant is not an indigent litigant cannot in my view be assailed on the basis of unreasonableness or irrationality under PAJA.

[23] Mr Bishop for the applicant argued that given the constitutional and statutory context of restitution claims, it is not permissible for the Commissioner, when exercising her discretion under Section 29 (4), to consider a claimant's award in analysing whether she can afford to fund her legal representation. He submitted that the purpose of restitution, as provided for by Section 25 (7) of the Constitution and the Restitution Act, namely, to make good the wrongs of the past, would be undermined if claimants had to spend part of the compensation they received in order to prosecute their claims in the Courts. An award, he stated, is not merely money. It is a recognition of past wrongs. It serves not only to improve a person’s financial position, but also to recompense for past sufferings and serves a strong symbolic purpose. The applicant, he said, has been granted approximately half of what she believes is equitable redress. The Commissioner, he contended, wants her to risk the part of her redress she has secured in order to obtain the other half.

[24] Requiring a claimant to spend even a small proportion of her award on an appeal, Mr Bishop contended, runs contrary to the Constitutional purpose of the Act. The Commissioner's decision, he argued, should in the circumstances be set aside for violating the provisions of PAJA in the following manner:

it was excessively unreasonable (s 6(2) (h)), materially influenced by an error of law (s 6 (2)(d))> taken because of irrelevant factors (6(2)(e)(iii)), it was not authorised by s 29(4) of the Restitution Act and the Constitution (s 6(2)(f){i)), it was “otherwise

unconstitutional” (s 6(2) (i)) and not rationally connected to the purpose of the empowering provision 6(2) (f) (ii) (bb).

[25] Neither the Restitution Act nor the Constitution regulates how a monetary award for restitution of rights in land should be spent. In Haakdoombult Boerdery CC and Others v Mphela and Others 2007 (5) SA 596 (SCA) at paragraph 43, Harms ADP (as he then was) said: “..what a dispossessed person or community subsequently did with the compensation received is of little consequence in determining whether the compensation received in respect of the property was adequate or not”.

There is certainly no authority for the proposition that it would be unconstitutional for the applicant to use a fraction of her award to fund her appeal. In fact, were the applicant to follow this course and succeed on appeal, her award would increase to just over R4000, 000,00 (four million rand), arguably the best possible return on her award. She would handsomely increase the amount to spend on educating her grandchildren, the purpose for which she intends using the award. I have difficulty in appreciating how such a use of a small portion of her award could be inimical to the purpose of the Restitution Act, the Constitution and the concept of redressing the wrongs of the past.

[26] There is in my view nothing unconstitutional, unreasonable or irrational in the reasoning of the second respondent that of the amount of Rl,649,691.00 (one million six hundred and forty nine thousand, six hundred and ninety one rand) awarded to the applicant,

R266.000.00 (two hundred and sixty six thousand rand) can be used to fund her appeal, Rl50,810.00 (one hundred and fifty thousand eight hundred and ten rand) of which can be funded by the interest. It is also so as pointed out by the second respondent that the amount required to fund the appeal is a fraction of the award. It cannot in my view be said that the second respondent’s reasoning in this regard offends against section 6 of PAJA as contended above for the applicant.

Is there confusion as to whether the second respondent’s decision to refuse funding was taken in line with the Commission’s Guidelines or under Section 29 (4), and is it for that reason reviewable?

[27] Mr Bishop submitted that there is significant confusion about the role the Guidelines played in the second respondent's decision. It is not clear if she took her decision in line with the Guidelines, as Mr Peters informed the applicant in his letter, or on the basis of Section 29 (4) as stated by the second respondent in her affidavit. The second respondent, he stated, does not deal with the specific factors laid out in the Guidelines in her answering affidavit. He submitted that this confusion alone is enough to set the decision aside. The decision is not rationally connected to the reasons given, he submits, as is required by Section 6(2) (f) (ii)(dd) of PAJA.

[28] If the second respondent did consider the Guidelines, he submitted that she applied them as a rule and did not consider other reasons or whether this was an exceptional case that justified a departure from the requirement that the claimant must satisfy the means test. The Guidelines he argued do not make the means test the be-all and end-all of an application for funding. They provide a range of factors to be considered. If the Commissioner did not consider the Guidelines her decision would be reviewable under Sections 6 (2) (e) (iii), 6(2)d, and 6 (2)(h).

[29] In my view the letter conveying the second respondent's decision makes clear that the Guidelines were considered in arriving at the decision. To the extent that the perception was created that the decision was taken only on the basis of the Guidelines, the second respondent disabuses this notion in her answering affidavit when she states that ultimately her decision was taken in terms of Section 29 (4) of the Act and not on the basis of the Guidelines. The Guidelines, she clarifies, are an internal guide prepared by the National Land Claims Commissioner's Office to be used by the Regional Land Claims Commissioners throughout the country when they consider and motivate requests for Section 29 (4) funding. She emphasises that the Guidelines do not have the force of law. She states she did not apply the Guidelines as a rule and that she treats each application on the basis of its own merit.

[30] From this it is apparent that the second respondent's decision was taken with regard to Section 29 (4) and the Guidelines. The fact that the letter of February 2013 conveying her decision does not evaluate her decision in relation to any of the factors in the Guidelines does not per se suggest she did not consider them. The reasoning in her answering affidavit with reference to the award received, the amount already expended in legal funding and the demands by other claimants on the public purse, indicate that she did not find the applicant deserving of sympathetic consideration on the grounds of exceptional or other circumstances. She was entitled on the basis of section 29(4) and the Guidelines to conclude that the applicant was not indigent, had capital at her disposal and to take cognisance of the demands of other claimants in considering the applicant's request for further funding.

[31] In view of the above I am unable to find that the second respondent's decision is reviewable under PAJA on account of the manner in which the second respondent employed the Guidelines.

[32] I conclude that the decision of the second respondent cannot be assailed in terms of section 6 of PAJA, as argued on behalf of the applicant. For the decision was reasonable and rational having regard to the requirement of affordability at section 29 (4) and the guidelines. The decision moreover does not offend against section 34 of the Constitution, section 25 (7) thereof nor the Restitution Act. Importantly the decision takes cognisance of the requests for funding from other claimants yet to pursue their claims. In the circumstances I am of the view that the Commissioner’s decision was reasonable and rationally connected to the facts placed before her. This being so the applicant is not entitled to the main relief or any of the relief in the alternative which is sought by her.

Costs

[33] In keeping with the Constitutional Court decision in Biowatch Trust v Registrar Genetics Resources and Others 2009 (6) SA 232 (CC) paragraph 22, to the effect that if a private litigant against the state in Constitutional litigation is unsuccessful, each party pays their own costs, I intend granting no order as to costs.

[34] I accordingly grant the following order;

1. The application is dismissed.

2. There is no order as to costs.

Y S MEER

Acting Judge President

Land Claims Court

APPEARANCES:

For applicant: Mr. B Bishop

Instructed by: Legal Resources Centre, Cape Town

For respondents: Mr. B Joseph

Instructed by: State Attorney, Cape Town