Matinese v Member of the Executive Council for the Department of Welfare, Eastern Cape (ECJ 005/2005) [2005] ZAECHC 6 (10 February 2005)

FORM A

FILING SHEET FOR EASTERN CAPE

JUDGMENT

ECJ NO: 053/2004

PARTIES:

MILEKA MATINESE

and

MEC DEPARTMENT OF WELFARE

EASTERN CAPE PROVINCE

REFERENCE NUMBERS -

Registrar: 1603/03

DATE HEARD: 22 OCTOBER 2004

DATE DELIVERED: 10 FEBRUARY 2005

(REPORTABLE)

JUDGE(S):

LEACH J

LEGAL REPRESENTATIVES –

Appearances:

for the State/Applicant(s)/Appellant(s): B HARTLE

for the accused/respondent(s): O RONAASEN

Instructing attorneys:

Applicant(s)/Appellant(s):

MIKE RANDALL ATTORNEYS

Respondent(s):

STATE ATTORNEYS

CASE INFORMATION:

Topic: AS

PER SUMMARY

IN THE HIGH COURT OF SOUTH AFRICA

(SOUTH EASTERN CAPE LOCAL DIVISION)

CASE NO.: 1603/03 the matter between:

MILEKA MATINISE Applicant

THE MEMBER OF THE EXECUTIVE COUNCIL

OF THE DEPARTMENT OF WELFARE,

EASTERN CAPE PROVINCE Respondent

______________

JUDGMENT

LEACH, J:

As has unfortunately been the case in far too many instances in recent years, the actions of public officials employed by what was formerly known as the Department of Welfare (now known as the Department of Social Development) has made it necessary for the applicant to seek redress by way of review.

The applicant is a disabled resident of Port Elizabeth. In 1995 she successfully applied for a disability grant under the provisions of the Social Assistance Act No 59 of 1992 (“the Act”), and was thereafter paid a monthly grant until November 1999 when payment was refused. When she enquired why she was not being paid, she was merely advised to re-apply for a grant. This she immediately proceeded to do, but it was only in October 2000 that her grant was reinstated. At the same time, she was paid an additional lump sum payment of R1000,00 as so called “back pay” (presumably a payment in respect of a period during which her disability grant had not been paid to her). As this latter payment was substantially less than what she would have received had her monthly payments not ceased in November 1999, she was aggrieved and consulted her attorney who, on 13 June 2003, wrote to the Department and demanded payment of R4900,00 (being the total amount she would have received for the period November 1999 to October 2002 had her grant not been terminated, less the R 1 000,00 paid when it recommenced). When this did not bear fruit, the applicant launched the present proceedings seeking an order in the following terms (I quote from the notice of motion):

“1. Directing that the administrative action of the Respondent, in stopping or suspending the payment of the Applicant’s disability grant during the period November 1999 to October 2000, be reviewed and set aside;

2. Directing the Respondent to remedy the defect resulting from the administrative action by paying to the Applicant the sum of R4 900,00, which would have been paid to her as a social grant during the period November 1999 to October 2000, in terms of the Social Assistance Act 52 of 1992, as if her grant had not been stopped or suspended during the said period.

3. In the alternative to prayer 2 above, directing the Respondent to pay compensation to the Applicant in the sum of R4 960.00, which would have been paid to her as a social grant during the period 24th June 1996 to May 1997, in terms of the Social Assistance Act 52 of 1992, but for the fact that her grant application had not been timeously considered and approved;

4. Directing that the Respondent pay to the Applicant interest on the sum R4 960,00 at the legal rate of 15,5% per annum calculated from the date that each monthly amount comprising the total of R4 960,00 which would have been (paid?) to the Applicant if the grant had been timeously considered and approved during or about June 1996, to date of payment.”

The references in prayers 3 and 4 of the notice of motion to the period 24 June 1996 to May 1997 and to an alleged failure to timeously consider and approve the applicant’s grant were probably included in error - possibly as a result of the careless use of the precedent – as they have no relation to any allegations relied upon by the applicant. I shall return to this in due course.

Be that as it may, it is common cause that the applicant’s grant was paid to her for at least four years before it was stopped. Consequently, in her founding affidavit she stated:

“… the Respondent regarded my disability as permanent. I say so because my payments extended beyond a period of one year, which I am advised is the limit for the payment of temporary grant of the Regulations promulgated under the Act”.

The applicant failed to identify the regulations which were of application, both when her grant was approved and when payment thereof ceased in November 1999. One would have expected this to have been done. In this, and many other similar matters, the fallacious view appears to have been that it is unnecessary to identify regulations upon which reliance is to be placed. Affidavits in motion proceedings are designed to set out the issues, and constitute both a party’s evidence and pleadings. In order for the issues to be properly defined, regulations of relevance should be properly identified in the affidavits. While I accept that judicial notice may be taken of regulations published in the Government Gazette (see s 5 of the Civil Proceedings Evidence Act No 25 of 1965) a court is not obliged to rummage through the gazettes in order to attempt to ascertain what regulations of relevance may have been passed and to what extent they may have been repealed by other regulations – compare S v Omega Bearing Works (Edms) Bpk en Andere 1977 (3) SA 978 (0) at 984, S v Koekemoer 1978 (2) SA 405 (O) at 407 and LexisNexis Law of Evidence at 6.2.3.2.

In the present case, the failure to properly identify the regulations was overcome during the course of argument by the parties agreeing that those promulgated in Government Notice No. R 418 of 31 March 1998 (“the 1998 regulations”) were in force at the time the payments of the monthly grant to the applicant ceased in November 1999 and that regard should be had thereto for purposes of determining the issues before me.

Those regulations are of cardinal importance to the outcome of this matter. As appears from the extract from her founding affidavit quoted above, the applicant contended that the respondent had regarded her disability as permanent. It was argued by Mr Ronaasen, who appeared for the respondents, that it had not been shown that she had been classified as permanently disabled. I do not agree. The applicant’s allegation that her 1995 grant was paid to her on the basis that she was permanently disabled was in no way denied by the respondent. Furthermore, it is common cause that she was paid her grant for more than four years up to November 1999. As regulation 2(3)(1)(a) of the 1998 regulations provides for the payment of a disability grant for not more than one year where the disability is temporary, the inference is irresistible that the respondent viewed the applicant as being permanently disabled. In these circumstances, and failing the respondent having alleged anything to the contrary, the matter must be decided on an acceptance of her having been paid her grant as a person who was permanently disabled.

That being so, the provisions of reg 23 of the 1998 regulations applied in regard to the termination of the applicant’s grant. Inter alia, it provides::

“ 23(1)……

(2) The Director-General shall review a grant at times and at intervals determined by him or her and, taking the circumstances of each case into consideration, increase, decrease or suspended a grant from a date which he or she determines, including a date in the past, and inform the beneficiary of his or her reasons in writing and inform him or her of the 90-day period referred to in subregulation (6) for an application for the restoration of the grant.

(3) ......

(4) ......

(5) ......

(6) If an application is made for the restoration of a grant, the Director-

General may restore the grant from the date on which the grant was suspended: Provided that the application for restoration shall be made within 90 days of suspension.”

These provisions are for all practical purposes the same as those in reg 21 of the regulations published in Government Notice No. R 373 of 1 March 1996 (and repealed by the 1998 regulations) considered by Van Rensburg J in Bushula and Others v Permanent Secretary, Department of Welfare, Eastern Cape Provincial Government and Another 2000 (7) BCLR 728 (E). The applicant in that matter had also been in receipt of a disability grant which was summarily terminated. The learned judge observed that a disability grant, once granted, conferred upon the beneficiary the right to receive it until it was lawfully terminated in terms of the Act and regulations promulgated thereunder, and held that there could not be a valid termination without due observance of the rules of natural justice and the right to fair administrative action, including the right to be heard. Accordingly, as the applicant had been entitled to a hearing before his grant was cancelled and as, on the facts, the respondents had failed to afford him such a hearing, it was held that the termination of his grant had been illegal.

It was not contended in casu that the Bushula case had been incorrectly decided and, as I understood him, Mr Ronaasen, conceded on behalf of the respondents that if the applicant’s grant had in fact been terminated without notice and had she merely been informed that she could reapply for it (as she alleged had been the case) her grant had been invalidly terminated in November 1999. This concession was correctly made – see further Ntame & Others v Member of The Executive Council, Department of Social Development, Eastern Cape (unreported judgment of Plasket J in this Court case no 3667/04 delivered on 11 January 2005) at paras [33] to [35] and Mpofu v The Member Of The Executive Committee For The Department Welfare & Population Development In The Gauteng Provincial Government and Another (unreported WLD decision of Marais J case no 99/2848 delivered on 18 February 200) . However, relying upon the opposing affidavit filed on behalf of the respondent, he submitted that regard should not be had to the applicant’s version to determine the matter.

The respondent’s opposing affidavit was deposed to by one Mark Rasmussen, who described himself as being a Deputy Director of Social Services in the Department. In dealing with the material facts upon which the applicant relied, Rasmussen could hardly have been terser. Apart from setting out certain legal contentions (to which I shall revert later in this judgment), Rasmussen contented himself with the following response to the facts deposed to by the applicant:

“2. The Applicant complains that payments in respect of her disability grant were suspended during the period November 1999 to October 2000. This is not correct. The correct position is as follows:

2.1 The Applicant was in receipt of a social grant for a period of approximately four years;

2.2 As a matter of policy the Applicant’s grant was reviewed during July 1999, when she had to undergo a fresh medical examination. It was decided by the regional medical officer that the Applicant no longer qualified for a grant and accordingly her grant was suspended. She was informed of this decision in writing;

2.3 In September 2000 the Applicant reapplied for social assistance and her application was approved;

Accordingly anything the Applicant states in her founding affidavit which is contrary to what is set out in the preceding paragraph is denied.”

At the outset, it is necessary to comment on Rasmussen’s allegation that the applicant was informed in writing that her grant had been “suspended”. He used the terminology of reg 23(2) but, having regard to the facts as they present themselves from the papers, it is clear that the grant was in fact terminated. As Van Rensburg J said in the Bushula case supra, at 731 H-J, the regulation envisages the permanent cessation of a grant if, after suspension thereof, the beneficiary does not apply for its restoration. Indeed, Rasmussen himself goes on to refer to the “cancellation” of the applicant’s grant in 1999. It is therefore clearly the respondent’s case that the grant was terminated in the way Rasmussen described.

Be that as it may, Rasmussen’s affidavit is hardly a model of clarity. While averring that the applicant’s grant was “reviewed” in July 1999 and that she was subsequently informed of the decision to suspend it, he does not say when this took place nor did he make available a copy of the alleged written notification. One does not know when or where it is alleged she was so informed. For example, if the respondent contended that the document informing her of the suspension was sent to her by post, this should have been stated. The medical report of the alleged examination in July 1999 and any other documentation containing any of the information Rasmussen referred to were similarly not produced nor, indeed, even mentioned. The respondent’s case is therefore bereft of vital information and documentation with which this Court should have been provided to enable it to make a fully informed decision.

In addition, as I have mentioned, Rasmussen holds a senior post in the Department. That being so, despite alleging at the commencement of his affidavit that the facts fall within his personal knowledge, the inference is irresistible that a person of his status in the Department would not have been the person who actually dealt with the applicant and her application at the relevant times, and one must presume in his favour that what he meant to convey was that he investigated the matter after the institution of proceedings and acquired certain knowledge as a result. But the essential difficulty that I have with this, is that the content of his affidavit is in fact hearsay and, without setting out his sources and making the relevant documentation available, the averments in paragraph 2 of his affidavit quoted above are, strictly speaking, probably inadmissible – See: Geanotes v Geanotes 1947 (2) SA 512 (C) at 514.

In the light of these deficiencies in the respondent’s case, Mrs Hartle argued on behalf of the applicant that it cannot, in truth, be said that the respondent has put up a case which genuinely disputes the applicant’s factual averments. She therefore submitted that, notwithstanding Rasmussen’s opposing affidavit, the applicant’s allegations should be accepted for purposes of determining her entitlement to relief and that, as had correctly been conceded by Mr Ronaasen, on the applicant’s case the termination of her grant with effect from November 1999 had been illegal as she had not been afforded a hearing.

There is considerable merit in this argument, but it seems to me to be unnecessary to consider whether it should be upheld as there is a further issue which, in my opinion, is fatal to the respondent’s case. In the Bushula case supra van Rensburg J analysed the regulation there in issue (which, as I have said, is virtually identical to reg 23 which is of application in the present matter) and went on to say the following in regard thereto (at 731):

“ Regulation 21(2) provides firstly for the review of a grant, after which the decision-maker may, inter alia, suspend the grant.

Secondly, in the event of a suspension of the grant, the decision-maker is required to inform the beneficiary of his reasons for suspending the grant in writing and to inform him of the fact that he has 90 days in which to make application for the restoration of the grant.

In summary after a grant has been reviewed and suspended, the beneficiary has a remedy, akin to an appeal, in terms of which, after receiving reasons for the suspension, he can within 90 days make application for the restoration of the grant.

Counsel for the respondents argued that regulation 21(2) envisages the suspension of a grant and not the cancellation thereof. In the present matter (so the argument went), the first applicant’s grant was cancelled and accordingly the provisions of regulation 21(2) have no application to the matter. There is, in my judgment, no merit in this argument. Clearly the provisions of regulation 21(2) envisage the permanent stoppage of a grant if after the suspension thereof the beneficiary does not apply for the restoration thereof within the ninety-day period, or unsuccessfully applies for the restoration thereof. It does not matter whether it is referred to as a suspension or as a cancellation of the grant. Either way where the procedure under regulation 21(2) has run its course and the suspended grant has not been restored, payment in terms thereof will cease permanently. In other words the initial suspension under regulation 21(2) progresses to cancellation where the restoration process has proved unsuccessful.”

The learned judge therefore held that the regulation required the respondents first to suspend the grant and then to furnish the applicant with written reasons for such suspension. The respondents were further required to inform the applicant of his right to apply for the restoration of the grant within ninety days of the date of the suspension and that, only after those procedures had been complied with and in the event of the application for the restoration having been unsuccessful, were the respondents entitled to cancel the grant. Failure to comply with these provisions, so the learned judge held, rendered the decision to cancel the grant invalid.

In the present case, all Rasmussen states is that, after it was decided by the regional medical officer that the applicant no longer qualified for a grant and her grant suspended, she was “informed of this decision in writing”. He does not go on to say that the applicant was furnished with written reasons for this suspension. He also does not go on to say that the applicant was informed of her right to apply for restoration of the grant within 90 days of the date of suspension. Without such written reasons being furnished and without the applicant being informed of her right to apply for the restoration of the grant within 90 days, the decision to cancel the grant is invalid – see Bushula’s case, supra at 734J – 735C. In the light of this, it is in fact common cause that reg 23 was not complied with in those vital respects – rendering the cancellation of her grant unlawful. For this reason, alone, the applicant must succeed.

This decision renders it unnecessary to consider the other interesting arguments raised by Mrs Hartle in regard to the question of invalidity. However, it is necessary to deal with the respondent’s further contention that review proceedings were not appropriate and should not be entertained by this Court.

The respondent’s contention in this regard appears to be that the applicant was simply seeking payment of R4960,00 (being the amount of the grant which she would have received from the time her initial grant ceased until her fresh grant was approved) and that there is no reason why she could not have instituted action in the Magistrates’ Court for payment of that sum. There is in my view no merit in this suggestion. While it is indeed so that I recently held that an applicant who sought payment of a welfare grant due to her could and should have sued in the Magistrates’ Court rather than proceeding by way of review (Makalima v The member of the Executive Council of the Department of Welfare, Eastern Cape Province case no. SECLD 1601/03, delivered on 27 January 2005) that matter is distinguishable from the present. The applicant in that case became entitled to payment under the regulations, a liability which arose ex lege with retrospective effect when her application for her grant was approved. Such liability was therefore not dependent upon the review which the applicant sought in relation to the delay in approving her application for her grant, and the review of such delay was therefore of academic importance in regard to the question of liability for payment of the sum claimed. That is not the case here. If the applicant in casu was to sue in the Magistrates’ Court,

she could be met by a defence that her grant had been terminated and, without the termination being reviewed and set aside (an issue in respect of which the Magistrate’s Court has no jurisdiction) that would be an absolute defence and her claim would undoubtedly fail. In order to succeed on her claim for payment, it is accordingly necessary for the applicant to approach this Court for an order reviewing and setting aside the suspension and cancellation of her grant.

It was also submitted on behalf of the respondent, on the strength of the provisions of s 7(2) of the Promotion of Administrative of Justice Act No. 3 of 2000 (“PAJA”) that this Court should decline to hear the matter because the applicant had failed to exhaust her internal remedies before bringing this review. This argument was founded on the submission that if the applicant was aggrieved by the decision to suspend her grant, s10 of the Social Assistance Act No 59 of 1992 provided her, within a period of 90 days after being notified of such decision, to appeal against it.

While s 7 of PAJA does provide that no court shall review an administrative act in terms of that act unless any internal remedy provided for in any other law has first been exhausted, that Act only commenced on 30 November 2000, after the respondent’s decision to suspend the applicant’s grant had been taken – and is not retrospective in operation (see: Bullock NO & Others v Provincial Government, North West Province & Another 2004 (5) SA 262 (SCA) at 267 and Premier, Western Cape v Faircape Property Developers (Pty )Ltd 2003 (6) SA 13 (SCA) at 29). But in any event, the respondent’s reliance upon s 10(1) of Act 59 of 1992 is, in my view, misplaced. That section provides as follows:

“10(1) If an applicant is aggrieved by a decision of the Director-General in the administration of this Act, such applicant may within 90 days after the date on which he or she was notified of the decision, appeal in writing against such decision to the Minister, who may confirm, vary or set aside that decision. (my emphasis).”

Importantly, s 1 of this Act draws a distinction between an applicant (who is defined as “any person who applies for social assistance in terms of this Act”) and a beneficiary (who is defined as “ any person to whom social assistance is rendered under this Act”). As the applicant had been awarded her grant in 1995 she was, therefore, not an applicant but a beneficiary as defined in s 1 and envisaged by s 10, at the time her grant was terminated. She therefore had no right of appeal under that section, and the respondent’s contention that she should have appealed before launching this review is without merit.

For the reasons I have set out above, it is clear that the applicant’s grant was illegally terminated in 1999. The respondent has not disputed that she would have been paid the amount R5900,00 between cessation of payment of her grant in 1999 and its recommencement in 2000, and was only paid R 1000,00 as so called “back pay” when it was reinstated. There accordingly seems to me to be no reason why an order should not issue in terms of prayers 1 or 2 of the notice of motion quoted early in this judgment.

In regard to the claim for interest, had the grant which the applicant was receiving not been unlawfully terminated, she would have received a monthly payment during the November 1999 to October 2000. The State can of course be held liable for mora interest and the failure on the part of the Department to pay and approve the social grant would lead to the respondent being in mora ex re – see Mbanga v MEC for Welfare, Eastern Cape & Another 2002 (1) SA 359 (SE) at 366 A–C and the cases there cited. I therefore have no difficulty in concluding that the respondent should pay interest on the sum of R4900,00 at the legal rate calculated from the date that each monthly amount should have been paid to the applicant.

The applicant has therefore made out a case for a review. While the references in prayers 3 and 4 of the notice of motion to the period 24 June 1996 to May 1997 and to an alleged failure to timeously consider and approve the applicant’s grant, were obviously included in error as I mentioned earlier, respondent’s counsel, quite correctly, had no objection to an order along the lines a draft prepared by Mrs Hartle (which I have altered somewhat) being issued in the event of the respondent’s contentions being rejected.

I therefore order as follows:

The administrative action of the respondent in suspending and then cancelling the payment of the applicant’s disability grant for the period November 1999 to October 2000 is hereby reviewed and set aside.

The respondent is directed to remedy the defect resulting from the aforementioned administrative action by paying to the applicant the sum of R5900,00 which would have been paid to her as a disability grant during the aforementioned period, less the sum of R1000,00 paid to her in October 2000, together with interest at the legal rate on each monthly amount that the applicant should have been paid, calculated from the date each payment should have been made to date of payment.

The respondent is to pay the applicant’s costs.

_____

L. E. LEACH

JUDGE OF THE HIGH COURT

SUMMARY

Disability grant – terminated without proper notice and without beneficiary being afforded a hearing – illegal termination set aside on review –beneficiary entitled to payment of amounts she would have received had grant not been terminated, together with interest thereon.

Section 10 of Social Assistance Act No 59 of 1992 not available to the applicant to appeal against termination of grant.

Contention that applicant should have sued in Magistrates’ Court rather than proceeding by way of review rejected.