THE SUPREME COURT OF APPEAL OF SOUTH AFRICA

JUDGMENT

Case no: 578/09

MEMBER OF THE EXECUTIVE COUNCIL FOR
Appellant
SOCIAL DEVELOPMENT

and

EUNICE MDODISA

Respondent

______________________________________________________________

Neutral citation:
MEC for Social Development v Mdodisa (578/09) [2010]
ZASCA 115 (22 September 2010)

CORAM:

Navsa, Ponnan, Shongwe and Leach JJA and K Pillay

AJA

HEARD:

9 September 2010
DELIVERED:
22 September 2010

SUMMARY:
Summary
termination
of
disability
grant
─
procedurally unfair ─ orders of court below not precluding the Member
of the Executive Council responsible for payment of social grants from
terminating a disability grant for valid reason.

______________________________________________________________

______________________________________________________________
ORDER
______________________________________________________________

On appeal from:
Eastern Cape High Court (Mthatha) (Miller J sitting as
court of first instance).
The appeal is dismissed with costs including the costs of two counsel.
______________________________________________________________
JUDGMENT
______________________________________________________________

NAVSA JA (PONNAN, SHONGWE AND LEACH JJA AND K PILLAY AJA
concurring)

[1] This appeal, with the leave of the court below, is a tale of mal-
administration and wasteful litigation. The appellant is the Member of the
Executive Council, Department of Social Development of the Eastern Cape,
who has been cited in these proceedings in his capacity as the provincial
head of the department that is responsible for the payment of social grants in
that province. The respondent is Ms Eunice Mdodisa, a quinqagenarian, who
resides at Ncambedlana farm, Mthatha, in the Eastern Province. I shall for
convenience refer to the appellant as the MEC and to the respondent as M.

[2] M has been treated since 2001 for what she alleges to be chronic
asthma. She claimed that this illness has prevented her from being gainfully
employed and that its disabling effect persists to this day. In 2002 M applied
for a disability grant in terms of s 3 of the then applicable Social Assistance
Act 59 of 1992 (the 1992 Act). She was awarded a temporary grant which
lapsed on 31 October 2002.

[3] In 2003 a subsequent application for a disability grant received no
official response. In 2005 she applied anew and a disability grant was
apparently approved. She insisted that she received no documentation which
described the nature and duration of the grant but was paid when she called
at a local pay point in December 2005 to enquire about her application. In a

supplementary affidavit she stated that she was made to believe that this
grant was permanent, subject only to annual review. M received monthly
payments from December 2005 until April 2007. In May 2007 payments were
stopped abruptly. Upon presenting herself at the pay point during that month
she was told by officials there that there was no money for her. They handed
her a slip which, inter alia, stated the following: ‘CLIENT INFORMATION NOT
IN PAY FILE’.

[4] In consequence, M instructed an attorney to launch an application in
the Mthatha High Court for an order declaring the action of the MEC, in
terminating her grant, to be unlawful and setting it aside. M had also sought
payment of the arrears due to her from the time that payments ceased and a
further order that the respondent continue paying her the monthly grant.

[5] M contended that the action of the MEC in terminating her grant,
without notice to her and without providing her with an opportunity of being
heard, was in breach of her right to fair administrative procedure in terms of
s 3(2) of the Promotion of Administrative Justice Act 3 of 2000 (PAJA).1

[6] The deponent to the affidavit filed in support of the MEC’s opposition to
the application is Ms Mandisa Mpunzi, who described herself as the
appellant’s senior manager in the Eastern Cape, operating out of an office in
East London. The first point taken by Ms Mpunzi was that M’s claim for
payment of arrears, being a ‘debt’ within the meaning of s 3 of the Institution
of Legal Proceedings Against Certain Organs of State Act 40 of 2002, had to
be preceded by a written notice in terms of the provisions of that Act and that
her failure to give such notice precluded her from proceeding against the
MEC. A person who intends to institute legal proceedings against an organ of

1 The relevant parts of s 3(2)(b) read:
‘In order to give effect to the right to procedurally fair administrative action, an administrator . .
. must give a person referred to in subsection (1)─
(i)
adequate notice of the nature and purpose of the proposed administrative action;
(ii)
a reasonable opportunity to make representations;
(iii)
a clear statement of the administrative action;
(iv)
adequate notice of any right of review or internal appeal, where applicable; and
(v)
adequate notice of the right to request reasons in terms of section 5.’

state for the recovery of a ‘debt’ is obliged to give notice of such intended
proceedings within a stipulated time limit.2 Thankfully, that point was not
persisted in.

[7] In respect of the merits of M’s complaint that she was the victim of
administrative action that was procedurally unfair, Ms Mpunzi’s affidavit is
singularly unenlightening, contradictory and confusing. The narrative in the
paragraphs that follow is my best attempt at making sense of a garbled and
non-sequential account of events.

[8] Ms Mpunzi took the view that the termination of M’s disability grant
was reasonable, procedurally fair and lawful. She sketched the following
background. The very first grant awarded to M, in 2002, was temporary and
was terminated on 31 October of that year. Insofar as the termination of the
presently relevant grant is concerned she stated that it had been intended as
a temporary grant of 12 month, duration to commence in November 2004 and
conclude in October 2005.

[9] The disability grant was in the amount of R740 per month. According to
Ms Mpunzi the monthly amounts remained uncollected for a year. A total of
R8 880 was thus due to M for that 12 month period. This amount was
collected by M in December 2005. Notwithstanding Ms Mpunzi’s protestations
that this was a temporary grant for a year, a further amount of R740 was paid
to M in December 2005, in addition to the hitherto uncollected amounts. It was
not disputed that payments continued from December 2005 until April 2007
and that payment of the disability grant suddenly stopped in May 2007. Ms
Mpunzi’s explanation for the termination of the grant is that the payments that
had been made beyond the 12 month period had been made ‘erroneously’.
The basis for the error is not provided. Nor are we told when or how the
department had first come to realise that an error had been made.

2 See ss 1 and 3 of that Act.

[10] According to Ms Mpunzi, when it was realised on behalf of the MEC
that M had received payments ‘erroneously’, a letter was written to her in
December 2006, informing her of this fact. Yet bafflingly, the letter informed M
that payment would cease in March 2007. That letter was allegedly sent by
registered post. No proof of receipt by M was provided. In any event, payment
continued beyond March 2007. M received her last payment in April 2007.

[11] To confuse matters even further, Ms Mpunzi, in support of her
contention that M always knew that the grant she received from 2005 was
temporary, alleged that on 4 October 2005 a letter had been handed to M at
her local pay point informing her that her application for a disability grant had
been approved with effect from 10 November 2004. A copy of the letter
allegedly despatched to M indicates that the first payment was due in
November 2005. The letter indicated that M’s disability is of a temporary
nature that would only last for 12 months. There was no affidavit by the official
who allegedly handed the letter to M confirming that fact, nor was any proof
provided of receipt by her.

[12] As if that was not confusing enough, Ms Mpunzi alleged that a letter
had been sent to M advising her that her application for a disability grant,
made in June 2005, had been rejected. In this regard, a copy of an undated
letter was attached to Ms Mpunzi’s affidavit. The reason given in the letter for
the rejection of the application is as follows:
‘Asthma and hypertension can be well controlled on regular medication, causing little, if any
permanent functional impairment.’
It is instructive that Ms Mpunzi does not say when or how this letter was
dispatched. Once again no proof of receipt was provided.

[13] Incredibly, yet another letter, dated 24 August 2005, was alleged by
Ms Mpunzi to have been sent to M, informing her that her application for a
disability grant was unsuccessful. That letter states that a medical
assessment indicated that M did not qualify for a grant. This letter and the
letter referred to in the preceding paragraph contain a postal address for M.

Similarly, no proof of dispatch or receipt of this letter was provided by Ms
Mpunzi.

[14] Following on this remarkable story of administrative mayhem, the
deponent on behalf of the respondent, even more remarkably, stated the
following:
‘The applicant ought to be grateful . . . that respondent has not asked her to repay the money
that was not due to her.’

[15] For completeness it is necessary to record that when M applied for her
disability grant in 2005, the Social Assistance Act 59 of 1992 was the
prevailing regulating statute, but that it has subsequently been repealed.
Section 3(a) of that Act provided that any person shall be entitled to an
appropriate social grant if she satisfies the Director-General that she is
disabled. The Social Assistance Act 13 of 2004 was assented to on 5 June
2004 with 1 April 2006 being the date of commencement. It repealed the
earlier Act. Section 33(2) of the latter Act provides that any notice issued, any
grant awarded or any moneys paid, under the earlier Act, is deemed to have
been issued, made or paid under its corresponding provisions. The statutory
change has no substantive effect on the present case.

[16] The court below (Miller J) held that M’s belief that the grant was
permanent was well-founded in that she had received 29 monthly payments.
Miller J correctly took into account the MEC’s failure to provide proof of receipt
by M of the letter allegedly informing her in October 2005 that the grant was a
temporary one. He rightly held against the MEC that there was no explanation
why this letter would have been sent one year after the grant had allegedly
been approved. The court below cannot be faulted for questioning why
payments commenced in December 2005, which was after the date when
payment was to have terminated, namely, October 2005.

[17] It was initially contended on behalf of the MEC, that since a temporary
disability grant lapses by effluxion of time, a recipient like M cannot insist that
fair administrative procedure be followed before it expires or even thereafter.

Regulation 24(1)(c) of the Regulations promulgated under the 1992 Act
provides that a social grant, which includes a disability grant, lapses when the
period of temporary disability has lapsed. Regulation 2(3), in effect, provides
that a temporary grant will continue for a continuous period of six months or
for a continuous period of not more than 12 months. Regulation 25(1)
provides that the Director-General shall, if he or she approves an application
for a social grant, inform the applicant in writing of such approval and the date
on which approval was granted. Such letter should also, if applicable, inform
the applicant that the grant is of a temporary nature and also when it will
lapse. The letter should inform the applicant of the right to reapply after the
lapsing and of the right to appeal.

[18] The court below said the following concerning temporary grants:
‘A temporary grant lapses by operation of law as it is subject to a resolutive condition. Such
lapsing is therefore not brought about by an administrative action and is therefore not subject
to review. However, the decision to make a grant a temporary grant is administrative action
and once that decision was made the applicant then had the right to receive notification of the
decision and to make representations through an appeal procedure. She was denied these
rights.’
In this regard the court relied on Mpofu v MEC Department of Welfare and
Population Studies, Gauteng & another WLD 2848/99 (unreported) and on an
article by N de Villiers entitled ‘Social Grants and the Promotion of
Administrative Justice Act’ (2002 18 SAJHR 338). The court below concluded
that the MEC was not entitled to evoke the automatic lapsing provisions of
Regulation 24 referred to above and declared the MEC’s decision to terminate
the grant to be invalid and of no force and effect. The court below ordered the
MEC to pay M’s costs. It made further orders the relevance of which is dealt
with below.

[19] In my view, the reasoning of the court below in relation to temporary
grants, referred to in the preceding paragraph, is not contentious but is not
entirely relevant. It is clear that one cannot confidently deduce from what was
stated by Ms Mpunzi that any of the actions contemplated in s 3(2)(b) of PAJA
to give effect to procedurally fair administrative action were taken by anyone
in the MEC’s department, either in relation to the initial decision concerning

the nature and duration of the grant or in respect of its termination. On the
contrary, one is constrained to accept M’s assertion, as the court below did,
that she received no communication from the department indicating the nature
and duration of the grant and that she was made to believe that the grant was
a permanent one subject only to annual statutory review. It is equally clear
that there was no communication about its termination nor was an opportunity
provided to M to make representations before the grant was terminated.

[20] Having regard to what is set out in the preceding paragraph and the
generally chaotic manner in which the disability grant in question was
administered, counsel for the MEC properly conceded that the court below
correctly declared the decision to terminate the grant to be invalid and of no
force and effect. In the light of that concession we enquired from counsel why
the MEC persisted in the appeal. Counsel submitted that the MEC was
concerned about the effect of the further orders of the court below. It was
contended that those orders could be construed as a permanent prohibition
against any termination of the disability grant. It was submitted that the MEC
was justifiably concerned about whether M’s asthma was such as to have a
permanently disabling effect and might be minded to take steps to terminate
the grant lawfully. It was submitted that the further orders precluded such
action. This is a startling submission as scrutiny of the orders in question will
reveal.

[21] The further orders of the court below are as follows:
‘2.
The respondent is ordered to re-instate the applicant’s disability grant within a period
of three weeks from the date of this order, such re-instatement to be with effect from the date
of the termination of payments of the applicant’s disability grant, that is 31 April 2007.
3.
It is declared that applicant is entitled to payment of all arrears owing under her
disability grant from 01 May 2007 to date.
4.
The respondent is ordered to pay the applicant all unpaid moneys owed to her as a
result of the unlawful termination of the payments of her disability grant, together with interest
thereon at the legal rate.’

[22] If the court below had issued only the declaration of invalidity the result
would ineluctably be what is set out in the orders referred to in the preceding

paragraph. I am unable to see why they would militate against a termination of
the disability grant on the basis of a legally sustainable reason. If, for
example, M’s asthma is shown to be treatable so that there is no functional
impairment and the MEC employs appropriate procedures I can see no
reason why the orders set out in the preceding paragraphs would be a bar.
But there really could have been no valid objection to those orders. They were
consequential upon and ancilliary to the declaration of invalidity. Once it was
found that the termination was invalid, it followed that M was entitled to have
her grant reinstated with retrospective effect to the date of the unlawful
termination. Those orders which flow quite logically from the primary relief, as
I have sought to show, do no more than put those aspects beyond dispute.
They may well have been superfluous but in issuing them Miller J wisely put
paid to any further litigation.

[23] The department for which the MEC is responsible has behaved
peculiarly, both in relation to the manner in which the disability grant was dealt
with and in the litigation that followed. The present appeal was as
unnecessary and unmeritorious as the preceding litigation. Both, it must be
added, at huge cost to the South African taxpayer, with no prospect, as the
MEC’s counsel conceded, of ever recovering any of those costs from a lay
litigant who was asserting her right to fair administrative action.

[24] For the reasons set out above the following order is made:
The appeal is dismissed with costs including the costs of two counsel.

_________________
M S NAVSA
JUDGE OF APPEAL

APPEARANCES:

For Appellant:
V S Notshe SC

N R Mtshabe

Instructed by

S Z Jojo Attorneys Mthatha

State Attorney Bloemfontein

For Respondent:
S M Mbenenge SC

A M da Silva

Instructed by

Voyi-Nyobole Attorneys Mthatha

Bokwa Attorneys Bloemfontein

THE SUPREME COURT OF APPEAL
REPUBLIC OF SOUTH AFRICA

MEDIA SUMMARY – JUDGMENT DELIVERED IN THE SUPREME COURT OF APPEAL

From:
The Registrar, Supreme Court of Appeal
Date:
22 September 2010
Status:
Immediate
Please note that the media summary is intended for the benefit of the
media and does not form part of the judgment of the Supreme Court of
Appeal

On 22 September 2010 the Supreme Court of Appeal handed down judgment in
Member of the Executive Council for Social Development v Eunice Mdodisa
dismissing an appeal by the Member of the Executive Council, Department of Social
Development of the Eastern Cape (the MEC), against a decision of the Mthatha High
Court in terms of which he was ordered to reinstate the disability grant of Ms Eunice
Mdodisa, quinqagenarian, who resides at Ncamedlana farm, Mthatha, in the Eastern
Province.

It was contended on behalf of the MEC that the grant had been a temporary one
which had expired by the effluxion of time. Ms Mdodisa contended that she had
been brought under the impression that it was a permanent grant subject only to
annual review. She had approached the Mthatha High Court because the grant had
been terminated without reason and notice to her. It was clear that Ms Mdodisa had
never been notified that the grant was temporary. It had in fact been paid for 29
months, a period of time way beyond the maximum duration of a temporary grant.

The answering affidavit on behalf of the MEC was garbled and non-sequential. The
court described the manner in which the grant was administered as ‘administrative

mayhem’. It recorded that because of this counsel for the MEC was constrained to
concede that the court below was correct in declaring the sudden termination of the
grant unlawful. Counsel for the MEC was questioned by the court about why the
MEC persisted in the appeal. He replied that the MEC was concerned that the
consequential orders, in terms of which the Mthatha High Court directed the MEC to
reinstate the grant and to pay Ms Mdodisa the arrears owing to her, were such as to
prohibit any lawful termination in the future based on the MEC’s view that the
asthma that Ms Mdodisa suffered from was not such as to cause functional
impairment. This court rejected this clearly unsustainable submission and noted that
the consequential orders complained of followed ineluctably from the order declaring
the termination unlawful and that if there was a legally sustainable basis for
terminating the grant the MEC was not precluded from doing so.

This court described the appeal as ‘a tale of mal-administration and wasteful
litigation’. It noted that the department for which the MEC was responsible behaved
peculiarly, both in relation to the manner in which the disability grant was dealt with
and in the litigation that followed. The appeal was as unnecessary and unmeritorious
as the preceding litigation. Both were at huge cost to the South African taxpayer,
with no prospect, as the MEC’s counsel conceded, of ever recovering any of those
costs from a lay litigant who was asserting her right to fair administrative action. The
appeal was consequently dismissed and the MEC was ordered to pay Ms Mdodisa’s
costs including the costs of two counsel.