Njongi v MEC, Department of Welfare, Eastern Cape

• Jurisdiction: South Africa
• Judge: Langa CJ, Moseneke DCJ, Madala J, Mpati AJ, Ngcobo J, Nkabinde J, Sachs J, Skweyiya J and Van Der Westhuizen J
• Judgment Date: 28 March 2008
• Citation: 2008 (4) SA 237 (CC)
• Docket Number: CCT 37/07
• Hearing Date: 06 November 2007
• Counsel: A Beyleveld (with B Hartle) for the applicant. GG Goosen SC (with OH Ronaasen and R Laher) for the respondent.
• Court: Constitutional Court

Yacoob J:

Introduction

G [1] This application for leave to appeal is concerned with the right to receive a disability grant within the context of the socio-economic rights embraced by our Constitution. In particular it concerns the right of grant receivers to lawful administrative action when social grants are cancelled, as well as whether the State can rely on extinctive prescription of its obligation in order to avoid paying these grants.

H [2] The specific question raised in the application for leave to appeal is whether prescription runs in favour of a provincial government against a person entitled to claim arrear disability grant payments during the period when an unlawful administrative decision that the grant should not be paid remains in existence and is not disavowed by the State. The I Eastern Cape Provincial Government (the provincial government), the effective respondent represented by the Member of the Executive Council for Welfare, claims that prescription can run against a person with disability entitled to payment of arrears in these circumstances. The South Eastern Cape High Court (the High Court) concluded that J prescription did not run so long as the administrative action that resulted

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in the termination of the disability grant remained. [1] But a full court of A the Eastern Cape High Court (the full court) on appeal by the provincial government concluded that it did. [2] Mrs Njongi, the applicant, having been refused leave to appeal by the Supreme Court of Appeal, seeks to challenge the correctness of the decision of the full court.

[3] A second, perhaps more important, dimension of the case emerged B during the hearing. It concerns whether, and the circumstances in which, the State can legitimately decide to avail itself of the defence of prescription. This question is significant because courts cannot invoke prescription of their own accord. They may decide whether a claim is prescribed only if the debtor (the State in this case) expressly and C properly raises it. If it is competent for the State to raise prescription as a defence the more specific question concerns the factors that the State must consider when deciding whether to deprive the disability pensioner of her right to receive disability grant arrears owed to her by pleading prescription. D

The facts

[4] The facts are relatively straight-forward. Mrs Njongi, the applicant, was in receipt of a disability grant from 1989 until November 1997 when the payment of the grant inexplicably ceased. The provincial departmental official consulted by the applicant gave no explanation for the E stoppage of her grant and simply asked her to re-apply. Regrettably Mrs Njongi was not the only victim compelled mercilessly to suffer the pain, misery and indignity of non-payment. There were literally tens of thousands of others.

[5] Mrs Njongi's re-application was successful in the sense that the F provincial government resumed payment of the grant during July 2000. At that time she was paid what was referred to as 'back-pay' in the sum of R1 100. During May 2004 she brought proceedings in the High Court for the setting aside of the administrative action terminating her disability grant. She consequentially claimed payment of the amount of G R15 200, which, according to her, was due as arrear payments for November 1997 to July 2000. She was paid a further sum of R9 400 after proceedings were instituted. As I have already said, the High Court rejected the contention of the provincial government that the debt had prescribed but the full court upheld the prescription argument and H non-suited the applicant.

[6] Two observations must be made at this early stage. One would have expected Mrs Njongi's application to have been finalised with the utmost urgency bearing in mind that Mrs Njongi was obviously a poor woman with little education. Moreover she had, by the time she re-applied, I

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A already been without a disability grant for more than a year. Far from it. The disability grant was approved only after 18 months. [3] Secondly the amount of back-pay was small. This payment must be evaluated against the background of the legal developments that had taken place while Mrs Njongi waited.

B [7] It will be convenient to set out the High Court order before describing this background:

1.

The administrative action of the respondent in stopping or suspending payment of the applicant's social grant during the period November 1997 to July 2000 is declared to be inconsistent with the C Constitution and invalid, and is set aside.

2.

The respondent is directed to reinstate the applicant's social grant during the period November 1997 to July 2000 by paying the amount of R5 800 to the applicant.

3.

The respondent is directed to pay interest on each monthly amount that the applicant should have been paid (making up the total of D R15 200) at the prescribed rate of 15,5% per annum calculated from the date each payment should have been made to the date of payment, the calculation of such interest to take into account the payment of R9 400 made on 10 March 2005.

4.

The respondent is directed to advise the applicant's attorneys in writing of the above payment when it is made.

5.

E The respondent is ordered to pay the applicant's costs.

6.

The applicant may in terms of rule 4(9) serve this order on the respondent at the offices of the State Attorney in Port Elizabeth.

The social and legal context

[8] It is necessary first to look broadly at the problem of the unlawful F termination of grants in the Eastern Cape, the attitude of the provincial government and the approach of the courts before the High Court decided Mrs Njongi's application. It is only in that context that the position taken by the State in Mrs Njongi's case can be evaluated properly.

G [9] I can best describe the surrounding circumstances and the extent and cause of this disaster by repeating what was said by our courts in two cases. The first, which may be referred to as the Ngxuza High Court judgment, [4] was concerned with an application by the Legal Resources Centre for leave to commence a class action in order to ensure that H people who had lost their grants in the way in which Mrs Njongi had lost hers received their grants again as soon as practicably possible. The High Court said:

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At the end of 1996 a meeting was held between the then A incumbent MEC for welfare in the Eastern Cape Province, representatives of the Grahamstown Black Sash Advice Office and representatives of the Legal Resources Centre (the LRC). In a memorandum the deficiencies in the procedure then routinely followed in the cancellation of welfare payments were pertinently drawn to the MEC's attention. The welfare department agreed to implement a number of measures to B improve the efficiency of the system. The office of the 'Pensioner's Friend' was created to provide quick and easy redress for welfare grievances.

Prior to 1994 six different administrations had been responsible for social grants in the province. Different Acts and regulations applied to C the different administrations. Legislative consolidation came in the form of the Social Assistance Act 59 of 1992 (the Act), which repealed the previous separate Acts. This was accompanied by the amalgamation of the previously fragmented databases into a unified national database known as the SOCPEN 5 system. The objective was to achieve amalgamation during the first quarter of 1996, but in the Eastern Cape D this was achieved only by the first quarter of 1997. The amalgamation process showed that the information on record for many of the beneficiaries was incomplete, that there was duplication of payments and that the eligibility of many beneficiaries for grants was suspect. The welfare department accordingly embarked on a process to verify and update the particulars of all beneficiaries. E

This was done by effectively requiring each beneficiary to re-apply for grants in accordance with prescribed formalities. This process has since been repeated on three occasions in respect of beneficiaries in the three categories of old age, disability and child support. The re-registration process was accompanied by the imposition of a moratorium on the processing of new applications and the processing of arrear payments to F welfare beneficiaries.

These measures resulted in increasing numbers of people reporting to advice offices, churches, social organisations and the LRC that their grants have been terminated. The LRC at first attempted to deal with these problems in co-operation and agreement with the welfare department. G In September 1997 a meeting was held with the then MEC, who gave a number of undertakings to redress the situation. An essential feature of the undertakings was the allocation of extra staff to deal with the backlog and the appointment of a senior staff member to liaise with advice offices and to communicate decisions taken by department officials. This task was similar to that of the by now defunct Pensioner's H Friend. This initiative failed because the officials were never appointed.

When attempted co-operation proved fruitless the LRC turned to litigation. During the first quarter of 1998 a number of successful individual applications were launched against the MEC, 43 in number. Most related to excessive delays in obtaining decisions on, and payment of, social grants. Three applications related to the review of cancelled I social grants. The litigation campaign was interrupted when the acting permanent secretary of the welfare department requested the regional director of the LRC in Grahamstown to attend a meeting in an attempt to resolve the remaining applications against the department. The meeting was held in April 1998. A minute of the meeting...