COSTS DE BONIS PROPRIIS AGAINST PUBLIC OFFICIALS

A string of court judgments seem to be setting a long overdue norm of holding State officials personally liable for costs of suit in certain matters in which they have acted negligently in a gross manner and with disregard to constitutional norms and standards. In matters where State officials have been involved in litigation and have lost such cases and subsequently costs have been awarded against them, it has been the taxpayer who has had to bear the burden of those costs. The tides, however, seem to be shifting.

This position took its inception in the Supreme Court of Appeal case of the GGB & Another v MEC for Economic Development [2013] ZASCA 67. This matter concerned an appeal by the Gauteng Gambling Board against the dismissal by the High Court of Gauteng, of an application to review and set aside the termination by the respondent’s predecessor, of the membership of all the members of the Board. On the evidence, it was the view of the court that the MEC had dissolved the Board for the ulterior purpose of pressurising it to act in a manner which she personally preferred. At paragraph 54 the court pointed out that the MEC had acted in flagrant disregard of constitutional norms. The court further stated that the cost order sought against the MEC (costs on an attorney client scale) was justified in the circumstances but unfortunately it would be the taxpayers who would ultimately have to bear these costs. Importantly, Navsa JA pointed out that “it is time for courts to seriously consider holding officials who behave in a high-handed manner personally liable for costs incurred”. The court in this case, however, could not order such an order as to costs as it had not been prayed for.

It would seem as though the courts heard the call of Navsa JA for the courts to hold officials accountable because a year later, the Gauteng Local Division of the High Court did exactly that in the case of Lushaba v MEC Health, Gauteng 2015(3) SA 616(GJ). In this case the court had made an order declaring the MEC for Health in Gauteng 100% negligent for damages of the Plaintiff arising out of the birth her child with disability and had ordered her to pay costs. The court also issued a rule nisi calling upon the MEC to show cause why she should not be held personally liable de bonis propriis for costs; alternatively, to identify the responsible officials. In considering a confirmation of the rule nisi, the court placed focus on the officials who had been involved in the decision as to whether or not to defend the action by the Plaintiff. As such, three individuals (an attorney in the employ of the State, a senior legal administrative officer of the Gauteng Department of Health and a medicolegal advisor of the Gauteng Department of Health) were identified as having dealt with this matter. Because the MEC was not personally involved in the decision making, the court was convinced that she was not to be held personally liable for the costs.

In dealing with the question of costs de bonis propriis against the officials the court as per Robinson AJ stated, at paragraph 68, that such costs are not easily awarded and are awarded in circumstances where there has been negligence in a serious degree. Robinson AJ went on to state further that it is only in exceptional circumstances that costs de bonis propriis should be awarded and not for every mistake made. The court found, however, that there is a limit as to what constitutes a mistake, and in that matter, it had been crossed. The line had been crossed in that the involved officials:

Had not considered the merits of the case as they were not in possession of all the necessary records,
Had paid no regard to the expert report of the Plaintiff,
Had failed to provide their medical expert with the relevant information,
Relied on their medical expert report which disclosed no defence,
Permitted litigation to continue in circumstances where no defence was pleaded, no defence was advanced at trial and they were unaware of any defence to negligence, and
Were reckless as to the facts of the matter in decision making.

As a result, the rule nisi was confirmed and the involved officials were ordered to pay de bonis propriis 50% of the costs jointly and severally with the Defendant on attorney and client scale.

As if the matter needed anymore clarity, the Constitutional Court also pronounced on the matter and finally made the position even more clear in the media reported constitutional court case of Black Sash Trust (Freedom Under Law Intervening) v Minister of Social Development and Others [2018] ZACC 36. In this case, Minister Bathabile Dlamini was, in her personal capacity, ordered to pay 20% of Black Sash Trust and Freedom Under Law in application, including the cost of two counsel.

In Black Sash Trust v Minister of Social Development [2017] ZACC 8 the issue of costs had been left open in that the Minister was called upon to show cause why on affidavit why she should not be joined in the proceedings in her personal capacity and why she should not be ordered to pay the costs of the application out of her own pocket. The Minister argued that to hold her personally liable for the costs of suit would constitute a breach of the separation of powers principle. She further submitted that the Court lacked the authority to hold a cabinet minister to account by ordering her to pay costs out of her own pocket. The Court found that the Minister’s argument on the separation of powers principle was without merit.in this regard, the Court reasoned that when courts make cost orders they do not make judgments on political accountability of public officials but do so in relation to how the rights of people are affected by the conduct of a public official who is not open, transparent and accountable and how that impacts on the responsibility to a court by those involved in the litigation.

The court went on to quote Black Sash Trust v Minister of Social Development [2017] ZACC 20 at para 9 where it was stated that “Within that constitutional context the tests of bad faith and gross negligence in connection with the litigation, applied on a case by case basis, remain well founded. These tests are also applicable when a public official’s conduct of his or her duties, or the conduct of litigation, may give rise to a cost order.”

It would seem that 2017 would be a decisive year on the question of personal cost orders against public officials as in the case of Westwood Insurance Brokers (PTY) LTD v eThekwini Municipality and Others (8221/16) [2017] ZAKZDHC 15,judgment delivered one month after the Black Sash decision, the High Court of KwaZulu Natal would make such an order. In this case, the Applicant brought an application to interdict the awarding of the tender for underwriting insurance services for water leaks for individual dwelling units. The court later found that the decision to award this tender to Eighth Respondent was irrational. The Court was then faced with the issue of cost, more specifically, who was to bear the costs of litigation. The court found that the award of the tender was riddled with such negligence, ignorance, incompetence and corruption by individual members that a personal cost order was indeed warranted and as such, awarded personal cost orders against certain individuals including members of the Bid Evaluation Committee, Bid Adjudication Committee, contract administrators and others.

The position in our law regarding the role of the courts in holding state officials accountable has now been set. The position has of course not been without its fair share of criticism. The most noticeable of which being the argument that imposing personal liability on officials may be a deterrent to them performing their jobs for the fear of cost orders being granted against them personally. this argument, however, quickly loses it potency once one reads the judgments referred to above. In Lushaba the court made it clear the that cost orders de bonis proprris against officials are only to be awarded in exceptional circumstances and not simply for any and every mistake made by an official. Although the test for whether or not an official should have a cost order de bonis proprris against them is not intention but rather that of negligence of a serious degree, this can not be said to have the effect of deterring officials from performing their jobs. As stated in Black Sash above, each case is to be assessed on its merits and the test is to apply on a case by case basis.

It is submitted that the effect of these judgments will be to caution state officials when acting as such to act reasonably and within the confines of the norms and standards of the Constitution. As it was stated by the Constitutional court in Tswelopele Non-Profit Organisation v City of Tshwane Municipality 2007(6) SA 511 at para 17, “though the Constitution speaks through its norms and principles, it acts through the relief granted under it. And if the Constitution is to be more than merely rhetoric, cases such as this demand an effective remedy.”

Contributor: SESETHU MAGABA (Candidate Attorney) assisted by Agrippa Mpungose (Director) (Public Law) (PMB Office)

E-mail: sesethum@tmj.co.za

Tel: 033 341 9100