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No carte blanche

July 2014

On 10 June 2014 the Constitutional Court handed down judgment in the matter of the Minister of Defence and Military Veterans v Motau & Others.

The facts of the case are as follows:

In August 2013 the Minister of Defence and Military Veterans terminated General Motau and Ms Mokoena's membership of the board of Armscor.  Motau and Mokoena had served as the chairperson and deputy chairperson respectively.  The termination of their services was undertaken in terms of section 8(c) of the Armscor Act, which permits the Minister to remove board members on good cause shown. 

In justifying the decision, the Minister citied various procurement projects where she averred that the failure of the board to carry out its mandate had led to these projects not being implemented.
These included a project to acquire high altitude parachutes for the special forces of the South African National Defence Force, as well as a project to acquire camping equipment for the SANDF.

Motau and Mokoena successfully challenged their dismissal in the Gauteng North High Court, which ordered their reinstatement.  The High Court held that the Minister's decision was administrative action and thus subject to the Promotion of Administrative Justice Act (PAJA). 

According to the North Gauteng High Court the decision was reviewable under the act as the Minister had made an error of law, had taken the decision in a procedurally unfair manner, and had acted for an ulterior purpose.  It also held that the Minister's decision to terminate Mokoena's services was irrational and ordered the reinstatement of both Motau and Mokoena. 

The Minister launched an appeal to the Constitutional Court in order to have the decision overturned.  The majority of the Constitutional Court judges concluded that the Minister's decision amounted to executive, rather than administrative action.  This was in part because the Minister's power to terminate the services of board members is closely related to the formulation of policy and was an extension of a policy making power.  The decision could not, therefore, be reviewed under PAJA.

The court also found that the Minister had shown the necessary good cause to terminate the services of the two respondents and that the decision was rational.  Under their leadership, Armscor and its board had failed to fulfil effectively its statutory mandate.  The majority of the court, however, held that in making her decision, the Minister was required to comply with the process for the dismissal of directors as set out in the Company's Act. Reference was had by the court to the Act, as Armscor is a company, with the government as the sole shareholder.  It held that the Minister’s failure to adhere to the process for the dismissal of directors rendered her decision unlawful.    It also held that it could not be just an equitable in the circumstances to set aside the Minister's decision as the terms of office of the two had lapsed. 

The minority judgement by Justice Jafta concluded that the Minister's decision amounted to administrative action and that PAJA applied.  It held that the decision had been taken in a procedurally unfair manner, because Motau and Mokena's membership was terminated without a hearing.  The minority concluded that the decision was unlawful and said that it would have set it aside.  

The court’s decision has once again emphasised the distinction between a reviewable decision falling under the ambit of PAJA and the non-permeability of a decision taken while exercising executive power by public officials.  It seems that the court was more persuaded to take the decision it did because of the failure of the board to carry out its statutory mandate, it does not give public officials carte-blanche to dismiss as they wish.  Whether they execute an executive power or an administrative power will depend on the facts of each case. 

As is often said: "In law, context is everything.”

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