The Constitutional Court has ruled that former social development minister, Bathabile Dlamini, was not negligent nor did she act in bad faith by bringing in an application for the extension of Cash Paymaster Services contract in February.
Instead, the court is holding former acting CEO Pearl Bhengu and the South African Social Services Agency (Sassa) will have to bear the cost of the court application in their official capacity.
The court is still to rule on whether Dlamini should pay for court costs from the first request for an extension of the CPS contract last year at the height of the grants payment crisis.
Last year March Sassa approached the court requesting for an extension on the CPS contract and the agency said they would be ready to pay grants without the company. But in February Sassa could still not pay grants without CPS and ran back to the court.
In February the court did not give a cost order when Sassa, with Bhengu at the helm, asked for another six month extension. The court said it would rule at a later stage whether Bhengu and Dlamini should be personally held liable for the court costs.
During that period the Constitutional Court was still awaiting findings of a commission of inquiry to determine if Dlamini should be held responsible for the grant crisis.
Dlamini was moved to the department of women in February after close to a decade at the department of social development. Her tenure as minister of social development — which included overseeing Sassa — saw the social security agency brought to its knees.
Last year, the Constitutional Court was forced to extend CPS’s invalid contract because Sassa had no other plan to pay grants. The court ruled it would have to establish a panel of experts to assist it in overseeing the handover of grant payments from CPS to another payment system.
The court also ordered that a commission of inquiry should look into the culpability of Dlamini in the grant payment crisis. Dlamini was accused of failing to ensure that Sassa could pay grants after the CPS contract had come to an end, leaving millions of vulnerable grant beneficiaries fearing that they would be destitute.
She was further accused of orchestrating the crisis by meddling in the administration of the agency, creating parallel structures to report only to her and essentially thwarting plans for Sassa to move the payment system to the South African Post Office.
During her testimony at the inquiry, Dlamini argued that holding her personally liable for legal costs for cases regarding the social grants crisis would not promote the advancement of constitutional justice.
Justice Leona Theron said that when Sassa requested an extension for CPS they failed to mention a contingency plan but said they had one days later.
“It is disconcerting that Sassa was not candid with this court,” said Theron.
Theron also noted that Sassa forced the court’s hand by extending the contract while they had other options to pay grants besides looking to CPS.
- In 2014 the Constitutional Court found that the contract that Sassa had awarded to Net1 Technologies’, CPS, in 2012 was invalid.
- Dlamini for years was meant to put a system together to ensure that CPS would no longer pay grants on an invalid contract.
- Instead, Dlamini wasted more than R40-million on so-called work streams which were meant to assist the agency in planning for a future without CPS. The work streams found that CPS was the best option.
- At least three senior managers resigned and were fired by Dlamini for questioning her for dragging her feet in finding a solution to the grant payments without CPS
There is no date set yet for a ruling on whether Dlamini should be held liable for the court costs of the first request for an extension of CPS’s contract last year.
But Dlamini is still to hear if she will have to pay about R2-million that was spent on bodyguards for her and her children. In May, Sassa told Parliament it would recoup R 2 008 086 from Dlamini who had used the agency’s funds to get security services for her children in the 2014/15 financial year.
Read the full judgment here: