Masetlha v President of the Republic of South Africa and Another (CCT 01/07) [2007] ZACC 20 (3 October 2007)

Case CCT 01/07

[2007] ZACC 20

BILLY LESEDI MASETLHA Applicant

versus

THE PRESIDENT OF THE REPUBLIC

OF SOUTH AFRICA First Respondent

MANALA ELIAS MANZINI Second Respondent

Heard on : 10 May 2007

Decided on : 3 October 2007

JUDGMENT

MOSENEKE DCJ:

Introduction

This case raises intricate questions on the constitutional validity of two decisions of the President of the Republic. He first suspended and later terminated Mr Masetlha’s employment as head and Director-General of the National Intelligence Agency (the Agency). The President did so by unilaterally amending his term of office so that it expired within two days of the notice and just over 21 months earlier than the original term. The termination of employment was accompanied by an offer to pay Mr Masetlha his full monthly salary, allowances and benefits for the unexpired period and other moneys that may be due to an incumbent at the expiry of a term of office.

Mr Masetlha has impugned the decisions as constitutionally impermissible. He has declined the financial pay-out and presses on with the claim to be re-instated to his post.

These issues reach us by way of an application for leave to appeal directly to this Court against the decision of Du Plessis J sitting in the Pretoria High Court. That Court dismissed two review applications brought by Mr Masetlha against the President on the grounds that his dismissal from employment constituted lawful executive action and that the dispute over the suspension had been rendered moot by the dismissal.

In this Court, Mr Masetlha seeks a declarator that the President has no power to suspend him from his post or to alter unilaterally his terms of employment. In the alternative, he asks for an order setting aside the two decisions as irregular. It must be said that Mr Masetlha does not concede that the decision of the President to change the terms of his appointment in effect amounts to his dismissal as head of the Agency. Nonetheless, at its core, his claim is for specific performance. It is a claim to be re-instated as Director-General and head of the Agency.

Mr Masetlha asks, in the alternative, that, should this Court not find in his favour on the disputes that are not capable of resolution on motion papers, the factual averments underpinning the disputes should be referred to oral evidence. Three of the four grounds relate to the suspension decision and one to the decision to alter his term of office or to dismiss him. All the grounds are directed at the state of mind of the President when he made the impugned decisions and in particular: (a) whether he or the Minister for Intelligence Services (Minister) made the decision to suspend; (b) if the President did, whether in so doing he properly applied his mind; and (c) whether both decisions were actuated, not by a lawful reason but by an ulterior purpose.

The President is the first respondent and opposes the relief the applicant contends for. Mr Manzini has been joined as the second respondent. This follows from his subsequent appointment by the President as the acting Director-General of the Agency. He abides the decision of this Court.

The facts

Mr Masetlha became Director-General and head of the Agency on 14 December 2004 through a presidential appointment. The letter of appointment informs that the President has appointed him to the post in terms of the provisions of section 3(3)(a) of the Intelligence Services Act^¹ (ISA) read with section 3B(1)(a) of the Public Service Act^² (PSA) for a period of three years.

I deal with these legislative provisions later.^³ Let it suffice for now to say that ISA is the legislation that regulates the establishment, administration, organisation and control of three intelligence agencies, one of which is the Agency. Section 3(3)(a) of ISA provides that “[t]he President must appoint a Director-General for each of the Intelligence Services.” On the other hand, section 3B of the PSA regulates, amongst other matters in the public service, the “[h]andling of appointment and other career incidents of heads of department”. The head of the Agency is a head of department under section 3B(1)(a) of the PSA.

On 31 August 2005 the so-called “Macozoma affair” broke into the public domain. Mr Macozoma is a businessman. At issue were the circumstances under which he came to be placed under surveillance by agents of the Agency. It is common cause that the surveillance was a clumsy blunder by field operatives of the Agency. The applicant insists that, as head of the Agency, he had not authorised and was not aware of the surveillance until the field operatives were exposed and Mr Macozoma had lodged a complaint with the Minister. The complaint reached the Minister on the 5 September 2005. The Minister had not been informed before then that Mr Macozoma was under surveillance.

The Minister requested Mr Masetlha to account formally on the surveillance operation. Mr Masetlha reported in writing that the surveillance did occur but that it was done without his knowledge and in error, attributable to Mr Njenje, the deputy Director-General of the Agency, and certain field operatives under Mr Njenje’s command. The Minister proclaimed himself dissatisfied with explanations given to him by Mr Masetlha and instructed the Inspector-General of Intelligence (Inspector-General)^⁴ to investigate the circumstances that gave rise to the surveillance.

On 17 October 2005, the Inspector-General prepared a written report in which he informed the Minister that the surveillance of Mr Macozoma was unauthorised and unlawful and that it had not been undertaken for the reasons given by the Agency operatives but for another purpose. The report notes that Mr Masetlha had deliberately sought to mislead the Inspector-General’s investigation team and the Minister in this regard. In addition, the Inspector-General recommended that disciplinary steps be taken against the applicant for failing to exercise the required degree of management and oversight on the surveillance operation. On the same day, the Minister convened a meeting attended by the Inspector-General and the applicant. At the meeting, the Minister read out the outcome of the investigation by and recommendations of the Inspector-General and he advised that he had made certain recommendations to the President for his consideration.

For the sake of completeness, I record that after receiving the report of the Inspector-General, the Minister suspended and thereafter dismissed Mr Njenje and another senior member of the Agency, Mr Mhlanga, for their reported role in the “Macozoma affair”. Following his suspension, Mr Njenje threatened to institute legal proceedings.

Within two days of the disclosure of the Inspector-General’s report and meeting with the Minister, on 19 October 2005, the applicant was summoned to a meeting with the President and the Director-General within the Presidency, Reverend Chikane. At that meeting, the President urged the applicant to persuade Mr Njenje to stall his intended court case until the President had met with him. Mr Masetlha, in turn, raised his concerns regarding the suspension of two of his subordinates. A further meeting, which would include the Minister and the Inspector-General, was arranged for the following day at the official residence of the President. Mr Masetlha explains that he left the meeting of 19 October 2005 with the distinct impression that the President wanted to reach an amicable arrangement with Mr Njenje and Mr Mhlanga. According to him, the President appeared to understand the concerns raised that the investigation by the Inspector-General had been flawed.

The following day, on 20 October 2005, Mr Masetlha attended the planned follow-up meeting at the official residence of the President. Also present at this meeting were the Minister and the Inspector-General. The President said that it was no longer necessary to proceed with matters raised the previous day. He urged the applicant to listen to the Minister, who had something to say. The Minister read out a letter dated 20 October 2005 and addressed to the applicant. It bore the signature of the Minister and informed Mr Masetlha that he was suspended from his position as the Director-General of the Agency. At no stage during the meeting did the Minister or the President suggest that the decision to suspend Mr Masetlha had been taken by the President.

Three weeks later, on 12 November 2005, the applicant launched an urgent application in the High Court against the Minister and the President, seeking to review and set aside the suspension as unlawful.^⁵ However, three days later, on 15 November 2005, the President recorded, as his own decision, the suspension of the applicant with effect from 20 October 2005. This he did by way of a Presidential Minute. The Constitution requires that a decision by the President, if it is to have legal consequences, must be in writing.^⁶ The Presidential Minute was therefore an indispensable step to give legal significance to the suspension as a decision of the President.

The applicant, however, does not accept that it is the President who made the suspension decision. He says that the Presidential Minute of 15 November 2005, which purported to record the decision of the President taken 35 days earlier, on 20 October 2005, is a belated effort by the President to legalise the Minister’s unauthorised suspension decision in order to save him political embarrassment.

On 10 March 2006, the applicant initiated a fresh application directed at setting aside the suspension at the President’s instance. The founding papers carried attacks on the integrity of the President. He also accused the President of lying. On 20 March 2006 and before filing an answering affidavit to the second suspension application, the President amended the applicant’s term of office so that it expired on 22 March 2006. This meant that the term of office was to expire within two days of the notice and 21 months and nine days earlier than the original term.

In making the decision, the President asserted that the relationship of trust between him, as head of state and of the national executive, and Mr Masetlha, as head of the Agency, had disintegrated irreparably. The President said that the Minister of Public Service and Administration (Minister Fraser-Moleketi) would communicate with the applicant regarding benefits that would be due to him and conditions attached to the expiry of his term of office. The letter also made the point that the applicant would be remunerated in terms of section 37(2)(d) of the PSA^⁷ for the remainder of his term of office before its amendment. The section simply provides for the granting of “any special benefit” to a head of department before or at the expiry of a term of office or any extended term or at a time of retirement or discharge from the public office.

In a letter dated 22 March 2006, Minister Fraser-Moleketi informed the applicant that he would be paid his full monthly remuneration for the remaining 21 months and nine days as well as specified benefits due at the expiry of the term of office. The financial tender also contained specified conditions related to the expiry of his term of office.

Consistent with his stance that the President had not lawfully terminated or amended his term of office, Mr Masetlha declined the cumulative salary, allowances, benefits and conditions tendered by Minister Fraser-Moleketi. Although he did not dispute the appropriateness of the quantum of the offer, he repaid to the government the amount that Minister Fraser-Moleketi had caused to be deposited into his banking account.

On 27 March 2005, the applicant initiated another application in which he sought a declaratory order that the President had no power to amend his term of office unilaterally and that he remains the head of the Agency. In the alternative, the applicant asked for an order re-instating him as Director-General of the Agency. The suspension and the amendment applications were consolidated and heard together.

In the High Court

The High Court dismissed both review applications. It found that section 3(3)(a) of ISA, the legislative provision which provides for the appointment of the head of intelligence services, simply echoes section 209(2) of the Constitution, which is the original source of the power to appoint the head of the Agency and that, although the power to appoint is provided for in legislation, it remained located in the Constitution itself. It is perhaps convenient to recite now the provision of section 209(2) of the Constitution:

“The President as head of the national executive must appoint a woman or a man as head of each intelligence service established in terms of subsection (1), and must either assume political responsibility for the control and direction of any of those services, or designate a member of Cabinet to assume that responsibility.”

The High Court considered the crucial inquiry to be whether the dismissal of the applicant is an exercise of executive power, particularly because the Constitution and applicable legislative provisions are silent on the dismissal of a head of an intelligence service. The Court found that the power to appoint includes the power to dismiss. The power to dismiss is implicit in section 209(2) of the Constitution and is an executive power in terms of section 85(2)(e) of the Constitution. The Court reasoned that the authority to dismiss is therefore not susceptible to judicial review under the provisions of the Promotion of Administrative Justice Act (PAJA).^⁸ However, it observed, this did not mean that the President’s decision is beyond the reach of judicial review on any basis. The decision of the President to dismiss must conform to the principle of legality. Therefore, the power to dismiss may not be exercised in bad faith, arbitrarily or irrationally.

On the facts, the Court found that, in order for the President to fulfil his role as head of the national executive, he must subjectively trust the head of a national intelligence service. Therefore the irreparable break-down of the relationship of trust between the President and the head of the Agency constituted a lawful and rational basis for the dismissal. Having concluded that the dismissal was constitutionally justifiable, the Court found that the disputes on the suspension decision had become academic and, on that basis, dismissed the application challenging the validity of the suspension.

The issues

There are five main issues that we are called upon to decide. First, whether leave to appeal should be granted. The second issue is whether the presidential decision to amend the applicant’s term of office or to dismiss him is constitutionally permissible. The third issue raises the validity of the decision to suspend the applicant from his post. The fourth issue relates to the appropriate remedy, if any. Lastly, there is the question whether any aspects of this case should, at the request of the applicant, be referred to oral evidence.

The High Court found that if the appeal against the amendment or dismissal decision were to fail, the suspension decision would become moot. I think that this is correct. It is plain that if an order for the re-instatement of the applicant is not granted, the determination of the suspension dispute would have no practical value. I can find nothing that would, in that event, impel us to decide the validity of the suspension decision. We have not been shown nor am I aware of any public interest or any factor in the interests of justice that would nonetheless require us to adjudicate the decision to suspend the applicant from his post when the resultant court order will have no practical value or effect as far as the parties are concerned.^⁹ In addition, the issues are essentially fact-dependant and their determination would have little, if any, precedential value. For that reason I am constrained to decide first the issues related to the amendment or dismissal decision. Before I do so, I have to consider whether leave to appeal against the decision of the High Court should be granted.

Should leave to appeal be granted?

It is by now trite that whether leave to appeal should be granted involves a determination of whether the issues raised are constitutional matters and whether it is in the interests of justice to adjudicate upon the dispute raised. It was contended somewhat half-heartedly on behalf of the President that leave to appeal should be refused because the application is, in essence, a claim for re-instatement, which does not raise any constitutional matter of broader significance and does not seek to test the constitutional validity of any legislative provision. There is no merit in this submission.

We are here confronted with an enquiry into the constitutional and legislative source and reach of the power of the President to appoint or dismiss a state functionary, in this case being the head of the Agency. The enquiry will compel us to probe whether the power to amend a term of employment or to dismiss is located within section 209(2) of the Constitution, read with section 3(3)(a) of ISA and section 12(2) of the PSA or within all of these provisions read together, and whether the provisions are capable of being construed harmoniously. Clearly, the task at hand calls for a construction of the constitutional provisions and legislation that give effect to them.^¹⁰ Whatever the origin or contours of the public power in issue, we are also called upon to decide whether the authority is executive power or administrative action reviewable under PAJA. It seems to me beyond contestation that important constitutional issues fall to be resolved in this application.

On whether it is in the interests of justice to hear this matter and in particular whether the applicant should be permitted to appeal directly to this Court, it must first be said that his term of office was due to expire on 31 December 2007. Thus, there is urgency and merit in having the suspension and dismissal disputes determined before that date. If the applicant were to appeal to the full bench of the provincial division or to the Supreme Court of Appeal, a possible further appeal to this Court would be frustrated because, on expiry of his term of office, his claim for re-instatement would become academic well before the appeal found its way to this Court.

As I have intimated earlier, the constitutional matters that arise do not involve the development of the common law but rather turn on the direct application of the Constitution. In these particular circumstances, it cannot be said that the benefit that may be derived from a judgment by the Supreme Court of Appeal outweighs the disadvantage of rendering any further appeal to this Court moot. I am of the clear view that it is in the interests of justice that leave to appeal directly to this Court should be granted.

Constitutional and legislative setting

The operative constitutional and legislative scheme looms large in the resolution of this matter. It is thus expedient to render a brief account of its main features before deciding each of the issues I have to confront.

A collective pursuit of national security is integral to the primary constitutional object of establishing a constitutional state based on democratic values, social justice and fundamental human rights. Chapter 11 of the Constitution recognises the importance of national security and to that end contains principles and other provisions that govern national security in the Republic. The first of these principles is cast in evocative language and bears repetition:

“National security must reflect the resolve of South Africans, as individuals and as a nation, to live as equals, to live in peace and harmony, to be free from fear and want and to seek a better life.”^¹¹

The security services of the Republic consist of a single defence force; a single police service and any intelligence services established in terms of the Constitution and must be structured and regulated by national legislation.^¹² Predictably, one of the important principles prescribed is that national security must be pursued in compliance with the law^¹³ and security services must act and teach and require their members to act in accordance with the Constitution and the law.^¹⁴ Besides the rule of law imperative, this constitutional injunction is also inspired by and deeply rooted in a repudiation of our past in which security forces were, for the most part, law unto themselves; they terrorised opponents of the government of the day with impunity and often in flagrant disregard of the law.

Whilst located within Chapter 11 of the Constitution, the provisions of section 209(1) are narrowly tailored to establish and regulate intelligence services other than an intelligence division of the defence force or the police service, which may be established only by the President and only in terms of national legislation.^¹⁵ Section 209(2) provides for the President’s power to appoint a head of each intelligence service. He must either assume political responsibility for the control and direction of any of those services or designate a member of the cabinet to assume that responsibility.^¹⁶ It is noteworthy that section 209 is silent on the power of the President to suspend or dismiss a head of an intelligence service.

The national legislation envisaged in section 209(1) of the Constitution is ISA. It came into operation during February 2003 but has transitional provisions that preserve the link and continuity with past intelligence services.^¹⁷ ISA establishes and regulates three intelligence services, one of which is the Agency. Section 3 provides for the continued existence of intelligence services established under previous legislation.^¹⁸ Section 3(3)(a) of ISA provides that the President must appoint a Director-General for each of the intelligence services, including the Agency. Section 3(3)(b) of ISA makes it clear that the Director-General is the head and accounting officer of the intelligence service. However, ISA makes no express provision for the suspension or alteration of the terms of employment or dismissal of the head of an intelligence service, including the Agency.

This position may be contrasted with the powers conferred on the Minister by the same legislation. Section 4 of ISA requires the Minister to create, in consultation with the President, the posts of deputy Director-General within the Agency. The Minister also bears the responsibility to create posts of assistant Director-General, all directorates, divisions and other lower post structures. Section 37(1) of ISA gives the Minister the power to make regulations, which include a power to regulate suspension and dismissal from the Agency. Regulations^¹⁹ (referred to by the applicant as the secret Regulations) appear to govern the suspension of members of the Agency. It is however clear from the provisions of ISA^²⁰ that the Minister may regulate the suspension and dismissal of the deputy Director-General and members of the Agency of a lower rank but has no similar power in relation to the Director-General and head of the Agency.

The head of the Agency is part of the public service for the Republic. The basic values and principles governing public administration are in turn prescribed by Chapter 10 of the Constitution. Within the public administration there is a public service. Section 197 of the Constitution stipulates that the public service must be structured in terms of national legislation and its terms and conditions of employment must also be regulated by national legislation, which in this case is the PSA.^²¹

The terms of employment of the head of an intelligence service, including the Agency, are regulated by both the PSA and ISA. Regrettably, the interplay between the provisions of these two statutes in this particular context is complex and less than clear. The starting point for understanding this interplay should be section 2(3) of the PSA which provides:

“Where persons employed in the . . . Agency . . . are not excluded from the provisions of this Act, those provisions shall apply only in so far as they are not contrary to the laws governing their service, and those provisions shall not be construed as derogating from the powers or duties conferred or imposed upon the . . . Agency . . . ”

It follows that the provisions of the PSA apply to the conditions of service of a head and members of the Agency when they are not at odds with the provisions of ISA. There are a few such relevant provisions in the PSA that apply to the head of the Agency and are not contrary to the provisions of ISA. These are section 3B(1)(a) and sections 12(2), (3) and (4). Section 3B provides generally for the appointment and “other career incidents” of heads of national departments. The relevant portion reads:

“(1) Notwithstanding anything to the contrary contained in this Act, the appointment and other career incidents of the heads of departments shall be dealt with by, in the case of–

(a) a head of a national department or organisational component, the President . . .”

Although the definition of “head of department” in paragraph 1 read with Schedule 1 of the PSA makes it clear that the conditions of service of the head of department of the Agency are also regulated under the PSA, section 3B(1)(a) does not grant specific power to appoint the head of the Agency. The source of the power to appoint heads of intelligence agencies is located in section 209(2) of the Constitution and that competence is echoed in section 3(3)(a) of ISA.

Section 12(2) of the PSA does not seek to regulate the power to appoint but the manner or process of appointment. Section 12(2)(a) stipulates that a head of department shall be appointed “in the prescribed manner, on the prescribed conditions and in terms of a prescribed contract” between the relevant executing authority for a period of five years or such shorter period as the executing authority may approve. In terms of section 1 of the Act, “prescribed” means prescribed by or under the PSA. The Public Service Regulations^²² prescribe that contracts that are to be concluded between an executing authority and a head of department in terms of section 12(2) shall be as set out in the Regulations.^²³ It may include matters referred to in subsections 12(4)(a) to (c) of the PSA. In terms of the Regulations, the executing authority shall provide the Minister of Public Service and Administration with a copy of the contract shortly after its conclusion.

In terms of section 12(4) of the PSA, the contract of employment of a head of department:

“. . . may include any term and condition agreed upon between the relevant executing authority and the person concerned as to—

. . . .

(c) the grounds upon, and the procedures according to which, the services of the head of department may be terminated before the expiry of his or her term of office . . . .” (Emphasis added.)

It appears plain that, in the case of the head of the Agency, the President is the relevant executing authority.^²⁴ In other words, the manner in which the term of office of the head of the Agency may be amended or indeed terminated before its expiry may form part of the service agreement between the executing authority and the head of the Agency.

It is, however, significant that outside this possible contractual process of termination, the PSA does not make provision for dismissal of the Director-General of the Agency. Section 17(2) of the PSA provides for discharge of officers but expressly excludes members of the Agency. Simply put, the PSA seems to make no provision for the termination of the service contract or dismissal of a head of an intelligence service, including the Agency. Another point of difference is that a discharge of an officer or employee under the PSA is subject to the applicable provisions of the Labour Relations Act.^²⁵ On the other hand, section 2(b) of the Labour Relations Act^²⁶ and section 3(1)(a) of the Basic Conditions of Employment Act^²⁷ expressly exclude members of the Agency from the scope of their application.

The decision to amend conditions of service or to dismiss

In this Court, the applicant put up a rather spirited criticism of the decision of the High Court on two main grounds, each with several strands. The first is that the decision to dismiss or to alter was not taken under section 209(2) of the Constitution. The applicant contends that the President purported to take the decision in terms of section 12(2) of the PSA which does not confer express authority on the President or on anyone else to do so. The kernel of the argument is that the dismissal was done without lawful authority. However, if section 12(2) of the PSA confers implied authority to amend or dismiss, then its exercise is the implementation of legislation and thus falls to be reviewed and set aside under PAJA as procedurally unfair.

The second main contention is that section 209(2) of the Constitution, even if read together with section 3(3)(a) of ISA, does not vest in the President the power to reduce or end the period of office of the head of the Agency. To this main argument, there are several strands.

First, is that the invocation of section 209(2) of the Constitution, as a provision which confers the requisite power on the President, is an afterthought and a belated and impermissible attempt to re-characterise his decision after the event. Second, these provisions do not confer on the President the implied power to dismiss. Third, even if the power to dismiss is to be implied, it must be sourced, not from the Constitution but from section 3(3)(a) of ISA, which vests in the President the power to appoint the head of the Agency. Since the exercise of such power would be the implementation of legislation, it would amount to administrative action for the purposes of PAJA. Fourth, if any implied power to dismiss is conferred by section 209(2) of the Constitution, it is, in any event, subject to the procedural fairness requirement. And, lastly, the manner in which the power to dismiss under section 209 was exercised is inconsistent with the principle of legality. I now turn to look at these arguments closely.

Did the President rely on sections 12(2) and (4) of the PSA to amend the applicant’s term of office?

It is correct, as the applicant contends, that on his own version, the President purported to act in terms of section 12(2) read with section 12(4) of the PSA to amend the applicant’s term of office in a manner that brought it to an end. The President chose this manner of termination on the advice of Minister Fraser-Moleketi because it would have the most humane financial impact for the applicant and his family. Minister Fraser-Moleketi explains on affidavit that she urged the President to amend the applicant’s term of office. This is because a head of department, who is not dismissed but rather whose term of office expires, has greater entitlements such as payment of his full remuneration for the whole of the remaining period of his term of office; added pensionable service; continued medical assistance; and resettlement benefits according to the Regulations on conditions of service made under ISA.^²⁸

Counsel for the President sought to persuade us that despite these facts, the President did not take the decision to amend on the strength of section 12 of the PSA because: (a) the President’s letter of amendment does not refer to section 12 of the PSA; (b) it is the affidavit of Minister Fraser-Moleketi which refers to section 12 and not that of the President; (c) the Minister concerned made it clear that when the President sought her advice, he had already made the decision to relieve the applicant of his duties; and (d) the President could not have relied on section 12 of the PSA for discharging the applicant from his duties because section 17 of the same legislation specifically excludes the discharge of members of the Agency.

These contentions advanced on behalf of the President bear no merit. First, at a factual level, the President, in his affidavit, states that he has read the affidavit of Minister Fraser-Moleketi and confirms the correctness of its contents.^²⁹ In this way, the President embraced the option not to dismiss the applicant but to amend his term of office under section 12(2) for reasons of financial compassion advanced by Minister Fraser-Moleketi. Another important consideration is that the import of the text of the President’s letter dated 20 March 2006, addressed to the applicant, is not open to doubt. In it the President states:

“. . . I have decided to amend your current term of office as head of the said Agency to expire on 22 March 2006. You will be remunerated, in terms of section 37(2)(d) of the Public Service Act, 1994, for the remainder of your term of office before its amendment.”

Second, the President’s letter seeks to amend the term of appointment and does so in deliberate terms in order to achieve a compassionate financial outcome for the applicant. This it achieves by making the term of office expire prematurely. The truth of the matter is that, in substance, the amendment brings to an end the appointment and is accompanied by an offer to place the applicant in the same financial position he would have been in had his contract of service run its full course. To that extent, the applicant is right that this was the outcome that the President sought to reach through the mechanics of an alteration of the period of office under sections 12(2) and (4) of the PSA.

Third, the argument relating to section 17 of the PSA does not help the cause advanced on behalf of the President because the provision does not apply to a head of a department. In any event, the President did not rely on section 17 but on section 37(2)(d) of the PSA, which is applicable to any special service benefit which may be granted to a head of department before or at the expiry of a term contemplated in section 12(1) of the PSA.

In my view, it is beyond question that the President was advised and he accepted as appropriate the form of dismissal under the provisions of sections 12(2) and (4) read with section 37(2)(d) of the PSA by amending the applicant’s term of office so that it would expire some two days later on 22 March 2006.

It is however beyond doubt that, although the decision is couched in the language of an alteration of conditions of service, it is in effect a decision to bring to an end the applicant’s term of office or to dismiss him. The blatant effect of the amendment of the term of office is to extinguish it. This is particularly true because this fatal amendment is accompanied by a financial offer to place the applicant in the same financial position he would have been in but for the termination of his appointment. This does not however change the fact that the President sought to use the provisions of the PSA and, in particular, sections 12(2) and (4) read with section 37(2)(d), as a manner of terminating the term of office. The sharp question is whether these provisions of the PSA alone or together with other constitutional and legislative provisions authorise the dismissal of the head of the Agency. It is to that question that I now turn.

Do sections 12(2) and (4) of the PSA authorise the President to amend the applicant’s terms of service?

The high-water mark of the applicant’s case is that the President acted without lawful authority because sections 12(2) and (4) do not confer on him the power to amend the term of office of the head of a department so as to reduce the term. He may do so, not unilaterally and not by the exercise of an unspecified statutory power, but only, the applicant argues, consensually in terms of a contract of service. In other words, absent the consent of the head of department, whatever the circumstances, the President cannot shorten or terminate his or her term of service.

This argument compels us to look closely at the provisions of sections 12(2) and (4) of the PSA in order to ascertain whether its primary purpose is to be a source of the power to appoint or dismiss a head of an intelligence service such as the Agency. These subsections state the following:

“(2) As from the date of commencement of the Public Service Laws Amendment Act, 1997—

(a) a person shall be appointed in the office of head of department in the prescribed manner, on the prescribed conditions and in terms of the prescribed contract between the relevant executing authority and such a person for a period of five years from the date of his or her appointment, or such shorter period as that executing authority may approve;

(b) the term of office as head of department of such a person may be extended at the expiry thereof in accordance with the terms and conditions of the contract or a further contract, as the case may be, concluded between that executing authority and such a person for a period or successive periods of not less than twelve months and not more than five years, as that executing authority may approve;

(c) the term of office as head of department of any person referred to in subsection (1), or any extended term thereof, may be extended at the expiry of the term of office or extended term, as the case may be, in the prescribed manner for a period of not less than twelve months and not more than five years, as the relevant executing authority may approve, provided the said person concludes the prescribed contract with that executing authority, whereupon any further extension of his or her term of office shall, subject to the provisions of paragraph (b), take place in accordance with the terms and conditions of that contract or a further contract, as the case may be.

. . . .

(4) Notwithstanding the provisions of subsection (2), a contract contemplated in that subsection may include any term and condition agreed upon between the relevant executing authority and the person concerned as to—

(a) any particular duties of the head of department;

(b) the specific performance criteria for evaluating the performance of the head of department;

(c) the grounds upon, and the procedures according to which, the services of the head of department may be terminated before the expiry of his or her term of office or extended term of office, as the case may be; and

(d) any other matter which may be prescribed.” (Emphasis added.)

By now we know that the President appointed the applicant by a letter of appointment that cites the power to appoint the head of the Agency under section 3B(1) of the PSA and section 3(3)(a) of ISA and not under section 12 of the PSA. The period of appointment is for a period less than the five years envisaged in section 12(2) of the PSA. This is permitted by the section that provides that the authority to agree to a shorter period is that of the President as the executing authority. We also know that no written or prescribed contract, as envisioned in section 12(2)(a) of the PSA, was concluded between the executing authority and the applicant as head of department. There is no explanation of this omission on the papers.

It is so that the President and Mr Masetlha did not agree on “any grounds upon, and the procedures according to which the services of the head of department may be terminated before the expiry of his or her term of office . . . .”^³⁰ Also, it is clear that the provisions of section 12(4) of the PSA are permissive and not peremptory. Additional terms may be concluded on particular tasks and performance criteria of the head of department. Similarly, the termination procedure, before the expiry of the term of service, may be agreed upon as an additional provision to the prescribed contract under section 12(2).

The fact of the matter is that no prescribed contract was entered into and no agreement concluded, as envisioned in section 12(4)(c) of the PSA, on the procedure for ending the term of office before its expiry. It is, however, common cause that there was a contract of employment for three years, between the executing authority and the applicant, initiated by the letter of appointment. In fact, the very cause of action of the applicant rests on the existence of that service contract initiated by the President’s letter of appointment. From this, the applicant urges us to construe the provisions of sections 12(2) and 12(4)(c) to mean that, whatever the circumstances, the President, has no power, express or implicit, to terminate the service contract of the head of the Agency, except with his or her consent. On this argument, the employment relationship is a matter regulated by principles of the law of contract. The subtext of this contention is that section 12(2) is silent about the power to amend or dismiss and because section 12(4)(c), in particular, provides for the possibility of an agreed expiry procedure, a unilateral ending of the service contract is impermissible.

In my view, this contention of the applicant is unsound on several grounds. It omits to make a necessary distinction between the substantive power to appoint and dismiss a head of an intelligence service, on the one hand, and the resultant contract of employment which is regulated by the provisions of section 12 of the PSA. The operative constitutional and legislative framework does make that distinction. The power, if any, to appoint and dismiss a head of an intelligence service is located in section 209(2) of the Constitution, read with section 3(3) of ISA and section 3B(1)(a) of the PSA. However, these provisions in themselves do not regulate how the appointment to and termination of office should happen. The manner and form of appointment that the legislature has chosen is a contract of service which, in the case of the head of the Agency, is regulated by sections 12(2) and (4) of the PSA.

In my view, the applicant seeks to put the provisions of sections 12(2) to (4) of the PSA to a use not intended for. He is searching for a power to appoint or dismiss in these provisions. But their purpose is much more limited and is principally focussed on the terms and conditions of employment. It seems to me that the purpose of section 12(2) is not to create or confer on the executing authority the power to appoint or to end a term of office or to dismiss its incumbent. Its purpose is to elect or prescribe, at a general level, a manner through which a head of department shall be appointed or dismissed. They are suited to regulating terms and conditions of an existing contract of service, which is open to several options.

For instance, whilst section 12(2) of the PSA requires that the head of department shall be appointed in the prescribed manner, on the prescribed conditions and in terms of the prescribed contract, it is permissive of which provisions may or may not be included in a service contract. The contract may be the prescribed one or a customised one. But the prescribed form of contract too has several open spaces to be completed and permits variations and adaptation. For instance, the term may be anything between 12 months and five years. The term may be extended at expiry and may be further extended at the end of the extended period, if the executing authority permits it. Section 12(4) in particular anticipates a number of optional provisions on the job specification, specific performance criteria and grounds and procedure of termination before the expiry of the term of office, all of which may be included in a service contract. Section 12(4)(d) also makes it clear that the contract may provide for “any other matter which may be prescribed.”

But even more importantly, nothing in the wording of section 12 of the PSA compels the parties to agree on any terms of the service agreement beyond the essential elements thereof, as it is the case between the President and Mr Masetlha. It seems to me therefore that the section provides for a contractual framework for the manner of appointment of the head of department under section 12(2) and also implicitly for the termination of his or her term of office, even in the absence of a specific and agreed procedure contemplated in section 12(4)(c) of the PSA.

In other words, if the alteration or termination of the service contract is not regulated by an express contractual provision, it would be regulated by implied contractual terms.^³¹ This means that neither contracting party may change the agreement unilaterally. Once a person is appointed, a contract of employment arises as envisaged and regulated by section 12 of the PSA. Here, no written contract was entered into but nevertheless the effect of the appointment of Mr Masetlha is that a contract of employment for a fixed period of three years arose between him and the government. Given that no terms were agreed upon for termination of the employment and that the Labour Relations Act^³² does not apply to this class of employment contract, the ordinary rules of contract of employment will apply to termination. The contract of employment is for a fixed period of three years. Therefore, it may not be terminated as a matter of contract before the expiry of the period unless there is material breach of the contract by the employee.

As I have said earlier, the power to appoint and the power to dismiss, if any, is not located in section 12(2) of the PSA. Section 12 provides only for the manner and form of the service contract once the appointment or dismissal has occurred. It is therefore unsound to search for the power of the President to end a term of office of the head of the Agency in section 12(2). The power and indeed obligation of the President to appoint the head of an intelligence service is not sourced from a private law relationship. It is a public law power. In other words, this dispute between the parties is not merely about a breach or wrongful termination of an employment contract. It is rather about whether public authority has been exercised in a constitutionally valid manner. That much is quite apparent from the very claim and relief that the applicant is pursuing.

The public power at stake derives from Chapter 11 of the Constitution and the operative legislation, which are intended to advance national security through the control and establishment of intelligence services. In particular, the provisions of section 209 of the Constitution regulate a specific element of the security forces, being intelligence services. Section 209(2) enjoins the President to appoint a woman or a man as head of an intelligence service and section 210 requires that national legislation must regulate the object, powers and functions of the intelligence service. As we have shown earlier, that national legislation is ISA. Again its provisions echo the original source of the power in section 209(2) of the Constitution when it provides that the President must appoint a Director-General for the Agency.

Thus, the procedural and permissive requirements of sections 12(2) and (4) of the PSA must not be read alone, but in conjunction with the constitutional and operative legislative scheme that I have described at length.^³³ It seems to me plain that the President may enter into a service contract with the head of the Agency only if he or she has the power to appoint. The source of that power is not section 12(2) of the PSA. It is section 209(2) of the Constitution, which is mirrored in the specific provision dealing with the appointment of the head of an intelligence service in section 3(3) of ISA. Of course, section 3B of the PSA also gives the general power of appointment of a head of department to the President.

Does the power to appoint under section 209(2) of the Constitution and section 3(3)(a) of ISA imply a power to dismiss?

The next question is whether the power to appoint implies the power to dismiss or to amend the terms of office so as to end it. The applicant sought to persuade us that, even if the power to appoint exists in section 209(2) of the Constitution or section 3(3)(a) of ISA, it does not incorporate a power to dismiss because the Constitution has omitted the power deliberately, as it is unnecessary. The Constitution requires that the establishment of an intelligence service may be done only through national legislation. Therefore, the appointment and dismissal of heads of security services were to be regulated by national legislation and not by implying provisions in the Constitution. The power to dismiss is only found in the context of a contract, envisaged in section 12(4)(c) of the PSA, or may be implied in section 3(3)(a) of ISA. And because the power to dismiss can be found only in a statute, its exercise is administrative action and is therefore susceptible to judicial scrutiny under PAJA.

This argument has a number of pitfalls. Firstly, I have already held that the power to appoint or dismiss is not to be found in the context of sections 12(2) and 12(4)(c) of the PSA. Secondly, if the Constitution does not confer implicit power on the President to dismiss, what would be the source of such power in national legislation such as section 3(3)(a) of ISA? Why would it be competent to imply the power in legislation but not in the empowering constitutional provision? I cannot accept that the power to dismiss has been deliberately omitted from the Constitution or that it is unnecessary.

The power to dismiss is necessary in order to exercise the power to appoint. The High Court is right that the power to dismiss a head of the Agency is a necessary power without which the pursuit of national security through intelligence services would fail. Without the competence to dismiss, the President would not be able to remove the head of the Agency without his or her consent before the end of the term of office, whatever the circumstances might be. That would indeed lead to an absurdity and severely undermine the constitutional pursuit of the security of this country and its people. That is why the power to dismiss is an essential corollary of the power to appoint and the power to dismiss must be read into section 209(2) of the Constitution. There is no doubt that the power to appoint under section 209(2) of the Constitution and the power under ISA implies a power to dismiss.

Of course, section 3(3)(a) of ISA is the legislation contemplated in section 209(1) of the Constitution. It is couched in terms similar to section 209(2) and it too is silent on the power to dismiss. However, that power must be present because it is implied in and flows from the empowering constitutional provision. But that does not alter or destroy, as the applicant will have us accept, the constitutional character of the power to dismiss a head of the Agency. I cannot find any valid reason why, as the applicant suggests, the power to dismiss may be inferred from the provisions of section 3(3) of ISA but not from those of section 209(2) of the Constitution.

It follows that the power that the respondent utilised to dismiss the applicant is located in section 209(2) of the Constitution read with section 3(3)(a) of ISA. The applicant pressed on us the argument that the respondent should not be permitted to rely on section 209(2) because it is an afterthought. The applicant argues that the President dismissed him under section 12(2) of the PSA and now seeks to rely belatedly on section 209(2) of the Constitution. He argues that allowing the President to change the nature of the decision he took would violate the principle of certainty, a subset of the rule of law, which does not permit an organ of state to communicate that it is doing one thing to the detriment of another person when, in actual fact, it is doing something else.^³⁴

The difficulty which confronts this argument is that section 12(2) of the PSA is not a source of the power to dismiss but regulates contractual terms in employment agreements of certain members of the public service. It is clear from the facts that both the President and Minister Fraser-Moleketi were concerned about the manner in which the term of office should be terminated and not with whether the President had the power to dismiss. I can find no suggestion from the facts that they ever disavowed reliance on section 209(2) of the Constitution as the original source of the power to appoint or end his term of office. If anything, express reference to section 209(2), as the source of the President’s power to appoint the applicant, appears at least four times in the answering affidavits in the termination application. This was long before the matter was ripe for hearing. Therefore, the complaint of the applicant that he would have formulated his case differently, if he was told that the President relied and continues to rely on section 209(2), is indeed misplaced.

I have no doubt that, in all the circumstances, the President had the requisite power under section 209(2) of the Constitution read with section 3(3)(a) of ISA and was entitled to take a decision to bring to an end the appointment of Mr Masetlha as Director-General of the Agency. However, as will become apparent later, the power to employ and to dismiss the Director-General of the Agency should not be conflated with the contractual implications of terminating his fixed term employment contract prematurely.

Is the decision of the President reviewable on any basis?

In sum, I have found that section 209(2) of the Constitution does confer on the President an implied power to dismiss a head of the Agency and that the power includes the power to amend the term of office of the incumbent of the Agency in such a manner as to end the term. I have also found that section 3(3)(a) of ISA contains a similar implied power to dismiss. I do not agree with the argument that the power to dismiss the head of the Agency must be sought only in national legislation and that that legislation is section 12 of the PSA. I have instead found that the purpose of section 12 of the PSA is not to confer the power to appoint but to regulate the manner of appointment and of dismissal. I have consequently rejected the argument that the only manner in which the services of the head of the Agency may be terminated is by his or her consent, whatever the cause of the dismissal.

The question then is whether the power to appoint and the correlative power to dismiss a head of the Agency as conferred by section 209(2) of the Constitution is subject to a requirement of procedural fairness. The unfairness that the applicant complains of lies in the President not affording him an opportunity to be heard before the impending dismissal. The applicant argues that the dismissal falls to be reviewed and set aside on the grounds of procedural unfairness. The gist of this contention is that nothing in section 209(2) expressly excludes the common law right on the part of the head of the Agency to be heard before dismissal.^³⁵ For this proposition the applicant relied on the seminal passage to be found in Administrator, Transvaal, and Others v Traub and Others:^³⁶

“The maxim [audi alteram partem] expresses a principle of natural justice which is part of our law. The classic formulations of the principle state that, when a statute empowers a public official or body to give a decision prejudicially affecting an individual in his liberty or property or existing rights, the latter has a right to be heard before the decision is taken (or in some instances thereafter . . .), unless the statute expressly or by implication indicates the contrary.”^³⁷

It is so that the audi principle or the right to be heard, which is derived from tenets of natural justice, is part of the common law. It is inspired by the notion that people should be afforded a chance to participate in the decision that will affect them and more importantly an opportunity to influence the result of the decision. It was recognised in Zenzile^³⁸ that the power to dismiss must ordinarily be constrained by the requirement of procedural fairness, which incorporates the right to be heard ahead of an adverse decision. In my view however, the special legal relationship that obtains between the President as head of the national executive, on the one hand, and the Director-General of an intelligence agency, on the other, is clearly distinguishable from the considerations relied upon in Zenzile. One important distinguishing feature is that the power to dismiss is an executive function that derives from the Constitution and national legislation.

Section 85(2)(e) of the Constitution, in particular, stipulates that the President exercises executive authority by performing “any other executive function provided for in the Constitution or in national legislation.” Furthermore, it is important to understand that section 1 of PAJA expressly excludes, from the purview of “administrative action”, executive powers or functions of the President referred to in section 85(2)(e). In other words, presidential decisions which constitute the exercise of executive powers and functions under section 85(2)(e) are clearly not susceptible to administrative review under the tenets of PAJA even if they otherwise constitute administrative action.^³⁹

It is clear that the Constitution and the legislative scheme give the President a special power to appoint and that it will be only reviewable on narrow grounds and constitutes executive action and not administrative action. The power to dismiss – being a corollary of the power to appoint – is similarly executive action that does not constitute administrative action, particularly in this special category of appointments. It would not be appropriate to constrain executive power to requirements of procedural fairness, which is a cardinal feature in reviewing administrative action. These powers to appoint and to dismiss are conferred specially upon the President for the effective business of government and, in this particular case, for the effective pursuit of national security. In Premier, Mpumalanga,^⁴⁰ this Court has had occasion to express itself on whether to impose a requirement of procedural fairness in the following terms:

“In determining what constitutes procedural fairness in a given case, a court should be slow to impose obligations upon government which will inhibit its ability to make and implement policy effectively (a principle well recognised in our common law and that of other countries). As a young democracy facing immense challenges of transformation, we cannot deny the importance of the need to ensure the ability of the Executive to act efficiently and promptly.”^⁴¹

This does not, however, mean that there are no constitutional constraints on the exercise of executive authority. The authority conferred must be exercised lawfully, rationally and in a manner consistent with the Constitution.^⁴² Procedural fairness is not a requirement. The authority in section 85(2)(e) of the Constitution is conferred in order to provide room for the President to fulfil executive functions and should not be constrained any more than through the principle of legality and rationality.

It is appropriate to recall what this Court had occasion to observe in SARFU:

“[T]he exercise of the powers must not infringe any provision of the Bill of Rights; the exercise of the powers is also clearly constrained by the principle of legality and, as is implicit in the Constitution, the President must act in good faith and must not misconstrue the powers. These are significant constraints upon the exercise of the President’s power.”^⁴³ (Footnotes omitted.)

Although within the context of ministerial regulation-making power, Ngcobo J restates the rationality test in the following terms:

“The exercise of public power must therefore comply with the Constitution, which is the supreme law, and the doctrine of legality, which is part of that law. The doctrine of legality, which is an incident of the rule of law, is one of the constitutional controls through which the exercise of public power is regulated by the Constitution. It entails that both the Legislature and the Executive ‘are constrained by the principle that they may exercise no power and perform no function beyond that conferred upon them by law’. In this sense the Constitution entrenches the principle of legality and provides the foundation for the control of public power.

. . .

The exercise of such power must be rationally related to the purpose for which the power was given.

. . .

As long as the regulation of the practice, viewed objectively, is rationally related to the legitimate government purpose, a court cannot interfere simply because it disagrees with it or considers the legislation to be inappropriate.”^⁴⁴ (Footnotes omitted.)

It is therefore clear that the exercise of the power to dismiss by the President is constrained by the principle of legality, which is implicit in our constitutional ordering. Firstly, the President must act within the law and in a manner consistent with the Constitution. He or she therefore must not misconstrue the power conferred. Secondly, the decision must be rationally related to the purpose for which the power was conferred. If not, the exercise of the power would, in effect, be arbitrary and at odds with the rule of law.

Reverting to the present case, I agree with the High Court that ordinarily a dismissal of a head of an intelligence service on the basis of irretrievable loss of trust on the part of his principal, in this case the President, would not be arbitrary or irrational. Of course, the facts in a particular case may demonstrate irrationality, arbitrariness or bad faith on the part of the person who makes the dismissal decision. In this case, nothing suggests that the President acted arbitrarily or without sufficient reason.

Even if procedural justice was a requirement for the exercise of the power to dismiss, it seems to me that, on the facts, Mr Masetlha has had ample occasion to respond to the allegations that were made against him in relation to the “Macozoma affair”. It will be remembered that after the unauthorised surveillance was exposed, he had had at least two meetings with the Minister, at which he was called upon to provide an explanation about the surveillance and his role in it. At the request of the Minister, he submitted a written report in which he sought to explain his complicity, if any, in the surveillance. He participated in and made submissions regarding the investigation process set up by the Inspector-General. Once the report of the Inspector-General was available, the Minister explained the adverse recommendations made against him and the fact that they were given to the President.

Before his dismissal, he had audience with the President at which he expressed his views on the “Macozoma affair” and dissatisfaction with the findings of the Inspector-General’s investigation, including recommendations that disciplinary proceedings be taken against him. Although the President did not ask the applicant for his views at the point of dismissing him, he had the benefit of the view of the applicant on all material issues that led to the dismissal.

The President dismissed the applicant because the relationship of trust between them has broken down irreparably. The applicant admits to this and blames the President for the break-down of the trust and contends that it could be restored if the President makes appropriate amends for the harm the President has caused to Mr Masetlha’s reputation.

It cannot be forgotten that the duties of the applicant are to head, exercise command over and control the Agency.^⁴⁵ The functions of the Agency itself include the duty to gather, evaluate and analyse domestic intelligence in order to identify any threat or potential threat to the security of the Republic or its people. This duty extends to national counter intelligence responsibilities, which includes gathering and co-ordinating counter intelligence, in order to identify any threat or potential threat to the Republic or its people. And importantly, the Agency bears the responsibility to inform the President of any such threat. It follows that in order to fulfil his duty in relation to national security, the President must subjectively trust the head of the intelligence services. Once the President had apprised himself of the facts from the Minister; the report of the Inspector-General; the various reports of the applicant himself; the meetings he had with the applicant; the attacks on his integrity and accusations of falsehoods contained in the papers on suspension proceedings, the President concluded that he had lost trust in the applicant and that it was in the national interest to terminate his appointment as head of the Agency. In my view, that break-down of the relationship of trust constitutes a rational basis for dismissing the applicant from his post as Director-General of the Agency.

The underlying contract of employment

As we have seen earlier, the President had the requisite power to make the decision to dismiss the applicant or to amend his term of office so as to end it. I can find no cause to hold that the exercise of that power is not in accordance with the law. This does not however mean that a contract of employment between Mr Masetlha and the government comes to naught. The question is what the legal consequences are of the premature termination of the underlying contract of employment.

Although it is clear that there has been a break-down in trust, that alone is not a sufficient ground to justify a unilateral termination of a contract of employment. It must however be said that the irretrievable breach of trust will be relevant for purposes of remedy. The ordinary remedies for breach of contract are either re-instatement or full payment of benefits for the remaining period of the contract.^⁴⁶ In my view, even if the contract of employment were terminated unlawfully, Mr Masetlha would not be entitled to re-instatement as a matter of contract. Re-instatement is a discretionary remedy in employment law which should not be awarded here because of the special relationship of trust that should exist between the head of the Agency and the President.^⁴⁷

On any version of the facts, trust between the head of the Agency and the President has broken down. The President says that the break-down is irretrievable. In his papers, Mr Masetlha has impugned the integrity of the President and has accused him of lying. He agrees that relationship of trust has disintegrated but says that it is not irretrievable and may be restored if the President were to make amends to his reputation. In my view, a relationship of trust between a President and the head of an intelligence service is indispensable. Trust goes to the very root of the special arrangement between a President, as head of state and of the national executive, and the head of an intelligence agency; without which the interest of national security cannot be best served. If anything, national security would be severely prejudiced.

Whether trust has irretrievably dissipated is a matter of fact, which falls to be decided on the facts of each case. In this case, the absence of trust is mutually acknowledged. It has not been suggested that, in taking the decision, the President acted irrationally nor am I able to find that he did.

As we have observed earlier, when a fixed term contract of employment is terminated the applicant may claim re-instatement or full payment of benefits for the remaining period of the contract. It is however plain that, in the context of this case, the re-instatement of Mr Masetlha would be inappropriate. To the extent that the mainstay of his claim is to be re-instated as Director-General of the Agency, his claim must fail. From that must follow that Mr Masetlha’s residual or alternative remedy is full payment of salary, allowances and benefits of his post for the remaining period of his contract.

Is it still necessary to decide the suspension dispute?

Given the conclusion I have reached, it is unnecessary to decide the suspension dispute. It will be remembered that the first respondent tendered costs of the suspension application on the ground that there was no longer a live controversy between the parties. Then the applicant took an opposite view and declined the costs tender and the offer to place him in the same financial position as he would have been in had his term of office run its full course. I would accordingly dismiss the appeal and uphold the decision of the High Court that the suspension dispute has been rendered moot by the decision on the dismissal of the applicant.

Should any of the disputes between the parties be referred to oral evidence?

The applicant thinks that certain issues should be remitted to the High Court for the hearing of evidence. These issues are related to the complaint of the applicant that in suspending and dismissing him, the President acted with an ulterior purpose. The applicant says that he was obliged to proceed by way of application and to adopt a procedure that would allow the President not to have to testify in relation to the performance of his official duties unless it was necessary for the resolution of the dispute between the parties. For this attitude, the applicant relied on the unanimous decision of this Court in SARFU.^⁴⁸

The applicant is the initiator of the suspension and termination applications and has elected motion proceedings. The duty is on him to seek an order for referral to oral evidence if he is of the reasonable view that genuine disputes of fact may require resolution through oral evidence.^⁴⁹ Ordinarily the election is not done on appeal. In any event, all but one of the causes of action relate to the suspension dispute that is now moot.

The last issue is premised on a claim that the President dismissed the applicant for an ulterior motive to protect the Minister from political embarrassment. On the other hand, the President refutes this allegation and avers that he has taken the decision to dismiss the applicant in the public interest. I do not think that this marginal dispute, in the overall scheme of this case, weighs heavier than the need for finality in this matter. Even if the motive, at a certain stage, had been to remedy the fact that the wrong power had been used to effect dismissal, this would not constitute an ulterior motive. What is important is that the trust between the parties had irretrievably broken down. The disputed issues of fact relate to matters peripheral to the basic legal questions.

In this regard, we will do well to remember the words of this Court in SARFU on a similar issue:

“Careful consideration must therefore be given to a decision compelling the President to give evidence and such an order should not be made unless the interests of justice clearly demand that this be done. The judiciary must exercise appropriate restraint in such cases, sensitive to the status of the head of State and the integrity of the executive arm of government. On the other hand, there is the equally important need to ensure that courts are not impeded in the administration of justice.”^⁵⁰

In all the circumstances, I would not grant an order to refer any issue to oral hearing.

Remedy

In its bare bones, the relief asked for by Mr Masetlha is to be re-instated as Director-General of the Agency. I have come to the conclusion that the President was entitled to dismiss him but, given the underlying contract of employment between Mr Masetlha and the government, it was open to him to claim specific performance in the form of re-instatement or full payment of salary, allowance and benefits that attach to his post for the unexpired term of the contract. For reasons that I have advanced, I hold that this is not an appropriate case to order re-instatement. I must immediately add that even if the applicant had otherwise succeeded in this Court, this would not be a case for ordering re-instatement.

This is so because it would not be proper to foist upon the President a Director-General of an important intelligence agency he does not trust. Nor would the public interest be served by a head of an intelligence service who says that he has lost trust and respect for his principals, being the President and the Minister. Before this Court, it was submitted on behalf of the applicant that he persists in seeking re-instatement more for personal vindication of his reputation than to be returned to his previous office. I have understanding for this personal quest to protect and restore his reputation. It is neither frivolous nor a matter which does not engage the cardinal constitutional value of dignity. At the inner heartland of our rights culture is human dignity. This has implications for the manner in which public power is exercised. Public power, even though properly conferred, must be exercised in a manner that would not violate the human dignity of those concerned including reputation, which is an incident of one’s sense of self worth.

The financial tender that was made to the applicant was intended to place him in the same financial position that he would have been in but for the early termination of his services. The applicant returned the tendered lump sum to the state. The appeal of the applicant has failed and therefore this Court has not made an order declaring that the conduct of the President is inconsistent with the Constitution and invalid as envisioned in section 172(1)(a) of the Constitution. The question is whether this Court has the power to make an order that is just and equitable as envisioned in section 172(1)(b) of the Constitution when it has not declared any law or conduct inconsistent with the Constitution.^⁵¹

This does not arise. Absent an order for the re-instatement of Mr Masetlha, the state remains duty-bound to place Mr Masetlha in exactly the same position as he would have been had he served his full term as Director-General of the Agency. It is quite clear that Mr Masetlha declined the tender in order not to prejudice his claim for re-instatement as Director-General. Now that that claim has failed, there is no reason in law why he should not be paid the amount and benefits which the state had detailed in the letter from Minister Fraser-Moleketi to him dated 22 March 2006 and marked “AR3” in the application papers.

Another additional consideration is that, during the hearing before us, counsel for the President conceded that the government had the duty to honour the tender to Mr Masetlha. To that extent, the order I intend making does not only arise from the obligation of the government arising from the contract of employment but also the consent of the government. However, the one remaining difficulty is that Mr Masetlha has never signified whether the tender is a true equivalent of the remuneration and benefits he would have been entitled to had his term of office not been interrupted. For that reason, I plan to make an order which will allow the parties to approach this Court or any other court of competent jurisdiction, on supplemented papers, for a speedy resolution regarding the extent of the applicant’s remuneration and benefits owing.

Costs

The applicant has raised important constitutional issues about the validity of certain decisions made by the President. Although his appeal is unsuccessful, we have required the President to place the applicant in exactly the same financial position as he would have been, but for the premature termination of his term of office. At the hearing, counsel for the President did not seek an order of costs against the applicant, nor do I find it appropriate to make an adverse order of costs against the applicant in this Court.

One additional matter remains. The High Court dismissed the consolidated application with costs including the costs of two counsel, but excluding the costs of the founding papers in that case. Having considered all the circumstances, I have come to the conclusion that that costs order should not stand. The applicant sought to vindicate important constitutional guarantees and should not be unduly mulcted in costs for attempting to do so. I will accordingly set aside the costs order of the High Court and make no order as to costs in this Court.

Order

The following order is made:
1. The application for leave to appeal is granted.
2. The application to refer certain disputes of fact in the termination application and the suspension application for determination by oral evidence is refused.
3. The appeal against the decision of the High Court, in which it dismissed the consolidated application, is refused.
4. The order made by the High Court is set aside and is replaced with the following order:

“The consolidated application is dismissed with no order as to costs.”

No order as to costs is made.
The first respondent is ordered to pay to the applicant remuneration, allowances, pension and other benefits in terms of section 37(2)(d) of the PSA for the period starting on 22 March 2006 up to 31 December 2007, all of which shall place the applicant in the same financial position that he would have been in but for the termination of his term of office on 22 March 2006.
Should any dispute arise between the applicant and the first respondent in relation to the extent of the financial position referred to in paragraph (6) above, either party may approach this Court or any other court of competent jurisdiction, on the same or supplemented papers for adjudication of the dispute.

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South Africa: Constitutional Court

Masetlha v President of the Republic of South Africa and Another (CCT 01/07) [2007] ZACC 20 (3 October 2007)