Minister of Defence and Military Veterans v Motau and Others

The Minister of Defence and Military Veterans dismissed Lieutenant General (Retired) Maomela Motau and Ms Refiloe Mokoena from the Board of the Armaments Corporation of South Africa (SOC) Limited (Armscor), a wholly state-owned entity, in terms of section 8(c) of the Armaments Corporation of South Africa Limited Act 51 of 2003. Motau and Mokoena were respectively the Chairperson and Deputy Chairperson of the Board. The Minister justified the dismissals on grounds of alleged poor governance, procurement delays in critical defence projects (including Projects Swatch and Porthole), failure to conclude a service level agreement with the Department of Defence, and a breakdown in relations with the defence industry. The dismissals were effected without following the procedures in section 71 of the Companies Act 71 of 2008. Motau and Mokoena challenged the decision in the High Court, which set aside the dismissals as unlawful administrative action. The Minister appealed directly to the Constitutional Court.

The appeal was upheld in part. The High Court’s order was set aside and replaced with an order declaring that the Minister acted unlawfully by failing to follow section 71 of the Companies Act, but the Minister’s decision to terminate Motau and Mokoena’s Board membership was not set aside. The Minister was ordered to pay the respondents’ High Court costs. No order as to costs was made in the Constitutional Court.

The case is a leading authority on the distinction between administrative and executive action in South African law, clarifying that ministerial decisions to appoint or dismiss boards of state-owned entities may constitute executive action. It also affirms that executive power is constrained by statutory procedural requirements and the principle of legality, and that unlawfulness does not automatically result in the setting aside of a decision.