Makhanya v Minister of Water Affairs & others

Mr Attwell Sibusiso Makhanya was employed as CEO of Umhlatuze Water (thirteenth respondent). On 7 November 2015, the Board of Umhlatuze Water (second to thirteenth respondents) suspended Mr Makhanya pending a disciplinary hearing based on findings in a report by ENS Forensics alleging impropriety. Mr Makhanya challenged his suspension and the decision to subject him to disciplinary proceedings in the KwaZulu-Natal High Court. The court (Mbatha J) declared the Minister's extension of the Board's term of office invalid and set aside the Board's decision to suspend and initiate disciplinary proceedings. However, the court suspended both invalidity orders for 180 days to allow appointment of a new Board and ordered that ENS Africa conduct the disciplinary proceedings to be finalized by 31 January 2017, with recommendations to the newly appointed Board. Mr Makhanya sought leave to appeal against the suspension of the invalidity orders. Subsequent developments included the Minister dissolving the Board, proposing to disestablish Umhlatuze Water, and ongoing uncertainty about the entity's future structure.

• Whether suspension of the declaration of invalidity of the Minister's decision to extend the Board's term was a just and equitable remedy
• Whether suspension of the declaration of invalidity of the decision to suspend and initiate disciplinary proceedings against the applicant was a just and equitable remedy
• What remedy would be appropriate in circumstances where administrative action is declared invalid but serious allegations against an employee remain to be addressed
• The proper application of section 8 of PAJA read with section 172(1) of the Constitution in crafting just and equitable remedies

1. The application for leave to appeal to the Supreme Court of Appeal was granted. 2. The application for leave to adduce further evidence was granted. 3. The appeal was upheld in part: Paragraph 3 of the high court order (insofar as it related to suspension and disciplinary proceedings) and paragraph 4 were set aside and substituted with an order that: (a) A properly and legally appointed Board of Umhlatuze Water or the Minister, acting under s 73(1)(f) of the Water Services Act 108 of 1997, must consider the ENS Forensics report and decide whether to suspend and initiate disciplinary proceedings against the applicant within 30 calendar days. (b) Pending that decision, the applicant is precluded from reporting to his office and performing his duties as CEO of Umhlatuze Water. 4. Each party to pay its own costs.

When determining just and equitable remedies under section 8 of PAJA read with section 172(1) of the Constitution following declarations of administrative invalidity: (1) Suspension of invalidity orders is not automatic and must be justified by considerations such as avoiding disruption of essential public services or national crisis; (2) There must be a public interest consideration that overrides the presumption of objective constitutional invalidity; (3) The remedy must not leave hollow the successful applicant's victory in setting aside unlawful administrative action; (4) A declaration of invalidity of a decision to initiate disciplinary proceedings does not invalidate the underlying evidence or report on which that decision was based; (5) A properly constituted authority may reconsider the underlying evidence afresh and make a new decision; (6) Where serious allegations exist against a senior employee involving potential witness interference or evidence tampering, the employee may be precluded from performing duties pending a proper decision by a lawfully constituted authority, even where the original suspension decision is set aside; (7) The rule of law must be vindicated while courts balance justice, equity and practical circumstances in each case.

The Court observed that water is a scarce resource and expressed concern about the ongoing uncertainty regarding Umhlatuze Water's future as an entity. The Court noted that the high court's attention had not been drawn to section 73(1)(f) of the Water Services Act, which would have provided an alternative solution to the concern about having a 'headless institution'. The Court commented that Mr Makhanya's allegations that his prosecution was victimization arising from refusing to engage in corrupt activities were serious but untested, and he would be free to raise these at a properly constituted disciplinary hearing or other competent forum. The Court emphasized that while courts have wide discretion in crafting just and equitable remedies, this power 'is not limitless' and 'must be used with caution and only in exceptional circumstances', citing Black Sash Trust. The Court noted that it is necessary to balance the rule of law with factual certainty in determining whether some amelioration of strict legality is justified.

This case provides important guidance on the application of section 8 of PAJA read with section 172(1) of the Constitution when courts craft just and equitable remedies following declarations of administrative invalidity. The judgment clarifies that while courts have wide discretion in fashioning remedies, such discretion is not unbridled and must vindicate the rule of law while balancing practical considerations. The case demonstrates that suspension of invalidity orders should not leave successful applicants' victories hollow, and there must be a legitimate public interest justification for such suspension. It also illustrates how courts can balance an employee's rights to administrative justice and presumption of innocence against legitimate concerns about potential interference with disciplinary processes, particularly in cases involving senior officials facing serious allegations. The judgment emphasizes that the purpose of public law remedies is to pre-empt, correct or reverse improper administrative functions and afford prejudiced parties administrative justice.