Case summary written by Tayla Bruce and checked by Jayna Hira.
05 October 2020
The Applicant (“Imbumba”) is an association consisting of twenty-five-member non-profit organisations, whose function is to provide specialised community-based care in accordance with section 11 of the Older Persons Act 13 of 2006 (“the Members”). Each of the Members entered into a service level agreement (“SLA”) with the Eastern Cape Department of Social Development, (“the Department”) in terms of which the Members would receive funding from the Department, for the provision of care and support services to older persons, as envisaged in each Member’s business plan.
The SLA’s were to run for the period 1 April 2020 to 31 March 2021, wherein the Department would pay funding on a monthly basis to each of the Members.
On 8 May 2020, Ms Vetten (“Vetten”) wrote to the Second Respondent on behalf of the Applicant, enquiring as to the services the Members could provide to older persons who were very vulnerable to Covid-19 and who had been advised to stay at home for the next few months. Vetten stated that the Members would remain committed to continuing to provide the services to their beneficiaries in safe and appropriate ways.
As at the end of July 2020, no payments had been made by the Department to the Members in accordance with the SLAs. On 5 June 2020, the Second Respondent issued a notice to all non-profit organisations funded by the Department for the 2020/2021 financial year, which notice stated that community-based care givers would only receive a stipend as Covid-19 regulations stipulated that the movement of older persons over 60 years is highly restricted.
Imbumba accordingly brought an urgent application in the Grahamstown High Court, seeking an order that the Department’s decision of 5 June 2020 constituted a repudiation of the SLAs and directing that the Department comply with the SLAs. In the alternative, Imbumba sought an order declaring the decision to be unconstitutional, unlawful and invalid and reviewing and setting the decision aside in terms of the principle of legality.
In its founding affidavit, Imbumba stated that ordinarily its services are provided at care centres operated by the Members. Imbumba further stated that the beneficiaries remained dependent on the services provided by the Members under the Covid-19 lockdown level 2. Imbumba alleged that in terms of the Disaster Management Act 57 of 2002 regulations of 25 March 2020, care services to older persons were included in the categories of essential services. Imbumba further provided that the Members still had a duty to provide those services, despite the restriction of movement under the Covid-19 lockdown level 2. Accordingly, the Members provided the necessary care to the beneficiaries at their homes, at no extra cost.
The Second Respondent alleged that the business funding model of the Department was premised on older persons physically visiting the care centres to access services, as opposed to the provision of home care-based services. The Second Respondent further stated that the Members’ decision to implement home care services was in violation of section 11 of the Older Persons Act 13 of 2006 and that if the Department were to fund the Members for home-based services, it would be considered as unlawful and wasteful expenditure.
The Court held that the matter was inherently urgent, considering the fact that one is dealing with the welfare of people in need, during a life-threatening pandemic.
Additionally, the Court held that two constants prevail in deciding the application:
- the constitutional obligation to provide social services in terms of section 27 of the Constitution; and
- the need of the beneficiaries for the provision of these services.
In this regard, the Court noted that the Department, in terms of the SLAs, acquired the services of the Members to carry out its constitutional obligation. It was held that the underlying purpose of the SLAs was to ensure that services were rendered to older persons who were dependant on those services. The manner in which those services were provided was not an essential element of the agreement.
The Court emphasised the point that if organisations such as the Members did not receive funding and could not provide services to their beneficiaries, the beneficiaries would be deprived of services to which they are constitutionally and statutorily entitled (keeping in mind that the Department has not entered into any SLAs for the provision of home-based services).
The Court declared the notice of 5 June 2020, published by the Department, to be a repudiation of the SLAs entered into and ordered the Department to pay the Members all amounts due in accordance with the SLAs, together with interest thereon, by no later than 15 October 2020.
To the extent that an organization enters into an agreement to exercise public power on behalf of a public entity, in respect of the provision of public services, it is essential that the agreement governing this relationship be considered in light of the public entity’s constitutional obligations.