The Supreme Court of Appeal (the “SCA”) in NSFAS v Moloi had to determine whether the Pretoria High Court erred in reviewing and setting aside the decision of the National Student Financial Aid Scheme (“NSFAS”) and the Minister of the Department of Higher Education and Training (“the Minister”) to ‘defund' the LLB postgraduate programme.
Background
On 11 March 2021, the Minister released a media statement announcing changes to the guidelines for the NSFAS bursary scheme. These changes were driven by a shortfall in the budget allocated to the bursary scheme for the 2021 academic year.
One of the changes introduced was that the bursary would only be awarded to first undergraduate qualifications. Previously postgraduate qualifications were generally not funded and only ‘some limited second qualifications in key areas' were funded.
However, as a consequence of the changes, new entrants in second or postgraduate qualifications would not be funded. Students who were already registered for postgraduate degrees would still be funded if they met the qualifying criteria. One of the postgraduate degrees that did not meet the criteria under the changes was the LLB postgraduate degree.
Subsequently, three LLB students who were studying at the University of the Witwatersrand at the time (“the respondents”) instituted an application in the High Court to review and set aside the decision to ‘defund' the postgraduate LLB programme under section 6 of the Promotion of Administrative Justice Act, 2000 (“PAJA”), alternatively under the principle of legality.
The difficulty that these Wits students faced at the time was that Wits only offered LLB as a postgraduate degree. Therefore, this decision meant that LLB students at Wits would not be funded by NSFAS.
The review application in the High Court was successful which resulted in the appeal to the SCA.
Considerations before the SCA
- Was the decision an exercise of executive power or an administrative action?
The SCA was not convinced that it was necessary to determine whether the action was an exercise of executive power or an administrative action since the main question revolved around procedural fairness, and our courts have affirmed the requirement of procedural fairness in respect of the exercise of public power (with a few exceptions). The court found the decision to be an exercise of executive power for, amongst others, the following reasons:
- Section 1(d) of PAJA excludes executive powers and functions of the National Executive in the definition of administrative action;
- Section 4(b) of the NSFAS Act provides that one of the functions of NSFAS is “to develop criteria and conditions for the granting of loans and bursaries to eligible students in consultation with the Minister”. According to the SCA, the process involved in performing this function is not mere administration of legislation; and
- The determination of the guidelines, including the eligibility criteria, was not a day-to-day bureaucratic implementation of policy or legislation.
Rationality
When dealing with the question of rationality, the SCA held that “it is a trite principle of Administrative Law that public power must be sourced in the law and the Constitution. Courts must review the exercise of public power to ensure compliance with this principle. The principle of legality requires that the exercise of executive power must be rationally related to the purpose for which it is conferred”.
The students contended that the decision was irrational, and this rested on the use of the word ‘qualification' as opposed to ‘programme' with reference to the LLB programme. This is because these words have different meanings in terms of the Higher Education Qualifications Sub-Framework.
The SCA's findings regarding rationality were as follows:
- The reference to LLB as a qualification was also made in the 2020 guidelines. Furthermore, the reference to postgraduate ‘qualifications' in the 2021 guidelines was not only in respect of the LLB degree, rather (according to the SCA) the term was chosen for its inclusive quality to refer collectively to different types of postgraduate qualifications.
- In any event, the distinction that NSFAS and the Minister made between the postgraduate LLB programmes and the four-year LLB was based on the fact that the former is a second qualification whereas the latter is a first undergraduate qualification.
- The 2021 guidelines were adopted for a legitimate government purpose, which was to fund the first undergraduate degree for each student, considering the prevailing financial constraints, to enable NSFAS to fund as many students as possible.
- Was the exclusion of the postgraduate LLB unreasonable?
The SCA held that “Reasonableness is a proportionality assessment as envisaged in s 36 of the Constitution that provides for limitation of rights in terms of a law of general application, to the extent that the limitation is reasonable”. The SCA highlighted that courts have preferred the rationality test over reasonableness, as a measure for legality of executive action. However, in The Government of the Republic of South Africa v Grootboom, the Constitutional Court applied reasonableness as a test for the rationality of executive action.
Furthermore, in this matter, the language of section 29(1)(b) of the Constitution incorporates reasonableness as a measure of adequacy of the action taken by the State to make further education accessible. Section 29(1)(b) provides that “everyone has the right to further education, which the State, through reasonable measures, must make progressively available and accessible”.
The reasonableness inquiry is determined in the context described in the evidence. The SCA found that in the context of this case, the extent of the limitation of the right to further education, although seemingly harsh on those affected, was reasonable. It reasoned that:
- The amendments to the eligibility criteria maintained the general approach that funding was for first-time entry students;
- Funding had to be maintained despite the increased number of impecunious students and financial constraints NSFAS faced; and
- Prioritising first-time entry students at the expense of those who required a second qualification was not a disproportionate measure.
Legitimate expectation
The students contended that when they commenced their Bachelor's degrees, NSFAS was funding LLB postgraduate degrees. Furthermore, NSFAS' response to the frequently asked question (FAQ) published in 2018 indicated that LLB is one of the postgraduate qualifications that they accept. Therefore, this created a legitimate expectation that NSFAS would fund their postgraduate LLB.
In setting out the principle for legitimate expectation, the SCA relied on Administrator, Transvaal and Others v Traub and Others where it was held that “a legitimate expectation may arise where an express promise had been made by a relevant authority or a where regular (well-established) practice had arisen which a claimant reasonably expected to continue. The test is objective and determination of whether an expectation, in the legal sense, exists, is made on a case-by-case basis”
Courts are generally reluctant to afford such relief, being wary of fettering with the discretion of State authorities. In the circumstances of this case, the SCA held that “As much as financial hardships which confront students pursuing second qualifications was real and the negative effects had to be understood, the courts could not tamper with the discretion of the executive to prioritise first time entry to higher education institutions, unless such discretion was exercised in a manner that offended the law and the Constitution”.
In any event, the SCA held that it was not satisfied that the respondents had demonstrated that there was a well-established practice of funding second-degree LLB programmes. Therefore, the SCA held that the respondents had no legitimate expectation that the LLB programme would be funded by NSFAS.
Procedural fairness
Section 33 of the Constitution guarantees to everyone a right of administrative action that is lawful, reasonable, and procedurally fair. Although executive decisions are not reviewable under PAJA, the exercise of executive authority must still comply with the law and the Constitution. The requirement of procedural fairness in the exercise of executive authority has been affirmed in various cases including the Constitutional Court judgment of Democratic Alliance v President of the Republic of South Africa.
Considering the above principles, the SCA concluded that NSFAS and the Minister's decision was procedurally fair because of inter alia the fact that:
- NSFAS consulted with the representatives of the Universities South Africa (“USAF”) and South African Union of Students (“SAUS”) organisations, although the general student community was not invited to make representations;
- Consultation with student representative bodies is an acceptable form of communicating with students;
- The media statement published in 2021 (detailing the “defunding” of the LLB postgraduate programme) gave the impression that the details of how the 2021 funding scheme would be structured were only provided for on the previous day when the National Cabinet approved the budget.
- Therefore, it would have been impractical, in those circumstances, to afford the general student body an opportunity to make representations prior to publishing the guidelines.
- Consequently, the consultation with SAUS and USAF constituted a reasonable and justifiable form of compliance with the requirement of procedural fairness.
Conclusion
In light of the above considerations, the appeal against the High Court order was successful. Given that the students were asserting their constitutional rights to further education, as provided in section 29 of the Constitution, there was no cost order against them.
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