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SARB seeks costs, abuse of office order against Public...

South Africa

ConCourt

SARB seeks costs, abuse of office order against Public Protector

The Constitutional Court heard Public Protector Busisiwe Mkhwebane's application on Tuesday to avoid personally paying legal costs regarding her report on the loans that the Reserve Bank gave to Bankorp during apartheid. The Reserve Bank dug in its heels, with potentially damning consequences for Mkhwebane.

Lawyers for Public Protector Busisiwe Mkhwebane and the South African Reserve Bank (SARB) faced off in the Constitutional Court on Tuesday over whether she should be personally liable to pay some of the legal costs in a case between the two institutions and whether she abused her office.

Mkhwebane was challenging a scathing North Gauteng High Court ruling ordering her to personally pay 15% of the legal costs in the case that set aside the remedial action in her report on SARB’s alleged failure to recover over R1-billion given to Bankorp, later bought by ABSA, during apartheid.

Can the country afford to have the head of a Chapter 9 institution, any Chapter 9 institution, operating under an ever-present threat of of a punitive and personal cost order simply for performing her constitutional functions and at the behest of powerful institutions that seek to avert or avoid accountability?” asked advocate Vuyani Ngalwana SC for the Public Protector.

Heads of other institutions would soon be targeted, limiting their ability to operate effectively, Ngalwana continued.

In September, the Constitutional Court ordered former social development minister Bathabile Dlamini to personally pay 20% of the costs in the Sassa grants case. The court said those who act in bad faith or are grossly negligent can be slapped with personal cost orders.

Making decisions founded on incorrect appreciation of the law or legal principles does not establish bias or bad faith,” said Ngalwana on Tuesday.

Advocate Kate Hofmeyr, acting for SARB, supported the cost order against Mkhwebane.

This is a case in which the Public Protector flagrantly disregarded the obligations on her office. This is not a case about an error of law or an error of fact, or a mistake, or misdirection. It is a case about a Public Protector who failed to give a frank and candid account as she is required to do before a court when her conduct is impugned,” she said.

The North Gauteng High Court said Mkhwebane could be “reasonably suspected of bias” in preparing her report on SARB and Bankorp and did not meet the standards of objectivity and honesty required of her office.

Chief Justice Mogoeng Mogoeng remarked: “An order for costs against a state official, whether it’s a judge or Public Protector or anybody, it’s not something you make lightly. You don’t just easily tie up the pieces and suddenly there’s an order because it could have far-reaching implications in the effective functioning of the state machinery.”

Hofmeyr said the Public Protector failed to disclose a meeting with former president Jacob Zuma while she was preparing the report where the role of SARB was discussed, did not give SARB an opportunity to reply to her provisional report, and misled the court about consultations with economic experts.

Ngalwana said failing to disclose the meeting with Zuma did not show bad faith: “We’re saying it doesn’t show bad faith. It shows bad judgement. That is the highest we can place it, and bad judgement is not punishable by an adverse personal and punitive cost order.”

SARB also wants the Constitutional Court to issue a declaratory order that Mkhwebane abused her office. Such an order would make it difficult for her to complete her term, with opposition parties in Parliament already calling for an inquiry into her fitness to hold office.

The advocate admitted the North Gauteng High Court judgment did not explicitly state the Public Protector acted in bad faith, but Hofmeyr said she still deserves censure.

In this case, the conduct of the Public Protector before the high court was evasive, was secretive, was disingenuous and was a pretence according to the high court. We submit none of that conduct is consistent with an appropriate approach by the PP,” said Hofmeyr.

The Public Protector had secret meetings with the Presidency. The Public Protector has never adequately explained those meetings,” said Hofmeyr.

She is an organ of state required to be transparent and she failed, we submit in an egregious manner in meeting that obligation,” she said.

The North Gauteng High Court rejected SARB’s plea for a declaratory order against Mkhwebane.

Ngalwana said Mkhwebane erred in not mentioning her second meeting with Zuma in her final report, but said the meeting was not inappropriate and she has full discretion on how to conduct her investigations.

But the (Reserve Bank) prefers a conspiratorial purpose as that seems to resonate with media-induced public opinion,” claimed the advocate.

Judgment was reserved. DM

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