ConCourt to rule on personal cost order against Public Protector

The Constitutional Court is set to rule on Monday morning on whether Public Protector Busiswe Mkhwebane should be held personally liable for a portion of the legal costs that the SA Reserve Bank incurred to overturn the findings of her Absa/Bankorp report.

Judgment is set to be delivered at 10:00 in Johannesburg. 

The matter relates to the scathing judgement delivered in mid-February 2018 by the North Gauteng High Court, which set aside the findings and remedial action of Mkhwebane’s Absa/Bankorp report. 

The public protector, in report published on June 19 2017, had tasked the Special Investigating Unit with recovering R1.125bn in “misappropriated public funds”, describing the funds as an “illegal gift” given to Bankorp by the SA Reserve Bank in the 1980s. As Bankorp and other banks were later subsumed into Absa, Mkhwebane ruled that the funds be recovered from Absa.

In her remedial action, she also ruled that Parliament should introduce a motion to amend the Constitution to change the SA Reserve Bank’s mandate to focus on economic growth. This caused the rand to fall as investors feared it would limit the central bank’s independence. This section of her report was already set aside in August 2017. 

Following the publication of her report, the SARB, the minister of finance, Absa and National Treasury instituted review applications set aside her directive that the SIU recover funds from Absa. These applications were later consolidated. 

The North Gauteng High Court in Pretoria set aside Mkhwebane’s findings in February 2018, citing a “reasonable apprehension of bias” in her work. Mkhwebane was also ordered to personally repay 15% of the SA Reserve Bank’s legal costs, while the office of the Public Protector was ordered to pay the remaining 85%. The court stated this was “necessary to show our displeasure with the unacceptable way in which she conducted her investigation as well as her persistence to oppose all three applications to the end”.

Legal challenges  

Mkhwebane’s applications for leave to appeal the judgment in the High Court and the Supreme Court of Appeal were refused.   

The public protector then sought leave to appeal the section of the ruling relating to her personal liability for the legal costs in the Constitutional Court.

The case was heard in November 2018. Mkhwebane’s legal team argued that a personal costs order could prevent the office of the Public Protector and other Chapter 9 Institutions from operating effectively, as they will be concerned about being penalised. 

In court papers lawyers for the SA Reserve Bank, meanwhile, argued that the court should declare that Mkhwebane abused her office during the investigation that led to her report. The central bank has also asked that its costs in Constitutional Court should be
paid by the Public Protector personally. 

Monday’s judgment will be relevant to another pending legal fees case against Mkhwebane. Her report into the Vrede dairy farm was set aside by the Pretoria High Court in May this year as unconstitutional and invalid. The court’s ruling on legal fees was reserved, awaiting the Constitutional Court’s decision in the Absa/Bankorp case.

Fitness to hold office

The apex court’s ruling comes at a time when Parliament is dealing with calls to probe Mkhwebane’s fitness to hold office.

In June Speaker of the National Assembly Thandi Modise referred a DA request for an inquiry into the public protector to Parliament’s oversight committee on justice and correctional services. According to a report in the Sunday Times at the weekend, Mkhwebane has written to Modise threatening her with legal action if Parliament tries to remove her. 

President Cyril Ramaphosa, meanwhile, in a televised address on Sunday evening called Mkhwebane’s finding that he violated the executive ethics code “fundamentally and irretrievably flawed”. The president announced he would be taking taking the report on urgent review.