Can the country afford to have the Head of a Constitutional Chapter 9 Institution – any Constitutional Chapter 9 Institution – operating under an ever-present threat of a punitive and personal costs order simply for performing her constitutional functions, and at the behest of powerful institutions (such as the South African Reserve Bank) that seek to avoid accountability?
Is it reasonable, is it appropriate, is it desirable for the Head of a Constitutional Chapter 9 Institution – any Constitutional Chapter 9 Institution – to be mulcted in personal and punitive costs in circumstances where she did not initiate the litigation; and also in circumstances – as in this case – where at least two Judges (Judge Willem Heath and Judge Dennis Davis) have found that the so-called Bankorp Lifeboat was unlawful?
Can it be said on the facts of this case that the Public Protector abused her constitutional powers when she investigated a complaint lodged by Senior Counsel of considerable experience, and when she took the remedial action that she did?
These are the questions that this Court is called upon to determine.
In its deliberations, members of this Court will no doubt be alive (and this has to be said) to the negative public sentiment currently sweeping the media and social media commentary in this country against this Public Protector.
In this specific regard, we can do no better than remind ourselves of the timely observation made by the Chief Justice last week on the occasion of the inaugural presentation of the Judiciary’s Annual Report, where the Chief Justice cautioned Judges (aptly, we submit) against the ever-lurking temptation to sacrifice Justice at the altar of public opinion.
We address the second question first.
THE DECLARATORY ORDER
The Reserve Bank anchors its abuse charge against the Public Protector (for which it wants this Court to make a declaratory order) on what it characterises as the Public Protector’s failure to act independently, impartially and without fear, favour or prejudice as required of her by s 181(2) of the Constitution.
In support of that charge, the Reserve Bank alleges
that the Public Protector held secret meetings with the Presidency;
that she failed to explain what was discussed at those meetings;
that she discussed her remedial action with the Presidency but did not do so with the Reserve Bank;
that she discussed the Bank’s vulnerability with the State Security Agency;
that her intention was to undermine the Reserve Bank;
that her explanation in relation to those meetings with the Presidency are false;
that her explanation that she relied on economics experts for her report is false, and that her subsequent explanation in this Court is “too little too late”; and
that she was biased against the Reserve Bank because she did not afford it the same courtesy of a meeting that she did the Presidency.
But the Reserve Bank
overlooks that the Reserve Bank, like the Presidency, was also given an opportunity to comment on the provisional report, and did (Vol 2, pages 62 to 86);
overlooks that the Public Protector had no less than 2 meetings with the Reserve Bank in September 2013 and in September 2016 (supplementary volume, page 879);
overlooks that neither of these meetings with the Bank was transcribed, yet there is no conspiracy theory about that;
overlooks that the views of the Bank were taken into account (supplementary volume, pages 888 to 889);
overlooks the real reason for meeting with the State Security Agency and prefers a conspiratorial reason which resonates with a belief perpetrated by a political party;
overlooks that the April 2017 meeting with the Presidency was, as the Presidency email itself shows (vol 9, page 687) for a meet and greet and had nothing to do with the remedial action, but the Bank prefers a conspiratorial purpose as that seems to resonate with media-induced public opinion;
overlooks that “the mere fact that audi alteram partem was not observed does not by itself justify an inference of bias” (CompComm v GCB 2002 (6) SA 606 (SCA) para );
overlooks that public opinion, however strong, is not an appropriate substitute for the rule of law and is in fact an undesirable and dangerous measure for what is in the interests of justice;
In addition to these, the Reserve Bank overlooks another crucial inquiry in the determination of whether or not the Public Protector has breached her constitutional obligation and it is this.
The Constitution, in s 182(1), confers upon the Public Protector the power
to investigate conduct,
to report on that conduct, and
to take appropriate remedial action.
There is no suggestion that she has not investigated the conduct complained of by an experienced Senior Counsel.
There is no suggestion that she has not reported on that conduct as the report itself attests.
There is no dispute that her remedial action was inappropriate. She is not challenging the high court’s decision in that respect.
But does taking inappropriate remedial action constitute a breach of her constitutional power?
One can answer that question by way of a rhetorical question in relation to Judges. Courts are enjoined by the Constitution in s 165(2) to be independent and apply the law impartially and without fear, favour or prejudice.
Does a Judge who makes a ruling based on wrong legal principles thereby fail to act impartially? If the answer to that question is no, why should it be yes in respect of the Public Protector?
Well, this Court answered that question in the negative in S v Basson 2007 (3) SA 582 (CC).
In that case the State raised a litany of complaints against the trial Judge, accusing him of bias because he “erred consistently and drammatically” and in favour of the accused. Among the examples mentioned were
that the trial Judge admitted evidence taken on commission in the USA without permitting the accused to respond to that evidence;
that the trial Judge permitted two State Counsel to cross-examine the accused;
that the trial Judge “misunderstood much the evidence presented” and made erroneous factual findings that were prejudicial to the State and exculpatory of the accused;
that the trial Judge accepted implausible evidence from Dr Basson which was contradictory and not borne out by the record;
that the trial Judge dismissed the State’s objection to a line of cross-examination that sought to establish whether the witness had discussed his guilt with his attorney. The ground for the objection was that the information sought was subject to attorney-client privilege. The trial Judge dismissed the objection on the ground that privilege attaches to the attorney and not the client.
This Court accepted that these were misdirections by the trial Judge. But did it find that this was evidence of bias or failure to apply the law impartially and without fear, favour or prejudice? No! This Court said
“ In respect of this second category of complaints, it is clear that at least one of the trial Judge’s interlocutory rulings was based on wrong legal principles and we accept that in many of the examples referred to by the State another court might have reached a different conclusion on the facts. Some aspects of the evidence of the respondent (for example, as to the financial principals) appear somewhat improbable to us. However, this Court is not sitting in judgment on the factual findings made by the trial Court. It is the issue of bias which has to be adjudicated.
 The fact that a trial Judge may make an interlocutory ruling mistakenly does not provide weighty material to support a conclusion of bias. Nor does the Judge’s refusal to exercise his discretion to call further witnesses.”
The Public Protector took inappropriate remedial action. She made a mistake or misdirected herself in law. Why should that be cause for a finding of bias against her when it is not in respect of a High Court Judge?
The Public Protector had a meeting with the Presidency and the State Security Agency at her offices without the presence of the Reserve Bank. She had two separate meetings with the Reserve Bank without the presence of the Presidency and the State Security Agency. Why should that be evidence of bias when this Court found that admitting evidence on commission without affording the accused the opportunity to respond to that evidence does not amount to bias?
The vulnerability aspect discussed at the meeting with the State Security Agency related to Judge Heath’s media statement concerning a run on the banks. The substance of the report, and the final remedial action, was not discussed at all.
We submit, with respect, that there is no merit in the charge that the Public Protector breached her constitutional obligations.
But the declaratory order was not properly sought. It was raised for the first time in replying papers. It is impermissible to mount a new case for the first time in replying papers. This is not a hard and fast rule, and may be relaxed in exceptional cases (Mostert and Others v Firstrand Bank t/a RMB Private Bank 2018 (4) SA 443 (SCA), at para 13).
There are no exceptional circumstances in this case. The Reserve Bank knew when it filed its review application about what it terms “undocumented meetings” and from these it drew inferences unfavourable to the Public Protector. It should have sought the declaratory order at that stage as that would have afforded the Public Protector an opportunity to deal with it under oath, not in heads of argument.
As it happens, the reply had been deposed to on Monday 27 November 2017 and argument was scheduled for the following Tuesday and Wednesday at which the Public Protector had to resist not just the Reserve Bank’s review application but two other applications by ABSA and National Treasury. We are instructed that all 3 applicants insisted on the matter being heard on those days because of the damage they claimed the remedial action was causing to them. We are instructed also that there was not much sympathy from the Bench either for the Public Protector for a postponement so that she could prepare properly and fully.
The Public Protector never had an opportunity to deal with what is, in effect, an existential prayer. As we know from EFF v The Speaker, a finding that a constitutional being has failed in her constitutional obligations sounds a death knell to any prospects of remaining in office. With such an outcome in prospect, a prayer such as this cannot fairly be introduced for the first time a week before argument, especially when the Reserve Bank knew all along that this was its intention.
Appropriate relief in this respect is to remit the matter to the high court so it can be dealt with fully and comprehensively under oath, or by this Court after a full ventilation under oath.
In any event, this Court has re-affirmed (in Tasima 2017 (2) SA 622 (CC) at paras 221 to 223 & 231) the principle that a Court is not free to grant relief that has not been sought. At least in SASSA v Minister of Social Development the Minister had been called upon to show cause why a personal costs order should not be made against her. On that ground this Court may dismiss the Reserve Bank’s counter-appeal.
THE PERSONAL COSTS ISSUE
Again, the Reserve Bank ambushed the Public Protector with this prayer in its replying affidavit (vol 7, page 546, para 58). It is an unprecedented prayer as never before has such a costs order been sought against a Public Protector or the Head of any Constitutional Chapter 9 Institution as far as we know. That alone should have prevailed on the high court to adopt the same approach that it did in relation to the declaratory order, and direct that the Public Protector be afforded sufficient time to consider the issue and deal with it properly under oath.
She was not afforded that opportunity. This was sprung on her a week before the hearing of argument in 3 applications by 3 different applicants with 3 different sets of Counsel. She had only 1 set of Counsel (1) who had 2 days to draft answering affidavits and settle them, (2) in 3 separate applications (3) 2 days to draft and settle heads of argument (4) in 3 separate applications (5) and just over a week to go through an entire record of 3 separate applications before arguing those 3 separate applications on 5 and 6 December.
This hardly conduces to the resolution of a dispute in a fair public hearing as s 34 of the Constitution requires.
In any event, the personal and punitive costs order against the Public Protector is both undesirable and inappropriate in the circumstances of this case.
Making decisions founded on an incorrect appreciation of the law or legal principles does not establish bias or bad faith. This Court tells us in S v Basson (2007).
It does not establish incompetence either. many high court judges and in the SCA get the law wrong from time to time and are set right by this Court. No one is suggesting that they are incompetent, or that they have breached their s 165(2) Constitutional obligation or duty. Why should that be so in the case of the Public Protector, or any Head of a Constitutional Chapter 9 Institution?
Failing to observe the audi principle does not by itself justify an inference of bias. The SCA tells us in CompComm v The GCB (2002). So, when the Public Protector met with the Presidency, and did not subsequently meet with the Reserve Bank on what she discussed, she was not being biased against the Reserve Bank.
Committing procedural irregularities in an investigation is not to act in bad faith. There are remedies in law for that, including a review application. It has proved effective in this case.
The Public Protector did not act unreasonably in opposing the 3 applications in light of the fact that both the Judge Heath and Judge Davis, independently of each other, concluded that the lifeboat transaction was unlawful.
The Public Protector did not discuss the final report or new remedial action with anyone.
The high court conflates the principles of fairness on the one hand and bias on the other.
The Public Protector did not intentionally file documents in a haphazard manner. She had 3 substantial review applications to contend with.
The high court order has now given impetus to costs orders being sought against the Pension Funds Adjudicator in applications brought against her for the setting aside of her determinations. It will not be long before the same personal cost orders are sought against the Fais Ombud for calling out Ponzi schemes.
Next, personal costs orders may be sought against the Auditor-General (now that he has been given teeth to hold errant organs of state accountable) when reviews are sought against his reports.
On this costs issue, too, the appropriate relief is to remit the matter to the high court so that it can be dealt with fully and comprehensively under oath, or by this Court after a full ventilation under oath, or this Court should set aside the high court decision.