About SAFLII
Databases
Search
Terms of Use
RSS Feeds
South Africa: North Gauteng High Court, Pretoria
SAFLII
>>
Databases
>>
South Africa: North Gauteng High Court, Pretoria
>>
2021
>>
[2021] ZAGPPHC 333
|
|
Cawe and Others v Public Protector of the Republic of South Africa and Others (66063/2018) [2021] ZAGPPHC 333 (28 May 2021)
IN
THE HIGH COURT OF SOUTH AFRICA
GAUTENG
DIVISION, PRETORIA
Case No: 66063/2018
REPORTABLE: NO
OF INTEREST TO OTHER
JUDGES: NO
REVISED.
DATE:28/05/2021
In
the matter between:
MAWETHU
CAWE
First
Applicant
JABULILE
NKOSI
Second
Applicant
TSHEGOFATSO
MALOKA
Third
Applicant
XOLA
STOCK
Fourth
Applicant
LINDA
CECIL
NENE
Fifth
Applicant
LUNGELWA
SHANDU
Sixth
Applicant
and
PUBLIC PROTECTOR OF
THE REPUBLIC OF
First Respondent
SOUTH AFRICA
MINISTER OF
TELECOMMUNICATIONS
Second Respondent
AND POSTAL
SERVICES
LUMKO
MTIMDE
Third
Respondent
JUDGMENT
MOLEFE
J
[1]
The applicants apply for an order reviewing and setting aside the
first respondent’s
final report dated 28 August 2018
[1]
,
alternatively, reviewing and setting aside the findings made in
paragraph 6 of the report, the remedial action imposed in paragraph
7
of the report, and the monitoring in paragraph 8 of the report.
The review is premised on procedural unfairness, irrationality
and
illegality of the first respondent’s investigation. The
applicants further seek a punitive costs order against
the first
respondent.
[2]
The application is opposed by the first respondent. The second
respondent has
served a notice to abide the Court’s decision,
and the third respondent is not opposing the application.
FACTUAL MATRIX
[3]
The Board of Directors of Universal Service and Access Agency of
South Africa (“USAASA”)
was appointed by the Minister of
Telecommunications and Postal Service (‘the second respondent’)
for a 3 (three) year
term. The applicants were all members of
the Board until they were removed by the second respondent on 30
August 2018.
The third respondent was appointed as the Chief
Executive Officer of USAASA on 23 May 2016 for a fixed 3 (three) year
term.
The appointment was made in terms of section 82A of the
Electronic Communications Act.
[2]
[4]
On 11 June 2017, the Board adopted a resolution placing the third
respondent on suspension.
However, the suspension was never
implemented due to the intervention by the Minister. The Board
then appointed a three-member
sub-committee to identify issues in
relation to the conduct and performance of the third respondent on
all areas on which the Board
had taken resolutions. A
preliminary report by the sub-committee was adopted, resulting in a
Board resolution to institute
disciplinary proceedings against the
third respondent.
[5]
On 1 March 2018, the Board adopted a resolution to place the third
respondent on suspension
with full pay. The third respondent
filed an urgent application in the Labour Court challenging his
suspension, and also
sought an order to interdict the disciplinary
inquiry which was to commence on 25 April 2018 as an occupational
detriment.
On 24 April 2018, the Labour Court struck the
application from the roll with costs for lack of urgency.
[6]
The disciplinary inquiry chaired by an independent chairperson
commenced on 25 April
2018, and the third respondent was charged with
serious acts of misconduct and financial irregularities. During
the inquiry,
the third respondent failed to attend the hearing and
informed the chairperson that he was ill and had been hospitalised.
The inquiry was postponed to 31 May and 1 June 2018 in order to
accommodate the third respondent, and these dates were communicated
to him.
[7]
On or about 25 May 2018, the third respondent advised the chairperson
of the disciplinary
hearing that he had lodged a protected disclosure
complaint with the Public Protector (the first respondent), and as a
result,
the disciplinary hearing should be postponed. The
request for a postponement was declined, and the disciplinary hearing
proceeded
in the third respondent’s absence.
[8]
The litigation between the applicants and the Public Protector has
its genesis in
the third respondent’s complaint, which he
lodged with the Public Protector on 15 May 2018. The issues
contained in
the complaint are
inter alia
that –
8.1 the appointment and
remuneration of the Company Secretary by the USAASA Board was in
violation of the provisions of the Companies
Act, the USAASA
Recruitment and Selection Policy, the Electronic Communications Act
36 of 2005 (‘the ECA’), the Public
Finance Management Act
1 of 1999 (‘the PFMA’) and other relevant legislation and
prescripts that regulate the appointment
and remuneration of the
company secretary of USAASA; and
8.2 the corrupt and undue
interference by the applicants against attempts by third respondent
to legally set aside the continuation
of the unlawful and irregular
process embarked upon regarding the production and manufacturing of
Set Top Boxes in terms of the
Broadcasting Digital Migration.
[9]
On 24 May 2018, the Public Protector issued a notice in terms of
section 8(1) of the
Protected Disclosure Act
[3]
,
and advised the applicants that she had accepted the third
respondent’s complaints and classified the information
disclosed
as a ‘Protected Disclosure’. In that
notice the Public Protector requested the applicants not to subject
the
third respondent to occupational detriment.
[4]
[10]
On 25 May 2018, the Public Protector addressed a letter to the
applicants in which she requested
that the Board should suspend all
further disciplinary processes against the third respondent, pending
the outcome of the Public
Protector’s investigation. A
legal opinion was obtained by the applicants from a Senior Counsel,
who advised the USAASA
board that the first respondent had no
authority to request the halting of the disciplinary inquiry while an
application on the
same facts was still pending before the Labour
Court.
[11]
On 30 May 2018, the third respondent sent an email to the chairperson
of the disciplinary inquiry,
requesting a postponement due to ill
health, and Mr Abongile Madiba of the Public Protector’s office
was copied in the email.
This request was also denied by the
chairperson of the inquiry and the disciplinary hearing was completed
in the third respondent’s
absence and he was subsequently
dismissed.
Relevant Legal
Principles
The Protected
Disclosure Act (‘the Act’)
[12]
The Act is designed to protect whistle blowers who make protected
disclosures
[5]
against
occupational detriments such as victimisation and dismissal.
The object of this Act
are –
(a) to protect an
employer, whether in a private or the public sector, from being
subjected to an occupational detriment on
account of having made a
protected disclosure;
(b) to provide for
certain remedies in connection with any occupational detriments
suffered on account of having made a protected
disclosure; and
(c) to provide for
procedures in terms of which an employee can, in a responsible
manner, disclose information regarding improprieties
by his or her
employer.
[13]
Section 3 of the Act provides that no employee may be subjected to
any occupational detriment
by his or her employer on account or
partly on account of having made a protected disclosure.
[14]
The office of the Public Protector was created under section 181 of
the Constitution
[6]
to
strengthen constitutional democracy in the Republic. Section
181(2) requires the Public Protector to be independent and
subject
only to the Constitution and the law, and to be impartial. The
Public Protector is charged with rooting out improper
conduct in
Government for the public benefit. The institution of the
Public Protector was ultimately created to serve the
people, and to
protect their interests against those in power, who might be tempted
to abuse it for nefarious purposes.
[7]
[15]
Under section 182(1) of the Constitution, the Public Protector has
the power to investigate any
conduct in state affairs or in the
public administration in any sphere of government that is alleged or
suspected to be improper
or to result in any impropriety or
prejudice, to report on that conduct, and to take appropriate
remedial action. The chapter
nine institutions must exercise
their powers and perform their functions without fear, favour or
prejudice, and obliges all organs
of State to assist these
institutions to ensure the independence, impartiality, dignity and
effectiveness of these institutions.
[8]
[16]
The powers of the Public Protector are regulated by the Public
Protector Act,
[9]
and she has a
duty to act lawfully. In
Democratic
Alliance v Public Protector; Council for the Advancement of the South
African Constitution v Public Protector
[10]
it was held that:
“
[30]
The PP must, like any public functionary, exercise her powers and
functions lawfully, in compliance with
her constitutional and
statutory mandate and duties. The proper and effective
performance of the functions of the PP is of
particular importance,
given her constitutional mandate and the extraordinary powers that
are vested in her office. When
the PP fails to discharge her
mandate and duties, the strength of South Africa’s
constitutional democracy is inevitably comprised,
and the public is
left without the assistance of their constitutionally created
guardian”.
[17]
In
Economic
Freedom Fighters v Speaker, National Assembly & others
[11]
it was stated that the Public Protector is:
“
one of the most
invaluable constitutional gifts to our nation in the fight against
corruption, unlawful enrichment, prejudice and
impropriety in State
affairs and for the betterment of good governance”.
[18]
Section 7 of the Public Protector Act describes the investigative
powers of the Public Protector,
which includes the power to subpoena
any person to give evidence on affidavit or in person, to produce
documents, or to appear
as a witness.
THE PROCEDURAL UNFAIR
INVESTIGATION
[19]
If it appears to the Public Protector during the cause of an
investigation that any person is
being implicated in the matter being
investigated, and that such implication may be to the detriment of
that person, or that an
adverse finding pertaining to that person may
result, the Public Protector shall afford such a person an
opportunity to respond
in connection therewith, in any manner that
may be expedient under the circumstances.
[12]
[20]
It is evident that the Public Protector Act provides for the right to
be heard. The court
in
Hlophe
v Constitutional Court of South Africa & others
[13]
stated that:
“
The foundation of
the right to be heard is not only constitutional; it is also anchored
in the common law principle of
audi alteram partem
that
recognises as part of the rules of natural justice, the right to
every person to be consulted or heard before a decision or
step is
taken that affects or may affect such person”.
[21]
On 24 May 2018, the Public Protector issued a notice in terms of
section 8(1) of the Act, purporting
to be initiating an investigation
into the allegations of maladministration, corruption, improper
conduct and abuse of power by
the Board of Directors of USAASA,
lodged by the third respondent.
[14]
The investigation was into:
“
(2.1) The
irregular appointment and remuneration of the Company Secretary in
terms of the provisions of the Companies Act, USAASA
staffing policy,
the Electronic Communication Act, the
Public Finance Management Act,
as
well as other relevant legislations and prescripts regulating the
appointment and a remuneration of a company secretary and in this
instance, specifically for USAASA, and
(2.2) The ostensible
corrupt and undue interference by the Board of USAASA in attempts by
the CEO to legally set aside a continuation
with the unlawful and
irregular process embarked upon regarding the Broadcasting Digital
Migration, in particular the production
and manufacturing of set top
boxes, a matter which is of national importance resulting in the
Board of Directors unconscionably
suspending the CEO from duty”.
[22]
This was then followed by a
section 7(9)(a)
notice of the Public
Protector Act on 15 June 2019, whereby the applicants were given 5
(five) days to respond to those aspects
of the evidence that may
implicate them in the investigation.
[23]
In response to the section 7(9) notice the applicants sent a letter
to the Public Protector on
20 June 2018, requesting her to remove Mr
Madiba from the investigation as he had taken an interest in the
matter and had shown
his unfair bias. The contents of Mr
Madiba’s email dated 31 May 2018 sent to the Board were:
“
Dear Mam, I think
this now constitutes contempt of the Public Protector which must be
actionable as such. The notice was submitted
to the Board and
they know about the protected disclosure that was filed with the
Public Protector.
Bayadelela
and nothing else.
Perhaps Mr Nemasisi can advise of an appropriate action to take
against the entire Board”.
[24]
Counsel for the applicants submits that this statement is highly
prejudicial and shows that the
outcome of the investigation and the
remedial action in the report have been pre-determined. Counsel
argued that it was after
Mr Madiba’s email of 31 May 2018 above
that on 15 June 2018 the Public Protector issued the section 7(9)
notices with a request
that the applicants should respond to the
notices by 22 June 2018.
[25]
Following the receipt of the section 7(9) notices, the applicants
wrote a letter to the Public
Protector informing her that her refusal
to remove Mr Madiba from the investigation left them with no option
but to approach the
Court for an appropriate relief, including
setting aside of her investigation as procedurally unfair and tainted
with irrationality
and illegality. The investigation was
already complete and the Public Protector only published the final
report which was
sent to the applicants on 10 August 2018, on 5
February 2019.
[26]
In
S v
Roberts
,
[15]
the Court stated that:
“
A cornerstone of
our legal system is the impartial adjudication of disputes which come
before our courts and tribunals. What
the law requires is not
only that a judicial officer must conduct the trial open-mindedly,
impartially and fair, but that such
conduct must be manifest to all
those who are concerned in the trial and its outcome, especially the
accused”.
[27]
The objective is to manifest that conduct of a fair investigation
must be evident to the parties
involved. Justice must not only
be done, but must manifestly be seen to be done.
[16]
This implies that not only actual bias but also the reasonable
perception of bias disqualifies the Public Protector or her
officers
from continuing to preside over the investigation. It is
therefore enough that the applicants had a reasonable suspicion
that
Mr Madiba as the Chief Investigator might be biased. The Public
Protector ought to have removed him.
[28]
Contrary to the Public Protector’s contention that the findings
at that stage were only
provisional “
based
on the information and evidence obtained so far as well as the
conduct of the Board
.
. .”, I agree with the applicants’ submission that it was
at this very stage of the investigation that the Public
Protector
violated the applicants’ rights to be heard. Natural
justice was implied because of the seriousness of the
allegations and
the potential damage to the applicants’ reputation if they were
not given an opportunity to be heard at the
representation stage.
[17]
[29]
The Public Protector had a duty to afford the applicants an
opportunity to reply to the complaints
before a report was issued.
In this regard the investigation was therefore procedurally unfair,
and the report stands to
be set aside.
DISCIPLINARY INQUIRY
[30]
The Public Protector Act defines and expressly circumscribes the
instances where the Public Protector
may refuse or must refuse to
investigate a complaint reported to her office.
Section 6(3) provides
that:
“
(3) The Public
Protector may refuse to investigate a matter reported to him or her,
if the person ostensibly prejudiced in the matter
is an officer or
employee in the service of the State; or is a person to whom the
provisions of the Public Service Act 1994 (Proclamation
103 of 1994)
are applicable and has, in connection with such matter not taken all
reasonable steps to exhaust the remedies conferred
upon him or her in
terms of the said Public Service Act, 1994; or prejudiced by conduct
referred to in subsections (4) and (5)
and has not taken all
reasonable steps to exhaust his or her legal remedies in connection
with such matter”.
The Public Protector may
at any time (prior to, during or after an investigation), refer any
matter which has a bearing on an investigation
to the appropriate
public body or authority.
[18]
[31]
In her letter dated 31 May 2018, the Public Protector requested the
applicants to keep the disciplinary
proceedings against the third
respondent in abeyance for 7 days to give her time to investigate the
third respondent’s complaint.
The applicants’
submission is that they could not accede to this request because it
was unlawful. When the third respondent
lodged the said
complaint with the Public Protector, he had already approached the
Labour Court on the same allegations to uplift
his suspension, and to
interdict the applicants from proceeding with the disciplinary
inquiry.
[19]
The
application was struck from the roll for lack of urgency.
[32]
In a letter dated 30 May 2018, the applicants informed the Public
Protector at the onset of her
investigation that the matter of
protected disclosure as alleged by the third respondent was still
pending on the merits before
the Labour Court, and that the third
respondent had not exhausted his legal remedies as provided for in
section 6(3)(b).
[20]
The
applicants’ requested the Public Protector to not entertain the
third respondent’s complaint in this regard
but she refused to
oblige, despite the pending court process.
[33]
The Public Protector’s findings with regard to whether the
applicants violated the provisions
of the Act by refusing and/or
frustrating and/or by failing to assist the Public Protector to
investigate the protected disclosure
lodged by the third respondent,
and proceeding with a disciplinary inquiry against him despite having
been notified of a complaint
in terms of the Act, that was lodged
with her against the applicants are detailed in her report.
[21]
The Public Protector found that the applicants subjected the third
respondent to occupational detriment on account of having
made a
protected disclosure which was in violation of section 3 of the Act.
[34]
It is the applicants’ submission that the Public Protector
ought to have allowed the matter
pending before the Labour Court to
conclude instead of investigating the matter herself. The
Labour Court had refused the
third respondent’s application to
interdict the disciplinary proceedings but his application was
lis
pendens
since the matter was still to be heard on the merits, and
the application was not withdrawn.
[35]
The Act affords an employee the right to approach any court having
jurisdiction, including the
Labour Court for appropriate relief or to
pursue any other process allowed or prescribed by any law.
[22]
It does not provide for an employee to elect one forum over the other
or both. Consequently, the applicants were within
their rights
to continue with the disciplinary proceedings against the third
respondent, and the Public Protector’s finding
that the
applicants should have halted same is in my view unlawful and ought
to be set aside.
THE APPOINTMENT OF THE
COMPANY SECRETARY
[36]
The interpretation and implementation of the provisions of section
83(5) of the Electronic Communications
Act
[23]
(the ECA) is the source of the difference between the parties.
The section 83 reads as follows:
“
CEO and Staff of
Agency
The Agency is under the
direction and control of the CEO appointed by the Board. The
CEO must employ a staff, including senior
management and such other
persons as may be necessary to assist him or her with the performance
of the functions of the Agency;
2. . . ;
3. . . .;
4. . . . ;
5. The CEO must employ a
staff, including senior management and such other persons as may be
necessary to assist him or her with
the performance of the functions
of the Agency”.
[37]
The USAASA Delegation of Authority of September 2015 under the
heading “Personnel Matters”,
provides for the appointment
or dismissal of the prescribed officer i.e. Company Secretary and the
Chief Financial Officer (“CFO”)
to be recommended by the
CEO for the approval by the Board.
[24]
[38]
Section 56(2)(c)
of the
Public Finance Management Act
(“PFMA”)
states that the Board’s delegation or instruction to the CEO in
terms of
section 56(1)
of the same Act does not divest the Board of
the responsibility concerning the exercise of the delegated power or
the performance
of the assigned duty. The Board also has the
power under section 56(3) of the PFMA to confirm, vary or revoke any
decision
taken by the CEO as a result of a delegation or instruction
in terms of subsection (1).
[39]
In his complaint to the Public Protector, the third respondent made
an allegation that by appointing
the company secretary at a salary
above the one advertised for the post, the applicants’
committed an impropriety. This impropriety
was also disclosed to the
Auditor General and the Treasury.
[40]
The application of section 83(5) of the ECA in relation to the
appointment of a company secretary
is qualified. Although the
CEO may appoint the company secretary, this appointment remains
subject to approval by the Board.
The appointment of the
company secretary is therefore the purview of the Board. In her
report, the Public Protector was wrong
in her reliance on section
83(5) of the ECA in respect of the appointment of a company secretary
being the purview of the third
respondent to the exclusion of the
Board. In addition, the power to appoint a company secretary is
a corporate governance
matter.
[25]
The purpose of the King Report is to promote the highest standards of
corporate governance in South Africa. The Code
of Corporate
Practices and Conduct contained in the King Report applies
inter
alia
,
to State-Owned Entities and agencies that fall under the PFMA,
including the USAASA.
[41]
In my view, the USAASA Board complied with the PFMA and the ECA which
provide for and recognise
the powers of the Board to control the
affairs of the USAASA, and ensure compliance with its policies, and
all the applicable legal
prescripts. There was therefore
nothing untoward in the Board’s appointment of the company
secretary, and the first
respondent’s finding in this regard
was irrational and unlawful and should be set aside.
COMPANY SECRETARY’S
REMUNERATION
[42]
The Public Protector’s finding is that the applicants
contravened section 51(1)(b) and
51(1)(h) (ii) of the PFMA for
non-compliance with the USAASA Recruitment and Selection Policy.
Rule 17 of the policy reads:
“
APPOINTMENT OF
CANDIDATES ON REMUNERATION ABOVE MINIMUM NOTCH OF THE SALARY RANGE
ENTRY (PERSONAL NOTCH)
17.1 If there is a need
to recruit a competent employee with rare, critical or exceptional
expertise and skills and such an employee
cannot be recruited at the
salary level indicated in the job weight, the CEO may authorise the
granting of a salary above the minimum
notch of the salary level as
indicated by the job weight. This will depend on the
circumstances of the candidate and the
availability of funds. . .”
[43]
The company secretary, Ms Motloung was earning in the region of R1.5
million at her previous
employment, and the previous company
secretary was earning R1.3 million. It is the applicants’
submission that the
appointment of Ms Motloung at the same salary
level could not have been a deviation from the operational policies
of the USAASA,
as it was clearly in line with clause 5.1.9.3 of the
Protocol, which provides that remuneration of directors should take
into account
the need to attract, incentivse and retain high quality
skill, experience and expertise as well as loyalty and commitment to
the
SOE.
[26]
[44]
It is further the applicants’ submission that they had
authority to vary the recommendation
of the third respondent and
increase the company secretary’s salary grade in terms of the
Delegation of Authority, which
also provides expressly that
remuneration of EXCO members is made under the recommendation of the
third respondent, and subject
to the approval of the Board.
[45]
In my opinion, the view held by the Public Protector that the company
secretary is on the same
level of employment as a senior manager and
therefore a level 3 employment is wrong. The Protocol on
Corporate Governance
in the Public Sector reads at clause 5.1.4.4
that:
“
The company
secretary should provide a central source of guidance and advice to
the Board and within the SOE as a whole on matters
of business ethics
and good governance. As a result, it is imperative that a
company secretary’s appointment be subject
to the same “fit
and proper test” to which a new director’s appointment is
subject. The company secretary’s
performance should also
be appraised in the same manner as that for the directors of the
SOE”.
[46]
It suffices therefore that any scheme employed in remunerating a
company secretary should follow
the provisions of 5.1.9.3 above.
[47]
I am satisfied that the applicants’ acted within their powers
to remunerate the company
secretary at an amount higher than was
previously advertised for the post. They did not commit an
irregular expenditure nor
financial misconduct.
[27]
The Public Protector’s finding against the applicants in
this regard was irrational and should be set aside.
Disclosure to the
Treasury and the Auditor General
[48]
In her report, the Public Protector makes a finding that the third
respondent was subjected to
an occupational detriment in
contravention of the Act by the applicants because he made a
disclosure to the applicants, Treasury
and the AGSA about the
irregular appointment of the company secretary.
[49]
It is the applicants’ submission that the letters from the
USAASA to the AGSA and Treasury
were written pursuant to advice from
the CFO, Mr Willie Olivier, who on 30 October 2017 took the
initiative to apprise the third
respondent of possible irregularities
in the Board’s approval of the company secretary’s
remuneration.
[28]
These
letters were intended to seek advice and to report the matter to the
AGSA as a matter of practice, as the appointment
of the company
secretary involved moneys in excess of one million rand (R1
million). By the third respondent’s own
admission, these
letters emanated from his initiative to seek clarity on whether
implementing the Board’s decision to appoint
a company
secretary would not (i) attract an audit finding; (ii) not be
non-complaint with policy; or (iii) not be deemed unlawful
[29]
.
[50]
Counsel for the Public Protector submitted that the applicants have
failed to recognise that
in fact the third respondent made the first
disclosure to the applicants by writing a note by hand on the last
page of Mr Olivier’s
submission wherein he stated that: “
I
appeal to the Board to review in the light of the SIU, Salary
desperations (sic) ECA, USAASA Policy and need to avoid audit finding
compromising labour relations and non-compliance with PFMA
”
[30]
,
which the applicants ignored. Counsel contends that the
applicants, being the employer at the time, should have in terms
of
section 3B of the Act, commenced with an investigation into the
matter or referred the disclosure to another body. Instead
the
applicants subjected the third respondent to occupational detriment
in the form of his suspension and ensuing disciplinary
inquiry.
[51]
The letter dated 15 December 2017, from the third respondent to the
applicants confirms that
he notified the National Treasury and
Auditor General of the issues related to the appointment of the
company secretary.
The letter to Treasury read as follows:
“
the purpose of
this letter is to seek advice from the National Treasury on the
appointment of the Company Secretary at the Universal
Service and
Access Agency of South Africa (USAASA) . . .
As the amount is above
R1 000 000.00 (One million rand) it is being reported to
the National Treasury and Auditor General
of South African (AGSA)”.
[52]
Section 51(2) of the PFMA provides that:
“
(2) If an
accounting authority is unable to comply with any of the
responsibilities determined for an authority in this Part, the
accounting authority must promptly report the inability, together
with reasons to the relevant executive authority and treasury”.
[53]
It is clear that the letter from the USAASA above was simply common
governance practice which
sought advice on whether the appointment of
the company secretary resulted in non-compliance with applicable
legislation and policies,
and can by no means be regarded as
protected disclosure by the Treasury and the AGSA. More
importantly, the letter was not
even written by the third respondent,
but by the CFO of the USAASA.
[54]
Furthermore, despite the CFO in a letter dated 24 October 2017
cautioning the third respondent
on possible irregularities in
remunerating the company secretary above level 13, the third
respondent authorized a letter of appointment
to the company
secretary on 7 November 2017. I agree with the applicants’
submission that these were not actions of
someone concerned with
impropriety. Consequently, the conclusion by the Public
Protector’s report that the third respondent’s
report to
the AGSA and Treasury in such circumstances was protected disclosure
is irrational and unlawful. The finding could
not be further
from the truth because the third respondent never made a protected
disclosure to the Treasury and the AGSA.
REMEDIAL ACTION
[55]
The issue regarding the powers of the Public Protector to take
remedial action has come before
our courts, and the courts have held
that section 182(1)(c) of the Constitution empowers the Public
Protector to determine the
remedies and direct the implementation
thereof in her pursuit of realising the constitutional purpose of her
office. Based
on a misguided believe that there was a protected
disclosure, the Public Protector directs the following unprecedented
form of
remedial action in her report:
“
Directing that the
second respondent of Telecommunications and Postal Services take
decisive and appropriate action against the
Board, and the Board
members should personally pay the costs of the litigation and the
disciplinary inquiry effective from the
date the first respondent
informed the Board of the protected disclosure lodged with her, and
further that an application be made
to court for a declaration of the
entire Board as delinquent directors;
Directing the Board to
lift the third respondent’s suspension; extend an apology to
the third respondent for the manner in
which the Board handled his
complaint;
Directing the third
respondent to recover from the Board members personally, the costs
the USAASA incurred with regard to appointment
and remuneration of
the company secretary effective from the date the first respondent
informed the Board of the protected disclosure
lodged with her.”
[31]
[56]
The Public Protector claims that her power and jurisdiction to
investigate and to take appropriate
remedial action justifies this
extraordinary relief on the explicit premise that “
the Board
violated the Protected Disclosure Act and defiant of the first
respondent, which defiance is in violation of section 181(3)
of the
Constitution”
. I have already found that the Public
Protector had no powers to halt the disciplinary hearing. I have also
noted that in
her report she found that appointing and remunerating
the company secretary above the level advertised did not constitute
an irregular
expenditure. However, she then contradicts herself
in her findings and the remedial action.
[57]
The Constitutional Court in
Economic
Freedom Fighters
[32]
emphasized that although the Public Protector’s powers to take
appropriate remedial action is wide, it is certainly not unfettered.
The remedial action is always open to judicial scrutiny. It is
also not ‘inflexible in its application but situational’.
An appropriate remedial action in a particular case depends on the
nature of the issues under investigation and the findings made.
Remedial action is therefore context specific.
[58]
In my view, the Public Protector’s remedial action does not
meet the criteria as set out
in
Economic Freedom Fighters
supra.
The remedial action is therefore improper and irrational and is set
aside.
[59]
The Public Protector’s report is essentially premised on the
basis that the disciplinary
proceedings against the third respondent
on 31 May 2018 constitute an occupational detriment and was
instituted by way of retaliation
against protected disclosures made
by the third respondent to the Treasury and AGSA on 17 November 2017,
and to the Public Protector
on 15 May 2018.
[60]
In
Public
Protector v Mail and Guardian
[33]
,
the
Court specifically addressed the nature of the Public Protector’s
duty to investigate complaints or suspicious of improper
conduct and
abuses of power in the public administration. The SCA held that
she is obliged to be proactive, impartial and
determined in her
investigations and to retain an open and enquiring mind.
[61]
I am not satisfied that the Public Protector conducted her
investigation as comprehensively as
possible in order to inspire
confidence that the truth had been discovered. Her report is
inaccurate and not reliable, and
the remedial action is irrational in
that it is not rationally connected to the information before her and
the reasons given for
it. It is trite that a report of the
Public Protector is legally binding and of full force and effect
until it has been reviewed
and set aside.
[34]
Following a declaration of invalidity, this court has the power to
order a just and equitable remedy under section 172(1)(b)
of the
Constitution.
[35]
In
this regard, the report is declared invalid and is reviewed and set
aside.
Costs
[62]
Counsel for the applicants submits that the Public Protector should
be ordered to pay costs of
this review on a punitive scale, as a
measure and indication of the Court’s displeasure at the manner
in which she conducted
the investigation, the reputational harm
suffered by the applicants as a result, and the unnecessary costs
incurred by the applicants
in an effort to undo the damage caused to
them by the report. On 5 September 2018, the Public Protector
issued a media statement
condemning the applicants’ efforts to
assert their rights by seeking to overturn her report and remedial
action.
[36]
[63]
The leading case on the award of costs on an attorney-and-client
basis is
Nel
v Waterberg Land bouwers Ko-operative Vereeniging,
[37]
Tindall JA stated that by reason of special considerations arising
either from the circumstances which give rise to the action
or from
the conduct of the losing party, the court in a particular case may
consider it just by means of such an order, to ensure
more
effectually than it can do by means of a judgment for party-and-party
costs, that a successful party will not be out of pocket
in respect
of the expenses caused by litigation.
[64]
The award of costs is a matter wholly within the discretion of the
court, and this is a judicial
discretion which must be exercised on
reasonable grounds. Even the general rule, viz that costs
follow the event is subject
to the overriding principle that the
court has a judicial discretion in awarding costs. An award of
attorney-and-client costs
will not be granted lightly, as the court
looks upon such orders with disfavour, and is loath to penalise a
person who has exercised
a right to obtain a judicial decision on any
complaint such party may have.
[38]
[65]
There is no reason why the ordinary rule in civil litigation that
costs follow the result should
not apply, given the facts and
circumstances in this matter. I am not in agreement with the
applicants’ contention
that the Public Protector should pay
costs on a punitive scale.
ORDER
[66]
I therefore make the following order:
1. The
Public Protector’s final report dated 28 August 2018 (Report No
13 of 2018/19) is reviewed and set
aside.
2. The
Public Protector to pay the costs of this application.
D S MOLEFE
JUDGE OF THE HIGH
COURT
GAUTENG DIVISION HIGH
COURT, PRETORIA
Delivered: This
judgment was prepared and authored by the Judge whose name is
reflected and is handed down electronically
by circulation to the
Parties/their legal representatives by email and by uploading it to
the electronic file of this matter on
CaseLines. The date for
hand-down is deemed to be 28 May 2021.
Appearances:
Counsel
for the Applicants
Adv. I Kealotswe-Matlou
Instructed
by
Victor Mabe Attorneys
Counsel for the first
Respondent
Adv. I Phalane
Instructed
by
VZLR INC. Attorneys
[1]
Report No 13 of 2018/2019.
[2]
Act 36 of 2005.
[3]
Act 26 of 2000
[4]
Supplementary Answering Affidavit, Annexure ‘SAA1’ pages
724-726.
[5]
Definition of “disclosure” is any disclosure of
information regarding any conduct of an employer, or an employee
of
that employer, made by any employee who has reason to believe that
the information concerned shows or tends to show one or
more of the
following: (a) that a criminal offence has been committed, is being
committed or is likely to be committed;
(b)
that a person has failed, is failing, or is likely to fail to comply
with any legal obligation to which that person is subject;
(c)
that a miscarriage of justice has occurred, is occurring or is
likely to occur; (d). . . (e) . . . (f) . . . (g). . . .
[6]
The Constitution of the Republic of South Africa, 1996.
[7]
Democratic
Alliance v Public Protector; Council of the South African
Constitution v Public Protector
2019
(3) All SA 127
(GP) para 20
.
[8]
Sec 181(2) and (3) of the Constitution.
[9]
Act 23 of 1994
[10]
Democratic
Alliance v Public Protector; Council for the Advancement of the
South African Constitution v Public Protector
2019 (3) All SA 127
(GP), para 30.
[11]
Economic
Freedom Fighters v Speaker, National Assembly & others
2016 (3) SA 580
CC, para 52.
[12]
Section 7(9) of the Public Protector Act.
[13]
Hlophe
v Constitutional Court of South Africa and Others
(08/22932)
[2008] ZAGPHC 289
(25 September 2008) para 20.
[14]
Annexure “MC7”, page 144
[15]
S v
Roberts
1999
(4) SA 915
(SCA) para 25.
[16]
R v
Sussex Justices, ex parte McCarthy [1924] 1 KB256 at 259.
[17]
Hlophe
v
Constitutional Court of South Africa & others
,
para 70.
[18]
Section 6(4)(c) Public Protector Act.
[19]
Annexures “RH 10” and “RH 11”.
[20]
Section 6(3)(b) of the Public Protector Act.
[21]
Report pages 87 to 89 paras 61-6.12
[22]
Section 4 of the Protected Disclosure Act.
[23]
Act 36 of 2005.
[24]
Annexure “RH 15”.
[25]
King Code IV report of 2016. “Annexure RH 16”.
[26]
Clause 5.1.9.3 of the Protocol provides that: “Any scheme
employed in remunerating directors should take into account the
need
to attract, incentivise and retain high quality skill, experience
and expertise as well as loyalty and commitment to the
SOE”.
[27]
Annexure “RH 19” letter from the AGSA dated 28 February
2018.
[28]
Annexure “RH22”, page -
[29]
Supplementary affidavit, Annexure “MD1”
[30]
Answering Affidavit, Annexure ‘AA8’ pages 610-618.
[31]
Report No 13 of 2018/2019, pages 62 and 64.
[32]
Economic
Freedom Fighters
para 84.
[33]
Public
Protector v Mail and Guardian
2011 (4) SA 420 (SCA).
[34]
Economic
Freedom Fighters
,
paras 73-75.
[35]
Section 172 of the Constitution of South Africa: (1) when deciding a
constitutional matter within its power a court: (a) must
declare
that any law or conduct that is inconsistent with the Constitution
is invalid to the extent of its inconsistency; (b)
may make an order
that is just and equitable including – (1) an order limiting
the retrospective effect of the declaration
of invalidity; and (ii)
an order suspending the declaration of invalidity for any period and
on any conditions, to allow the
competent authority to correct the
defect.
[36]
Founding affidavit page 19, para 39, Annexure “MC10”.
[37]
Nel v
Waterberg Land bouwers Ko-operative Vereeniging
1946 AD
597
, interpreted with Mudzimu v Chinhoyi Municipality
1986 (3) SA
140
(ZH) at 143 D-144.
[38]
Pienaar
v Boland Bank
1986
(4) SA 102
(O) at 116 B-C.