Absa Bank Limited and Others v Public Protector and Others (48123/2017; 52883/2017; 46255/2017) [2018] ZAGPPHC 2; [2018] 2 All SA 1 (GP) (16 February 2018)

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[2018] ZAGPPHC 2
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Absa Bank Limited and Others v Public Protector and Others (48123/2017; 52883/2017; 46255/2017) [2018] ZAGPPHC 2; [2018] 2 All SA 1 (GP) (16 February 2018)

IN
THE HIGH COURT OF SOUTH AFRICA
(GAUTENG
DIVISION, PRETORIA)
Case
number: 48123/2017
52883/2017
46255/2017
Date: 16/2/2018
In
the matter between:
ABSA
BANK
LIMITED                                                                                        APPLICANT
(CASE
NO: 48123/2017)
SOUTH
AFRICAN RESERVE
BANK                                                                  APPLICANT
(CASE
NO.: 52883/2017)
MINISTER
OF
FINANCE

APPLICANT
(CASE
NO.: 46255/2017)
NATIONAL
TREASURY                                                                                      APPLICANT
(CASE
NO.: 46255/2017)
And
PUBLIC
PROTECTOR
FIRST
RESPONDENT
SPECIAL
INVESTIGATING UNIT
SECOND
RESPONDENT
THE
PRESIDENT OF THE REPUBLIC OF SOUTH AFRICA
THIRD
RESPONDENT
JUDGMENT
THE
COURT,
INTRODUCTION:
(1)
The Public Protector issued a final report, Public Protector's Report
8 of 2017/2018 into the
"Alleged Failure to Recover
Misappropriated Funds"
(the Report) on 19 June 2017. The
Public Protector made certain factual findings and came to certain
conclusions in the Report that
includes that the South African
Government had improperly failed to implement the CIEX report which
dealt with alleged stolen state
funds, after commissioning the report
from CIEX and paying for it; the Government and the Reserve Bank had
improperly failed to
recover R3,2 billion from Bankorp Limited/ABSA,
and that the South African public was prejudiced by the conduct of
the South African
Government and the Reserve Bank.
(2)
These findings and conclusions by the Public Protector lead to her
prescribing certain remedial actions in her report. The remedial

actions are set out in paragraphs 7 and 8.1 of the Report as follows:
"7.
REMEDIAL
ACTION
7.1 The Special Investigating
Unit:
7.
1.1 The Public Protector refers
the matter to the Special Investigating Unit in terms of section
6(4)(c)(ii) of the Public Protector
Act to approach the President in
terms of
section 2
of the
Special Investigating Units and Special
Tribunals Act No. 74 of 1996
, to:
7.1.1.2
Re-open and amend
Proclamation R47 of 1998 published in the Government Gazette dated
7
May 1998 in order to recover misappropriated public funds
unlawfully given to ABSA Bank in the amount of R1. 125 billion; and
7.1.1.3
Re-open and amend
Proclamation R47 of 1998 published in the Government Gazette dated
May 1998 in order to investigate alleged misappropriated
public funds
given to various institutions
as
mentioned in the CIEX report.
7.1.2 The South African Reserve
Bank must cooperate fully with the Special Investigating Unit and
also assist the Special Investigating
Unit in the recovery of
misappropriated public funds
mentioned in 7.1.1.1 and 7.1.1.2.
8. MONITORING
8.1 The Special Investigating Unit,
the South African Reserve Bank and the Chairman of the Portfolio
Committee on Justice and Correctional
Services must submit an action
plan with
(sic)
60 days of this report on the initiatives
taken in regard to the remedial action above."
(3)
This caused the South African Reserve Bank, the Minister of Finance
and the Treasury, and ABSA, respectively, to institute review

proceedings, challenging the Report. The Public Protector is the
first respondent in all three applications. These applications
were
consolidated, hence the present hearing dealing with all the relevant
review applications. All the parties challenged the
Report and
requested the Court to review and set aside paragraphs 7.1.1, 7.
1.1.1 and 7.1.2 of the Report, as well as paragraph
8.1.
(4)
The Reserve Bank had previously instituted a review application, on
an urgent basis, that the court should review and set aside
paragraph
7.2 of the Report. The Public Protector consented to the relief
sought in the urgent application and Murphy J
[1]
made it an order of court on 15 August
2017. Throughout, however, the Reserve Bank had reserved its rights
to challenge the remainder
of the Report and does so in these
proceedings. The Reserve Bank instituted the review in terms of
Uniform Rule 53 of the Uniform
Rules of Court. The Reserve Bank
requested the court to review and set aside the whole of paragraphs
7.1.1, 7.1.1.1 and 7.1.2 of
the Report.
(5)
ABSA's application is to review and set aside the remedial action in
paragraphs 7.1.1, 7.1.1.1 and 7.1.2, as well as paragraph
8.1, of the
Report, which imposes the obligation on the second respondent, the
Special Investigating Unit (SIU) and the fourth
respondent, the South
African Reserve Bank. ABSA brings the application for review under
the provisions of
PAJA
[2]
,
in the alternative in terms
of the principle of legality.
(6)
The Minister and Treasury's review application is on the basis of
PAJA,
in
the alternative on the principle of legality in terms of section 1(c)
of the
Constitution
[3]
.
The Minister and Treasury
argued that, should the court set aside paragraphs 7 and 8.1, then
the court should review and set aside
the entire report.
(7)
The applicants' applications for the review and setting aside of the
Public Protector's recommended remedial action is based
on the
following grounds:
7.1 that the Public Protector was not
authorised either by the
Public Protector Act
or any other law
and therefore acted contrary to section 6(2)(a)(i) of
PAJA.
7.2 that the recommended remedial
action was materially influenced by an error of law contrary to
section 6(2)(d) of
PAJA.
7.3 that the action taken by the
Public Protector was for an ulterior purpose or motive contrary to
section 6(2)(e)(ii) of
PAJA.
7.4 that the Public Protector failed
to take into account relevant considerations and had taken into
account irrelevant considerations
contrary to section 6(2)(e)(iii) of
PAJA.
7.5 that the Public Protector acted
arbitrarily contrary to section 6(2)(e)(vi) of
PAJA.
7.6 that the Public Protector imposed
remedial action which is not rationally connected to the purpose for
which it was taken on
the information before her, contrary to section
6(2)(f)(ii)(aa) and (cc) of
PAJA.
7.7 that the remedial action imposed
was so unreasonable that no reasonable person would have exercised
the power or performed the
function, contrary to section 6(2)(h) of
PAJA.
7.8 that the process undertaken in
recommending the remedial action was procedurally unfair, contrary to
section 6(2)(c) of
PAJA.
7.9 that the Public Protector was
biased or reasonably perceived to be biased as contemplated in
section 6(2)(a)(iii) of
PAJA.
(8)
In the alternative, the applicants contend that the imposed remedial
action is contrary to the principle of legality. ABSA Bank
and the
Reserve Bank are challenging the Public Protector's Report on the
following grounds:
8.1
that
the Public Protector lacks the jurisdiction to re-open the
investigation into the transfer of funds by the Reserve Bank during

the period 1986 to 1995. The Public Protector's office was
established on 1 October 1994, the transactions in issue, took place

before the establishment of the Public Protector's office. Therefore
the Public Protector, in purporting to exercise her powers
in terms
of section 6(9) of the
Public
Protector Act
[4]
,
lacked jurisdiction to investigate the matter which took place prior
to the establishment of the office of the Public Protector.
She had
failed to consider the effect of the reopening of the investigation
into ABSA Bank on the financial stability of the banking
system; and
8.2
that
the debt, if any, the Public Protector seeks to recover has
prescribed in terms of the provisions of section 11(d) of the
Prescription Act
[5]
(Prescription).
(9)
The Reserve Bank, belatedly, in the replying affidavit, requested the
court to issue a declarator that the Public Protector
had abused her
office. No such relief had been requested in the Notice of Motion and
it only became relevant when the Reserve Bank
filed its replying
affidavit to the Public Protector's answering affidavit.
APPLICATION
BY AMICUS CURIAE:
(10)
Open Secrets Non-Profit Company
("Open Secrets'}
applied
to be admitted as amicus curiae. The application was opposed by all
the reviewing parties.
(11)
According to the founding affidavit of Open Secrets the purpose of
the application was
"to place limited evidence and
submissions before this Court on the nature and existence of
apartheid era economic crimes which
have never been fully
investigated or remediated".
Open Secrets also contended
that there was public interest in having the investigation into
apartheid era economic crimes remitted
to the Public Protector for
comprehensive investigation and reconsideration of the nature and
extent of all such crimes.
(12)
This application is subject to the provisions of Rule 16A. The
relevant part thereof provides in sub-rule (6) that an application
of
this nature shall clearly and succinctly set out the submissions
which will be advanced, the relevance thereof to the proceedings
and
reasons for believing that the submissions will assist the Court and
are different from those of the other parties. If these
requirements
are not met, the Court should, in the exercise of its discretion,
refuse the application
[6]
.
(13)
The main reason, set out by Open Secrets, to be admitted as an amicus
curiae is to place evidence and submissions before this
Court about a
number of apartheid era economic crimes that have not been fully
investigated or remediated. These alleged crimes,
as well as the
question whether they had been fully investigated or not, are not
relevant to the issues in the main proceedings.
The main issue before
us is whether this Court should in three different review
applications, which have since been consolidated,
review and set
aside certain conclusions, findings and remedial actions taken by the
Public Protector in her Report dated 9 June
2017.
(14)
Open Secrets sought to introduce new issues relating to the nature
and existence of a number of apartheid era economic crimes
which fall
outside the scope of these proceedings. Furthermore, submissions or
even evidence with regard to these new issues would
not assist the
Court in considering and deciding the main issue. After hearing
argument, the application was dismissed.
LEGAL
AND CONSTITUTIONAL FRAMEWORK:
(15)
In terms of section 181(1) of the
Constitution
the office of
the Public Protector was established
"to strengthen
constitutional democracy in the Republic".
Section 181(2)
clearly provides:
"These institutions are
independent, and subject only to the Constitution and the law, and
they must be impartial and must
exercise their powers and perform
their functions without fear, favour or prejudice."
This
is confirmed in section 181(3) and (4), which guarantees the
independence and no interference in the Public Protector's work.
In
Economic Freedom Fighters v
Speaker of the National Assembly and Others; Democratic Alliance v
Speaker of the National
Assembly
and Others
[7]
Mogoeng CJ held:
"We learn from the sum-total
of sections 181 and 182 that the institution of the Public Protector
is pivotal to the facilitation
of good governance in our
constitutional dispensation. In appreciation of the high sensitivity
and importance of its role, regard
being had to the kind of
complaints, institutions and personalities likely to be investigated,
as with other Chapter Nine institutions,
the Constitution guarantees
the independence, impartiality, dignity and effectiveness of this
institution as indispensable requirements
for the proper execution of
its mandate. The obligation to keep alive these essential
requirements for functionality and the necessary impact is placed
on organs of State. And the Public Protector is one of those
deserving
of this constitutionally-imposed assistance and protection.
It is with this understanding that even the fact that the Public
Protector
was created, not by national legislation but by the supreme
law, to strengthen our constitutional democracy, that its role and
powers must be understood."
(16)
This power, as set out in the above judgment, must be exercised with
respect for the organs of State the Public Protector investigates
and
she has to give due deference to the expertise within these organs of
State and, in this instance, the Reserve Bank. In
Bapedi
Marota
Mamone v
Commission on Traditional Leadership Disputes and Claims and
Others
[8]
Khampepe J stated:
"A level of deference is
necessary
-
and this is especially the case where matters fall
within the special expertise of
a
particular decision-making
body. We should, as this Court counselled in Bato Star, treat the
decisions of administrative bodies
with "appropriate respect"
and "give due weight to findings of fact
. . .
made by
those with special expertise and experience"."
(17)
The functions of the Public Protector had been set out in section 182
of the
Constitution
[9]
:
"(1) The Public Protector has
the power, as regulated by national legislation-
(a)
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;
(b)
to report on that
conduct; and
(c)
to take appropriate
remedial action.
(2) The Public Protector has the
additional powers and functions prescribed by national legislation."
(18)
The
Public Protector Act
[10]
in section 6(4)(b) empowers the Public
Protector, in her sole discretion, to resolve any dispute or rectify
any act or omission
by
"mediation,
conciliation or negotiation".
Section
6(4)(c)(ii) allows the Public Protector to
"make
an appropriate recommendation regarding the redress of the
prejudice".
Section
8(1) of this Act provides:
"The Public Protector may,
subject to the provisions of subsection (3), in the manner he or she
deems fit, make known to any
person any finding, point of view or
recommendation in respect of
a
matter investigated by him or
her."
(19)
Section 7(9)(a) and (b)(i) provide that any person implicated in the
matter being investigated or subject to a potential adverse
finding
has a right to be heard. This was confirmed by the Supreme Court of
Appeal in South African Broadcasting Corporation SOC
Ltd and Others v
Democratic Alliance and Others
[11]
and by the Constitutional Court in
Economic Freedom Fighters v Speaker of the National Assembly and
Others; Democratic Alliance
v Speaker of the National Assembly and
Others
[12]
.
(20)
Section 1(c) of the Constitution provides that the democratic state
of South Africa was founded on the supremacy of the Constitution
and
the rule of law. Therefor the Public Protector has to act according
to the rule of law in all, or any decisions, she makes.
(21)
Section 223 of the Constitution establishes the Central Bank, the
Reserve Bank. Section 224 of the Constitution provides:
"(1) The primary object of the
South African Reserve Bank is to protect the value of the currency in
the interest of balanced
and sustainable economic growth in the
Republic.
(2) The South African Reserve Bank,
in pursuit of its primary object, must perform its functions
independently and without fear,
favour or prejudice, but there must
be regular consultation between the Bank and the Cabinet member
responsible for
national financial matters."
(22)
Section 225 prescribes the powers and functions of the Reserve Bank.
One of the functions of the Reserve Bank is to act as
lender of last
resort to prevent instability in the banking sector. These powers and
functions are customarily and internationally,
exercised and
performed by central banks. These powers must be exercised with great
skill and care by experts in financial matters.
Other organs of
State, such as the Public Protector, ought not lightly to interfere
with the discretionary exercise and powers
of the Reserve Bank. The
Public Protector's mandate is to pursue maladministration and not to
interfere with experts in other spheres
of government.
(23)
The provisions of the
Special
Investigating Units and Special Tribunals Act
[13]
(the
SIU
Act)
are important. Section
2 of the
SIU Act
provides
that the President may establish special investigating units. Section
4 refers to the functions of a SIU whereas section
5 sets out the
powers of such a unit. Subsection (6)(b) provides:
"The Head of
a
special
investigating unit may refer any matter which, in his or her opinion,
could best be dealt with by the Public Protector,
to the Public
Protector and the Public Protector
may, if he or she deems it
appropriate, refer any matter which comes to his or her attention and
which falls within the terms of
reference of
a
special
investigating unit, to such unit."
Again,
the operative words applying to both a SIU and the Public Protector
are
"may refer".
This subsection allows the Public
Protector and the head of a SIU to refer matters to one another. The
SIU is a statutory institution
established by the President in terms
of section 2 of this Act. It has, like the Public Protector, only
those powers assigned to
it by statute. This subsection does not
create a hierarchy between the two. Each can bring a matter to the
attention of the other,
but neither can instruct the other on how to
deal with a matter.
FACTUAL
BACKGROUND:
(24)
A complaint was lodged in 2010 by Advocate Paul Hoffman SC of the
Institute for Accountability in Southern Africa (IFAISA),
complaining
about the alleged failure of the South African Government to
implement the findings of CIEX Ltd ("CIEX")
and to recover
the money from ABSA.
(25)
The alleged debt arises from what has become known as the "lifeboat
transactions" entered into during the mid-1980s
between the
Reserve Bank and several small banking institutions, which included
Bankorp Ltd, which was in financial distress at
the time. A detailed
exposition of the three agreements the Reserve Bank and Bankorp/ABSA
Bank concluded is set out by Murphy J
in
South
African Reserve Bank v
Public
Protector & Others
[14]
.
In brief the facts are that between 1985 and 1991 the Reserve Bank
had provided financial assistance to Bankorp in the amount
of R1,25
billion, of which R300 million was at an interest rate of 3% per
annum and the balance at 16% interest per annum. Part
of the
agreement was that Bankorp would invest R400 million in the Reserve
Bank. R600 million would be invested at 15% interest
per annum, which
would be used to buy government bonds to serve as security for the
loans. On 1 April 1992 ABSA Bank acquired Bankorp
for an amount of
R1.230 million. The acquisition of Bankorp by ABSA Bank was
conditional upon the existing financial assistance
arrangements
between the Reserve Bank and Bankorp being extended to ABSA bank. The
agreement between ABSA Bank and the Reserve
Bank was terminated.
(26)
CIEX is a UK based assets recovery agency which was headed by a
certain Mr Michael Oatley. In 1997 CIEX had approached the
Government
with a proposal to assist it investigating and recovering
misappropriated public funds and assets, that had, allegedly,
been
misappropriated prior to the coming into being of the democratic
government in 1994. Subsequently, in October 1997, the Government
and
CIEX concluded a Memorandum of Agreement ("MOA"). In terms
of the MOA, CIEX undertook to investigate and advise the
Government
on the recovery of a debt allegedly owed by ABSA Bank and other
entities to the Reserve Bank. In return, and in the
event that CIEX
recovered any illicit funds, the government undertook to pay it a
certain percentage of the recovered funds as
commission. CIEX thus,
allegedly, operated as a bounty hunter on behalf of the government.
(27)
In pursuance of its mandate CIEX produced three reports. In the final
report, CIEX concluded that there were corruption, fraud
and
maladministration committed in relation to the financial assistance
the Reserve Bank rendered to Bankorp/ABSA Bank. The agreement
between
CIEX and the government terminated in 1998 and was not renewed. Only
the final CIEX report forms part of the record before
the court.
(28)
In 1998 the State President published Proclamation R47 of 1998 for
the establishment of the Heath Commission which was headed
by retired
Judge Willem Heath. The Heath Commission was mandated to investigate
the possible recovery of alleged financial assistance
to Bankorp/ABSA
Bank made by the Reserve Bank during the nineteen eighties. In its
findings, according to newspaper reports, the
Heath Commission
concluded that the financial assistance given to Bankorp by the
Reserve Bank was a simulated loan transaction
which was in fact a
donation by the Reserve Bank to Bankorp/ABSA bank. However, the Heath
Commission decided not to recommend the
recovery of the monies/funds
allegedly donated to Bankorp/ABSA Bank based on certain financial
market related considerations. One
of the considerations which
influenced the decision by the Heath Commission on non-recovery of
the funds, allegedly owed, is that
should legal steps be taken to
recover the funds from ABSA Bank, this could lead to a serious run by
investors on ABSA Bank and
the banking sector in general. These
alleged facts pertaining to the Heath Commission, are hearsay, as the
Heath Commission report
does not form part of the record, neither has
it, inexplicably, been confirmed by Heath J.
(29)
On 15 June 2000 the Governor of the Reserve Bank appointed a panel of
experts headed by Judge Dennis Davis to investigate,
inter alia,
whether the Reserve Bank acted lawfully in giving financial
assistance to Bankorp/ABSA Bank. If it had acted unlawfully,
the
Davis commission had to determine the legal consequences of such
illegality. The Davis panel came to the conclusion that the
financial
assistance to Bankorp/ABSA Bank was unlawful, in that the Reserve
Bank had acted
ultra vires
its powers as set out in
the
Reserve Bank
Act
[15]
and/or in terms of its protocols. The
panel concluded that there was a possible enrichment claim, but it
would have been difficult
to identify the actual beneficiaries
against whom claims could be lodged. In the Davis commission's
opinion, the real beneficiaries
of the financial assistance were
Sanlam policyholders and pension fund beneficiaries. Furthermore, the
panel concluded that ABSA
Bank did not benefit from the financial
assistance given to Bankorp, in that it had paid fair value for its
acquisition of Bankorp.
Any recovery of the funds from ABSA would be
unwarranted, according to the findings of the panel.
(30)
In pursuance of the complaint submitted by Advocate Hoffman SC, the
Public Protector invoked her powers in terms of section
6(9) of the
Public Protector Act
to investigate the 'lifeboat'
transactions the Reserve Bank concluded with Bankorp/ABSA and other
entities. In December 2016, the
Public Protector released a
preliminary report for comment. In this report the Public Protector
made findings and conclusions which
included,
inter
alia:
· that the loan provided by the
Reserve Bank to Bankorp was not repaid by ABSA Bank;
· that ABSA Bank had made
provision in respect of the lifeboat given to Bankorp by the Reserve
Bank; and
· that the government and the
Reserve Bank improperly failed to recover an amount of R3.2 billion
from ABSA Bank.
(31)
The remedial action proposed by the Public Protector in her
preliminary report included the following:
31.1 that Treasury and the Reserve
Bank must recover the money owed from ABSA, being an alleged amount
of R1.125 billion which constitute
16% allegedly not paid by ABSA
bank.
31.2 that Treasury and the Reserve
Bank must put in place systems, regulations and policies to prevent
'this anomaly in providing loans/lifeboats to banks in future'.
(32)
Both ABSA and the Reserve Bank responded to the Public Protector's
preliminary report. Subsequent thereto, on 19 June 2017,
the Public
Protector issued her final Report with findings and conclusions. She
recommended remedial action as set out in paragraph
2 above. As
appears from this Report, prior to finalising it, the Public
Protector had interviews/meetings with an official from
the State
Security Agency (SSA) and a certain Mr Stephen Mitford Goodson, an
economist. However, the Public Protector did not disclose
that she
had also met with officials from the Presidency and representatives
of an organisation known as Black First Land First
(BFLF).
Furthermore, in the final Report the Public Protector's recommended
remedial action is totally different to that proposed
in the
preliminary report. This was done without affording the applicants an
opportunity to comment on the conclusions reached
in paragraph 6 of
the Report and the intended remedial action.
THE
PUBLIC PROTECTOR RAISED TWO POINTS
IN LIM/NE:
REMEDIAL
ACTION IS NOT ADMINISTRATIVE ACTION:
(33)
The Public Protector submits that the applicants' rights were not
materially affected by her remedial action. The first and
second
applicants brought the application in terms of
PAJA
or in the
alternative, in terms of section 1(c) of the
Constitution,
or
under the principle of legality.
(34)
According to the Public Protector the remedial action in paragraph
7.1 of the Report is not administrative action as it does
not have a
direct external legal effect on the applicants' rights. She contends
that it is a mere recommendation and therefor the
applicants did not
prove that their rights, in terms of
PAJA,
were adversely
affected.
(35)
ABSA argues that the remedial action is peremptory, but even if the
court should find that it is not peremptory, it still has
a direct
external effect on ABSA's rights, as well as the rights of the
Reserve Bank, as both these parties are specifically mentioned
and
implicated in the remedial action in paragraph 7.1.
(36)
In
Greys Marine Hout Bay
(Pty) Ltd and Others v Minister of Public Works and Others
[16]
Nugent JA explained the requirements
of
"which adversely
affects the rights"
and
"which has
a
direct, external
legal effect":
"While PAJA's definition
purports to restrict administrative action to decisions that, as
a
fact, 'adversely affect the rights of any person', I do not think
that literal meaning could have been intended. For administrative

action to be characterised by its
effect in particular
cases
(either beneficial or adverse) seems to me to be paradoxical and
a/so
finds no support from the construction that
has
until
now been placed on s 33 of the Constitution. Moreover, that literal
construction would be inconsonant with s 3(1), which envisages
that
administrative action might or might not affect rights adversely. The
qualification, particularly when seen in conjunction
with the
requirement that it must have
a
'direct and external legal
effect',
was probably intended rather to convey that
administrative
action is action that has the capacity to
affect legal rights, the two qualifications in tandem serving to
emphasise that administrative
action impacts directly and immediately
on individuals."
(37)
Although obiter, the persuasive value of this
dictum
should not be
under-estimated. There is support for a wider interpretation of
"rights"
in
this context, as opposed to the literal meaning thereof. In
Minister
of Defence and Others v Dunn
[17]
Lewis JA also referred to the
dictum
,
in
Grey's
Marine Hout Bay
[18]
emphasising that, with regard to the
"rights"
of
any person, a literal meaning could not have been intended by the
Legislature. In
Steenkamp v
Provincial Tender Board, Eastern Cape
[19]
the Constitutional Court has indicated
that a decision awarding or refusing a tender, constitutes
administrative action as such
a decision materially and directly
affects
"the legal
interests or rights of tenderers"
concerned.
(38)
The learned authors
Currie &
De Waal
[20]
explain it as follows :
''The verb 'to affect' is ambiguous
in the context of rights, as it may mean either to 'deprive' someone
of
a
right or to 'determine' someone's rights
...
since
much official action concerns applications of this kind, or 'mere
applications', taking 'affect' to mean 'deprive' considerably
narrows
the class of administrative action
-
whereas taking it to mean
'determine'
makes
for
a
much broader class
...
Here
it is important to remember that the Act is intended to give effect
to the constitutional rights to administrative justice,
and the
Constitution (and the jurisprudence relating to it) imposes no such
qualification on the meaning of administrative action.
The
'determination' meaning, which does not restrict the application of
the Act to decisions affecting established rights, is therefore

preferable."
(39)
There seems to be support for this view.
Cora
Hoexter
[21]
also holds the view that the phrase
"adversely affects
...
rights"
would
create an unacceptably high threshold for admission to the category
of administrative action if it is intended to import the
stricter
"deprivation theory".
According to her:
"If the phrase 'adversely
affects
...
rights' refers to
...
the 'determination
theory', then its limiting effect is negligible. However, if the
phrase is intended to import the stricter 'deprivation
theory', which
implies the abolition of existing rights, the effect is to create an
unacceptably high threshold for
admission to the category of
administrative action
...
while the language of the PAJA does
not yield up
a
clear answer overall, I would suggest on the
basis of s 33 of the Constitution that
determination ought to
be accepted as the meaning of the Act."
(40)
We associate ourselves with this approach. It accommodates both the
determining of potential or future rights, as well as the
affecting
or abolishing of established rights. Such an interpretation would
also give effect to the provisions of section 33(1)
as required by
section 33(3) of the
Constitution
[22]
.
(41)
In these review applications there is a comparable two-stage process,
which, taken together constitutes administrative action.
The SIU
investigation impacts on basic rights of ABSA and the Reserve Bank.
In the present instance the Public Protector went further
than was
found in
Special
Investigating Unit v Nadasen
[23]
:
"A unit such as the appellant
is similar to
a
commission of inquiry. It is as well to be
reminded, in the words of Corbett JA in
S
v Naude
1975 (1) SA
681
(A) 704 B-E, of the invasive nature of commissions, how they can
easily make important inroads upon basic rights of individuals
and
that it is important
that an exercise of powers by a
non-judicial tribunal should be strictly in accordance with the
statutory or other authority whereby
they are created. The
introductory part of
s
4(1) of the
Act emphasises the
point. This accords with the approach of the
Constitutional
Court (South African Association of Personal Injury Lawyers v Heath
and Others supra par 52). Appellant's reliance
upon
a
"liberal"
construction (meaning in the context of the argument
"executive-minded'/ is therefore misplaced. A tribunal
under the
Act, like
a
commission, has to stay within the boundaries set
by the Act and its founding proclamation; it has no inherent
jurisdiction and,
since it trespasses on the field of the ordinary
courts of the land, its jurisdiction should be interpreted strictly
(cf Fey NO
and Whiteford NO v Serfontein and Another
1993 (2) SA 605
(A) 613F-J)."
(42)
Even if the meaning of the Public Protector is to
"recommend"
then the second stage is the President's decision to let the SIU
investigate or not. The requirement is that the President re-open
the
investigation by the SIU into ABSA and that the Reserve Bank is
ordered to
"co­ operate fully with the Special
Investigating Unit".
(43)
The outcome of the investigation is predetermined as the Public
Protector informed the SIU that ABSA is guilty. She does not
leave
the investigation to the SIU to determine whether ABSA is guilty and
has to pay back R1,25 billion. She has already found
ABSA to be
liable and decided that the money must be paid back. The transaction
relates to time periods which occurred during the
nineties. The
proposed investigation concerns transactions which occurred decades
ago. It was pointed out, by counsel, that it
is far more difficult
for ABSA to find people now, and obtain documentary evidence required
to defend itself after such a lengthy
period. Potential prejudice in
this regard is thus a real threat. There has already been three
investigations into the matter by
the SIU, the Davis Panel and the
Public Protector. This would then be the second investigation into
the same facts by the SIU.
The further argument by both ABSA and the
Reserve Bank is that, in any event, should the court find that
PAJA
does not apply, then the principle of legality should apply.
(44)
In
South African Reserve
Bank v Public Protector and Others
[24]
Murphy
J had already found that the contention by the Public Protector that
paragraph 7.2 was a mere recommendation was
"disingenuous".
He
set out in paragraph 55:
"The attempt to
pass
off
the remedial action
as a
mere recommendation
is
disingenuous. The language in which the remedial action
is
formulated
is
peremptory."
This
finding is confirmed in the present review application, as the same
applies to paragraphs 7.1.1, 7.1.1.1, 7.1.1.2 and 7.1.2.
The language
used throughout is peremptory, there can be no doubt.
(45)
The Public Protector makes her findings clear in paragraphs 6.3 of
the Report:
"6.3
Whether the South African public was prejudiced by the
conduct of the Government of South Africa and the South African
Reserve Bank
and if so, what would it take to ensure justice:
6.3.1 The allegations whether the
South African public was prejudiced by the conduct of the Government
of South Africa and the South
African Reserve Bank is substantiated;
6.3.2 The South African Government
wasted an amount of 600 000 British Pounds on services which were
never used;
6.3.3 The amount given to Bankorp
Limited/ABSA Bank belonged to the people of South Africa. Failure to
recover the illegal gift from Bankorp Limited/ABSA Bank resulted
in prejudice to the people of South Africa as the public funds could

have benefitted the broader society instead of
a
handful of
shareholders of Bankorp Limited/ABSA Bank;
6.3.4
The conduct of the
South African Government and the South African Reserve Bank goes
against the ethos laid in the preamble of the
Constitution and
section 195 of the Constitution in respect of redressing social
injustices and promoting efficiency;
6.3.5 The conduct further is
contrary to the Batho Pele Principles that requires redress and the
view held in the Khumalo case,
mentioned above, that requires
a
public
functionary to arrest reported irregularities; and
6.3.6 The conduct of the South
African Government and the South African Reserve Bank constitutes
improper conduct as envisaged in
section 182(1) of the Constitution
and maladministration
as
envisaged in section 6 of the Public
Protector Act."
(46)
She clearly makes findings and conclusions in these paragraphs, which
by no means can be regarded as recommendations and which
have to be
taken into account when dealing with the meaning in paragraphs 7.1.1,
7.1.1.1 and 7.1.2 read with paragraph 8.1. The
peremptory, prescribed
legal action, according to the Public Protector, as set out in
paragraphs 7 and 8, is to recover the
"illegal gift"
of
R1,25 billion from ABSA.
(48)
The Public Protector's powers were set out in the
Economic
Freedom Fighters v Speaker of the National Assembly and Others;
Democratic Alliance v Speaker of the National Assembly
and Others
[25]
where the Constitutional Court held
that compliance with remedial action taken in terms of section
182(1)(c) of the
Constitution
is peremptory and not
optional.
(49)
The argument by the Public Protector is found to be constrained. The
Public Protector submits that the remedial action merely
creates an
obligation which is placed on the SIU to request the re-opening and
amendment of the 1998 Proclamation to the President.
This, despite
the finding in paragraph 7.1.1.1, that misappropriated public funds
which had been given to ABSA unlawfully, in the
amount of R1,25
billion, must be recovered. There is no room for doubt that the
action is against ABSA Bank. Furthermore, the Reserve
Bank is
directed to co-operate fully with the SIU and to assist in recovering
"the misappropriated public funds".
Paragraph 7.1.2
specifically refers to ABSA Bank. Then the Public Protector goes even
further in paragraph 8.1 where the Reserve
Bank is included as part
of the team that has to submit an action plan within 60 days on the
implementation of the remedial action.
(49)
Even if the provisions of section 8 of the
Public Protector Act,
which draw a distinction between a finding, a point of view or
recommendation, are taken into account there can be no doubt that
the
Public Protector has made findings and came to conclusions and did
not make recommendations.
(50)
Once this court applies the principles and the findings in respect of
administrative action by the Constitutional Court in
Bapedi
Marota Mamone v Commission on Traditional Leadership Disputes and
Claims and Others
[26]
,
as well as section
182(1)(c) of the
Constitution,
then it is clear that the
decision and remedial action set out in the report by the Public
Protector is administrative action which
falls squarely in the
definition of administrative action, according to the provisions of
PAJA.
(51)
If we have misdirected ourselves that
PAJA
applies, then both ABSA and
the Reserve Bank argued that in the alternative, the principle of
legality should apply. Section 33
of the
Constitution
is applicable as the Public
Protector exercises a public power when making a decision. In such an
instance it is not necessary to
consider whether the decision affects
the rights of the applicants. See
Minister
of Public
Works and
Others v Kyalami Ridge Environmental Association and Others
(Mukhwevho lntervening)
[27]
(52)
The doctrine of legality is one of the constitutional controls
through which the Constitution regulates the exercise of public

power. Therefore, when making a decision, her decision must be
lawful, reasonable and procedurally fair. The Reserve Bank relies
on
section 1(c) of the Constitution which sets out that one of the
values the Republic of South Africa has been founded on is
"Supremacy
of the constitution and the rule of law".
It is thus
incumbent on the Public Protector to respect the rule of law, act in
good faith and deliver outcomes that can be justified.
The Public
Protector did not deal with the principle of legality in the heads of
argument, but only dealt with the question whether
PAJA should apply.
Even though the court has found that PAJA does apply, it is clear
that, in the alternative, the principle of
legality will apply as the
Public Protector had made a decision. She had to comply with the rule
of law as defined in the Constitution,
when making such a decision.
Having regard to all these considerations, we are of the view that
the decision on remedial action
does constitute administrative
action, both according to the provisions of PAJA and the principle of
legality, and therefore the
first point
in limine
should be
dismissed.
UNREASONABLE
DELAY:
(53)
The Public Protector's second point
in
limine
is that there was an
unreasonable delay in bringing the review applications without a
proper explanation for the delay. According
to the Public Protector
the review is out of time as it should have been brought in 2012 when
the parties became aware that she
was investigating the matter.
According to her, the review application is outside of the 180 day
period prescribed by
PAJA.
The argument is founded
upon the provisions of section 7(1) of
PAJA
[28]
.
The argument goes on to say that, because the Public Protector's
jurisdiction to investigate this matter is challenged, such a

challenge
"ought to
have been brought without unreasonable delay, and not later the 180
days from the point in 2012 when the applicants
became aware of the
fact that the Public Protector was investigating the complaint by the
Director of /ASA".
This
view is contrary to the position held in the first point
in
limine,
where the Public
Protector argues that
PAJA
does not apply. It was
decided in
National Director
of Public Prosecutions v King
[29]
that
the law generally waits for the outcome of a process before rushing
to court to review the exercise of the public power. See
Take
and Save Trading CC and Others v Standard Bank of SA Ltd
[30]
.
Therefor a party should wait for the outcome before deciding to
launch a review application.
(54)
Two different stages are envisaged by section 7(1), i.e. a stage
before the effluxion of 180 days and another one thereafter
(Opposition to Urban Polling
Alliance v Sanral
[31]
).
The onus is on an applicant who has delayed in bringing review
proceedings to make out a proper case that the delay be condoned
in
the interests of justice (section 9(2) of
PAJA).
(55)
The ABSA application (case number 48123/17) was issued on 13 July
2017; the SARB application (case number 52883/17) on 31 July
2017;
and the application by the Minister of Finance (case number 46255/17)
on 6 July 2017. In all three applications the relief
sought is
similar, i.e. a review of and setting aside the remedial action as
stipulated in certain parts of paragraphs 7 and 8
of the Report. The
Minister of Finance goes further to also include the
"conclusion
and findings"
referred to in the said report. It is common
cause that this report is dated 19 June 2017, which we shall accept
to be the date
on which it was made public.
(56)
It is clear from the formulation of the point
in limine
that
the Public Protector is focusing on a date during 2012, when the
applicants became aware of the fact that she was
investigating
the
complaint concerned. Her decision to investigate is not under attack.
It is the conclusions, findings and remedial action, consequent
upon
her investigation, which is the subject-matter of the review
applications.
(57)
Both ABSA and the Reserve Bank had continuously communicated with the
Public Protector since 2012, when the investigation was
instituted.
(58)
While it is possible that the applicants could have reviewed the
decision to investigate on the basis that the Public Protector
lacked
jurisdiction, it is clear that the balance of the review
applications, based on the alleged procedural unfairness, errors
of
fact, substantial unlawfulness and bias, could not have been brought
before the finalisation and publication of the report on
17 June
2017. The law generally requires parties to wait for the outcome of a
process before rushing to Court to review the exercise
of public
power
[32]
.
(59)
Taking into account the above considerations, the fact that the
report was finalised and published on 17 June 2017 and that
all the
review applications were instituted shortly thereafter, during July
2017, there can be no doubt that these proceedings
were instituted
without any unreasonable delay and before the expiry of 180 days as
required by
PAJA.
It therefore follows that the second point
in limine
should be dismissed.
GROUNDS
OF REVIEW:
(60)
In considering the grounds of review we remind ourselves of the
principle that a review is not concerned with the correctness
of a
decision made by a functionary, but with whether (and how) it
performed the function with which it was entrusted
[33]
.
Judicial review is therefore essentially concerned with the judicial
detection and correction of maladministration
[34]
.
In
Zuma v Democratic
Alliance and Others; Acting National Director of Public Prosecutions
and
Another v Democratic
Alliance and Another
[35]
Navsa ADP dealt with rationality
review and held:
"Rationality review is
concerned with the evaluation of
a
relationship between means
and ends: the relationship, connection or link (as it is variously
referred to) between the means employed
to achieve
a
particular
purpose on the one hand, and the purpose or end itself on the other.
The aim of the evaluation of the relationship is
not to determine
whether
some
means will achieve the purpose better than others
but only
whether the means employed are rationally related to
the purpose for which the power was conferred. Rationality review
also covers
the process by which the decision is made. So, both
the process by which the decision is made and the decision itself
must be rational. If
a
failure to take into account relevant
material is inconsistent with the purpose for which the power
was
conferred there can be no rational relationship between the means
employed and the purpose."
(61)
We also take into account the constitutional principle of the
separation of powers. In
Bato
Star Fishing (Pty) Ltd v Minister of Environmental Affairs and
Tourism
[36]
O'Regan J sounded a warning (in par
48) that a court should be careful
"not
to attribute to itself superior wisdom in relation to matters
entrusted to other branches of
government".
It was also pointed out
that a court should therefore give due weight to findings of fact and
policy-decisions made by those with
special expertise and experience
in their field.
(62)
The main grounds of review advanced by the reviewing parties fall
into two main categories. The first relates to the unlawfulness
of
the remedial action and the second pertains to the procedure followed
by the Public Protector. There are also other grounds
of review such
as jurisdiction and prescription to which we shall refer later, if
necessary.
LAWFULNESS
OF REMEDIAL ACTION:
(63)
It was contended on behalf of ABSA that the remedial action is
substantially unlawful because it is
ultra vires
the
Public
Protector Act,
as well as the
SIU Act.
Counsel for the
SARB further argued that the remedial action is unlawful as the
President is not empowered to reopen an investigation
that was
concluded and where a final report had been issued years ago.
(64)
It was argued on behalf of the Public Protector that the reviewing
parties do not enjoy the necessary standing to challenge
the remedial
action, as it places a primary obligation only upon the President and
the SIU. According to this argument the remedial
action does not
direct that the misappropriated public funds must be recovered from
ABSA. The argument goes on to say that no person
or entity has been
identified from whom the funds should be recovered.
THE
ULTRA VIRES
ARGUMENT:
(65)
The
ultra vires
argument, as we understand it, is founded upon
section 6(2)(a)(i) of
PAJA.
It provides that a court has the
power to judicially review an administrative action if the
administrator who took it was not authorised
to do so by the
empowering provision. This means that what would have been
ultra
vires
under common law by reason of a functionary exceeding his
or her power is now invalid under the Constitution and the provisions
of
PAJA.
(66)
According to paragraph 7 of the report the remedial action is taken
in terms of section 182(1)(c) of the
Constitution.
In terms of
paragraph 7.1.1 of the report the matter is referred to the SIU to
approach the President in terms of section 2 of Act
No 74 of 1996 to
reopen and amend Proclamation R47 of 1998
"in order to
recover misappropriated public funds unlawfully given to ABSA Bank
and in order to investigate alleged misappropriated
public funds
given to various institutions"
as mentioned in the CIEX
Report. Having regard to the wording of this part of the remedial
action, a duty has been placed upon the
SIU to perform three
different functions, i.e. to approach the President to reopen and
amend the proclamation, to recover misappropriated
public funds
unlawfully given to ABSA, and to investigate alleged misappropriated
public funds given to various institutions.
(67)
The Public Protector confirms in her answering affidavit
[37]
that there is "a
duty
upon the SIU to approach the President"
and
to request him to amend the relevant proclamation with a view to
reopening the investigation. The suggestion from the Public

Protector, as we understand it, is that the remedial action is not
binding upon the President as he retains a discretion as to
whether
to issue the proclamation or not. Should we assume, without deciding,
that the Public Protector is correct in her interpretation
that the
remedial action binds the SIU, but not the President, the question
remains as to whether the Public Protector may lawfully
order the SIU
to approach the President, to recover misappropriated public funds
and to investigate misappropriated public funds
given to other
institutions.
(68)
When subsection 6(4)(c) of the
Public Protector Act
is
considered holistically, it appears that the Public Protector may at
any time prior to, during or after an investigation:
(a)  bring the matter to the
notice of the relevant authority;
(b)  refer any matter which has a
bearing on an investigation to the appropriate public body or
authority or to make an appropriate
recommendation to the affected
public body or authority.
(69)
The operative words are
"to bring to the notice
of ' and
"to refer any matter
...
or to make an appropriate
recommendation".
It does not empower the Public Protector to
be prescriptive or to instruct the SIU as to how to deal with the
matter she brings
to its notice. Once the Public Protector has
referred a matter to the SIU, or has made an appropriate
recommendation, she has exhausted
her powers under this subsection.
The decision as to how the matter must be handled is not that of the
Public Protector, but the
prerogative of the public body or authority
concerned, in this instance the SIU.
(70)
Taking into account the wording of paragraph 7.1 of the remedial
action, we find it difficult to interpret the purpose of the
referral
as an appropriate recommendation to the SIU. The purpose of the
referral has been made clear, i.e. to approach the President,
to
recover and to investigate. It is peremptory. The Public Protector
acted in a manner inconsistent with the provisions of the
Constitution
and the
Public Protector Act,
by placing a
duty on the SIU to re-open the investigation and to recover the
misappropriated public funds from ABSA. She exceeded
the powers
entrusted to her by the
Constitution
and the
Public
Protector Act.
(71)
This is, however, not the end of the
ultra
vires
argument. It was also
contended that the remedial action is
ultra
vires
the provisions of the
SIU Act
[38]
.
Section 2 of the
SIU Act
provides that the President
may establish special investigating units.
(72)
In terms of paragraph 7.1.1 the remedial action places a duty upon
the SIU to approach the President in terms of section 2
of this Act
to reopen the proclamation. Section 2 does not make provision for the
SIU to approach the President to reopen and amend
a proclamation. The
SIU is not authorised by statute to do so and neither can the Public
Protector instruct such a unit to perform
such a function, which it
does not have.
(73)
According to the wording of paragraph 7.1 of the report two of the
reviewing parties have been identified. The one is ABSA
to whom
misappropriated public funds had been
"unlawfully given".
The instruction is clear that these misappropriated public funds
must be recovered from ABSA. Furthermore, in terms of the remedial

action the SARS must cooperate fully with the SIU in the recovery of
misappropriated public funds. The instruction is furthermore
that the
SARS is obliged to assist the SIU to recover the alleged
misappropriated public funds unlawfully given to ABSA. The argument

raised, on behalf of the Public Protector, that none of the reviewing
parties have the necessary standing to challenge the remedial
action
as they have not been identified, is therefore without any merit, as
they are all implicated in the remedial action to be
taken. We
therefore conclude that the remedial action referred to in paragraph
7.1 of the report is
ultra vires
the
SIU Act.
THE
FUNCTUS
OFFICIO
ARGUMENT:
(74)
It was contended on behalf of the SARB that the President has no
power under the
SIU Act
to reopen a completed investigation as
such conduct would militate against the
functus officio
doctrine.
Counsel for the Public Protector submitted that the directive that
the SIU must approach the President, with a view to
reopening the
investigation, is a proper mandate as there was only a media
statement issued by the then Head of the SIU, but no
report submitted
to the President.
(75)
It has been pointed out, in the founding affidavit of the SARB, that
the SIU concluded its investigation and issued a final
report on 1
November 1999. A copy of this document is attached to the founding
affidavit of ABSA
[39]
.
These allegations have not been denied by the Public Protector in her
answering affidavit.
(76)
However, the document referred to by the SARB as a
"final
report"
appears to be an official statement, issued as a
media release, dated 1 November 1999. It records that this
investigation was referred
to the SIU by the President by way of
Proclamation R47 of 1998 published in the Government Gazette of 7 May
1998. According to
this document the SIU concluded,
inter alia,
as
follows:
"The unit accordingly arrived
at the conclusion that although it believes there is
a
legal
basis to attack the validity of the 'Lifeboat' contract, there are
other compelling reasons not to proceed with litigation
in this
matter."
(77)
In the next paragraph of this document it has been pointed out that:
"The Unit has conveyed its
attitude to the office of the President. The Unit believed that in
the light of the surrounding
circumstances in this matter, that it
was proper to inform the President before
a
public release
was
made. Due to the President's temporary absence from the country
representatives of the Unit could not meet with him immediately.
"
(78)
Taking into account this evidence we are satisfied the inference is
justified that the SIU concluded its investigation and
finally
reported to the President regarding the so-called
"Lifeboat
case".
There is no evidence to suggest otherwise as the
Heath report has not formed part of the record. In view of this
conclusion, we
should now consider whether the SIU is competent to
approach the President and to request him to amend the relevant
proclamation,
with a view to reopening the investigation on the one
hand, and whether the President has the power to reopen a completed
investigation
in terms of the SIU Act, on the other hand.
(79)
The doctrine of
functus
officio
is founded upon the
principle of finality. In
Minister
of Justice v Ntuli
[40]
the Court stated that public policy
demands that the principle of finality in litigation should generally
be preserved rather than
eroded. This principle, in our view, also
applies to administrative decisions. It was explained as follows by
Navsa J (as he then
was) in Carlson Investments Shareblock v
Commissioner, SARS
[41]
:
"In my view, the Chandler and
Katnich cases supra place the functus officio principle in proper
perspective. As we saw, in
the discussion of the functus officio
principle in Baxter's Administrative Law (supra) the general
principle is that finality of
administrative decisions is to be
favoured. However, our law and comparable legal systems recognise
that statutes may provide how
and when a decision is to be finalised
and may provide for revisiting of a particular administrative
decision in the public interest
and in the interests of justice."
(80)
Section 2(1) of the SIU Act gives the President the power to
establish, by proclamation, a special investigative unit, or to
refer
a matter to an existing special investigating unit to investigate the
matter as set out in subsection (2). In terms of section
2(4) the
President may at any time amend a proclamation issued by him in terms
of subsection (1). Section 4(1)(g) empowers the
SIU, upon conclusion
of the investigation, to submit a final report to the President.
(81)
Although section 2 of the SIU Act is broadly framed, this does not
mean that the President can reopen an investigation that
was
concluded and finalised more than 17 years ago. Although the general
principle of finality in administrative decisions still
applies,
there may be instances in which an express power to revisit such a
decision is necessary. However, there is no such indication,
either
expressly or by necessary implication, in the
SIU
Act.
Section 2(4) has to be
read together with section 4(1)(g) of the Act, which empowers the
SIU,
"upon the
conclusion of the investigation, to submit
a
final report to the
President".
Once that
step is taken, the investigation, that was authorised by the
President, is completed. There is no power given to the President

under this Act to reopen such an investigation. The President's power
under section 2(4) of the Act to amend a proclamation
"at
any time"
is a power
that can only lawfully be exercised while the investigation that was
proclaimed, is still under way. It would serve no
purpose to amend a
proclamation after the investigation, that was authorised by the
President, has been concluded. Furthermore,
the rationale behind this
principle is that there should be both certainty and finality on
matters that have already been decided
to enable parties to arrange
their affairs appropriately
[42]
- even more so after 17 years.
(82)
Taking into account the evidence and considerations referred to
above, we have to conclude that the Public Protector has imposed

remedial action on the President and the SIU that is unlawful. The
remedial action should therefore be reviewed and set aside under

section 6(2)(d) and 6(2)(f)(ii)(bb) of
PAJA.
PROCEDURAL
UNFAIRNESS:
(83)
Both the SARB and ABSA contend that the Public Protector failed to
conduct a fair and unbiased investigation. Both parties
refer to this
ground of review as a
"reasonable apprehension of bias".
(84)
The substance of this complaint is that notes of the Public Protector
reveals that after publication of her provisional report,
she met
with the Presidency, as well with the SSA, without affording the
reviewing parties a similar opportunity. It was contended
that this
conduct of the Public Protector violated her constitutional
obligation under section 181(2) of the
Constitution
to be
independent and to perform her functions without favour or prejudice.
It is not denied by the Public Protector that she had
meetings with
the Presidency and the SSA during the course of finalising the final
report. According to her these meetings were
not improper and
correctly conducted during the course of her investigation.
(85)
In its supplementary founding affidavit the SARB points out that the
meeting with the Presidency took place on 7 June 2017,
i.e. 12 days
before the Public Protector issued her report. This meeting took
place after the SARB had responded to the Public
Protector's
preliminary report. It occurred after the Public Protector, without
notice to the SARB or ABSA, decided substantially
to change the focus
and remedial action of her investigation. By this stage, the Public
Protector's aim was to amend the Constitution
to deprive the Reserve
Bank of its independent power to protect the value of the currency.
This is an aspect of the remedial action
that had nothing to do with
the Presidency and should have been discussed with experts at the
Reserve Bank.
(86)
Reference was also made to a note of a meeting with the SSA on 3 May
2017. This note was originally included in the confidential
section
of the record, but the claim of confidentiality has since been
waived. In this note there is a section dealing with the
Reserve Bank
in which the following question is posed:
"How are they
vulnerable?".
It is alleged that the discussion of this
topic with the SSA indicates that the Public Protector's
investigation was aimed at undermining
the Reserve Bank. This
question was not posed to the experts at the Reserve Bank, who is
ultimately qualified to answer the question,
and she should have
consulted with them.
(87)
In its supplementary founding affidavit ABSA also referred to the
notes of the Public Protector. It is alleged that according
to the
note of a meeting held with the Presidency's legal advisors on 7 June
2017, the idea of ordering the SIU to reinvestigate
the
"Lifeboat"
was discussed. The Public Protector never alerted ABSA to the
prospect that she would incorporate the SIU in her remedial action.

This was a material omission that violates ABSA's right to procedural
fairness and is also an indication of further one-sided conduct
by
the Public Protector.
(88)
Reference was also made to a meeting between the Public Protector and
the SSA. The note of this meeting records a discussion
of the
remedial action, including that the operations of the SARB
"be
aligned to social responsibility".
There is also a
discussion of what appeared to be options for recovery of the money,
supposedly owing by ABSA, including the payment
thereof in
instalments, or that the State should be given ABSA shares as a form
of repayment. It is recorded that ABSA is deeply
disturbed as to why
the SSA should have any views on the remedial action being considered
by the Public Protector against ABSA.
She failed to alert ABSA of
this meeting.
(89)
The Public Protector points out in her report that she had made
certain findings concerning the government and the SARB's failure
to
recover the misappropriated funds and direct them to take remedial
action to rectify this. Therefore, both the President, as
the primary
representative of government, and the SIU, are implicated as
contemplated in section 7(9) of the
Public Protector Act.
In
terms of this subsection the Public Protector must afford such
person(s) an opportunity to respond. The Presidency responded
in
writing on 28 February 2017.
(90)
On 29 March 2017 the Public Protector received an email from the
Presidency in which the President called for a meeting. She
agreed to
a meeting, which subsequently took place on 25 April 2017. From the
discussion during this meeting the Public Protector
became concerned
that her draft remedial action, to direct the President to establish
a judicial commission, may face similar difficulties
as she is
currently facing in the State Capture Report. This was not discussed
with either ABSA or the Reserve Bank before she
issued the final
report. There are no transcripts of the meeting of 25 April 2017.
(91)
The agreement between CIEX and the Government was signed by the then
Director-General of the South African National Intelligence
Agency
(NIA) on behalf of the Government. The NIA has now become the State
Security Agency (SSA). According to the Public Protector
it was
therefore necessary to have a follow-up meeting with this entity to
confirm the agreement, and also to enquire why the SSA
failed to
follow up the matter on its implementation. She did not alert ABSA or
the Reserve Bank of this important meeting or did
not share the
outcome of this meeting with either of the two parties.
(92)
Although the rule against bias finds application essentially in
judicial and
"quasi-judicial"
contexts, the
Constitutional Court has made it clear that the rule against bias
applies in all types of decisions
[43]
.
It should immediately be pointed out that absolute neutrality on the
part of a judicial or administrative officer can hardly,
if ever, be
achieved and a reasonable person should expect that triers of fact
will probably be influenced in their deliberations
by their
individual perspectives
[44]
.
It would be a mistake to assume that a fundamental breach of
administrative justice necessarily indicates bias on the part of
the
administrator
[45]
.
The mere fact that a party considers that the decision- maker erred
at the level of substance or procedure to their prejudice
does not
necessarily amount to bias.
(93)
The following facts appear not to be in dispute:
(a)  the Public Protector
attended a meeting with the SSA on 3 May 2017 without informing the
reviewing parties about this
meeting;
(b)  the Public Protector did not
afford the reviewing parties a similar opportunity to meet with them
after 3 May 2017;
(c)  the Public Protector
attended two meetings with the Presidency. The first took place on 25
April 2017 and the second on
7 June 2017;
(d)  the Public Protector did not
inform the reviewing parties about these meetings, neither did she
afford them an opportunity
to meet with her and inform them of these
meetings;
(e)  the Public Protector did not
attach any transcripts of these meetings.
(94)
These facts should be understood in their proper context. In her
report the Public Protector has disclosed, under the heading
"CORRESPONDENCE SENT AND RECEIVED",
that there is
correspondence between her and the Presidency. Under the heading
"INTERVIEWS CONDUCTED AND MEETINGS HELD"
there is a
list of meetings held with various persons as well as the meeting on
3 March 2017 with the SSA. It is, however, important
to point out
that there is no reference to any meeting with the Presidency. It was
only in her answering affidavit that she had
admitted to her meeting
with the Presidency on 25 April 2017, but she is totally silent on
the second meeting, which took place
on 7 June 2017. The reviewing
parties only became aware of this meeting when a handwritten note of
such a meeting was found in
the record of proceedings made available
in terms of Rule 53. In addition to this, during the meeting which
she had with the SSA
it was also discussed how the SARB was
"vulnerable".
Also this topic only became known to
the reviewing parties on inspection of the record of proceedings.
(95)
The reason that the Public Protector gives for affording the
Presidency and the SSA the opportunity to consult with her, after
she
had decided to change the focus and remedial action of her
investigation substantially without affording the reviewing parties
a
similar opportunity, is disingenuous . According to the Public
Protector the President as the primary representative of Government

and the SIU have been implicated as contemplated in section 7(9) of
the
Public Protector Act
in
the final report. It is further common cause that the Public
Protector had met with the BFLF at their request, but turned down
a
similar request for a meeting or consultation from ABSA. This, after
the BFLF had embarked upon an unlawful campaign of intimidation

against ABSA, after the Report had been published. As a matter of
fact it was concluded
[46]
by the Public Protector that the South
African Government and the SARB did not protect the interest of the
public in regard
"to
the irregular and unlawful 'lifeboat' granted to Bankorp Ltd/ABSA
Bank".
It was also
concluded that the Ministry of Finance failed to exercise its
obligation in terms of section 37 of the South African
Reserve Bank
Act
"by ensuring that
there is compliance of the Act by the South African Reserve Bank".
Under the heading
"FINDINGS" it was found
[47]
as follows:
"The allegation whether the
South African Government and the
South African Reserve Bank
improperly failed to recover from Bankorp Limited/ABSA Bank an amount
of R3.2 billion cited in the JEX
Report, owed
as a
result of
an illegal gift given to Bankorp Limited/ABSA Bank between 1986 and
1995 is substantiated."
(96)
The Public Protector did not give the same opportunity of consulting
with the reviewing parties, or to allow them the opportunity
to
respond to this adverse finding that directly implicates the SARB and
ABSA. There can be no doubt that the findings in paragraph
6.2.1 are
adverse conclusions and findings as contemplated in section 7(9) of
the
Public Protector Act.
(97)
Section 181(2) of the
Constitution
provides that the Public
Protector should be
"independent"
and she has to perform her
functions without
"fear,
favour or prejudice".
The
test to establish bias was set out in
President
of the Republic of South Africa and Others v South African Rugby
Football Union and Others
[48]
"whether
a
reasonable, objective and
informed person would on the correct facts reasonably
apprehend that the Judge has not or
will not bring an impartial mind to bear on the adjudication of the
case".
This test
similarly applies in the present matter, where the Public Protector
is a functionary performing administrative action.
(98)
The Public Protector is subject to a higher duty and higher standards
than ordinary administrators taking administrative action.
This
differentiation should still be read subject to the requirement of
reasonableness, i.e. that both the person who apprehends
bias, and
the apprehension itself must be reasonable
[49]
.
No doubt, the party who relies on bias, or reasonably suspected bias
bears the onus to prove this ground of review.
(100)
It cannot be doubted that the appearance or perception of
independence plays an important role in evaluating whether the Office

of the Public Protector is sufficiently independent
[50]
.
This is a constitutional imperative. Section 7(9) sets out that
should there be an adverse finding against any person, then
"the
Public Protector shall afford such person an opportunity to respond
in connection therewith, in any manner that may be
expedient under
the circumstances".
It
is thus couched in peremptory terms that she
"shall"
afford an opportunity. The
right to be heard is integral to the Constitutional scheme. In
Joseph
and Others v City of Johannesburg and Others
[51]
the Constitutional Court observed:
"Both this court and the
Supreme Court of Appeal have already
expressed support, albeit
obiter, for
a
purposive approach to the concept of 'rights'
under s 3 of PAJA. In Premier, Mpumalanga O'Regan J remarked that
'(i)t may be that
a
broader notion of "right" than
that used in private Jaw may well be appropriate'. The importance of
procedural fairness
is well described by Hoexter:
'Procedural fairness
. . .
is
concerned with giving people an opportunity to participate in the
decisions that will affect them, and
-
crucially
- a
chance of influencing the outcome of those
decisions. Such
participation is
a
safeguard that not only signals respect for
the dignity and worth of the participants, but is also
likely
to improve the quality and rationality of administrative
decision-making and to enhance its legitimacy.
"'
(100)
The Public Protector engaged with the Presidency and the SSA without
affording a similar opportunity to the reviewing parties.
This cannot
be an administrative oversight as she was clearly aware of the
provisions of section 7(9) of the Public Protector Act
when she
decided to have an interview with the Presidency on 25 April 2017.
Furthermore, if it was an oversight, one would have
expected the
Public Protector to have said so in her answering affidavit.
(101)
The Public Protector did not disclose in her report that she had
meetings with the Presidency on 25 April 2017 and again on
7 June
2017. It was only in her answering affidavit that she admitted to the
meeting of 25 April 2017, but she was totally silent
on the second
meeting which took place on 7 June 2017. She gave no explanation in
this regard when she had the opportunity to do
so. Having regard to
all these considerations, we are of the view that a reasonable,
objective and informed person, taking into
account all these facts,
would reasonably have an apprehension that the Public Protector would
not have brought an impartial mind
to bear on the issues before her.
We therefore conclude that it has been proven that the Public
Protector is reasonably suspected
of bias as contemplated in section
6(2)(a)(iii) of
PAJA.
(102)
It is further the applicants' contention that the manner in which the
Public Protector concluded her final Report was informed
by an unfair
procedure. It was argued that the Public Protector did not provide
the applicants with two reports preceding the final
CIEX report to
enable them to respond if they so wished, before preparing her final
Report. In this regard the applicant relied
on the decision in
Minister of Health and
Another v New Clicks South Africa
[52]
where the Constitutional Court held
that affected parties cannot make meaningful representations when
they do not know what factors
will weigh against them in a decision
to be taken. In this instance they were not informed at all before
the final Report was published.
(103)
It was submitted that although the Public Protector has recommended
that the State President should, through the SIU, reopen
the
investigation into the alleged stolen funds, she has not furnished
any reasons as to why the Heath report's findings are irrelevant
to
the extent that there is a need for another investigation by the SIU.
It is the applicants' contention that they have a right
as affected
persons to know the reasons for the discounting of the Heath report
and, in terms of the
audi alteram partem
rule, to respond
thereto. It was argued that the Public Protector's conduct in failing
to provide the applicants with the above-mentioned
documents, she
denied them an opportunity to respond to those documents before the
final report was prepared. The court finds that
in terms of section
6(2)(c) of
PAJA
this conduct by the Public Protector was
procedurally unfair. Therefor the remedial action in paragraphs 7.1
and 8.1 of the Report
has to be set aside. They were the product of a
procedurally unfair process and are unlawful. The process was not
impartial and
therefor there is a reasonable apprehension that the
Public Protector was biased against ABSA and the Reserve Bank.
APPLICATION
FOR DECLARATOR:
(104)
The Reserve Bank requests the court to issue a declaratory order in
terms of section 172(1)(a) of the
Constitution
which provides:
"(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;"
(105)
According to the Reserve Bank Ms Mkhwebane had abused her office and
therefor the court should grant the declaratory order.
The request
for the declaratory order was only dealt with in the Reserve Bank's
replying affidavit and during argument.
(106)
According to counsel for the Reserve Bank a declaratory order is
sought as the Public Protector has abused her office. This
submission
is based on the actions of the Public Protector when filing the
answering affidavit out of time and doing so after the
court had
ordered her to do so. The Public Protector had applied for a
postponement which application was heard by Mathie J on
17 November
2017. At the hearing she withdrew her application, causing severe
prejudice to all the parties, who then had to deal
with her answering
affidavit and the submission of heads of argument in the limited time
available.
(107)
The Public Protector relies on new reasons in her answering affidavit
which do not accord with the reasons she set out in
her report. She
justifies her findings
ex
post facto
in the answering
affidavit. She attaches documents that were not filed and were not
included in the record of proceedings filed
in terms of Rule 53. Her
averment that she had received advice from economic experts whilst
compiling the Report, is doubtful
[53]
Dr Mokoka's report was only obtained
after the Report had been issued and the review applications had been
served. The Public Protector
herself sets out in the answering
affidavit that she engaged Dr Mokoka
"following
receipt of the three review applications ...to consider the true
nature of the Lifeboat schemes".
It
has already been decided that the Public Protector has heightened
obligations to be frank and candid when dealing with the court.
(108)
The Public Protector had two meetings with the Presidency, after the
release of the preliminary report, but failed to address
the second
meeting and also failed to disclose what was discussed. The Public
Protector's meeting with the SSA and the former Minister
of State
Security on 3 May 2017 and her discussion pertaining to the Reserve
Bank cannot be justified in any manner. She should
have engaged
directly with the Reserve Bank if she was concerned about the
security of the Reserve Bank. She further failed to
record these
meetings, although it was customary to record all meetings. She
cannot supply transcripts of these meetings, nor any
minutes of the
meetings. She failed to mention the second meeting with the
Presidency in her final report.
(109)
The new reasons set out in her answering affidavit are:
102.1. She now relies on
"special
circumstances"
for investigating outside the two year time
limit - these circumstances were not set out in her Report.
102.2. Her rationale for overcoming
prescription differs completely in her answering affidavit to that in
the Report.
(110)
She directs that the SIU must recover the R1.125 billion that was
purportedly unlawfully given to ABSA. She quite clearly
directs and
it is obvious that she has found that ABSA owes R1- 125 billion. She
is wrong, where she declares in the answering
affidavit that the
remedial action only advises the state of
"available remedies
in Jaw".
This is in total contrast to the remedial action
set out in paragraphs 7 and 8 of the final report.
(111)
Ms Mkhwebane did not engage either ABSA or the Reserve Bank after her
meetings with the Presidency and State Security and
before issuing
her final Report. The applicants did not have the opportunity to
comment on the final report, whilst parties who
should not have been
consulted, were consulted and their views taken into consideration.
She should have informed all parties of
these meetings, requested
their comments, if any, before releasing the final report.
(112)
These actions by the Public Protector only became known when she
filed her answering affidavit. This was the first opportunity
for the
Reserve Bank to deal with it. Therefor the Reserve Bank argues that
it could not have requested the court earlier for a
declaratory order
as it only became evident, once her answering affidavit was filed, to
what an extent she had abused her office.
(113)
Rule 28 of the Uniform Rules of Court deals with amendments. In the
current matter there is no formal application for an amendment
to the
prayers in the Notice of Motion to add an additional prayer.
Generally, the court will allow an amendment of a prayer if
the main
issue between the parties remain the same, but will not do so where a
new cause of action is added at a late stage during
the proceedings
which could cause prejudice to the other party. In
Gollach
8.
Gomperts
(1967) (Pty) Ltd v Universal Mills & Produce Co (Pty) Ltd and
Others
[54]
Miller AJ held:
"...that a litigant who seeks
to add new grounds for relief at the eleventh hour does not claim
such amendment as a matter
of right but rather seeks an indulgence."
(114)
In
Earthlife Africa (Cape
Town) v Director-General: Department of Environmental Affairs and
Tourism and Another
[55]
the Full Bench held:
"Subsequent thereto, however,
no further submissions from interested parties were entertained or
even invited by the DG, notwithstanding
the fact that the final EIR
differed materially from the earlier report on which the applicant
did comment. Furthermore, the DG
made his decision without having
heard the applicant and without even being aware of the nature and
substance of the applicant's
submissions. In these circumstances, I
am
driven to the conclusion that the process that underlay the
decision of the DG was procedurally unfair and falls to be set aside.

,.
This
authority strengthens the case for review, but does not pertinently
deal with an amendment without an application to amend.
(115)
In this instance the Reserve Bank is relying on section 172(1)(a) of
the
Constitution. In
Merafong City Local Municipality v AngloGold Ashanti Limited
[56]
Cameron J dealt with the contents of
section 172(1) as follows:
"These consequences follow
from the wording of section 172(1) itself, which requires
a
court
to declare any law or conduct inconsistent with the Constitution
invalid to the extent of its inconsistency, but requires
the court to
do so only "when
deciding"
a
constitutional
matter within its jurisdiction. The provision does not dictate to
courts when or how they must decide. It contemplates
that
a
court
may decline to decide
a
matter because the right complainant
is not before it, or
because the challenge is not warranted in
the particular proceedings before it."
The
Reserve Bank submits that the Public Protector had breached the
provisions of the
Constitution,
and in particular section
181(2) and therefor section 172(1)(a) applies and permits the court
to issue the requested declaration.
(116)
The Public Protector vehemently opposes this application as an
inappropriate attack on the Public Protector and argues that
it
undermines the institution of the Public Protector. According to
counsel for the Public Protector it has not been proven on
the papers
that the Public Protector had acted in bad faith. She had no malice
or a sinister purpose when meeting with the Presidency
and the State
Security Agency without alerting ABSA and the Reserve Bank that she
had done so. The question remains unanswered
as to why she had acted
in such a secretive manner and she does not give an explanation for
doing so.
(117)
It is possible that the Public Protector had not fully taken the
court into her confidence when deposing to paragraph 2 of
the
answering affidavit, where she set out:
"Where I make
averments relating to economics I do so on the basis of advice
received from economic experts during the investigation
of the
complaint referred to below, which advice I accept as correct".
Dr Mokoka's report was obtained after the final report had been
issued and the applications for review had been served. The second

meeting with the Presidency, was not divulged in the Report.
(118)
Counsel for the Public Protector argued that the Reserve Bank at no
stage requested an amendment to the Notice of Motion,
nor was there
any such application at any stage during the proceedings. The
argument is that the Public Protector would be severely
prejudiced if
such an order is made as the Public Protector did not have an
opportunity to oppose the granting of a declaratory
order. The
Reserve Bank's argument is that the Public Protector had known of the
Reserve Bank's stance since the replying affidavit
had been served ,
but chose not to depose to a supplementary answering affidavit and to
explain these complaints and untruths.
(119)
The court has to agree that if an amendment had been sought in terms
of Rule 28, the Public Protector could have dealt with
it. The vital
consideration is that an amendment will not be allowed in
circumstances which will cause the other party such prejudice
that
cannot be cured by an order for costs or a postponement
[57]
.
(120)
The Public Protector did not conduct herself in a manner which should
be expected from a person occupying the office of the
Public
Protector. In these proceedings and the Reserve Bank's submissions in
this regard are warranted. She did not have regard
thereto that her
office requires her to be objective, honest and to deal with matters
according to the law and that a higher standard
is expected from her.
She failed to explain her actions adequately. There may be a case to
be made for a declaratory order.
(121)
However, the Reserve Bank failed to apply for an amendment to the
prayers in the Notice of Motion, but relied strictly on
the
provisions of section 172 of the
Constitution
and only dealt
with it in the replying affidavit and during argument.
(122)
If the court applies the dictum in
Merafong
[58]
then the challenge should have been
brought explicitly by an application for an amendment and not only
when the replying affidavit
was filed. The circumstances set out
above may warrant an application for a declaratory order, but it
should not be granted when
it is raised for the first time in the
replying affidavit. This court will not issue a declaratory order,
although it will be possible,
in these circumstances, as set out
above, to apply to court in a proper application, for such an order.
CONCLUSION:
(123)
All the reviewing parties applied for the reviewing and setting aside
of certain paragraphs of the remedial action. The Minister
and
Treasury also applied for the reviewing and setting aside of the
report in its entirety. Should all the review applications
succeed in
the reviewing and setting aside of the remedial action, we are of the
view that it is not necessary to also set aside
the remaining part of
the report itself. Once the remedial action has been set aside the
report itself has no force. This Court
should be reluctant to
encroach unnecessarily on the preserve of the Public Protector as an
administrator and should keep in mind
the separation of power. In
view of our conclusion regarding the unlawfulness of the remedial
action as well as the reasonable
apprehension of bias, we do not deem
it necessary to deal with all the other grounds of review as we have
found that the Public
Protector was biased and the remedial action
should be set aside. If we apply the principles as set out in
Westinghouse Electric
Belgium
SA v
Eskom
Holdings (SOC) Ltd and Another
[59]
it is not necessary to deal with all
the grounds of reviewing and setting aside the decision. The court
has found the remedial action
to be unlawful and that there is a
reasonable apprehension of bias. The court further finds no reason to
remit the report. It is
clear that the Public Protector unlawfully,
ultra vires
and
breached several provisions of
PAJA.
In these circumstances it
would be untenable to remit the Report to the Public Protector.
COSTS:
(124)
It was submitted on behalf of ABSA Bank that a punitive cost order
should be granted against the Public Protector in her official

capacity. However, counsel for the SARB contended that the Public
Protector should be ordered to pay the costs
de bonis propriis,
i.e. from personal funds. Counsel for the Public Protector argued
that there is no justification for granting an order
de bonis
propriis.
It was also pointed out that in terms of section 5(3)
of the
Public Protector Act
there is a general indemnification
against personal liability.
(125)
The issue as to what order of costs would be appropriate falls
primarily within the discretion of a Court which must be exercised
in
a judicial manner. Generally speaking, a Court will not grant an
order for costs to be paid personally where a litigant is acting
in a
representative capacity.
Herbstein
& Van Winsen
[60]
give the following summary of the law
in this regard:
"A representative litigant
whose conduct is
so
unreasonable
as
to justify this
special order can, despite acting in good faith, be ordered to pay
the costs de bonis propriis. The Court will not,
however, make such
an order lightly, and mere errors of judgment will not be sufficient.
It has been held that such an order should
not be granted in the
absence of
some
really improper conduct, and that the fairness
or unfairness of proceedings honestly brought should not be
scrutinised too closely.
The criterion
has
been stated to be
actual misconduct of any
sort
or recklessness, and the
reasonableness of the conduct should be judged from the point
of
view
of
the person of ordinary ability bringing an average
intelligence to bear on the issue in question, not from that of the
trained lawyer."
(126)
In
Gauteng Gambling
Board & Another v MEC for Economic
Development,
Gauteng Provincial Government
[61]
the following was said by Navsa JA
with regard to the personal liability of public officials for the
payment of legal costs:
"The MEG, in her responses to
the opposition by the board, appeared indignant and played the
victim. She adopted this attitude
while acting in flagrant disregard
of constitutional norms. She attempted to turn turpitude into
rectitude. The special costs order,
namely, on the attorney and
client scale,
sought by the board and Mafojane is justified.
However, it
is
the taxpayer who ultimately will meet those
costs. It
is
time for Courts to seriously consider holding
officials who behave in the high-handed manner described above,
personally liable
for costs incurred. This might have
a
sobering
effect on truant public office-bearers."
(127)
In the matter before us it transpired that the Public Protector does
not fully understand her constitutional duty to be impartial
and to
perform her functions without fear, favour or prejudice. She failed
to disclose in her report that she had a meeting with
the Presidency
on 25 April 2017 and again on 7 June 2017. As we have already pointed
out above, it was only in her answering affidavit
that she admitted
the meeting on 25 April 2017, but she was totally silent on the
second meeting which took place on 7 June 2017.
She failed to realise
the importance of explaining her actions in this regard, more
particularly the last meeting she had with
the Presidency. This last
meeting is also veiled in obscurity if one takes into account that no
transcripts or any minutes thereof
have been made available. This all
took place under circumstances where she failed to afford the
reviewing parties a similar opportunity
to meet with her.
(128)
The Public Protector failed to make a full disclosure when she
pretended, in her answering affidavit, that she was acting
on advice
received with regard to averments relating to economics prior to
finalising her report. We have already pointed out that
Dr Mokoka's
report was obtained after the final report had been issued and the
applications for review had been served. Section
5(3) of the
Public
Protector Act
provides for an indemnification with regard to
conduct performed
"in good faith".
The Public
Protector has demonstrated that she exceeded the bounds of this
indemnification. It will therefore be of no assistance
to her. It is
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.
(129)
Having regard to all the above considerations, we have to conclude
that this is a case where a simple punitive costs order
against her
in her official capacity will not be appropriate. This is a case
where we should go further and order the Public Protector
to pay at
least a certain percentage of the costs incurred on a punitive scale.
We therefore conclude that all three review applications
should
succeed. The Public Protector, in her official capacity, should be
ordered to pay 85% of the costs of the application by
the South
African Reserve Bank on an attorney and client scale, and the balance
of 15% should be paid by the Public Protector in
her personal
capacity. This does not include costs for the Minister of Finance and
Treasury, as they did not request costs.
(130)
ABSA requested costs on an attorney and client scale, including the
costs of three counsel. The Minister of Finance and Treasury
argued
that it was entitled to costs, but left it for the court to decide.
The Reserve Bank requested costs
de bonis propriis
against the
Public Protector.
(131)
In the result the following orders are made:
1.    Both points
in
limine
raised by the Public Protector are dismissed;
2.    The remedial
action as set out in paragraphs 7.1.1, 7.1.1.1, 7.1.1.2 and 7.1.2 of
the Public Protector's Report
8 of 2017/2018 into the "Alleged
Failure to Recover Misappropriated Funds" ("the Report")
issued by the Public
Protector on 19 June 2017 is reviewed and set
aside;
3.    The remedial
action imposing the obligation referred to in paragraph 8.1 of the
report to submit an action
plan to the Public Protector in relation
to paragraphs 7.1.1, 7.1.1.1, 7.1.1.2, and 7.1.2 of the Report is
reviewed and set aside;
4.    4.1 The first
respondent, in her official capacity, to pay the costs of ABSA, on an
attorney and client scale,
including the costs of three counsel;
4.2 The first respondent, in her
official capacity, to pay 85% of the costs of the South African
Reserve Bank on an attorney and
client scale, including the costs of
three counsel in her capacity as Public Protector;
4.3 The first respondent, in her
personal capacity, is ordered to pay 15% of the costs of the South
African Reserve Bank on an attorney
and client scale, including the
costs of three counsel,
de bonis propriis.
____________________
Judge
C Pretorius
I
agree.
____________________
Judge
N P Mngqibisa-Thusi
I
agree.
____________________
Judge
D S Fourie
Case
number

: 48123/2017
52883/2017
46255/2017
Matter
heard on
: 5 and 6
December 2017
For
ABSA

: Adv. G Marcus SC
Adv C Steinberg
Adv M Musandiwe
Adv M ela Phukubje
Instructed
by

: Webber Wentzel Attorneys
For
the Reserve Bank         :
Adv D Unterhalter SC
Adv K Hofmeyr
Adv C Tabata
Instructed
by

: Werksmans Attorneys
For
the Minister of Finance and
Treasury

: Adv T Ngcukaitobi
Adv E Richards
Instructed
by

: State Attorney Pretoria
For
the 1st Respondent     : Adv P Kennedy SC
Adv P Khoza
Adv T Manchu
Adv M Manala
Adv T Mankge
Instructed
by

: Motsoeneng-Bill Attorneys Inc.
Date
of Judgment
: 16 February 2018
[1]
SARB v Public Protector 2017(6) SA
198 (GP)
[2]
Promotion of Administrative Justice
Act 3 of 2000
[3]
Constitution of the Republic of South
Africa Act 108 of 1996
[4]
Act 23 of 1994
[5]
Act 68 of 1969
[6]
Brummer v Minister for Social
Development
2009 (6) SA 323
(CC) at par 21 and 22
[7]
2015(3) BCLR 268 (CC) at paragraph 50
[8]
2015 (3) BCLR 268
(CC) at paragraph
79
[9]
Supra section 182(1)(a), (b), (c) and
(2)
[10]
Act 23 of 1994
[11]
2016(2) SA 522 (SCA) at paragraph 38
[12]
2016 (3) SA 580
(CC) at paragraph 60
[13]
Act 74 of 1996
[14]
Supra
[15]
Act 90 of 1989
[16]
2005(6) SA 313 (SCA) at paragraph 23
[17]
2007 (6) SA 52
(SCA) at par 4
[18]
Supra
[19]
2007 (3) SA 121
(CC) at paragraph 21
[20]
The Bill of Rights Handbook, 6th ed,
p 661
[21]
(Administrative Law in South Africa,
2nd ed, p 221)
[22]
cf Hoexter, supra, p 222
[23]
2002(1) SA 605 (SCA) at paragraph 5
[24]
2017(6) SA 198 (GP)
[25]
Supra
[26]
Supra
[27]
2001(3) SA 1151 (CC) at paragraph 54
[28]
Which provides that "any
proceedings for judicial review" must be instituted without
unreasonable delay and not later
than 180 days after the date on
which the person concerned was informed of the administrative
action, became aware of it or might
reasonably have been expected to
have become aware of it.
[29]
[2010]3 All SA 304 (SCA) at
paragraphs 4 and 5
[30]
2004(4) SA 1 (SCA) at paragraph 4:
"[4] A balancing act by the
judicial officer is required because there is a thin dividing line
between managing a trial and
getting involved in the fray. Should
the line on occasion be overstepped, it does not mean that a recusal
has to follow or the
proceedings have to be set aside. If it is, the
evidence can usually be reassessed on appeal, taking into account
the degree
of the trial court's aberration. In any event, an appeal
in medias res in the event of a refusal to recuse, although legally

permissible, is not available as a matter of right and it is usually
not the route to follow because the balance of convenience
more
often than not requires that the case be brought to a conclusion at
the first level and the whole case then be appealed."
[31]
[2013] 4 All SA 639
(SCA) at par 26
[32]
(cf Take and Save Trading CC &
Others v Standard Bank of SA Limited (supra) with regard to appeal
proceedings)
[33]
MEC for Environmental Affairs and
Development Planning v Clairison's CC 2013(6}SA 235 (SCA) at
paragraph 18
[34]
Hoexter, supra, p 9
[35]
[2017] 4 All SA 726
(SCA) at
paragraph 82
[36]
2004 (4) SA 490 (CC)
[37]
Paragraph 26
[38]
Act 74 of 1996
[39]
Annexure "MR10"
[40]
[1997] ZACC 7
;
1997 (3) SA 772
(CC) at par 23
[41]
2001 (3) SA 210
(WLD) at 232F
[42]
cf Ka Mtuzi v Bytes Technology Group
and Others
2013 (12) BCLR 135
(CC) par 18
[43]
President of the RSA v South African
Rugby Football Union
[1999] ZACC 9
;
1999 (4) SA 147
(CC) par 35
[44]
President of the RSA v South African
Rugby Football Union, supra, par 42
[45]
(Commissioner, Competition Commission
v General Council of the Bar of South Africa
2002 (6) SA 606
(SCA)
at par 16 where Heter AP said that the mere fact that audi alteram
partem was not observed does not by itself justify an
inference of
bias)
[46]
In par 5.3.20 of the Report
[47]
In par 6.2.1
[48]
1999(4) SA 147 (CC) at paragraph 48
[49]
cf Bernert v ABSA Bank Ltd
2011 (3)
SA 92
(CC) par 34
[50]
cf Van Rooyen & Others v The
State & Others
2002 (5) SA 246
(CC) par 32
[51]
2010(4) SA 55 (CC) at paragraph 42
[52]
2006(3) SA 311 (CC) at [152]
[53]
Paragraph 2 of the answering
affidavit
[54]
1978 (1) SA 914
(A) at 928D
[55]
2005(3) SA 156 (WCC) at paragraph 78
[56]
(CCT106/15)
[2016] ZACC 35
at
paragraph 37
[57]
Erasmus Superior Court Practice, RS4,
2017, D1-329
[58]
Supra
[59]
2016 (3) SA 1
(SCA) in paragraphs 44
and 45
"[44] It is
a
well-established principle that if an administrative body takes
into account any reason for its decision which is
bad, or
irrelevant , then the whole decision, even if there are other good
reasons
for it, is vitiated."
[60]
The Civil Practice of the High Court
of South Africa, 5th Ed, Vol II, p 983
[61]
2013 (5) SA 24
(SCA) par 54