Mpumelelo Mkhabela

The Guptas' legal reasoning is fatally flawed

2017-02-03 08:36
High court. (Duncan Alfreds, News24)

High court. (Duncan Alfreds, News24)

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In their court battle with Finance Minister Pravin Gordhan, the Guptas launched an attack on the idea of rationality and exposed their lack of understanding of our governance system.

In an affidavit, Ronica Ragavan, the chief executive officer of Gupta-owned Oakbay Investments, makes some strange remarks about our governance system.

This in a bid to rubbish Gordhan’s application for an order confirming he cannot intervene in disputes between the banks and the Guptas whose accounts were closed because of suspicious transactions.

There are countless senseless remarks in the affidavit. Paragraphs 43 and 44 are particularly revealing.

First, Ragavan claims to have been advised that Gordhan is asking the court to insert itself into the functions of the executive in a manner that raises a significant question of the separation of powers under the Constitution.

Had Ragavan read the Constitution properly and delved deeper into recent jurisprudential developments, she would have discovered that the courts have a final say on whether the conduct of the executive or legislature is in line with the Constitution.

The nature of Gordhan’s application goes beyond his role as a Cabinet minister. It’s also about the National Treasury and the Reserve Bank whose roles are clearly spelt out in the Constitution and other laws. It’s not about what the Guptas want. It’s about what the Constitution says.

Second, Ragavan claims that even if Gordhan had correctly concluded that the Oakbay Group had asked him to intervene in its dispute with the banks – a point she denies – she saw no reason why the minister felt compelled to act.

She then proceeds to make a very scary claim: “Surely it is wholly within the normal exercise of his powers and his discretion to ignore or reject a citizen’s request. Governments function in this manner across the world every day, deciding to reject or ignore citizens’ requests?”

Whoever lectured Ragavan and the Guptas on how the governance system works did a shoddy job. Our jurisprudence is full of explanations on rationality, the idea that exercise of public power must be rationally connected with the purpose. It must not depend on the mood or impulse of an official.

The separation of powers was carefully crafted in such a manner that it should cover for a lack of accountability for decisions taken by any section of the state.

The idea that citizens can be summarily ignored or rejected by a minister would have served the DF Malan executive well. And maybe it does serve other tyrannical governments well “across the world, everyday” but it should not apply in democratic South Africa. Regardless of the office they hold, public officials – from the president to a municipal official – are obliged to exercise public power rationally.

It, therefore, made sense for Gordhan to hear Oakbay’s concerns, give them a response on why he won’t intervene and advise them of the institutions legally empowered to hear their complaint.

The Guptas failed to accept that Gordhan was not empowered to intervene on their behalf. This triggered the divisive lobbying of ministers outside Gordhan’s finance portfolio. In the end, Gordhan had no option but to launch an unusual but necessary application to seek protection from the court.

Should Gordhan succeed, it would be a victory not only for him but for the integrity of the South African governance system. Unseemly interference by powerful private interests that “insert” themselves in the functioning of the executive without constitutional permission is dangerous. But a court order that restores the integrity of the executive branch of government would be fantastic.

Ideally, the president should be taking the lead in safeguarding the integrity of decision-making of his Cabinet. But absent such leadership from Zuma due to well-known conflicts of interests, someone else had to step up and do the job. This patriotic task got into Gordhan’s in-tray.

In her affidavit, Ragavan puts a qualification that contradicts her earlier emphasis on arbitrary decisions of ministers to reject or ignore citizens. She says citizens can approach the court if a decision by the executive is not reasonable and not in line with applicable laws. Which begs the question: why didn’t the Guptas challenge the banks in court as Reserve Bank Governor Lesetja Kganyago once advised them? Ragavan’s response to Gordhan’s application has no semblance of coherence.

The third argument by Ragavan is the old, tired “floodgate argument”. She tells the court: “If this court were to countenance the minister’s application for guidance here, it would open the floodgate for other weak-kneed political officials who are too scared to take positions on sensitive political and policy matters, as they could (and would) simply retreat to the judiciary for advisory rulings on any issue that they did not want to decide.”

Had Ragavan familiarised herself with some of the recent judgements from our courts, she would have known that a higher court has long dismissed the “floodgates” argument. She would have come across a very interesting judgement typically referred to as the “spy tape” decision. In DA vs Acting National Director of Public Prosecution, the Supreme Court of Appeal ruled to have the spy tapes, which saved Zuma from prosecution, released.

In that case, the SCA dealt extensively with the so-called floodgate argument. The NPA had argued that if the court ordered the release of the spy tapes and a review of the decision not to prosecute Zuma, it would open a floodgate against other prosecutorial decisions.

In the judgement, the SCA quoted Justice Kirby of the New South Wales Court of Appeal, who once remarked: “It may sometimes be necessary to open the floodgates in order to irrigate the arid ground below them.”

Justice Kirby could not have put it better. 

-        - Mkhabela is a fellow at the Centre for the Study of Governance Innovation (GovInn) at the University of Pretoria.

Disclaimer: News24 encourages freedom of speech and the expression of diverse views. The views of columnists published on News24 are therefore their own and do not necessarily represent the views of News24.

Read more on:    gordhan  |  pravin  |  oakbay investments  |  guptas

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