Personal cost order will set bad precedent for public office, Public Protector tells ConCourt

The "punitive personal costs" sought against Public Protector Busisiwe Mkhwebane over her legal defence of the Bankorp-CIEX report would set a bad precedent for her office, Mkhwebane's lawyers told the Constitutional Court on Tuesday.

Mkhwebane is fighting a February 2018 High Court order which ruled that she was personally liable for part of the legal costs incurred by the SA Reserve Bank in the Bankorp matter.

The Public Protector, in 2017, had said that Absa must repay R1.125bn for a "lifeboat" provided to Bankorp by the SA Reserve Bank during the apartheid era. Bankorp was acquired by Absa in 1992. The central bank and Absa both went to court to have the report and its findings set aside. 

Mkhwebane appealed the February 2018 ruling, but the North Gauteng High Court dismissed her application in late March. She then approached the Constitutional Court. 

In his submission before the Constitutional Court on Tuesday, Mkhwebane's attorney Vuyani Ngalwana asked if it was reasonable to have the office of the Public Protector slapped with "punitive costs" while carrying out its functions.

"Can the country afford to have a head of a Chapter 9 institution operating under a threat of punitive legal costs ... is it reasonable, is it appropriate, is it desirable," he asked. 

Ngalwana further argued that the order that the Public Protector personally pay 15% of the central bank's legal costs could set a negative precedent, and dismissed allegations that Mkhwebane acted unreasonably.

Kate Hofmeyr, on behalf of the Reserve Bank, said the Public Protector "did not act in a manner that is becoming of the high office she occupies". 

Hofmeyr argued the Public Protector had "secret meetings" with the Presidency during the investigation and did not disclose those interactions in her report. "We submit that the costs be paid by the Public Protector personally," she said.

Mkhwebane's 2017 report, which separately recommended a review of the Reserve Bank mandate, caused market jitters with a R1.3bn sell-off in government bonds, according to Hofmeyr's submission. 

Chief Justice Mogoeng Mogoeng reserved judgment in the matter.

* Sign up to Fin24's top news in your inbox: SUBSCRIBE TO FIN24 NEWSLETTER

ZAR/USD
16.13
(-0.01)
ZAR/GBP
20.93
(+0.17)
ZAR/EUR
19.12
(+0.10)
ZAR/AUD
11.81
(+0.08)
ZAR/JPY
0.15
(+0.14)
Gold
1952.57
(+0.29)
Silver
27.13
(+0.40)
Platinum
941.00
(+0.96)
Brent Crude
43.78
(+2.41)
Palladium
2341.00
(+1.23)
All Share
55049.24
(+0.02)
Top 40
50721.20
(+0.04)
Financial 15
10077.83
(+0.21)
Industrial 25
72950.81
(-0.54)
Resource 10
55479.72
(+0.66)
All JSE data delayed by at least 15 minutes morningstar logo
Company Snapshot
Voting Booth
Do you think it was a good idea for the government to approach the IMF for a $4.3 billion loan to fight Covid-19?
Please select an option Oops! Something went wrong, please try again later.
Results
Yes. We need the money.
11% - 1287 votes
It depends on how the funds are used.
73% - 8579 votes
No. We should have gotten the loan elsewhere.
16% - 1886 votes
Vote