High court sets aside public protector's findings against Pravin Gordhan

Public protector Busisiwe Mkhwebane has been dealt another legal blow.

A full bench of the high court in Pretoria has overturned her report that found public enterprises minister Pravin Gordhan had irregularly approved the early retirement of former SA Revenue Service (Sars) deputy commissioner Ivan Pillay with benefits in 2010.

Gordhan was `the finance minister at the time. In her report, Mkhwebane recommended that President Cyril Ramaphosa take disciplinary action against Gordhan. Mkhwebane’s probe was prompted by an anonymous complainant.

Gordhan, who denied any wrongdoing, did not take it lying down and took legal action last year to have the report overturned. Pillay and former Sars commissioner Oupa Magashule then joined Gordhan in the litigation against Mkhwebane. On Thursday, the high court set the report aside.

“What the court is required and permitted to do in the application of this nature, is merely to ask itself whether the decisionmaker acted rationally in making the decision she or he made, and for that purpose one looks at the reasons given by the decisionmaker for the decision she or he made and it is not required or permitted for the court to inquire into the question whether there might be other reasons for the same conclusion,” the 111-page judgment reads.

“It is in that respect that we finally conclude that the public protector’s decision [findings], and by extension her report, should be reviewed and set aside.”

Gordhan's lawyers, Malatji and Co Attorneys, said in a statement on Sunday, “In our view, this judgment bolsters our client’s belief that he has been subjected to a series of unlawful and unfair investigations by the office of the public protector.”

The statement quoted parts of the judgment, including: “There is nothing in the report that establishes that minister Gordhan as a member of cabinet or otherwise, contravened any of the basic values and principles governing public administration or that he acted contrary to any of the duties of members of cabinet provided for in the constitution.”

The complaint which resulted in the protracted legal battle was lodged, anonymously, on November 18 2016. It claimed Gordhan had approved Pillay’s early retirement and re-employment on a fixed-term contract as deputy commissioner with full benefits “as though he had retired at a statutory age”. 

“The essence of the complaint was that minister Gordhan and Mr Magashula acted dishonestly in their dealing in this matter and placed Mr Pillay at an advantage,” the judgment reads.

“Furthermore, Sars has incurred fruitless and wasteful expenditure in paying the penalty on behalf of Mr Pillay. The complaint as such contended that Messrs Magashula and Pillay as well as minister Gordhan’s conduct, amounted to maladministration in that they failed to prevent Sars from incurring irregular, fruitless and wasteful expenditure.”

Mkhwebane launched an investigation which was conducted through correspondence, interviews and analysis of documentation.  

“The allegation that minister Gordhan irregularly approved the early retirement of Mr Ivan Pillay with full retirement benefits and his subsequent retention at Sars is substantiated,” Mkhwebane found.

“Since neither Mr Pillay’s request for early retirement nor Mr Magashula’s recommendation to minister Gordhan contemplated retirement, there was no retirement in fact and in law. If there were no retirement in fact and in law, it can be concluded that Mr Pillay was not entitled to early retirement with full pension benefits under any statutory provision ...”

Mkhwebane also found that even if the contentious retirement was “in fact a retirement”, Gordhan had no authority to approve it. She recommended that disciplinary action be taken against Gordhan. She also urged the Sars commissioner to recover the levy Sars paid on behalf of Pillay from the both Pillay and Magashula. She recommended that the Sars commissioner should “ensure that Sars introduces as part of their recruitment process, regulations, policies and practices which are clear and unambiguous relating to early retirement and staff retention”.

Gordhan, Pillay and Magashula pushed back. Mkhwebane was sued in both her capacity as public protector and personally and a punitive cost order was sought against her.  

Gordhan told the court that he approved the proposal because he believed that it was “entirely above board”. He said he also thought it was appropriate to recognise the “invaluable work Mr Pillay had done in the transformation of Sars since 1999”.

“Mr Gordhan understood that Mr Magashula had established from enquiries with the department of public service & administration that the terms of Mr Pillay’s early retirement and redeployment were lawful and not unusual,” the judgment reads.

“Before approving the request, Mr Gordhan, himself, also consulted various other persons about the request set out in the memorandum from Mr Magashula. These consultations are said to have been undertaken over a period of three months from receipt of the request to its approval.”

Gordhan consulted a pensions expert at Sars, the Treasury deputy-director general, the chief of staff in the finance ministry, public service and administration minister who referred him to the department’s acting director-general. Gordhan, Pillay and Magashula argued that Mkhwebane had no authority to probe the matter because it fell outside her jurisdiction.

“The first ground they raise is that the initial notice of investigation that was sent by the public protector made no mention of any special circumstances that prompted the public protector to entertain the claim,” the judgment reads.

“Secondly, when they requested the public protector to provide the specific circumstances, minister Gordhan was provided with generic factors which are present in virtually every complaint that is referred to the public protector’s office. The said factors were in any event, said to be descriptions of general factors and not specific facts or circumstances that required investigation in this matter.”

They also argued that the lawfulness of Gordhan’s decision had been scrutinised by the Hawks, the national director of public prosecutions and the judicial commission of inquiry into tax administration by Sars — and they all found no wrongdoing.

The court set Mkhwebane’s finding aside, dismissed her counter application and ordered her office to pay the legal costs of the review application. Gordhan and Pillay were also ordered to pay her office’s legal costs for an application to strike out “paragraphs ... of ... Gordhan’s founding affidavit.”

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