Chief justice Mogoeng Mogoeng takes time on Busisiwe Mkhwebane costs decision

Public protector Busisiwe Mkhwebane is already facing a R900,000 personal costs order over her disastrous legal battle with the Reserve Bank — now SA’s central bank wants her to personally pay the costs of her appeal against that order.

Chief justice Mogoeng Mogoeng on Tuesday reserved judgment in Mkhwebane’s challenge to the costs order granted against her, the first given against a public protector, as well as the Bank’s application for Mkhwebane to be found to have “abused her office”.

Mkhwebane’s advocate Vuyani Ngalwana maintains that the costs order granted against her must be overturned, because Mkhwebane did not “act in bad faith” in her investigation into the apartheid-era bailout given by the Bank to Bankorp.

Instead, he says, she “showed bad judgment” by failing to disclose certain meetings she had — including with then-president Jacob Zuma’s office — prior to the release of the report.

Essentially, he says, Mkhwebane made “errors” in her investigation and report “but these should not be the basis of an adverse costs order against her”.

Mkhwebane was forced to admit that she had got it wrong when she ordered that the Bank’s constitutional mandate be changed to no longer focus on protecting the value of the rand‚ as part of that report’s remedial action.

Arguing for the Bank in the Constitutional Court, advocate Kate Hofmeyr said that remedial action had resulted in the sale of R1,3bn in government bonds and caused a drop in the value of the rand.

Hofmeyr has urged SA’s highest court to dismiss Mkhwebane’s attempt to overturn the personal costs order granted against her in the case.

Should the court grant Mkhwebane leave to appeal that order, she said, the Bank would ask it to find that Mkhwebane “abused her office” in the way she conducted the probe.

“The public protector failed to live up to the standards required of her office during her investigation. She conducted a partisan investigation which was aimed at undermining the Reserve Bank,” the bank’s lawyers stated in documents before the Constitutional Court.

They added that Mkhwebane “also fell egregiously short of her duties” during the litigation that ultimately saw her office’s report on the apartheid-era bailout, given by the SARB to Bankorp, being overturned. Bankorp was later taken over by Absa.

In her report‚ Mkhwebane ordered the Special Investigating Unit (SIU) to reopen its earlier investigation into the apartheid-era lifeboat granted to Bankorp “in order to recover misappropriated public funds unlawfully given to Absa Bank ...”

Crucial to the adverse rulings made against Mkhwebane by the Pretoria High Court were meetings she held with the presidency and the State Security Agency (SSA) over her Bankorp investigation‚ certain parts of which she did not initially disclose. It also emerged in court proceedings that a note recorded during Mkhwebane’s meeting with the SSA stated — in reference to the Bank — “how are they vulnerable?”

The high court expressed concern that Mkhwebane had met the SSA and the presidency less than two weeks before she released her far-reaching Bankorp report‚ without disclosing this to the Bank or Absa.

“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 bought an impartial mind to bear on the issues before her‚” the court ruled.

“We therefore conclude that it has been proven that the public protector is reasonably suspected of bias”. The court added: “It is necessary to show our displeasure with the unacceptable way in which [Mkhwebane] conducted her investigation as well as her persistence to oppose all three applications [bought by the Reserve Bank] to the end.”

It was on the basis of these findings that the high court ordered that Mkhwebane personally pay 15% of the Reserve Bank’s legal costs.

Mkhwebane now wants the Constitutional Court to rule that the costs order given against her by three Pretoria High Court judges “impacts adversely and directly” on the office of the public protector’s constitutional power‚ obligations and functions.