1
IN THE HIGH COURT OF SOUTH AFRICA GAUTENG DIVISION, PRETORIA
CASE NO: 48521/19
(1) REPORTABLE: YES
(2) OF INTEREST TO OTHER JUDGES: YES
(3) REVISED: YES
In the matter between: DATE:
PRAVIN JAMNADAS GORDHAN Applicant
And
THE PUBLIC PROTECTOR 1st Respondent
BUSISIWE MKHWEBANE 2nd Respondent
THE PRESIDENT OF THE REPUBLIC OF SOUTH AFRICA 3rd Respondent
THE SPEAKER OF THE NATIONAL ASSEMBLY 4th Respondent 2
THE MINISTER OF STATE SECURITY 5th Respondent
THE NATIONAL DIRECTOR OF PUBLIC PROSECUTIONS 6th Respondent
THE NATIONAL COMMISSIONER OF POLICE 7th Respondent
VISVANATHAN PILLAY 8th Respondent
GEORGE NKGAKANE VIGIL MAGASHULA 9th Respondent
ECONOMIC FREEDOM FIGHTERS 10th Respondent ______
JUDGMENT
THE COURT
INTRODUCTION
1. On 5 July 2019 the Public Protector released a report “On an Investigation into Allegations of Violation of the Executive Ethics Code by Mr Pravin Gordhan, MP as well as allegations of Maladministration, Corruption and Improper Conduct by the South African Revenue Services” (“the Report”). Apart from the adverse findings made against Minister Gordhan, the Report also implicates Mr Visvanathan Pillay and Mr George Nkgakane Vigil Magashula, the latter both former employees at the South African Revenue Services (“SARS”), in serious misconduct, maladministration and criminality.
2. Central to the findings in the Report is a unit that was established within SARS. The Report refers to this unit as an “intelligence unit” and Minister Gordhan, Mr Pillay 3 and Mr Magashula refer to this unit as the “investigative unit”. To avoid confusion, we will simply refer to this unit as “the unit” in the judgment.
3. This is an application to review and set aside the Report under the principles of the rule of law in terms of section 1(c) of the Constitution.1
4. The application was launched on 10 July 2019 by Minister Gordhan and consists of a Part A and a Part B. Part A was an urgent application seeking to suspend and interdict the enforcement of the Public Protector’s remedial orders contained in the Report, pending the determination of Part B. The relief in Part A was granted by Potteril J on 27 July 2019.2 The judgment and order contained therein were the subject of opposed applications for leave to appeal to the Constitutional Court by the Economic Freedom Fighters (“EFF”) and the Public Protector.3 The application for leave to appeal was dismissed. The personal cost order against the Public Protector (Adv Mkhwebane) was set aside and replaced by an order that the Public Protector pay the costs of Minister Gordhan, Mr Pillay and Mr Magashula.
5. The present application is Part B of the review application.
6. The respondents cited are the following: The first respondent is the Public Protector. The second respondent, Advocate Busisiwe Mkhwebane, is cited in her personal capacity. The third respondent is the President of the Republic of South Africa (“the President”). The fourth respondent is the Speaker of the National Assembly (“the Speaker”). The fifth respondent is the Minister of State Security. The sixth respondent is the National Director of Public Prosecutions (“the NDPP”). The seventh respondent is the National Commissioner of Police (“the Commissioner”). The eighth respondent is Mr Pillay. The ninth respondent is Mr Magashula. The EFF intervened during Part A in Minister Gordhan’s review application and is now the tenth respondent.
1 Act 108 of 1996. Minister of Home Affairs v Public Protector 2018 (3) SA 380 (SCA).
2 Gordhan v Public Protector (48521/19) [2019] ZAGPPHC 311; [2019] 3 All SA 743 (GP) (29 July 2019). 3 Economic Freedom Fighters v Gordhan and Others; Public Protector and Another v Gordhan and Others [2020] ZACC 10. 4
7. The Public Protector, Advocate Mkhwebane, and the EFF oppose the application and filed answering affidavits. The President abides the outcome, except for the striking out of a few words re the remedial action. He filed a supporting affidavit and heads of argument. The Minister of State Security also abides the outcome and filed a supporting affidavit and heads of argument. The Speaker, the NDPP and the Commissioner do not oppose the application, and filed notices to abide.
8. Mr Pillay, the eighth respondent, delivered an affidavit in support of the relief sought by Minister Gordhan in Part A, but subsequently launched a substantive application, supported by a founding affidavit, to intervene as a further applicant in Part B to review and set aside the Report ("Mr Pillay’s application"). His founding affidavit sets out in detail the grounds upon which he, in his own right, seeks the review and setting aside of the Report.
9. None of the parties have opposed Mr Pillay’s application to intervene in the matter and the Public Protector has approached the matter on the basis that Mr Pillay had already successfully intervened in the matter. Mr Pillay clearly has a direct and substantial interest in the review application as he is directly implicated by the Report. Leave is granted to him to intervene.
10. Mr Magashula, the ninth respondent, filed a notice to abide but also filed an affidavit seeking an order that the findings and the remedial action ordered against him be reviewed and set aside.
11. In essence, there are, therefore three review applications before the court. We propose to deal with Minister Gordhan’s, Mr Pillay’s and Mr Magashula’s applications separately, although there is a significant overlap in the evidence pertaining to the Public Protector’s findings against these three individuals.
THE RELIEF SOUGHT
12. The applicants seek relief in the following in terms: 5
i. The Public Protector’s decision in terms of section 6(9) of the Public Protector Act,4 (“the Public Protector Act”) to entertain the complaints upon which she reported in the Report, is reviewed, declared unlawful and set aside. (Paragraph 5.1 of the Notice of Motion). ii. The Report is reviewed, declared unlawful and set aside. (Paragraph 5.2 of the Notice of Motion). iii. It is declared that the Public Protector and Advocate Mkhwebane personally, acted in breach of their constitutional duties to be independent and to exercise their powers and perform their functions without fear, favour or prejudice. (Paragraph 5.3 of the Notice of Motion). iv. It is declared that the Public Protector and Advocate Mkhwebane personally, dishonestly or, alternatively, recklessly made her findings in the Report against the applicants in that they knew that the findings were false or were reckless as to their truth. (Paragraph 5.4 of the Notice of Motion). v. The Public Protector and Advocate Mkhwebane personally are ordered, jointly and severally, to pay the applicants’ costs on the scale between attorney and client. (Paragraph 5.5 of the Notice of Motion).
13. During the hearing of the matter the declaratory relief sought against the Public Protector and Advocate Mkhwebane in paragraphs 5.3 and 5.4 of the Notice of Motion were not persisted with by the applicants.
14. The Public Protector brought two applications: Firstly, an application to strike out certain paragraphs in Minister Gordhan’s founding affidavit, and, secondly, a counter-application for an order that “Minister Gordhan had a constitutional duty in terms of section 181(3) of the Constitution5 to assist and protect the independence,
4 Act 23 of 1994. 5 Supra. Section 181 provides that: “(1) The following state institutions strengthen constitutional democracy in the Republic: (a) The Public Protector. (b) The South African Human Rights Commission. (c) The Commission for 6 impartiality, dignity and effectiveness of the Public Protector and that he has failed to do so.” We deal with these two applications separately later in the judgment.
THE COMPLAINTS
15. On 11 October 2018 and 8 November 2018, the Public Protector received two complaints; one by an anonymous whistle-blower and the other by Mr Floyd Shivambu (the Deputy President of the EFF).
16. In the EFF complaint it is, inter alia, claimed that Minister Gordhan “willingly established an intelligence unit against the Intelligence Laws of South Africa”. The EFF relies on the SARS investigation report compiled by the Sikhakhane panel. The Sikhakhane panel was an external panel appointed in September 2014 by Mr Pillay to conduct an investigation into allegations of impropriety against Mr Johan van Loggerenberg (“Mr Van Loggerenberg”), SARS Group Executive at the time. The panel was chaired by Adv. Sikhakhane. The Sikhakhane report is dealt with in more detail later in the judgment.
GROUNDS OF REVIEW
17. Mr Gordhan and Mr Pillay seek to review and set aside the report of the Public Protector on various grounds. Firstly, on the basis that she has no jurisdiction over the complaints under section 6(9) of the Public Protector Act. Secondly, that the Public Protector has failed to exercise her powers and functions in compliance with the Constitution and the Public Protector Act in that she had failed to act independently,
the Promotion and Protection of the Rights of Cultural, Religious and Linguistic Communities. (d) The Commission for Gender Equality. (e) The Auditor-General. (f) The Electoral Commission. (2) 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. (3) Other organs of state, through legislative and other measures, must assist and protect these institutions to ensure the independence, impartiality, dignity and effectiveness of these institutions. (4) No person or organ of state may interfere with the functioning of these institutions. (5) These institutions are accountable to the National Assembly, and must report on their activities and the performance of their functions to the Assembly at least once a year.” 7 impartially, and without fear, favour or prejudice. Thirdly, that the Public Protector took into account irrelevant considerations, relied on discredited reports and failed to take into account the extensive evidence that was placed before her, particularly in the detailed affidavits submitted by Mr Pillay. Fourthly, that the Public Protector’s remedial action is ultra vires, unlawful, incapable of being implemented and falls short of the appropriate standard. Finally, the applicants seek to review the Report on the basis of the Public Protector's manifest bias against the applicants.
18. The applicants submit that the failure of the Public Protector to act in a manner consistent with the high standards expected from a person occupying the office of the Public Protector, resulted in the Report containing conclusions that are not only irrational, but also materially informed by errors of law. The Report, so it is argued, is the product of a procedurally flawed process, influenced by her manifest bias and use of her powers for an ulterior purpose, during which the principles of audi alteram partem rule have been ignored.
JURISDICTION
19. It is apposite at this stage, before turning to the findings made against Minister Gordhan, Mr Pillay and Mr Magashula, to consider the first ground of review, namely that the Public Protector had no jurisdiction over the complaints made under section 6(9) of the Public Protector Act. As stated, both Minister Gordhan and Mr Pillay raised this issue with the Public Protector. For purposes of discussion, we will, however, only focus on the Gordhan’s correspondence and engagement with the Public Protector.
20. Section 6(9) of the Public Protector Act reads as follows:
“Except where the Public Protector in special circumstances, within his or her discretion, so permits, a complaint or matter referred to the Public Protector shall not be entertained unless it is reported to the Public Protector, within two years from the occurrence of the incident or matter concerned.”
21. The Public Protector therefore has to establish the existence of special circumstances before embarking on an investigation of complaints where such 8 complaints have been referred more than two years from the occurrence of the incident or matter concerned.
22. The complaints in the present case refer to matters that are older than two years and in some of instances more than ten years older. Minister Gordhan, acting through his attorney (and reacting to public reports that the investigation against him was proceeding), requested the Public Protector on 27 March 2019 to identify the special circumstances on which she relied in terms of section 6(9) in order to pursue an investigation against Minister Gordhan. The Public Protector did not respond and instead issued Minister Gordhan with a section 7(9) notice on 8 April 2019.
23. Upon the failure to elicit a response from the Public Protector, Minister Gordhan, through his attorney, pursued the matter further and again requested the Public protector to identify the “special circumstances” permitting her to investigate the complaints against Minister Gordhan. The Public Protector responded on 24 April 2019 by stating that she had been reliably informed that:
“the surveillance equipment illegally acquired at astronomical costs, is still being utilised to intercept communications between people by the unit which was not completely disbanded. So this was a matter of special interest as public funds are still being used for illegal purposes.”
24. It would appear from the above explanation that this was a reference to the complaint regarding the purchase of equipment by SARS. This explanation, however, failed to explain the exercise of her discretion over the remaining issues raised in the complaints.
25. When the Public Protector served a section 7(9) notice on Minister Gordhan on 3 June 2019 she provided additional factors which she perceived constituted further special circumstances justifying her decision to investigate:
“…consideration is given to the nature of the complaint and the seriousness of the allegations; whether the outcome of the investigation into the complaint 9
can rectify systemic problems in state administration; whether the matter can be successfully investigated, with due consideration to the availability of evidence and/or records relating to the incident(s); whether there are any competent alternative remedies available to the complainant and overall impact of the investigation; whether the prejudice suffered by the complainant persists; whether refusal to investigate the matter perpetuates the violation of Section 195 of the Constitution and whether the remedial action will redress the imbalances of the past. What constitutes ‘special circumstances’ will depend on the merits of each case”.
26. Notably, these additional or new factors bore no resemblance to the “special circumstances” which the Public Protector had furnished in her previous communication regarding the purchase of equipment by SARS. Also notable is the fact that the additional factors now enumerated appear to be factors applicable to all the complaints investigated by the institution of the Public Protector. For that reason, it cannot be said to be “special”.
27. On 20 June 2019, Minister Gordhan responded to the section 7(9) notice. He again called on the Public Protector to furnish full particulars of the “special circumstances” she relied upon when she exercised her discretion in this case. The Public Protector again failed to respond.
28. On 5 July 2019 the Public Protector released her report. Despite the requests to fully respond, the report again merely listed the generic lists of factors.
29. Counsel for the Public Protector submits that the Public Protector is at liberty to determine whether or not to investigate a complaint irrespective of the age of the complaint. He submits that since the greater majority of complaints are lodged by laypersons, the period between the layperson becoming aware of the information and the occurrence of the incident “will never perfectly fit the two year time limits”.
30. There is no merit in this submission. The Public Protector’s understanding and interpretation of section 6(9) seems to override the intent of the legislator. This cannot 10 be the correct approach to a legislative provision in which the intent of the legislator is patently clear: The investigative powers of the Public Protector are limited to complaints referred within two years from the occurrence of the incident or the matter concerned, except if there are special circumstances present.
31. The Public Protector is supported by the EFF regarding the submission that the Public Protector acted within the ambit of section 6(9) when she received and investigated the complaints despite the age thereof.
32. The EFF seeks to bolster their argument by making reference to the fact that, when Minister Gordhan testified about the same events before the Zondo and Nugent Commissions, no similar objection was raised to his evidence in that regard. The EFF’s reasoning, however, fails to appreciate the fact that the Public Protector operates within the provisions of a specific Act, the Public Protector Act, and that her conduct must be assessed in terms of the provisions thereof. Commissions such as the Zondo and Nugent Commissions, are governed by their own terms of reference. The jurisdictional parameters of the different fora can therefore not be equated.
33. The EFF further submits that it is in the public interest to determine the lawfulness of the unit. This is a misinterpretation of the provisions of section 6(9). The mandate of the Public Protector is founded on the basis of public interest: The Public Protector investigates all complaints in the public interest. Despite this broad-based mandate, the legislator has nonetheless deemed it fit to circumscribe the Public Protector’s jurisdiction in a prescribed set of circumstances. It would therefore be stretching the argument to put up “public interest” as a special circumstance justifying the Public Protector’s decision. The submissions by the EFF are therefore not sustainable.
34. In conclusion, the Public Protector’s decision to conduct the investigation was unlawful because there were no special circumstances present. The review should succeed in its entirety on this ground alone. However, if we are wrong in this regard and the Public Protector had the necessary jurisdiction to investigate the complaints, we will nonetheless consider the review. 11
MR GORDHAN’S APPLICATION
35. Minister Gordhan was first advised of the complaints lodged against him on 8 April 2019 when a subpoena was hand-delivered to the offices of his legal representatives. He was directed to submit an affidavit in terms of the Public Protector Act on 23 April 2019. The subpoena detailed the following complaints:
“[7.1.1] During your tenure as the then Commissioner of SARS, you, Mr Pravin Gordhan, MP (Mr Gordhan) established an intelligence unit in violation of South African Intelligence Prescripts. The establishment and existence of the intelligence unit was confirmed by a SARS investigation report compiled by Advocate Sikhakhane;
[7.1.2] SARS violated section 209 of the Constitution which confers the powers and authority to establish any intelligence service, only on the President as head of the national executive and does so only in terms of the national legislation (sic);
[7.1.3] SARS further violated section 41(1)(a) of the Constitution by not respecting the constitutional status, power and functions of the National Intelligence Agency;
[7.1.4] SARS irregularly procured intelligence equipment, which the intelligence unit utilised for intelligence gathering;
[7.1.5] SARS failed to follow proper procurement processes in appointing employees who worked for the intelligence unit;
[7.1.6] The SARS Intelligence unit irregularly bugged the offices of the National Prosecuting Authority (NPA) and the Directorate of Special Investigations (DSO);
[7.1.7] SARS, based on an instruction from Mr Gordhan, as the former Minister of Finance, in 2012, pursued the tax affairs of the current 12
Economic Freedom Fighters President, Mr Julius Malema, MP, without a legal basis;
[7.1.8] Mr Pillay was appointed to the position of Deputy SARS Commissioner and subsequently as SARS Commissioner whilst he did not possess the necessary qualifications for the positions;
[7.1.9] SARS failed to follow correct procurement procedures in the appointed of Accenture;
[7.1.10] SARS irregularly extended the SARS IT tender for 12 years resulting in fruitless and wasteful expenditure that has escalated to R8 billion to date; and
[7.1.11] SARS purchased an IT company by the name INTERFRONT at an amount of R72 million whilst the company was worth R2 million at the time of purchase.
[8] Mr Shivambu further alleged that you violated the Executive Ethics Code by deliberately misleading the National Assembly in failing to disclose that you had met with a member of the Gupta family since taking office.”
36. We have already referred to the letter dated 16 April 2019 in which Minister Gordhan’s legal representatives addressed a letter to the Public Protector requesting to disclose the “special circumstances” upon which she relied as justification to investigate the complaints. In this letter, the legal representatives also raised the issue of the short time (20 business days) afforded to Minister Gordhan within which he had to file his response to the section 7(9) notice and requested the Public Protector for an extension.
37. On 17 April 2019 Minister Gordhan’s legal representatives directed a letter to the Acting Commissioner of SARS (Mr Mark Kingon) requesting copies of documents and access to persons that could assist in responding to the allegations investigated by the Public Protector. On 18 April 2019 Mr Kingon replied that he was not in a 13 position to accede to Minister Gordhan’s request at that stage because he operated within a legal framework and he needed legal certainty whether he was permitted to disclose the information.
38. The request for an extension was repeated on 22 April 2019. Instead of responding directly to Minister Gordhan’s legal representatives regarding the request for an extension, the Public Protector released a media statement on 23 April 2019 in which Minister Gordhan was granted an extension, but only until 3 May 2019.
39. On 2 May 2019 Minister Gordhan’s legal representatives again sought clarity on when the Public Protector will respond to the substantive issues raised in the letter of 16 April 2019, particularly with reference to what constituted special circumstances entitling the Public Protector to investigate complaints more than ten years after the events in issue.
40. The office of the Public Protector responded by stating that a response had already been provided to Minister Gordhan as she preferred to communicate directly with him due to “leakages to the media”. Minister Gordan’s legal adviser informed the Public Protector that, notwithstanding her preference, all correspondence should be directed to the office of the legal representatives of Minister Gordhan.
41. In her letter dated 24 April 2019, the Public Protector (as already pointed out) responded that special circumstances were present as she was in possession of “reliable information” that the surveillance equipment that was acquired at astronomical costs, was still in use. She further pointed out that the matter was of special public interest as public funds were being used for illegal purposes.
42. On 17 May 2019 Minister Gordhan submitted an affidavit to the Public Protector in compliance with the subpoena.
43. On 3 June 2019 the Public Protector announced via a video posted on YouTube6 that Minister Gordhan would be served with a section 7(9) notice. This video
6 YouTube is an online video sharing platform. 14 was posted on a public platform before giving any notice to Minister Gordhan or his attorneys.
44. The section 7(9) notice informed Minister Gordhan that the Public Protector intended to split the initial 12 complaints into two reports. The notice further afforded Minister Gordhan 10 working days to comment on the adverse findings that the Public Protector intended to make against him.
45. Minister Gordhan’s legal representative sought an extension of the deadline to respond to the serious issues under investigation in order to afford him an opportunity to properly consider his response thereto. An extension was granted and Minister Gordhan responded to the section 7(9) notice on 21 June 2019. In his response Minister Gordhan took issue with the fact that neither he nor his legal representatives was furnished with the notice and submitted that he was not only entitled to be informed timeously of any developments in respect of the investigations as he was the subject of an investigation but, that he had the right not to be informed by the media of notices served on him.
46. On 5 July 2019 - 10 days after receipt of Minister Gordhan’s affidavit - the Public Protector released the Report to the media in which various adverse findings against Minister Gordhan were made. The Report was released before either Minister Gordhan or his legal representatives was furnished with the Report. The Report dealt with six of the fourteen issues raised in the two complaints. The remainder of the complaints were deferred for further investigation.
ALLEGATIONS AGAINST MINISTER GORDHAN
47. The accusations levelled against Minister Gordhan can briefly be divided into three categories:
(i) The first is the accusations about the establishment of an unlawful intelligence unit at SARS in violation of South African intelligence prescripts at the time when Minister Gordhan was the Commissioner of 15
SARS; the procurement of intelligence equipment by the unit; SARS’s recruitment of employees of the unit; and the operations of the unit.
(ii) The accusation that Minster Gordhan violated the Executive Ethics Code by deliberately misleading the National Assembly by failing to disclose that a member of the controversial Gupta family was present at a meeting between Minister Gordhan and a certain Mr Ambani in 2010; and,
(iii) The accusation that Mr Pillay was appointed as the SARS Deputy Commissioner when he was not qualified for that position.7
48. Although the Public Protector also found that SARS had failed to follow correct procurement procedures when it procured intelligence equipment for gathering intelligence and that the unit carried out irregular and unlawful operations, Minister Gordhan is not directly implicated in the Report in respect of these findings. These findings will be discussed as part of the Pillay application.
49. In her remedial action proposed in respect of Mr Gordhan,8 the Public Protector made the following orders:
i. The President to take appropriate disciplinary action against Minister Gordhan for his violation of the Constitution and the Executive Ethics Code within 30 days of issuing the Report.
ii. The Speaker to, within 14 days of receipt of the Report, refer Minister Gordhan’s violation of the Code of Ethical Conduct and Disclosure of Member’s Interest for Assembly and Permanent Council Members, to the Joint Committee on Ethics and Member’s Interest, for consideration in terms of the provisions of paragraph 10 of the Parliament Code of Ethics.
7 This aspect of the Report is dealt with in the Pillay application. 8 Ad paras [8] and [9] of the Report of the Public Protector. 16
iii. The Minister of State Security, acting in line with the Intelligence Services Amendment Act,9 to, within 90 days of the issuing of the Report, implement in totality the Office of the Inspector General of Intelligence’s report (“the OIGI report”) dated 31 October 2014 and that all intelligence equipment utilised by SARS’s intelligence unit, be returned, audited and placed into the custody of the State Security Agency within 30 days of the Report.
iv. The NDPP to finalise the various criminal proceedings instituted against implicated former SARS officials.
v. The Commissioner to, within 60 days, investigate criminal conduct of Minister Gordhan, Mr Pillay and officials involved in the SARS intelligence unit, for violation of section 209 of the Constitution and section 3 of the National Strategic Intelligence Act,10 including Mr Magashula’s conduct of lying under oath.
vi. The abovementioned individuals and entities to submit plans for the implementation of the orders for the Public Protector’s approval and then to implement those plans within tight timelines.
50. In respect of Minister Gordhan, the following three issues will be considered: Firstly, whether Minister Gordhan violated the Ethics Code by deliberately misleading parliament in respect of the meeting he attended with Mr Ambani where a member of the Gupta family was present. Secondly, whether Minister Gordhan was involved in the recruitment of staff for the unit. Thirdly, the lawfulness of the establishment of the unit, including whether section 209 of the Constitution was violated. The complaint about the recruitment of staff overlaps with one of the findings against Mr Pillay and will therefore be dealt with as part of the Pillay application.
9 Act 65 of 2002. 10 Act 39 of 1994. 17
CONTRAVENTION OF THE EXECUTIVE ETHICS CODE
51. The Executive Ethics Code was promulgated by Presidential Proclamation R41 of 2000 in terms of Section 2(1) of the Executive Members Ethics Act.11 Paragraph 2.3(a) of the Code reads as follows:
“Members of the Executive may not wilfully mislead the legislature to which they are accountable.”
52. The Public Protector found that Minister Gordhan had violated the Executive Ethics Code (“the Code”) by deliberately misleading the National Assembly in 2016 by not being able to remember a 2010 meeting with a certain Mr Ambani at which a member of the Gupta family was said to have been present. This incident occurred in response to a written question where Minister Gordhan described his contacts with the Gupta family. He responded as follows:
“I have not attended any meeting with the Gupta family or anyone else at their Saxonwold Estate. I have encountered one or more members of his family at public events on a few occasions e.g a cricket match. I have met one of the Gupta brothers at Mahlamba Ndlovu around 2009/2010 during which brief discussion on small business finance took place.”
53. Minister Gordhan thereafter testified before the Zondo Commission in 2018. He stated that he attended a meeting in June 2010 with an affluent businessman, Mr Ambani of the Reliance Group. He testified that he had been advised by his former Chief of Staff, Mr Dondo Mogajane, in preparation for the Zondo Commission, that a member of the Gupta family had been present at the Ambani meeting. He stated that he had no independent recollection regarding the presence of a member of the Gupta family at the meeting, but there might have been one, and he had accordingly decided of his own accord to make a full disclosure after being reminded by Mr Mogajane of the meeting held during June 2010.
11 Act 82 of 1996. 18
54. The Public Protector found that Minister Gordhan’s inability to remember “does not seem like a bona fide mistake” on the following basis:
“7.1.2 Mr Gordhan conceded to not having disclosed that he had actually met a member of the Gupta family and an associate of the family in 2010.
7.1.3 He contended that at the time of his response to the Parliamentary question he could not recall as he had forgotten about the meeting at which Mr Ajay Gupta was present.
7.1.4 According to his affidavit to the State of Capture Commission inquiry (the Zondo Commission), that it was only after being reminded by Mr Dondo Mogajane who at the time was his Chief of Staff. I find this rather implausible when one considers the prominence of the subject of State Capture in South Africa.
7.1.5 I therefore find that his conduct in this regard is in violation of paragraph 2 of the Executive Ethics Code and accordingly amounts to conduct that is inconsistent with his office as a member of Cabinet as contemplated by Section 96 of the Constitution.”
55. The Public Protector in her answering affidavit further took issue with Minister Gordhan’s explanation that he could not independently remember meeting with a member of the Gupta family and argued that “Mr Gordhan’s comments were evidence of the formation and implementation of a scheme to downplay and obfuscate the extent of his dealings with the Guptas and to mislead Parliament in regard thereto”.
56. Minister Gordhan explains that his meeting was with Mr Ambani and not Mr Gupta. The notoriety of the Guptas in 2010 had not yet risen to a level where he would have had to take particular note of a member of the Gupta family presence at the Ambani meeting. He had disclosed his other casual meetings with the Guptas including a meeting where one of the Gupta’s was introduced to him by former President Zuma at the Presidential Guest House, in Pretoria. 19
57. Minister Gordhan’s testimony that he did not recall and still does not recall the presence of a member of the Gupta family in response to a parliamentary question put to him during 2016, was not contradicted by any other evidence. In the absence of any countervailing evidence to the account given by Minister Gordhan regarding the Ambani meeting to Parliament and to the Zondo Commission, there is no basis for the Public Protector reaching a conclusion that he deliberately misled Parliament. Mr Gordhan’s state of recollection at the Zondo Commission was not different save for the reminder by his former Chief of Staff. The Public Protector’s conclusion is not based on any rational assessment of the evidence presented and is irrational.
58. But what compounds the Public Protector’s misdirection is that she then makes a complete about–turn by departing from her report and now argues that an “inadvertent or mistaken misrepresentation violates the Executive Ethics Code”. In doing so she then shifts her focus to the judgment of Potterill J, who presided over Part A of this application. In her judgment, the judge briefly dealt with interpretation of the wording contained in section 2.3(a) of the Executive Ethics Code and made the following comments in respect of the wording in paragraph 2.3(a) of the Executive Ethics Code:
“[22] Paragraph 2.3(a) of the Executive Ethics Code reads as follows: “Members of the Executive may not … wilfully mislead the Legislature to which they are accountable.” The review grounds set up by Gordhan is that he did not wilfully mislead the National Assembly. The PP found that Gordhan dishonestly concealed the fact that at the “Ambani meeting” there was a Gupta present. Gordhan sets out that until today he cannot recall that a Gupta was present, but his Chief of Staff informed him in preparation for his evidence at the Zondo Commission that there was a Gupta present at that meeting; he without an independent recollection thereof disclosed this fact to the Commission. [23] The EFF submitted that it matters not that Gordhan may not wilfully have misled the Legislature, an innocent mistake is sufficient. This is of course contra the wording of paragraph 2.3(a) of the Code specifying that it must be done wilfully. 20
[24] On these facts Gordhan has established prima facie right.”
59. Potterill J, with reference to the express wording employed in the Executive Ethics Code thus held the view that what is required is that the misleading statement must have been done “wilfully” and that “an innocent mistake” will therefore not fall short of the provisions of section 2.3(a) of the Executive Ethics Code.
60. In her affidavit in the proceedings before us, the Public Protector strongly disagrees with the interpretation adopted by Potterill J namely that wilfulness is a requirement for a transgression of the Executive Ethics Code. But, instead of merely recording her disagreement with the court’s interpretation, she launched into a scathing, unwarranted and personal attack on the integrity of the learned Judge. She even goes as far as to accuse the learned Judge of “a gross misinterpretation of the … Code” and of “deliberately omitting” words from the Code. She says this in her affidavit:
“The High Court further committed a gross misinterpretation of the applicable Executive Ethics Code. Section 2.3 expressly states that Members may not- (a) Deliberately or Inadvertently mislead the President, or the Premier or as the case may be; the legislature;” Inexplicably the High Court close to rewrite the said provisions of the Code and adopted Mr Gordhan’s view that Code only prohibits “wilfully” misleading “the Legislature to which they are accountable”. The High Court did so by deliberately omitting the words “inadvertently mislead” from the actual code. The High Court states on para 22 of the judgment that “the review grounds set up by Mr Gordhan is that he did not wilfully mislead the National Assembly. I found that Mr Gordhan dishonestly concealed the fact that at the “Ambani meeting” there was a Gupta present. As if to highlight its grossly misplaced interpretation of the Code, the Court went on to state on paras 23 and 24 the following:
[23] The EFF submitted that it matters not that Gordhan may not wilfully have misled the Legislature, an innocent mistake is sufficient. 21
This is of course contra the wording of paragraph 2.3(a) of the Code specifying that it must be done wilfully.”
61. Apart from the fact that the personal attack on the learned Judge is shockingly inappropriate and unwarranted, the Public Protector’s reading and interpretation of paragraph 2.3(a) of the Executive Ethics Code is wrong in law: The Code prohibits members of the Executive from “wilfully” misleading the legislature. The wording of the Code is clear and does not contain a provision that an “innocent” mistake constitutes a contravention of the Executive Ethics Code. To claim that Potterill J “deliberately omitted the words ‘inadvertently mislead’” from the actual Code, is simply astonishing. Besides being a Public Protector, Adv Mkhwebane is officer of this court owes it a duty to treat the Court with the necessary decorum. She not only committed an error of law regarding the Code but was also contemptuous of the Court and Judge Potteril personally. What makes this reprehensible conduct worse is that the remarks by Adv Mkhwebane were made under oath, when she ought to have known about the falsity thereof. This clearly held the possibility of misleading this court. This is conduct unbecoming of an advocate and officer of this court. She owes Judge Potteril an apology. The Registrar of this Division is requested to send a copy of this judgment to the Legal Practice Council for consideration.
62. In the matter of The President of the Republic of South Africa v The Public Protector (The Information Regulator Amicus Curiae)12 the full bench of this division similarly criticized the Public Protector’s flawed understanding of the contents of section 2.3(a) of the Executive Ethics Code:
"[207] Of similar concern is her confusion over the proper version of the Executive Code. She has not explained how she committed this error. Her conduct in this regard goes further than simply having reference to two different versions of that Code. The legal test for a violation of the Code by misleading the National Assembly was fundamentally different in the two versions. Instead of appreciating the difference between the "willful" misleading of the National Assembly, and the "inadvertent" misleading of it,
12 2020 JDR 0406 (GP). 22
she asserted that if she had made an error at all it was an immaterial error of form over substance. This submission shows a flawed conceptual grasp of the issues with which she was dealing.
[208] Like any official required to make pronouncements to the public, the Public Protector must surely strive to be as clear as possible in her findings. Her reasoning on the disclosure issue was muddled and difficult to understand. It failed to explain to the public why she had found that the President of the country had wilfully breached the duty of transparency established by the Code. Indeed, her conclusion inexplicably found that at the same time the President had also inadvertently misled Parliament, sowing further confusion."
63. The Public Protector also bemoans the fact that Minister Gordhan has launched an attack on her integrity which she labels as “scandalous” and made in an attempt to support a “political crusade” against her to mobilise “political support” for her removal from her office. Yet she has no qualm launching a blistering and personal attack on a Judge of this division.
64. To summarise: The evidence presented to the Public Protector does not support a conclusion that Minister Gordhan wilfully contravened the Code. A conclusion to the contrary is incorrect and irrational.
THE UNIT
65. The unit was established in 2007. The findings of the Public Protector in respect of the establishment of the unit should therefore be viewed against the common cause fact that Minister Gordhan was the Commissioner of SARS only until May 2009 whereafter he was appointed as the Minister of Finance and later the Minister of Cooperative Governance and Traditional Affairs. His involvement in SARS and by implication the unit, therefore came to an end during May 2009. The unit was headed by Mr Pillay as General Manager: Enforcement and Risk Division. Mr Pillay’s role in the operation of the unit is discussed elsewhere in the judgment. 23
66. The sordid saga about the unit has been unfolding in the public domain over the course of many years. It paints a picture of malfeasance and impropriety, not only in respect of the establishment of the unit, but more alarming, about the alleged recalcitrant and murky activities of this unit to such an extent that this unit was labelled in the press as a “rogue unit”.
67. The rogue unit narrative first raised its head two weeks after Mr Tom Moyane took office as SARS Commissioner. In a newspaper report published on 12 October 2014 in the Sunday Times, it was claimed that a “rogue unit” operated within SARS. Two years later and numerous similar newspaper articles, the Sunday Times unconditionally withdrew its allegations regarding an alleged “rogue unit” operating within SARS and tendered an apology to SARS. By that time the damage had unfortunately been done and those employees of SARS that have been implicated in the Sunday Times reports have already faced disastrous consequences.13
68. The rogue unit narrative suggested that Minister Gordhan in particular had actively and knowing participated in the establishment of a unit in violation of South African Intelligence prescripts. There can be no doubt that, should these allegations be true, the implications thereof for Minister Gordhan (personally and politically) and the trust that the wider public has in a public institution such as SARS, would be profoundly damaging.
69. The principal finding of the Public Protector in respect of the unit was firstly, that Minister Gordhan, during his tenure as the Commissioner of SARS established an “intelligence unit” in violation of the South African Intelligence prescripts and, secondly, that the establishment of the unit was “improper and in violation of section 209 of the Constitution and therefore amounted to maladministration as envisaged in section 182(1) of the Constitution and an abuse of power as envisaged in section 6(4)(ii)14 of the Public Protector Act”.
13 Final Report of the Commission of Inquiry into Tax Administration and Governance by the South African Revenue Service. Date 11 December 2018 ad para [2]. 14 The relevant part of this section reads as follows: “(4) The Public Protector shall, be competent- (a) to investigate, on his or her own initiative or on receipt of a complaint, any alleged- … 24
70. As will be pointed out, this finding is not supported by the established facts that were placed before the Public Protector, and is fundamentally wrong in law.
Background leading up to the establishment of the unit
71. SARS is established in terms of the South African Revenue Service Act15 (“the SARS Act”). Although SARS is established as an organ of state within the public administration, SARS as an institution falls outside of the public service. SARS is the sole administrator and revenue collecting agency responsible for investigating and enforcing compliance with tax and customs legislation.
72. Section 3 of the SARS Act lists as its objectives “the efficient and effective (a) collection of revenue; and (b) control over the import, export, manufacture, movement, storage or use of certain goods”, including those subject to customs and excise duty. Section 4 sets out the functions of SARS and provides that SARS “must secure the efficient and effective, and widest possible, enforcement” of all tax laws. SARS is not an intelligence service nor a law enforcement agency, but a revenue and custom agency by law.
73. In terms of section 5(1) of the SARS Act, SARS may do all that is necessary to perform its functions properly including engaging in any activity whether alone or together with other organisations in the Republic or elsewhere, to promote proper, efficient and effective tax administration, including customs and excise duty administration,16 and may do anything that is incidental to the exercise of any of its powers.17 Schedule 1 of the SARS Act lists the various laws which are to be administered by SARS. These laws were the operative laws at the time when the unit was formed in 2007. In addition to these laws, SARS also had to consider other legislation such as the National Strategic Intelligence Act18 (“the NSI Act”). As will be
(ii) abuse or unjustifiable exercise of power or unfair, capricious, discourteous or other improper conduct or undue delay by a person performing a public function;” 15 Act 34 of 1997. 16 Section 5(1)(j) of the SARS Act. 17 Section 5(1)(k) of the SARS Act. 18 Act 39 of 1994. 25 pointed out herein below, there is no provision contained in the NSI Act prohibiting SARS to conduct investigations in terms of its own powers and functions in a discreet manner.
74. In September 2002, SARS and the National Intelligence Agency (“the NIA”) concluded a Memorandum of Understanding agreeing to cooperate to enhance the fulfilment of their respective mandates. The different responsibilities of the NIA and SARS were recognised: The NIA is primarily responsible for the gathering, correlation, and analysis of domestic intelligence, fulfilling the national counter-intelligence responsibility and gathering departmental intelligence upon request, whereas SARS is primarily responsible to administer and enforce tax and customs laws for the purpose of the efficient and effective collection of revenue, the facilitation of trade and protection of the economy.
75. In 2007, during his tenure as Commissioner of SARS, Minister Gordhan authorised the establishment of the unit. At the time the unit was also known at various times as the “Special Projects Unit” (“SPU”), the “National Research Group” (“NRG”) and the “High Risk Investigations Unit” (“HRIU”). The manager of the unit, Mr Van Loggerenberg, reported to Mr Pillay in his capacity as the General Manager: Enforcement and Risk. Mr Pillay, in turn, reported to Minister Gordhan until May 2009 when Minister Gordhan was appointed the Minister of Finance.
76. Minister Gordhan explains in his affidavit that the unit was established pursuant to an express commitment of government to crack down on crime generally and more in particular on organised crime and to give effect to former President Mbeki State of the Nation Address of 9 February 2007 during which he stated that government would, amongst other things:
“… start the process of further modernising the systems of the South African Revenue Services (sic), especially in respect of border control, and improve the work of the inter-departmental co-ordinating structures in this regard; intensify intelligence work with regard to organised crime, building on the successes that have been achieved in the last few months in dealing with cash-in-transit heists, drug- trafficking and poaching of game and abalone.” 26
77. SARS thus had to enhance its intelligence-gathering capacity to combat organised tax crime and illicit trade. To this end the unit was set up within SARS’ Enforcement Division.
78. Minister Gordhan explains that SARS always had its own investigation and enforcement units and that these units have been engaged in a wide range of investigations, including criminal investigations, with tax implications such as combatting the importation, exploitation and manufacturing of drugs, the illegal harvesting of abalone and its supply, the illegal importation of second-hand vehicles, the importation of counterfeit goods and the smuggling of cigarettes and other goods.
79. The unit was responsible for cracking down on organised tax crime and tax evasion and did so in collaboration with various government departments and other law enforcement agencies. Minister Gordhan explains that the law enabled and indeed required SARS to establish a unit to investigate economic crimes with tax implications.
80. Initially, it was contemplated that the unit was to be housed within the NIA. To this end SARS and the NIA had discussions with a view to developing a dedicated intelligence capacity within the NIA to support SARS in the investigation of economic crimes with tax implications. Minister Gordhan explains that the initial idea was that SARS would recruit and train members of the unit to conduct tax and customs investigations and thereafter transfer them to a ring-fenced unit housed in the NIA dedicated to the support of tax objectives of SARS. The approval of the Minister of Finance was required because the arrangement would have entailed the transfer of funds from SARS to the NIA.
81. To this end, Minister Gordhan and Mr Pillay sent a memorandum to the then Minister of Finance, Mr Trevor Manuel, dated 2 February 2007, to obtain ministerial approval for the establishment and funding of the unit within the NIA (“the first memorandum”). On 22 February 2007 Minister Manuel approved the funding for the establishment of a unit within the NIA. As already stated, this approval was necessary because funds had to be transferred from SARS to the NIA to fund the unit within the NIA. In this memorandum it is clearly recorded that SARS did not have the capability, 27 including a legislative mandate, to collect tactical intelligence which invariably entailed penetrating and intercepting organised criminal syndicates. For that reason, there were at the time discussions taking place with the NIA to supplement SARS’ intelligence capability. At the time the NIA was willing to create a ring-fenced capability provided that funds were made available to cover personnel costs and was willing to formalise this arrangement into a Memorandum of Understanding.
82. On 13 February 2007, Mr Magashula, who at that time was the Chief Officer: Corporate Services, approved a proposal that SARS hire employees for a dedicated unit to focus on illicit trade and to take decisive steps to minimize, inter alia, the importation, exportation and manufacturing of drugs; illegal harvesting of abalone and its supply; illegal importation of second hand vehicles; importation of counterfeit goods and smuggling of cigarettes (“the second memorandum”).
83. SARS also obtained two legal opinions on the lawfulness of the establishment of the unit, in January 2007 and May 2007. However, when the NIA lost its appetite for the establishment of such a unit, Mr Van Loggerenberg, (at that stage employed at SARS Enforcement Division) proposed to Mr Pillay that they establish a unit with specialised skills within its own legislative mandate within its existing Enforcement Division in support of its strategic objective of combatting economic crime with a tax and customs dimension. In an internal memorandum dated 25 July 2007, Mr Van Loggerenberg explains the need for this unit in order to give effect to the statement of President Mbeki in his State of the Nation address to, inter alia, “intensify intelligence work with regard to organised crime, building on the successes that have been achieved in the last few months in dealing with cash-in-transit heists, drug trafficking and poaching of game and abalone…” Mr Van Loggerenberg stated that the document proposed a mandate for those functions in support of SARS’ strategic objectives.
84. It was after the above-mentioned proposal from Mr Van Loggerenberg to Mr Pillay, that the unit was established within SARS.
The legislative framework 28
85. We have already referred to the legislative framework within which SARS was established and the need that existed at the time for SARS to have an internal investigative capacity to fulfil its objectives. To achieve these objectives section 4(1)(a) of the SARS Act provides that SARS must ensure that the national legislation listed in Schedule 1 be enforced. At the time when the unit was established in 2007, the national legislation listed in Schedule 1 of the SARS Act included: (i) The Customs and Excise Act.19 (ii) The Income Tax Act20 (before its amendment by the Tax Administration Act); and (iii) The Value Added Tax Act21 (before its amendment by the Tax Administration Act). These tax laws vested SARS with wide powers to investigate tax matters including the investigation of crimes with tax implications.22
86. On behalf of Minister Gordhan it was submitted that, given the wide powers vested in SARS by this legislative framework to enforce and ensure compliance with the applicable tax, customs and excise laws, SARS’ need for internal investigative capabilities was clear. It is further submitted that the unit was therefore lawfully established and that there was no basis for the Public Protector to have concluded otherwise. The applicants contend that the Public Protector arrived at her conclusions by inter alia relying on unsubstantiated allegations and by blatantly ignoring the mass of evidence already at her disposal. It is submitted that the Report is therefore irrational and a product of a procedurally unfair and flawed process.
87. The author, Hoexter,23 states that rationality means that a decision must be supported by the evidence and information before it. It must also objectively be capable of furthering the purpose for which the power was given and for which the
19 Act 91 of 1964. 20 Act 58 of 1962. 21 Act 89 of 1991. 22 In terms of the Customs Act, for example, SARS is granted the internal investigative capability to prepare for and perform the types of operations for which the SARS unit was established. In terms of section 4A of the Customs Act, customs officials may, under certain circumstances, enter any premises without a warrant for the purposes of enforcing the objects of the Customs Act. Such officers may conduct an inspection, examination, enquiry or search of the premises. Certain officials also have the power to carry out an arrest for purposes of enforcing this Act. Wide powers are also conferred upon SARS in terms of section 5(1)(j) of the SARS Act to “engage in any activity, whether alone or together with any other organisations in the Republic or elsewhere, to promote proper, efficient and effective tax administration, including customs and excise duty administration.” 23 Cora Hoexter, Administrative Law in South Africa (2011). 29 decision was taken.24 In Democratic Alliance v President of the Republic of South Africa25 the Constitutional Court held that:
"[36] The conclusion that the process must also be rational in that it must be rationally related to the achievement of the purpose for which the power is conferred, is inescapable and an inevitable consequence of the understanding that rationality review is an evaluation of the relationship between means and ends. The means for achieving the purpose for which the power was conferred must include everything that is done to achieve the purpose. Not only the decision employed to achieve the purpose, but also everything done in the process of taking that decision, constitutes means towards the attainment of the purpose for which the power was conferred.”
88. In determining whether the Public Protector’s findings were rational, it is therefore important to ascertain what process she followed in coming to the findings and what evidence was available to her when she made her findings. The reports and evidence are discussed hereunder.
The Sikhakhane Report
89. In the executive summary of the Report,26 it is recorded that Minister Gordhan, during his tenure as the former Commissioner of SARS, established an intelligence unit in violation of South African prescripts. Reliance for this conclusion is specifically made with reference to the fact that that the “intelligence unit was confirmed by a SARS investigation report compiled by Advocate Sikhakhane.”27
90. The panel in the Sikhakhane investigation concluded that the unit was established unlawfully primarily on the basis that it was in breach of section 3 of the NSI Act. Section 3(1) of this act reads as follows (before its amendment in 2013 and before the unit was established):
24 At page 340. 25 [2012] ZACC 24; 2013 (1) SA 248 (CC); 2012 (12) BCLR 1 297 (CC). 26 Executive summary: Ad paragraph (dd) of the Report of the Public Protector. 27 Dated 5 November 2014. 30
“If any law expressly or by implication requires any department of State, other than (the NIA) or (SASS), to perform any function with regard to the security of the Republic or the combatting of any threat to the security of the Republic, such law shall be deemed to empower such department to gather departmental intelligence, and to evaluate, correlate and interpret such intelligence for the purpose of discharging such function; provided that such department of State- (a) … (b) … shall not gather departmental intelligence within the Republic in a covert manner …”
91. From a reading of this section, we are not persuaded that the unit contravened the provisions of the NSI Act for the following reasons: Firstly, section 3(1) did not impose a general prohibition on the gathering of intelligence. The prohibition only applied to those departments of the State that were required by law to perform functions “with regard to the security of the Republic or the combatting of any threat to the security of the Republic”. SARS was not such a department and was not required by law to perform any functions with regard to state security. SARS was therefore not subject to the prohibition in section 3(1). Secondly, section 3(1) did not prohibit all covert intelligence gathering. It only prohibited the gathering of “departmental intelligence” in a covert manner. “Departmental intelligence” is defined in section 1 of the NSI Act as “intelligence about any threat or potential threat to the national security and stability of the Republic”. The unit housed in SARS was never engaged in the gathering of intelligence of this kind and its activities fell well beyond the scope of the prohibition contained in section 3(1) of the NSI because it was not in the business of gathering intelligence about threats or potential threats to the national security and stability of the Republic.
92. The findings identified in the Sikhakhane report and the panel’s interpretation of section 3(1) of the NSI Act has since its publication been widely repudiated. Judge Nugent, who chaired the Commission of Enquiry into Tax Administration and Governance by SARS (“the Nugent Commission”) in 2018 criticized the view of the 31
Sikhakhane report (namely that the unit was considered to be unlawful) and stated as follows:
“The so-called ‘Rogue Unit’ [7] The unit concerned was a successor to a unit that had been established in about 2008 to counter the illicit trade in commodities such as liquor, cigarettes, and counterfeit goods. It started in about 2007 when a proposal was considered for funding staff within the National Intelligence Agency to address organised crime and the illicit economy. . . .
[8] Mr Pillay and Mr Gordhan, . . ., addressed a memorandum to the Minister of Finance, requesting approval ‘to fund a special capability within SARS and law enforcement with the necessary information to address the illicit economy. Approval was granted by the Minister but negotiations with the NIA came to nought and a unit within SARS was established instead. . .
[9] Why such a unit was considered unlawful is not clear to me. While the National Strategic Intelligence Act prohibits the covert gathering of certain intelligence, that applies to intelligence concerning threats to the safety of the state, which hardly applies to intelligence relevant to collecting tax . . . I see no reason why SARS was and is not entitled to establish and operate a unit to gather intelligence on the illicit trades, even covertly, within limits.”
93. In this regard Judge Nugent referred to the legal opinion furnished by Adv Trengove SC and Adv Nxumalo on 1 September 2015 to the former Commissioner of SARS in response to the Sikhakhane report.28 The opinion, inter alia, advised SARS, that it:
i. May keep people under surveillance in the public domain but not in private.
28 This legal opinion was also considered by the Public Protector. See the Public Protectors’ Report ad para [4.4.4.28]. 32
ii. May follow a person or vehicle in the public domain but not in private.
iii. Probably may place an electronic tracking device on property to trace its movements.
iv. May watch a person or property . . . but only in the public domain.
v. May take photographs or video of people or property in the public domain but not in private.
vi. May not listen to or record private conversations.
vii. May not electronically record third party conversations by using listening devices.
viii. May record conversations between SARS officials and third parties.
ix. May accept information from informers.
x. May accept information from a person even if it knows that the information was unlawfully obtained.
94. Judge Nugent, with reference to the legal opinion and to the Sikhakhane report, as well as the SARS Advisory Report chaired by Judge Kroon, 29 concluded as follows regarding the lawfulness of the establishment of the unit:
“[11] It was said to be unlawful by a panel chaired by Adv Sikhakhane SC, but I find nothing in its report to persuade me why that was so. Adv Sikhakhane was asked if he could elaborate but his reply took it no further than what was said in the report. The SARS Advisory Report chaired by Judge Kroon, reported to the Minister, and issued a media statement saying
29 In 2015 retired Judge Kroon was appointed to chair an advisory committee to inter alia review events reported to the media. 33
the unit was unlawful, but in evidence he told the Commission that was not a conclusion reached independently by the Board, but had been adopted from the Sikhakhane panel, and he had come to realise it was wrong. Indeed, he supported the re-establishment of capacity to investigate the illicit trades which we recommend.”
95. The Public Protector inexplicably ignored the report of the Nugent Commission in reaching her conclusions. The Public Protector similarly ignored the apology and retraction of the adoption of the Sikhakhane’s panel’s finding by the SARS Advisory Board headed by retired Judge Frank Kroon (and also referred to by Justice Nugent in the excerpt quoted above).
96. In Wingate-Pearse v Commissioner, SARS30 the court was likewise critical of the view adopted by the Sikhakhane report and commented as follows:
“[28] However, the Commissioner of Inquiry into Tax Administration and Governance by SARS appointed by President Cyril Ramaphosa and chaired by retired Judge Nugent (the Commission), made findings in its final report that support SARS’ stance that Mr Wingate-Pearse’s allegations about the existence of a rogue unit within the ranks of SARS are without a sound factual basis. The Commission found inter alia that there was an onslaught upon those who managed SARS founded upon allegations once peddled by the Sunday Times to a beguiled public for a year or more, about a “rouge” unit that was alleged to have existed within SARS; the Sunday Times itself withdrew its allegations and apologised some two years later; although the establishment of HRIU was termed unlawful by a panel chaired by Adv Sikhakhane SC, there was nothing in the report to persuade the Commission why that was so; and the SARS Advisory Board chaired by Judge Kroon, reported to the Minister, and issued a media statement, saying the unit was unlawful, but in evidence he told the Commission that was not a conclusion reached independently by the Board, but had been adopted from the Sikhakhane panel, and he had come to realise it was wrong. Indeed, he
30 2019 (6) SA 196 (GJ). 34
supported the re-establishment of capacity to investigate the illicit trades, which he recommends. In his testimony before the Commission, Judge Kroon said: ‘Yes, as I have said in my report, my first comment was that the statement relating to the unlawfulness of the establishment of the unit were not thought through properly and were (sic) in fact incorrect.”
97. The Sikhakhane report had dire consequences not only for existing activities at SARS, but also for those officials implicated by the report. Following this report, Mr Moyane (the then Commissioner of SARS) removed several SARS officials from their positions. On behalf of Minister Gordhan it was submitted that the report had the effect of “gutting” SARS’ enforcement capabilities and that it undermined SARS’ capabilities to ensure tax compliance by prominent politicians and underworld figures and thus had the result of enabling, in a large part, the capture of SARS.
98. It is clear from a careful reading of the Sikhakhane report that the authors deviated from their terms of reference and made “factual” findings about allegations concerning the so-called “rogue unit” without affording any opportunity to those implicated in the report. The Sikhakhane report also relied upon and entertained allegations made by the Sunday Times newspaper which the Sunday Times later repudiated, admitting that it had reported fake news. The Sunday Times newspaper subsequently apologised to those that it had baselessly pilloried and defamed, including Minister Gordhan and Mr Pillay.
99. There is no indication from the Report that the Public Protector considered the public apology published in the Sunday Times regarding its role in postulating what became the “rogue unit” narrative. In fact, the Public Protector during a public interview on 31 January 2019, with Advocate Jay Govender of the OIGI, referred to the unit as the “rogue unit” and as a “monster”. She also publicly expressed her desire to “defeat the monster”. These comments, unfortunately, do little to allay the applicants’ allegation that the Public Protector is biased or at least subject to a reasonable perception of bias. We come back to this issue later in the judgment. It is, however, clear that the Public Protector made no effort to avoid herself being drawn into the sordid rogue unit narrative, despite the fact that she must have been aware at the time of the very public denunciation of the narrative by the Sunday Times newspaper. 35
100. The Public Protector’s stubborn reliance on an erroneous interpretation of section 3(1) of the NSI Act is not explained in the Report. She also does not engage with any of the legal arguments that are contrary to those expressed in the complaints and her own. At the very least, it was expected that the Public Protected would critically engage with views contrary to hers instead of simply repeating the conclusions reached in the Sikhakhane report in respect of the lawfulness of the unit.
101. But, in addition to the fact that the Sikhakhane report has been widely discredited, we can likewise find no factual or legal basis upon which it can be concluded that the establishment of the unit was unlawful. In as far as the Public Protector has placed any reliance on a contravention of section 3(1) of the NSI Act in arriving at a finding that the unit was unlawfully established, her conclusions are clearly wrong in law and therefore irrational and unlawful.
102. The Public Protector also concluded31 that the unit was established in violation of the NSI Act because it was set up without the involvement of the NIA. This conclusion is equally wrong in law. The NIA was not legally required to be involved in the establishment of the unit. The Public Protector’s conclusion in respect of the apparent lack of involvement of the NIA in the establishment of the unit are therefore wrong in law, irrational and unlawful.
103. The Public Protector in addition argues in the Report that the establishment of the unit “is improper and in violation of section 209 of the Constitution and therefore amounts to maladministration as envisaged in section 182(1) of the Constitution and abuse of power as envisaged in section 6 (4)(ii) of the Public Protector Act”.
104. This interpretation of section 209 of the Constitution is wrong in law and does not constitute a legal basis for her conclusion. On a plain reading of section 209 it is clear that this section does not deal with the establishment of “covert information gathering units” at all. Section 209(1) reads as follows:
31 Paragraph [7.2.3] of the report of the Public Protector. 36
“Any intelligence service, other than any intelligence division of the defence force or police service, may be established only by the President, as head of the national executive, and only in terms of national legislation.”
105. This section regulates the establishment of “intelligence services” and is confined to the establishment of intelligence services dedicated to the protection of national security. It was, as already pointed out, never the aim of the unit to protect national security. The unit, in any event, was never an “intelligence service” in the first place: The focus of the unit was to investigate tax evasion, illicit trade and organised crime with tax implications.
106. The Public Protector’s finding32 that Minister Gordhan has acted improperly and in violation of section 209 of the Constitution and that his conduct consequently amounted to maladministration in terms of section 182(1) of the Constitution and an abuse of power in terms of section 6(4)(ii) of the Public Protector Act is therefore not only wrong in law but irrational and falls to be reviewed and set aside.
The KPMG Report
107. The second report relied upon by the Public Protector is a report compiled by the audit firm KPMG for the erstwhile SARS Commissioner Mr Moyane. In the Report the Public Protector relies on the findings made in the KPMG particularly with reference to the unit’s operations. Reference is made in the Report to the fact that the KPMG report had found that there was clear evidence that the unit intercepted private individual communication and that members of the unit were not employed by SARS, but that they were recruited outside of SARS’ acknowledged systems and processes.
108. Apart from the findings in respect of the activities of the unit, a key finding in the KPMG report is that Minister Gordhan knew or ought to have known, not only that the establishment by SARS of an “intelligence unit” was in contravention of the law, but that the unit was “rogue” in nature.
32 Ad para [7.2.7] of the Report of the Public Protector. 37
109. Although the Public Protector does not explicitly state in the Report that Minister Gordhan knew, or ought to have known about the “rogue” nature of the unit, she nonetheless found that SARS had already began operating a unit that had gathered information “covertly”, even prior to Minister Gordhan’s memorandum to Minister Manuel, and that Minister Gordhan “should have been aware, and I believe, was aware that the unit had already started operating”. This finding apparently led the Public Protector to conclude that the “establishment of the unit with the approval of Mr Gordhan as the erstwhile Accounting Officer was in breach of section 209 of the Constitution in terms of which only the President may establish such covert information gathering unit”.
110. What the Public Protector does not record in the Report is the fact that on 16 September 2017, long before the Public Protector delivered the Report, KPMG had disavowed its own report and particularly its conclusions regarding the lawfulness of the unit. Not only did KPMG tender an apology for its governance lapses, it refunded the fees it had received for its report. KPMG had since admitted that important quality controls were not performed to the standard of the firm. KPMG also acknowledged that insofar as the report “refers to legal opinions and legal conclusions as if they are the opinions of KPMG South Africa” it was “outside the mandate of KPMG South Africa and outside the professional expertise of those working on the engagement”. KPMG then conceded that:
“...., the language used in section of the report is unclear and results in certain findings being open to more than one interpretation. As a result, it is possible to read [certain sections] contained in the report in a way which suggests that Pravin Gordhan knew, or ought to have known, of the establishment by SARS of an intelligence unit in contravention of the law that was ‘rogue’ in nature. This was not the intended interpretation of the report. To be clear, the evidence in the documentation provided to KPMG South Africa does not support the interpretation that Mr Gordhan knew, or ought to have known, of the ‘rogue’ nature of this unit”. We recognise and regret the impact this has had. KPMG South Africa had no political motivation or intent to mislead…Given the failure to appropriately apply our own risk management and quality controls, that part of the report which refers to conclusions, 38
recommendations and legal opinions should no longer be relied upon. KPMG South Africa has contacted SARS and offered to repay the R23 million fee received for the extensive work performed”.
111. The KPMG report is flawed in fact and in law and its findings and conclusions had been formally withdrawn. Any reliance by the Public Protector on the KPMG report was, under the circumstances, irrational and ill-placed.
The IOIG Report
112. The third report relied upon by the Public Protector is a report said to originate from the Office of the Inspector General of Intelligence. This report was issued on 31 October 2014. The Public Protector states in the Report that she was “reliably informed that it was in the custody of the former Minister of State Security, Ms Dipuo Letsatsi- Duba from whom [she] tried to get a declassified copy of the report without success”.33 She also states that she had requested the President’s assistance in making available the declassified report by the Minister of State Security, but to no avail.
113. The Public Protector relies on this report despite explicitly stating that she has not seen the report. She relies on it because she has it “on good authority” that it was found in the report that:
(i) SARS had created a covert unit utilising covert and intrusive methods which was not in line with the SARS mandate and in violation of section 209(1) of the Constitution which empowers only the President to establish any intelligence service; and,
(ii) that the establishment of an intelligence capacity within SARS – a capability exclusive only to legislated intelligence service – was illegal.
114. The Public Protector further recites the remedial action proposed by the OIGI in its report namely that criminal charges be investigated against Minister Gordhan,
33 Ad para [5.2.26] of the Report of the Public Protector. 39
Mr Pillay, Mr Van Loggerenberg and a certain Mr Richer for the establishment and involvement in the “intelligence unit” in SARS.
115. Despite the fact that the Public Protector, according to the Report, has never seen nor verified the contents and findings of the OIGI report, she ordered the Minister of State Security, to implement, within 90 days of the issuing of the Report, and acting in line with the Intelligence Services Amendment Act, the OIGI report dated 31 October 2014 in its totality. The Minister of State Security was further ordered to ensure, within 30 days, that all intelligence equipment utilised by the unit is returned, audited and placed into the custody of the State Security Agency. Finally, the Minister of State Security was ordered to, within 14 days of the issuing of the Report, to avail a declassified copy of the OIGI report to the offices of the Public Protector.34
116. The Public Protector further makes her findings in respect of the OIGI report ostensibly in terms of the powers vested in her by section 181(2) and (3) of the Constitution.35 It is difficult to understand on what basis these sections of the Constitution can notionally grant the Public Protector the power to rely on a report that she herself has not seen - because this is what she says in the Report. Although the Public Protector undoubtedly has wide investigative powers, it does not follow that she can blindly rely on evidence and facts that she is unable to verify independently, but only became aware of “on good authority”. As was said by the Supreme Court of Appeal in Public Protector v Mail & Guardian Ltd and Others:36
34 Ibid ad para [8.3.1] – [8.3.3]. 35 “181 Establishment and governing principles (1) The following state institutions strengthen constitutional democracy in the Republic: (a) The Public Protector. (b) The South African Human Rights Commission. (c) The Commission for the Promotion and Protection of the Rights of Cultural, Religious and Linguistic Communities. (d) The Commission for Gender Equality. (e) The Auditor-General. (f) The Electoral Commission. (2) 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. (3) Other organs of state, through legislative and other measures, must assist and protect these institutions to ensure the independence, impartiality, dignity and effectiveness of these institutions.” 36 2011 (4) SA 420 (SCA). 40
“[19] The Public Protector must not only discover the truth, but must also inspire confidence that the truth has been discovered. It is no less important for the public to be assured that there has been no malfeasance or impropriety in public life, if there has not been, as it is for malfeasance and impropriety to be exposed where it exists. There is no justification for saying to the public that it must simply accept that there has not been conduct of that kind, only because evidence has not been advanced that proves the contrary. Before the Public Protector assures the public that there has not been such conduct he or she must be sure that it has not occurred. And if corroboration is required before he or she can be sure then corroboration must necessarily be found. The function of the Public Protector is as much about public confidence that the truth has been discovered as it is about discovering the truth.”
117. Had the Public Protector, however, applied her mind to the OIGI report and “not relied on good authority” she would have appreciated the shortcomings of the OIGI report and in turn would not have issued the impugned remedial action. Had she applied her mind she would have realized two important aspects: (i) the Inspector General acted ultra vires in investigating SARS’ officials and activities, and (ii) Mr Pillay and Minister Gordhan were not afforded a hearing as the audi alteram partem principle was not adhered to before coming to her findings.
118. Most alarming, however, and despite the fact that the Public Protector stated in the Report that she did not have sight of the IOGI report before coming to her findings, counsel acting on behalf of the Public Protector asserts, in their third set of heads of argument, that:
“…the Public Protector made an independent assessment of the legal and factual questions involved in her investigation on the SARS intelligence unit and made her own conclusions. This investigation included assessing the OIGI Report for its factual and legal conclusions. Having carefully studied the OIGI Report and conducted her own independent investigation on the issues covered in that report, she concluded that the findings and recommendations in the OIGI Report be implemented. When she issued the remedial action on the OIGI Report, she was satisfied that the OIGI had acted within its powers 41
in conducting the investigation and was correct in its factual and legal conclusions”.
119. During argument, when counsel for the Public Protector was confronted with the contradictory statements in the heads of argument, the debate regarding the OIGI report took a bizarre turn. Counsel on behalf of the Public Protector now conceded that, despite the explicit statement in the Report that she has not had sight of the OIGI report in preparing the Report, she had in fact had the OIGI report in her possession when she drafted the Report. The Public Protector now claims that she subsequently received the OIGI report from an anonymous source who left it at her offices.
120. This turn of events is disturbing to say the least and it is difficult to label the Public Protector’s conduct in this regard as anything else but dishonest.
121. In her heads of argument, the Public Protector criticised Mr Gordhan for “making a meal of this in his complaint against the Public Protector” and that it was “water under the bridge” as the Minister of State Security subsequently agreed to give the Public Protector a declassified version of the OIGI Report with redactions of sensitive information on it.
122. This argument, unfortunately, does not cure the blatantly misleading statement made by the Public Protector in the Report. The comments made by the court in South African Reserve Bank v Public Protector and Others,37 cannot be overemphasized:
“[59] … However, there is no getting away from the fact that the Public Protector is the constitutionally appointed custodian of legality and due process in the public administration. She risks the charge of hypocrisy and incompetence if she does not hold herself to an equal or higher standard than that to which she holds those subject to her writ. A dismissive and procedurally unfair approach by the Public Protector to important matters placed before her by prominent role players in the affairs of state will tarnish her reputation and
37 2017 (6) SA 198 (GP) ad paragraph [59]. 42
damage the legitimacy of the office. She would do well to reflect more deeply on her conduct of this investigation and the criticism of her by the Governor of the Reserve Bank and the Speaker of Parliament.”
123. Statements such as this made by the Public Protector in her answering affidavit and heads of argument only serve to tarnish her reputation and damage the legitimacy of the office that she holds. Those who are and have been the subject of an investigation by the Public Protector, as well as the public at large, must have faith in the integrity of the office of the Public Protector and its incumbent. After all, the Public Protector is regarded as one of the most invaluable gifts to our nation in the fight against corruption, unlawful enrichment, prejudice and impropriety in state affairs, and for the betterment of good governance.38
124. Mr Van Loggerenberg has since the publication of the OIGI report successfully reviewed and set aside the OIGI report.39 Any reliance thereon is (apart from the fact that the Public Protector’s reliance thereon has, in any event, been highly irregular) now moot, as the IOGI report is incapable of being implemented. Counsel on behalf of the Public Protector, in a last desperate attempt, submitted that her reliance on the OIGI report cannot be criticised as the OIGI report had not been reviewed at the time. Her own ambivalence regarding the OIGI report discussed above totally discredits her own report. There is no merit in this submission.
125. To add insult to injury, the Public Protector never provided the OIGI report to Minister Gordhan and Mr Pillay to respond to during the Public Protector’s investigation. The procedural unfairness of the process that led to the Report is dealt with more fully elsewhere in the judgment.
126. But probably the most egregious, is the Public Protector’s failure to consider the extensive body of evidence that Mr Pillay provided to the Public Protector. We will now deal with this aspect in the context of the Pillay Application.
38 See Economic Freedom Fighters v Speaker of the National Assembly (2016) ZACC 1 at [59] 39 Court Order dated 8 June 2020. Case number 91150/19. 43
THE PILLAY APPLICATION
127. As stated previously, aside from the adverse findings made in the Report against Mr Gordhan, the Report also implicates Mr Pillay in misconduct, maladministration and criminality.
128. Mr Pillay was previously employed by SARS, and held various senior positions within SARS from April 1999 until May 2015, when he left the employ of SARS. Those positions include: Chief Manager Special Investigations; Chief Officer Enforcements; Chief Officer Strategy and Enablement and Deputy Commissioner as well as Acting Commissioner. The unit (HRIU), formerly known as the SPU (between March 2007 to May 2008), and renamed NRG from May 2008 to October 2009, reported directly to Mr Pillay from inception in July 2007 to March 2008.
129. At the time of delivery of the Report, Mr Pillay faced charges on an array of criminal complaints,40 together with Mr Van Loggerenberg and Mr Andries Janse van Rensburg (“Mr Janse van Rensburg”), arising out of a complaint made against them by the former Commissioner of SARS, Mr Tom Moyane. The charges amongst others, included the bugging of the offices of the erstwhile Directorate of Special Operations (“DSO”) and National Prosecuting Authority (“NPA”) in 2007 and contravening the Regulation of Interception of Communications Act.41 At the time that the Report was published and the various affidavits deposed to by Mr Pillay were filed, an application in terms of the provisions of section 179(5)(d) of the Constitution to review the decision by the NPA to prosecute Mr Pillay, was pending before the NDPP. On 25 February 2020, the NDPP gave formal notice that the charges against Mr Pillay and his co- accused were withdrawn as there were no reasonable prospects of a successful prosecution.
130. In the course of the Report, the Public Protector made five adverse findings against Mr Pillay. These findings will be dealt with under separate headings later in the judgment. She found that:
40 Under Brooklyn CAS 427/05/2015 41 Act 70 of 2002. 44
i. SARS, under Mr Pillay’s guidance and management as General Manager: Enforcement and Risk Division, established an intelligence unit "in violation of South African Intelligence prescripts". (This aspect has already been dealt with earlier in the judgment)
ii. Mr Pillay was involved in a failure by SARS to "follow proper procurement processes in the procurement of intelligence equipment which the intelligence unit utilised for gathering intelligence" (“the equipment issue”).
iii. Mr Pillay was involved in a failure by SARS to "follow proper recruitment processes in appointing employees who worked for the intelligence unit" (“the employment issue”).
iv. Mr Pillay was involved in the carrying out of "irregular and unlawful intelligence operations". More particularly, that "Mr Pillay and Mr Janse van Rensburg irregularly procured Mr Helgard Lombard and Mr De Waal and/or authorised Mr Helgard Lombard and Mr De Waal to intercept communication from the offices of the DSO and those of the NPA without an interception direction issued by a designated judge in terms of the Regulation of Interception of Communication and Provision of Communication (sic)” and that the “conduct of SARS officials in such unauthorised interception and surveillance is in violation of the Regulation of Interception of Communication and Provision of Communication (sic) and amounts to an abuse of power as envisaged in section 6(4)(ii) of the Public Protector Act" (“the interception issue”).
v. Mr Pillay was appointed to the position of Deputy SARS Commissioner and subsequently as SARS Commissioner “whilst he did not possess the necessary qualifications for the positions" (“the qualification issue”).
131. The Public Protector directed that the following remedial action be taken:
45
i. The Minister of State Security must, within 90 days of the issuing of the Report, acting in line with the Intelligence Services Amendment Act, implement the OIGI report dated 31 October 2014 in totality, and avail a declassified copy of the OIGI report to the Public Protector, within 14 days of delivery of the Report.
ii. The NDPP to note that the Public Protector is “aware that there are currently criminal proceedings underway against implicated former SARS officials and that therefore effective steps should be taken to finalise the court process as the matter has been remanded several times".
iii. The Commissioner to investigate the criminal conduct of Messrs Gordhan, Pillay and officials involved in the SARS intelligence unit, for violation of section 209 of the Constitution and section 3 of the NSI Act within 60 days of the Report.
MR PILLAY’S GROUNDS FOR REVIEW
132. Mr Pillay raised, in essence, two complaints against the Public Protector’s findings. The first complaint, namely the absence of any "special circumstances" or any other basis on which the Public Protector could rationally exercise her discretion in terms of section 6(9) of the Public Protector Act to entertain complaints older than two years, has already been dealt with earlier. The second complaint is that the Public Protector failed to obtain evidence and instead relied on unsubstantiated allegations to support her findings and blatantly ignored the mass of evidence already at her disposal and provided to her by Mr Pillay. As a result, so it is argued, the Report is irrational and a product of a procedurally unfair and flawed process.
133. As stated earlier, in determining whether the Public Protector’s findings were rational, it is important to ascertain what process she followed in coming to the findings and what evidence was available to her when she made her findings. As a starting point it is therefore necessary to briefly deal with the complaints against Mr Pillay as set out in the subpoena (“the subpoena”), which was delivered to Mr Pillay by the Public Protector on 10 April 2019 and the notice in terms of section 7(9) of the Public 46
Protector Act ("the notice"), which was delivered to him on 7 June 2019. It is also necessary to briefly deal with Mr Pillay’s response to both these documents which is set out in two affidavits. The first affidavit was deposed to on 23 April 2019 in response to the subpoena (“the first affidavit”); and a second affidavit deposed to by Mr Pillay on 18 June 2019 in response to the notice (“the second affidavit”).
THE EVIDENCE
The subpoena
134. The complaints against Mr Pillay are set out in paragraph 7 of the subpoena. In paragraphs 7.1.3 to 7.1.5 the alleged unlawfulness of the establishment of the unit, is raised, which have largely been dealt with earlier in the judgment. The remainder of the complaints, relevant to Mr Pillay’s application, are the following:
7.1.6. SARS also irregularly, procured costly intelligence equipment which the intelligence unit utilised for gathering intelligence;
7.1.7. SARS failed to follow proper recruitment processes in appointing employees who worked for the intelligence unit;
7.1.8 The SARS intelligence unit irregularly bugged the offices of the National Prosecuting Authority (NPA) and the Directorate of Special Operations (DSO)”.
135. Notably, the qualification issue was not raised in the subpoena issued to Mr Pillay. It was, however, raised in the subpoena issued to Minister Gordhan.
The first affidavit
136. In the first affidavit in response to the subpoena, Mr Pillay stated that the allegations contained in the subpoena had been made on various occasions over the past ten years and have been refuted on each occasion. With particular reference to the allegation in paragraph 7.1.5 of the subpoena, namely that SARS failed to respect 47 the "constitutional status, power and functions of the National Intelligence Agency", Mr Pillay provided detailed explanations of the relationship between SARS and the NIA, and referred the Public Protector to a myriad joint activities, interactions, support and documents between the two bodies. He also referred to some circumstances where the NIA acted unlawfully. He stated that he had informed the Public Protector that her office and its previous incumbent had already, in 2014, received complaints regarding the supposed unlawful establishment of the unit, and that the Public Protector had elected not to further investigate the complaint, but rather focussed on complaints concerning alleged irregular recruitment processes. He had therefore, at the time, delivered a detailed response, including supporting documents, to the Public Protector which dealt comprehensively with her requests. There was no further communication from the Public Protector in this regard and he stated that it was accordingly clear that the Public Protector was satisfied with the responses given and that the investigation was closed. He stated that he was, however, not in a position to provide this correspondence to the Public Protector, but that she would be able to find it in the Public Protector's own records, as well as the records of SARS.
137. With particular reference to the allegation in paragraph 7.1.6, namely that SARS "irregularly procured costly intelligence equipment, which the intelligence unit used for gathering intelligence", Mr Pillay stated that he could not answer the allegation because it was cast in vague terms and no specifics were provided to him. In this regard he however referred the Public Protector to previous evidence given by him, which included: (i) a statement issued by him on 2 March 2016, following a presentation to the media by the then Minister of State Security, Mr David Mahlobo; (ii) his statement to the Sikhakhane panel, and (iii) a report from the then Chief Financial Officer of SARS, confirming that no such equipment was procured.
138. He informed the Public Protector that he had been restricted in his responses and had difficulty providing certain documents due to the SARS secrecy oath he took while employed with SARS, as well as the confidentiality provisions of the Tax Administration Act.42 He further informed the Public Protector that he had, however, made a formal request to SARS to supply him with the relevant documents during a
42 Act 28 of 2011. 48 meeting that he attended with various SARS officials on 12 April 2019 when he informed SARS of the subpoena. Mr Kingon responded on 17 April 2019 to the request as follows:
"Kindly be advised that l have considered your request and the contents of the PP’s subpoena dated 10 April 2019 and wish to advise you that SARS is not in a position to accede to your request pending counsel's opinion which I intend to obtain urgently. It is our preliminary view that the requested records contain inter alia, personal information of third parties, the disclosure of which will be in contravention of legislation aimed at safeguarding data privacy and/or SARS confidential information and/or taxpayer information respectively, and information about internal operations at SARS, the disclosure of which is likely to jeopardise the effectiveness of SARS operations and/or procedures.”
139. He further informed the Public Protector that although the allegations in paragraphs 7.1.3, 7.1.4, 7.1.5 and 7.1.6 of the subpoena were entirely devoid of merit, he had been criminally charged with offences relating to the alleged establishment of the unit and that he was entitled to the rights contained in section 35 of the Constitution, and that he had chosen to invoke those rights in the face of the Public Protector’s demand. He further stated that he had just cause, as contemplated in section 11(3) of the Public Protector Act, to decline to respond to the interception issue raised in paragraph 7.1.8 of the subpoena, because that particular allegation was the precise subject of one of the charges that he faced at the time. He explained that, although there was no merit to that charge, it would be remiss of him not to raise within this context various incidents where individual operatives of the State Security Agency (“the SSA”) and erstwhile NIA had unlawfully and illegally interfered in SARS’ operations, cases, audits, investigations and projects, and illegally and unlawfully undermined SARS as institution and its officials. He stated that these incidents were raised formally by SARS with the NIA and later the SSA, the Presidency and the Inspector General of Intelligence on multiple occasions, and that the relevant records can be obtained from them. He stated that none of these matters were ever meaningfully investigated and resolved. 49
The notice
140. The notice of the Public Protector made brief reference to Mr Pillay’s first affidavit and disclosed the evidence she had considered in coming to her provisional findings. She also made reference to the key sources she relied upon during her investigation, namely, inter alia, the Sikhakhane report, the IOGI report, the KPMG report, certain documentation pertaining to the equipment, employment and qualification issues, and recordings with individuals relating to the interception issue.
141. In relation to the equipment issue, the Public Protector referred to several documents in the notice. She bemoaned the fact that SARS had failed to provide her with documents relating to the procurement of equipment for the Customs Border Control Unit (“CBCU”), the NRG and subsequently the SPU, and that such conduct was in violation of section 181(4) of the Constitution. She concluded that it was “extremely unlikely that a unit carrying out investigations on behalf of SARS would not procure equipment necessary for the fulfilment of its duties and functions” and that it was “unclear why SARS and/or its former employees would keep the procurement of equipment such a guarded secret”. She found that, without proper explanation, she could only infer that the proper procurement processes were not adhered to.
142. As far as the employment issue is concerned, the Public Protector made reference to, amongst others, the Gene Ravele dossier (more about this later), as well as employment agreements and internal SARS memorandums. In conclusion she found that SARS failed to provide her with a policy that applied at the relevant period, regulating the transfer of staff within SARS branches, as well as a policy regulating the headhunting of staff for positions with SARS. She concluded that the failure to advertise positions externally was a violation of section 8.3.2 of the SARS Recruitment and Selection Policy.
143. In relation to the interception issue, the Public Protector relied on, inter alia, two recordings she had received. The first was an interview with Mr Janse van Rensburg, which was conducted with the investigators working with Adv. Brassey SC in 2014, tasked to gather information on the activities of the unit. The Public Protector stated that in the recording Mr Janse van Rensburg discussed issues relating to, inter 50 alia, the bugging of the NPA and DSO offices in 2007 by the unit. Mr Janse van Rensburg apparently confirmed the existence of the unit and indicated that the operations of the unit, at the time he was active within it, were mostly kept undercover to a point where some of its employees did not have office space at SARS. Meetings to discuss current operations underway, and to provide briefings to Mr Pillay, were in most cases held on Sundays, either at Mr Pillay’s residence, or at a restaurant. He stated that the team members termed these meetings "Project Sunday Evenings".
144. The Public Protector stated that Mr Janse van Rensburg said during the interview that he had received a telephone call from the personal assistant of Mr Gerrie Nel, whom at the time was a prosecutor at the NPA, requesting a meeting with him. At the meeting Mr Nel indicated that the NPA had been having a problem with leaks and required a system that would record. Mr Janse van Rensburg indicated that Mr Nel did not enquire where he and Mr Helgaard Lombard (“Mr Lombaard”) worked, as they never operated in an official capacity as SARS officials. Mr Janse van Rensburg did however indicate that he informed Mr Pillay of Mr Nel's request, which Mr Pillay acceded to. Presentations of a recording system were made to Mr Nel who decided to approve the procurement of the recording system. The system was installed at the NPA after hours in the presence of Mr Nel and/or his personal assistant. The equipment installed was non-visible and remote, meaning that Mr Nel, as the client, would have access to the system from home. Mr Nel was also aware that Mr Lombard would have access to the system for purposes of testing. After a few months, Mr Janse van Rensburg received a call from Mr Pillay, who asked how far they were with the installation at the NPA offices and whether they could hear and see inside. Mr Pillay informed Mr Janse van Rensburg that he had authorisation to see if the system can be used to obtain information on the Jackie Selebi case. Nothing was however documented as they operated a “gentlemen's agreement”. Mr Janse van Rensburg then instructed Mr Lombard to record the information on the Jackie Selebi case.
145. The second recording relied on by the Public Protector was a recording of an interview between Mr Lombard and Mr Johan De Waal (“Mr De Waal”) and the former Commissioner of SARS, Mr Tom Monyane. Mr Lombard and Mr De Waal provided information on the unit's activities and discussed the unit and certain operations they had participated in during its tenure. 51
146. Mr Lombard indicated that he and Mr De Waal had started in the unit in 2007 with Mr Janse van Rensburg as the leader of a few operations. In relation to the bugging of the DSO, Mr Lombard stated that he had received a call from the Scorpions requesting the installation of certain equipment at the offices of the DSO. The equipment installed included cameras, microphones, digital video recorder (with routers), alarm systems, encrypted cell phones and biometric access controls. After the installation, Mr Janse van Rensburg requested Mr Lombard to listen in on the conversations at the DSO. Mr Lombard requested that Mr Janse van Rensburg obtain an “approved section 127”. A couple of days later, Mr Janse van Rensburg informed Mr Lombard that Mr Pillay had received an approved section 127 from former President, Mr Thabo Mbeki, and therefore could begin listening in on the conversations of the DSO. Mr Lombard stated that Mr Janse van Rensburg said to him that Mr Mbeki had been surprised by the arrest of Mr Jackie Selebi and Mr Lombard was therefore tasked to listen for anything “that might surprise the President” in the future. Eventually, Mr Pillay confirmed to Mr Lombard that there had never been authorisation for the listening of conversations at the DSO offices.
147. In the recording Mr De Waal confirmed the above statements and stated further that he was of the impression that the client (the person who wanted the recordings of the conversations at DSO) was the President and/or Mr Gordhan. Mr De Waal further stated that there were other instances whereby covert intelligence was used to gather information on certain targets. These included Dr Mandisa Mokoena, Mr Leonard Radebe, and a conversation between Messrs Glen Aggliotti, Paul Delober and Jusuf Kajee. He stated that these operations were for the benefit of SARS, unlike the bugging of the DSO offices, which was politically motivated.
148. The Public Protector also placed reliance on what is referred to in the notice as the “Gene Ravele Dossier”, an undated “dossier” written by Mr Humbulani Gene Ravele (“Mr Ravele”), the former Chief Officer: Tax and Customs Enforcement Investigations at SARS and Mr Van Loggerenberg’s direct line manager. In the dossier it was stated that Mr Ravele received Mr Van Loggerenberg’s Curriculum Vitae from Minister Gordhan, whom in turn received it from Mr Pillay. She also made mention in the notice of Mr Keletso Manyike (“Mr Manyike”), whom she stated was a “former 52 employee of SARS and was employed as a Specialists Agent with the CBCU”, who, according to her, laid a complaint with the Public Protector’s office on 21 February 2014. The Public Protector stated that Mr Manyike submitted documents to the Public Protector detailing operations and functions of the unit. He also, inter alia, detailed that induction into the unit was done at a private location where members were taken through tactics such as tracings, tracker installation, and bugging systems.
149. Mr Manyike apparently alleged that the unit operated by collecting intelligence on tax payers by means of covert tactics. These tactics included the stealing of mail from residences (dumpster diving), interception of e-mails, mobile phones and landlines, extraction of bank statements, the installation of tracker systems on vehicles, posing as loiters around the premises while monitoring movements via hidden cameras, and even using sound enhancers to listen to the conversation of the target. Mr Manyike confirmed that the unit was instructed to track and tag Mr Leonard Radebe's vehicle because “he constantly visited Mr Jacob Zuma”. This information was found by tapping and intercepting Mr Radebe's phone.
150. The Public Protector noted that Mr Pillay, in his first affidavit, denied that the unit was involved in unlawful or illegal activity on the part of SARS or its officials, and that he had been indicted for the allegations relating to the bugging of the DSO and NPA offices and therefore maintained his constitutionally guaranteed rights as an accused person as set out in section 35 of the Constitution. She found that the evidence, however, indicated that during June 2007 until November 2007, Mr Pillay and Mr Janse van Rensburg irregularly recruited Mr Lombard and Mr De Waal and/or authorised Mr Lombard and Mr De Waal to intercept communication within the offices of the DSO and those of the NPA, without an interception direction issued by a designated Judge.
151. As far as the qualification issue is concerned the Public Protector stated that SARS in their response did not dispute that Mr Pillay did not have a degree and that he possessed a matric certificate. She made reference to Mr Magashula’s interview on 25 March 2019 with the Public Protector’s office during which he referred to the leadership competency model review, accompanied by what is termed the “Goodness of Fit”, conducted by SARS during the year 2008, which confirmed the value that Mr 53
Pillay brought to SARS. She stated that it was however apparent that SARS did not take the qualifications of Mr Pillay into consideration in the appointment of Mr Pillay as Deputy SARS Commissioner. The decision to appoint him, based only on his previous experience and acquired skill, was “vague considering the level of the position” and that the sole use of the “Goodness of Fit” model as a benchmarking tool, in identifying potential candidates for the leadership in SARS, does not comply with the “values of fairness, transparency and accountability in public administration”.
The second affidavit
152. In response to the notice, Mr Pillay, in a 200-page affidavit, set out the reasons why he believes the Public Protector has a complete lack of understanding of SARS as an institution, its various enforcement and investigative units over the years 1998 to 2014, the legal and policy framework within which these units operated, their mandates, and how they functioned. Mr Pillay submitted that, as a result, the notice reflected cardinal factual errors and untruths (which he dealt with specifically later in the affidavit). In support of his contentions he provided various examples of how the Public Protector’s notice confused separate SARS business units that reported to completely different divisions and sub-divisions under completely different management structures with completely different budgets, oversight controls, organisational attributes, functions and purposes.43
153. Mr Pillay explained how SARS as an institution, its audits and investigations and certain of its officials, have been the subjects of deliberate disinformation campaigns and attacks for many years dating back to 2003. He stated that most of these campaigns and attacks are attributable to persons who were under investigation by SARS, certain disaffected persons who had left SARS for a variety of reasons, certain state officials from other departments and SARS officials within the institution, sometimes as individuals, sometimes as groups, sometimes separately and
43 As an example the notice confuses the CBCU, which resorted under Custom Operations, with the NRG which reported to the sub-division which in turn resorted under the Enforcement and Risk division. In addition, the Anti-Corruption and Security Unit (“ACAS”), was a stand-alone division reporting to the General Manager: Risk and Enforcement and later to the SARS Commissioner. Similarly, at inception, the SPU was a small sub-unit under the CBCU division and shortly after transferred to an entirely different division namely Enforcement and Risk. 54 sometimes in conjunction with each other. He stated, in great detail, that over the years, various reports and letters and memorandums were compiled by SARS and sent to, handed to and discussed in detail with, inter alia, the Presidency, various members of Parliament, various committees at Parliament, the National Commissioner of Police, the Inspector General of Intelligence, the South African Police Service, the NIA and later the SSA.
154. Mr Pillay made specific reference to Mr Michael Peega ("Mr Peega"), a former SARS official, who, during late November 2009 and February 2010 had set out to recruit persons within SARS and others who had left SARS, to "implicate PG (Pravin Gordhan), IP (myself) and JvL (Johann van Loggerenberg)" with the "Old Man" (a reference to former President Jacob Zuma) under the code name "Broken Arrow". Mr Pillay stated that at the time, in 2009, the intention of Mr Peega (and others) was recorded in writing, by some of those he approached, as wanting to use former and current SARS officials, who were "willing to collaborate" and by using the then named NRG, as the focal point of this disinformation campaign. The disinformation campaign came to fruition in November 2009 and February 2010 when Mr Peega distributed a so-called "intelligence dossier" under the code name "Operation Snowman" to various media houses and politicians. Mr Pillay set out that the rogue unit narrative, in embryonic stage, has its roots here.
155. Mr Pillay described how SARS and its officials were attacked over the years and that these attacks always took on typical formulas. Some attacks were in the form of "dossiers" and "intelligence reports" which always carried the same hallmarks of false and unsubstantiated allegations against people, including Mr Pillay. These “dossiers” falsely branded officials as apartheid-era-spies or remnants thereof, accused them of being racist, being "Anti-Zuma", conspiring in some way or another against government and illegally intercepting taxpayers’ communications. He explained how these "dossiers" all had the same characteristics and that they almost always found their audience amongst persons who sought to attack and discredit SARS and its officials and work, regardless of the obvious and easily disputable content. 55
156. Mr Pillay stated that SARS was always able to meaningfully defend itself against these sorts of attacks, such as in late 2009 and early 2010, when Mr Peega released "Operation Snowman", by releasing two very detailed line-by-line refutations, with annexures as proof, to the Presidency, media, politicians and law enforcement and intelligence agencies and briefing them thoroughly. These documents acknowledged the existence of the unit known then as the SPU and later the NRG, explained its approved mandates and operations (including work conducted in conjunction with other law enforcement agencies) and demonstrated the fallacies of "Operation Snowman". Mr Pillay observed that it is significant that the notice failed to reflect or consider or pronounce upon these documents, complete with their annexures, publicly released by SARS in October and November 2009 and in February 2010. Mr Pillay stated that it was always the official and expressed view of SARS until October 2014 when the former SARS Commissioner, Mr Tom Moyane, commenced his duties at SARS, that what informed these "dossiers" and attacks arose from any or a combination of persons who were being investigated by SARS, failed attempts to intimidate SARS officials, persons who sought to repurpose SARS, and internal politics.
157. Mr Pillay submitted that, in particular, the Sikhakhane panel (September 2014 to December 2014), the Kroon Advisory Board (2015), the KPMG process (2015), the processes conducted by Advocates Martin Brassey SC, Nadine Fourie and Mike van As and attorneys Mashiane, Moodley & Monama (2014 to 2015), as well as the multiple investigations conducted by the Hawks and NPA (since 2014 to date) as well as the OIGI report (August to October 2014), have all fallen victim to the perpetuation of the false rogue unit narrative to some extent or another. He submitted that this is particularly so because they all, as a rule, failed to hear those they pronounced upon meaningfully or at all, failed to provide any a right of reply before making “conclusions” and "findings" and "recommendations", and cherry-picked or twisted little truths mixed with a great deal of fiction. Their records and reports were, without fail, always leaked to the media. In the result, these processes deliberately created a veneer of credibility to the false allegations. Mr Pillay proceeded to set out the manner in which the Sikhakhane panel report is flawed in fact and law, and submitted that any reliance thereon by the Public Protector, for any purpose, would be irrational and ill-placed. He 56 stated that he had already provided the Public Protector with all of this information, but that it was not reflected on in the notice.
158. Mr Pillay also warned the Public Protector that any reliance on the "KPMG report" would be irrational and ill-placed, because it was admitted by KPMG South Africa to be a mere "documentary review" which included "limitations" and had no value whatsoever. Mr Pillay contended that in addition none of the people implicated in the KPMG report were afforded a hearing or right of reply and the report has been contested as profoundly flawed in fact and in law in many ways by many people in many platforms, amongst others by KPMG South Africa, SARS, and Parliament. Moreover, its findings, conclusions and recommendations have been formally withdrawn. Mr Pillay stated that he had even privately received an apology from KPMG South Africa in this regard.
159. Mr Pillay described how the rogue narrative was perpetuated by these reports, while those affected by these reports had never seen them, were never afforded a right of reply and were “banned” by former SARS Commissioner Mr Tom Moyane from defending SARS, its officials and themselves from this “public onslaught”. He stated that, having read the notice, he was firmly of the view that the Public Protector was merely advancing this same false rogue unit narrative and the ever-changing, continuing attempt to make something stick to the unit was malicious and capricious, and clearly intended to keep the narrative alive for ulterior purposes.
160. Mr Pillay specifically set out various matters that he himself had reported for investigation. He noted that it was perplexing that the Public Protector had not considered any of these facts in any manner or form, or any records, information, evidence and directions, most of which are publicly known and easily accessible to her. This is more so because all these matters relate directly to the content of the notice. He contends that it is therefore simply inconceivable why the Public Protector had failed to discover and consider any of these matters in the course of her investigation.
161. As far as Mr Ravele was concerned, Mr Pillay stated that although the Public Protector found it necessary to rely on the “Gene Ravele Dossier” in her notice, she 57 failed to reflect on Mr Ravele’s testimony under oath before the Nugent Commission. He stated that it was public knowledge that Mr Ravele told the commission that the allegations over the so-called rogue unit was false and that the allegation that it conducted illegal surveillance using high-tech equipment was “hogwash”.
The affidavits filed in the review application
162. Except for Mr Pillay’s founding and replying affidavits, the following further affidavits are of relevance to Mr Pillay’s application: an affidavit deposed to by Mr Pillay on 29 September 2019 in the Minister of State Security’s interlocutory application; an affidavit deposed to Mr Van Loggerenberg on 29 September 2019, being Annexure A to Mr Pillay’s affidavit dated 29 September 2019; the founding affidavit in Mr Van Loggerenberg’s application to review and set aside the OIGI report; the supplementary founding affidavit by Mr Van Loggerenberg dated 5 February 2020 in the OIGI review proceedings; a further affidavit deposed to by Mr Pillay on 10 June 2020 dealing with the resolution of Mr Van Loggerenberg’s application to review and set aside the OIGI report; an affidavit deposed to by the Minister of State Security on 12 June 2020; the Public Protector’s answering affidavit, deposed to on 20 July 2020, to the Minister of State Security’s affidavit; an affidavit deposed to by Mr Pillay on 22 July 2020; an affidavit deposed to by Mr Peter Richer on 15 June 2020, being Annexure C to Mr Pillay’s affidavit dated 22 July 2020; and a replying affidavit deposed to by the Minister of State Security on 29 July 2020.
Mr Pillay’s evidence
163. Except for the founding affidavit and replying affidavit, Mr Pillay also filed a supplementary founding affidavit after the final documents in the Rule 53 record were filed. In this affidavit Mr Pillay referred to a letter that he addressed to the Public Protector on 26 August 2014 in response to a demand made by the Public Protector on SARS for information in the course of an "Investigation into a complaint in connection with allegations of maladministration, irregular recruitment and unlawful surveillance of unsuspecting civilians, politicians and prominent businessmen". That 58 letter referred to and attached some 23 supporting documents, which formed part of the record that served before the Public Protector when she compiled the Report.
Mr Van Loggerenberg’s evidence
164. Attached to the supplementary affidavit of Mr Pillay, is an affidavit of Mr Van Loggerenberg, one of the people implicated by the Report. He has intimate knowledge of the unit and is clearly the person most capable of confirming the accuracy and factual position relating to the unit. He was responsible for all management functions of the unit at all times from April 2008 until its closure in October 2014, except for a period of nine months in 2012 when he was assigned as advisor in the office of the Chief Officer: Tax and Customs Enforcement Investigations.
165. Mr Van Loggerenberg stated that his first meeting as manager of the unit occurred on 11 April 2008. On this day, he provided the unit with a basic policy document entitled "Rules of Play". ln May 2008, he conducted an audit of all prior and ongoing investigations of the unit in order to familiarise himself with the work of the unit. In July 2008, he conducted a second audit of all prior and ongoing investigations of the unit as part of a process to implement a more robust and defined investigations process. During October 2009 he conducted a third detailed audit of all prior and ongoing investigations of the unit in order to understand the origins of certain rumours regarding the unit as depicted in a “fake dossier” titled "Project Snowman" that was being circulated. He prepared a document on behalf of SARS, with relevant annexures, in response to this fake "dossier”. The document was publicly released by SARS in November 2009. In February 2010 he conducted a fourth detailed audit of all prior and ongoing investigations of the unit in order to prepare a more detailed document with relevant annexures in response to the same “fake dossier". He also provided a detailed report to the then NIA which had requested such details. This report was provided to, inter alia, the Presidency, parliamentary committees, the chairpersons of parliamentary committees, members of parliament, the National Commissioner of Police and a variety of media houses. In November 2010, he conducted a fifth detailed audit of all prior and ongoing investigations of the unit in order to prepare a more detailed document with relevant annexures in preparation for a meeting with the SSA and thereafter in respect of various fake "dossiers", including 59
"Project Snowman". At this time, he also provided a detailed report to the SSA which requested such details, and he ensured the availability and cooperation of those members of the unit that the SSA wished to speak to.
166. Mr Van Loggerenberg stated that the above excluded the annual audits of the unit and its members’ performance, finances and assets as conducted by the SARS Internal Audit Division and the Auditor-General of South Africa. The unit, throughout its existence, have always received clean and unqualified audit results without exception, and Mr Van Loggerenberg had never received any audit query about the unit from either the Internal Audit division in SARS, nor from the Auditor General of South Africa. He stated that he however does not have access to any of these records anymore as he left SARS in 2015, and attempts to obtain access to these records from SARS since May 2018 to date have not been successful.
167. Following the Sunday Times articles from 12 October 2014 onwards, Mr Van Loggerenberg had several meetings with several persons who were part of the unit over the years since inception, and on three occasions reflected upon all work conducted by the unit. This was done in an attempt to assist SARS to refute and debunk the rumours and allegations as reflected in the media. Mr Van Loggerenberg stated that, at this time, Mr Tom Moyane had become the SARS Commissioner and all his further attempts to offer assistance to do so were denied.
168. Mr Van Loggerenberg denied that the members of the unit were trained by SARS in “tracking, tracker installation, bugging systems, surveillance', electronic system's breaching, building of cover stories, changing of identity, house penetration, cryptology and protection of safe house". He stated in this regard, that he noted that the Report lists this training, as if attributable to a Mr Manyike, whereas in fact it is a verbatim quote from "Project Snowman", authored by Mr Peega. As far as the unit's investigations is concerned, he denied that SARS "had an interception and monitoring of communications capability" or that the members of the unit were "involved in stealing mail from residences, interception of e-mails, mobile and landlines..." He stated that SARS’ line-by-line refutations, as released over the years since 2009, specifically dealt with these allegations. 60
169. To the extent that tracking devices were ever used by the unit, he was aware of two such instances in 2007, when the unit worked closely with the Johannesburg Metro Police Department to ensure the arrest of a tax fraud fugitive with a warrant of arrest issued by the NPA and one instance where, in conjunction with the SAPS, a container containing contraband was seized and forfeited to the State. In both cases this was done lawfully and in the interests of the State. These devices did not belong to the unit.
170. Attached to Mr Van Loggerenberg’s affidavit are two emails that were sent to the Public Protector in 2016. Appended to the emails are an array of documents relating specifically to the rogue unit narrative, the fake "dossier” titled "Project Snowman" and persons involved in “capturing SARS”. The Public Protector acknowledged receipt of the emails and annexures on 24 August 2016.
The Public Protector’s answer
171. The Public Protector in her answering affidavit stated that she was not bound by Mr Pillay’s “views” on affidavit and that she was not interested in a “narrative” but in “facts and the law”. She further stated that his complaint about access to evidence and documentation was unjustified and that the full details of what he was required to respond to were contained in the notice.
172. As far as Mr Peega and Mr Manyike were concerned, she stated that it was not clear how the fact that they were discredited and/ or disgruntled SARS employees would help the Public Protector determine the lawfulness of the “SARS spying unit” and that it was irrelevant. She further stated that the Nugent Commission’s report was not binding on the Public Protector and that Mr Ravele’s evidence was irrelevant to the work of the Public Protector.
173. The Public Protector briefly dealt with the equipment and employment issues and stated that she had sufficient evidence to come to the findings in the Report. She stated that she has ample sources of information on the establishment of the unit, its activities and the capability, its resources and equipment. She averred that the Rule 61
53 record amply demonstrates the vastness of these sources, which included anonymous complainants and whistle-blowers. She argued that it cannot, with reference to the Rule 53 record, be contended that the Public Protector did not have access to information on the resources of this “illegal spying unit” within SARS.
174. A far as the interception issue is concerned the Public Protector stated the following:
“When this interview was conducted with the Office of the OIG, I was aware from the preliminary investigations that there was an unlawfully established and rogue spying unit established within SARS. The OIGI as set out in its report had concluded that the SARS had established an illegal spying unit which was engaged in corrupt and illegal activities. There are recordings of people working in the spying unit detailing how the spying unit performed its activities which are part of the Record in these proceedings. The content of these recordings demonstrates an abuse of the unit that should make anyone with a constitutional duty to promote, advance and uphold the Bill of Rights cringe. I was shocked to leam that SARS had established a spying unit to advance its statutory objectives. More importantly, the spying unit appears not to have operated lawfully but in a rogue manner”
175. In dealing with the qualification issue, the Public Protector stated that Mr Pillay had numerous opportunities to assist the Public Protector to reach accurate conclusions in respect of his qualification, but that he had failed to do so. She stated that had he told her that he had matric, the Report would have reflected that fact and that he, for the first time, in these proceedings, stated under oath that he had matriculated. She however denies that she made any finding that he did not have a matric qualification.
EVALUATION 62
176. In the matter of Public Protector v Mail and Guardian Ltd and Others44 the Supreme Court of Appeal emphasised the role of the Public Protector as an instrument for unveiling the truth. The court elucidated the approach and outlook that the Public Protector as an investigator must adopt in its quest for the truth in the following words:
“[21] There is nonetheless at least one feature of an investigation that must always exist – because it is one that is universal and indispensable to an investigation of any kind – which is that the investigation must have been conducted with an open and enquiring mind. An investigation that is not conducted with an open and enquiring mind is no investigation at all. That is the benchmark against which I have assessed the investigation in this case.
[22] I think that it is necessary to say something about what I mean by an open and enquiring mind. That state of mind is one that is open to all possibilities and reflects upon whether the truth has been told. It is not one that is unduly suspicious but it is also not one that is unduly believing. It asks whether the pieces that have been presented fit into place. If at first they do not then it asks questions and seeks out information until they do. It is also not a state of mind that remains static. If the pieces remain out of place after further enquiry then it might progress to being a suspicious mind. And if the pieces still do not fit then it might progress to conviction that there is deceit. How it progresses will vary with the exigencies of the particular case. One question might lead to another, and that question to yet another, and so it might go on. But whatever the state of mind that is finally reached, it must always start out as one that is open and enquiring.”
177. Central to Mr Pillay’s application is the allegation that the Public Protector failed to properly deal with the allegations of fact set out in his first and second affidavits dated 23 April 2019 and 18 June 2019. Mr Pillay submits that despite providing the Public Protector with detailed and material evidence under oath and documentary evidence in these two affidavits, the Public Protector effectively ignored
44 Supra. 63 the evidence set out in each of these affidavits, thus refusing to afford him any hearing at all.
178. Mr Pillay contends that the Public Protector instead relied on fundamentally flawed and discredited reports of others; applied a process of irrational reasoning and flawed logic; shown a clear pattern of bias; and, failed to apply an open and enquiring mind in pursuit of the truth, which ultimately resulted in a procedurally unfair and flawed process. Moreover, so it is argued, the Report imposes incompetent, inappropriate and improper remedial action on the Minister of State Security, the NDPP and the Commissioner.
179. Mr Pillay further contends that the manner in which the Public Protector has dealt with him is demonstrative of her manifest bias against him. That is: her failure and indeed refusal to hear him in any meaningful way; the closure of her mind entirely to the uncontroverted evidence provided by him; her casting of unconscionable slurs upon him; her abject failure to conduct any semblance of an investigation with an open and enquiring mind as she is duty bound to do; and her adoption of untested and baseless allegations made against him, as if she had real evidence before her, whereas in fact she had nothing of the sort.
Failure to deal with Mr Pillay’s evidence
180. Mr Pillay responded, in considerable detail, to the complaints enumerated by the Public Protector in his first affidavit dated 23 April 2019. The Public Protector then delivered the notice on 5 June 2019, setting out her provisional findings. The sole references in the notice to the content of the Mr Pillay’s first affidavit were a terse recordal of a few of the submissions made in his affidavit regarding the allegation that the unit was unlawfully established; a redacted and inaccurate recordal of what Mr Pillay stated in his affidavit dated 23 April 2019 regarding the allegation that SARS had "irregularly procured costly intelligence equipment which the intelligence unit used for gathering"; a dismissive response to the contention in Mr Pillay’s affidavit dated 23 April 2019 that the Public Protector had previously investigated and satisfactorily resolved complaints relating to the recruitment of staff; and a recordal that Mr Pillay stood on his constitutionally enshrined rights as an accused person in relation to the 64 allegations that he was party to certain illegal activities that he had at the time been indicted for and which were pending.
181. In response to the notice, Mr Pillay filed a substantial affidavit setting out in great detail his factual response to the sources that the Public Protector had relied upon in reaching her provisional findings. Mr Pillay’s detailed affidavit received a wholly dismissive response by the Public Protector in the Report.
182. By dismissing Mr Pillay and his evidence out of hand, the Public Protector breached her oath of office in the most fundamental way. She discarded the only evidence that served before her under oath, that of Mr Pillay, and instead uncritically adopted, under the guise of conducting her own investigation, the unattributed and anonymous complaint that was delivered to the office of the Public Protector by Mr Manyike on 21 February 2012 (emphasis added). It is important to note that the former Public Protector declined to investigate the anonymous complaint. In the Report the Public Protector, however, describes the complaint as “submissions of Mr Keletso Manyike” and states that he was “employed as a specialist agent with the CBCU”. It is common cause that Mr Manyike was not a specialist agent and Mr Pillay and Mr Van Loggerenberg disputed that the complaint originated from Mr Manyike. They allege that the complaint was lodged by Mr Manyike on behalf of someone named Ms Dottie Modiane. The Public Protector in the Report, however, continued attributing certain allegations concerning the operations of the unit to Mr Manyike as if he had testified before her to this effect. She did not investigate the origin of the complaint or the veracity of the allegations made in the complaint.
183. The Public Protector further relied on the “Operation Snowman” document that formed part of what was attached to the anonymous complaint, without paying any regard whatsoever to what Mr Pillay said in his second affidavit dated 18 June 2020, namely that the author of “Operation Snowman” was Mr Peega, alleged to be a disgraced and disgruntled former SARS employee. With total disregard to any semblance of a fair investigation the Public Protector did not deem it necessary to interview Mr Peega, Mr Manyike or Ms Modiane to satisfy herself that there was any merit in the allegations contained in the complaint. 65
184. The Public Protector had further failed to reflect on material and relevant events, facts and evidence relating to the Kroon Advisory Board. Mr Pillay particularly referred to the testimony by Judge Kroon before the Nugent Commission in September 2018 which specifically impacted on the intended or provisional findings in the notice. He referred to the formal apology by Judge Kroon to Minister Pravin Gordhan in 2018 and the formal apology by Judge Kroon to various persons (current and former SARS officials and their families, including Mr Pillay) dated 19 May 2019 as issued by the Judicial Service Commission on his behalf. The Public Protector failed to consider the fact that soon after 28 April 2015, for the period May to June 2015, the entire board reconsidered the notion that the unit was unlawfully established and concluded that they should not have made this finding after all but never informed the public. She further failed to reflect on the testimony given under oath by Mr Ravele at the Nugent Commission with specific reference to the unit in question, its "equipment" and its establishment and functions. The testimony by Mr Ravele is specifically relevant to the findings in the notice and specifically impacted on the intended or provisional findings in the notice.
185. As stated earlier the Public Protector also relied extensively on the Sikhakhane report, the KPMG report and the IOIG report. This issue has been dealt with in Mr Gordhan’s application. The comments made in Minister Gordhan’s application with regards to these reports are equally relevant to Mr Pillay’s application.
186. The failure by the Public Protector to take account of and evaluate the evidence of Mr Pillay as it appears in his affidavit dated 18 June 2019 in response to the notice has resulted in the Report being, to all intents and purposes, merely a regurgitation of the provisional findings recorded in the notice. What the Public Protector has done in her Report is to base her findings and conclusions on mere untested assertions, without any investigation into the truth of the assertions and without regard to the actual evidence placed before her.
Material evidence not considered 66
187. In paragraph (x) of the Executive Summary to the Report45 the Public Protector recorded that during the investigation process she "… also tried to subpoena information and documentation from Mr van Loggerenberg but to no avail as his last known residence has new occupants allegedly having relocated some years ago".
188. This statement is most surprising because, as the record now shows, the Public Protector had in her possession reams of evidence and documents already provided by Mr Van Loggerenberg. In addition, the address appearing on the subpoena is non-existent and, despite communication from Mr Van Loggerenberg’s attorneys, the Public Protector made no attempt to contact him or his attorneys.
189. Mr Van Loggerenberg, filed a substantive affidavit in support of Mr Pillay’s application on 29 September 2019, which was delivered in answer to the EFF’s affidavit. Mr Van Loggerenberg painstakingly responded to the assertions made by Mr Malema in the EFF’s affidavit and set out a comprehensive rebuttal of the notion that the activities of the unit were rogue or unlawful in any conceivable respect.
190. Mr Van Loggerenberg’ s affidavit sets out his personal knowledge of many of the issues involved in the Public Protector’s investigation, the history of the unit in question, and the matters that it dealt with. He corroborates what Mr Pillay stated in his founding and other affidavits. Mr Van Loggerenberg further set out in detail the engagement he had with the office of the Public Protector during August 2016 in regard to the rogue unit narrative, during which he was interviewed. The interview was recorded. He was also asked to submit a myriad of documents to the office of the Public Protector which confirms much of the evidence provided by Mr Pillay in all his affidavits. He submitted the documents that were requested and the receipt of these documents was acknowledged by the office of the Public Protector on 24 August 2016.
191. The office of the Public Protector therefore has been in possession of evidence in relation to the activities of the unit for a number of years but, despite the fact that it formed part of the record, the Public Protector failed to consider it at all. No mention is made of this evidence in the Report. This clearly shows that the Public Protector adopted a one-sided approach to the investigation. She conducted an
45 Page 8 of the Report. 67 imperfect investigation that does not meet the high yardstick of reasonableness that is set in law. Her approach to the investigation was fallacious.
192. This is further evidenced in the way the Public Protector approached Mr Pillay’s evidence in the review application. In her answering affidavit she adopted a dismissive attitude towards what she termed Mr Pillay’s ”views”, and dealt almost exclusively with Mr Gordhan’s various affidavits. This is clear from the following passage taken verbatim from her answering affidavit:
“The Public Protector was not bound by Mr Pillay’s views on affidavit. She considered them but found that they were a defence of an indefensible establishment of a spying unit within the SARS.”
193. She then set out a number of points on which she expressed that she was in disagreement with Mr Pillay’s “views” and dismissed the entirety of what was deposed to by Mr Pillay in his two affidavits dated 23 April 2019 and 18 June 2019 in the following terms:
“The rogue unit narrative is their coining which is irrelevant to the Public Protector. The views of Mr Pillay on State Capture are just that – views...... ”
” Mr Pillay did not wish to candidly and openly deal with the issues that the Public Protector was interested in.....”
“His response was belligerent and displayed a lack of interest in giving the Public Protector coherent and straight answers to the questions asked...... ”
“The allegations made by Mr Pillay were vague and speculative. They were riddled with political narratives totally irrelevant to the specific issues that required the Public Protector to investigate.”
Mr Pillay attacked the investigation and questioned its legitimacy “based on his political theories of State Capture and false political narratives.” 68
“He ignored the evidence that the Public Protector indicated to him and in broad terms sought to discredit that evidence without giving alternative and credible evidence.”
“I disagreed with Pillay on the legal basis for the establishment for the spying unit within SARS. His explanation sought to avoid giving credible and straight answers but windy and verbose.”
“Mr Pillay waffled about the so-called rogue unit narrative and the capturing of SARS, giving no credible evidence.”
194. It is important to note that no other party in these proceedings, including the Public Protector and the EFF, has sought to respond at all to what Mr Van Loggerenberg testified to in the affidavit deposed to by him. What he says thus stands entirely uncontradicted and unchallenged. The Public Protector has put up no facts or evidence, either in the Report or in her affidavits filed in this matter that refutes the evidence provided by Mr Pillay (and now by Mr Van Loggerenberg). All that she has done in her answering affidavit is belabour evidence put up by Mr Pillay as simply his "views" and opinions, and that she was not bound by it.
195. This evidences the most egregious failure of the Public Protector to understand and honour the most basic requirements of the office she occupies. It is plain that the Public Protector has approached this investigation with an unwavering commitment to her own preconceived views and biases. The manner in which the Public Protector had, and continued, to simply ignore Mr Pillay’s evidence, clearly demonstrates her manifest bias. We will return to the issue of bias herein below.
196. But aside from the allegation that Mr Pillay was involved in the unlawful establishment of the unit, the Public Protector also implicated Mr Pillay in the equipment issue, the employment issue, the interception issue and the qualification issue. These four issues will be discussed in more detail under separate headings hereunder.
“The equipment issue” 69
197. Mr Pillay, in his second affidavit dated 18 June 2019, explained that the "equipment" procured and utilised by the unit throughout its existence was limited to standard, commercially available equipment, none of which had any facility to intercept communications. He set out a list of items that the unit had access to. Apart from binoculars and some vehicles, the items described by Mr Pillay are all office equipment. None of the items listed could be described as “spy equipment”. The Public Protector simply ignored Mr Pillay’s evidence in this regard and instead found that the unit had equipped itself with a great deal of sophisticated surveillance and interception equipment. The lists of “equipment” the Public Protector believes the unit obtained and used have been redacted in the Report.
198. As stated, when Mr Pillay delivered his supplementary founding affidavit in these proceedings, he attached to it an affidavit deposed to by Mr Van Loggerenberg. Mr Van Loggerenberg deals with the “equipment” that the Public Protector seems to refer to under cover of her redaction in his affidavit. Mr Van Loggerenberg points out that there appear to be three categories of equipment referred to by the Public Protector which include:
i. A set of equipment publicly displayed on 2 May 2016 in a slide show presentation by the then Minister of State Security, Mr David Mahlobo, and the then Minister of Police, Mr Nati Nhleko, which had been acquired not by the unit but by the Anti-Corruption and Security Unit at SARS (“ACAS”), an entirely unrelated entity.
ii. A second set of equipment which was offered to SARS by the Customs and Border Control Services of the USA and was taken up by SARS in 2017. That equipment is in standard use by Customs Authorities world-wide and is commercially available.
iii. The third set of equipment relates to acquisitions by ACAS and SARS in general when Mr Moyane was in charge of SARS and after the unit had been shut down. 70
199. Despite the fact that Mr Van Loggerenberg testified to this effect under oath and attached documentary evidence in support of what he stated, the Public Protector has failed to respond to, or challenge the evidence of Mr Van Loggerenberg.
200. But, there are also numerous places in the record which are demonstrative of the fact that the Public Protector had, prior to the writing of the Report, documents in her possession which plainly showed that the unit never procured or used any unlawful, clandestine “spying equipment”. In the Report the Public Protector made certain findings that attributed the listed “equipment” directly to the unit in question, that is SPU/NRG and HRIU specifically. She did not attribute it to ACAS, or Customs, or to the CBCU, but to “the unit”. The Public Protector found that the procurement of intelligence equipment utilised for “the unit” was improper and therefore amounted to maladministration. The listed equipment in the Report and Rule 53 record are used to seemingly support this as evidence. However, on closer inspection, this is not so. There is no evidence whatsoever, that demonstrates any of the impugned “equipment” to have been procured by SARS for the unit, used by the unit or that the unit even knew of such equipment. All procurement files in the Rule 53 record, dated from 2009 onwards, until after Mr Moyane took over at SARS, points to ACAS. The files includes motivations, quotes, and approvals by ACAS, and signatures by ACAS staff. None of it can, however, be described as “wiretapping” or “interception” equipment.
201. In the Report46 the Public Protector sets out in detail how ACAS procured equipment for ACAS in 2009. At paragraph 5.3.18 on page 64, the unit is simply “slipped in”. At page 65 of the Report the Public Protector dealt with the so-called “Mahlobo list”. Again, all these items can directly be found under the ACAS procurement records in the Rule 53 record. The same goes for the items dealt with on page 66: it is all part of the “ACAS list” and/or the “Moyane list”. (Pillay’s affidavit annexes a newspaper article, complete with photos and the description of these items, donated by the US Customs, taken by SARS in June 2017, long after Pillay had left SARS and long after the unit had closed down.) Nowhere is the unit referenced, listed or reflected in any of the procurement or payment documents.
46 Pages 62 to 63 of the Report. 71
202. After listing the “evidence”, the Public Protector then found that “although SARS failed to provide me with documents relating to the procurement of equipment for the CBCU, NRG and subsequently the SPU, evidence at my disposal confirm the existence of such equipment as well as the acquisition thereof”. This is untrue. There was no evidence available to support the findings made by the Public Protector. As stated, all the documents in the Rule 53 record had nothing to do with the unit and all related to ACAS. It even included photos taken by the SSA at SARS office B3, Riverwalk offices, which was the storage for ACAS. There was no evidence that demonstrated any procurement of any equipment by the SPU, NRG or HRIU from 2007 to 2014, except for the list supplied by Mr Pillay in his second affidavit in reply to the notice and subsequently confirmed by Mr Van Loggerenberg in his affidavit. Moreover, the Public Protector could easily, by invoking her powers of subpoena, have obtained further documents and viva voce evidence from various persons, who would have assisted her in avoiding arriving at an illogical and unsupportable conclusion about the equipment.
203. The Public Protector further finds that “It is extremely impossible that a unit carrying out investigations on behalf of SARS would not have procured equipment for the fulfilment of its duty and functions, as admitted to in so many instances and at so many levels. The only contention by SARS being that it was not conducting illegal operations.” This is a peculiar statement to make. How does no evidence become evidence? The Public Protector then proceeds to make the following finding:
“However, if its operations were lawful, it is unclear why SARS and/or its former employees would keep the procurement of equipment such as guarded secret. I can only come to the conclusion that proper procurement processes were not adhered to, and that such conduct amounted to the violation of the PFMA and thus constituted improper conduct as envisaged in section 182 of the Constitution and maladministration as envisaged in section 6(4) of the Public Protector Act.
I am of the firm view that the failure and blatant refusal of SARS and its former employees to provide me with records of the Procurement to confirm the purchasing of the said equipment and the whereabouts thereof is suspicious 72
and unwarranted and is aimed at perpetuating the narrative that there was no such intelligence unit at SARS.”
204. The reasoning adopted by the Public Protector in coming to these findings, in light of the evidence available to her at the time of the Report, is illogical and clearly fallacious. For the Public Protector to conclude that the unit was in possession of equipment capable of being used to conduct clandestine activities in the absence of SARS providing the office of the Public Protector with such a list of “spying equipment” is astonishing.
205. The Public Protector’s flawed reasoning goes even further. The Public Protector starts off on the premise that the unit was engaged in illegal intelligence gathering, namely spying, wire-tapping and generally doing the things that only an intelligence service such as the NIA/SSA was lawfully entitled to do. She finds that the unit was illegal from the outset by adopting the legally flawed finding of the Sikhakhane panel. Because the unit was illegally conceived (the Sikhakane panel said so), it must have procured and used illegal, clandestine equipment in the course of its illegal activities. But even the Sikhakhane report did not find “equipment” for wiretapping and interception. At paragraph 82 of this report it was found that: “However, as a general rule, it was accepted that the unit did not have the required equipment to carry out such electronic surveillance or interceptions”.
206. Even more egregious is the reference to the “operations”. This suggests that the Public Protector considered the unit’s operations from March 2007 to October 2014. She clearly did not. Mr Van Loggerenberg stated that the unit did 81 investigations. He explained them in detail and stated that in no instance was “equipment” of the nature the Public Protector attributes to the investigative unit ever procured by it.
207. The Public Protector, clearly not satisfied with the evidence Mr Pillay gave under oath in respect of the equipment, failed to interview a single member of the unit about the equipment. She could have subpoenaed any of them. Moreover, she did not interview any member of ACAS, or finance, or a service provider about the equipment. It would have been a relatively straight forward exercise for the office of 73 the Public Protector to undertake because all their details are reflected on the purchase orders of ACAS in the Rule 53 records, including their invoices, quotes and receipt of payment. The Public Protector also ignored the media statement issued by Mr Pillay about the “Mahlobo list” on 2 March 2016, following a presentation to the media on the same date, which included a PowerPoint presentation listing certain equipment. She also ignored Mr Pillay statement about the Chief Financial Officer of SARS that issued a formal submission to the Sikhakhane panel regarding any equipment of the unit. As a consequence, she did no investigation and elected to make a finding based on no evidence. This is completely irrational.
208. The KPMG report appears to suggest that the specific unit in question acquired and/or used sophisticated surveillance equipment. Mr Pillay sets out in his first affidavit why the KPMG report provides no evidence or substantiation for this contention. On closer inspection of the Report, (from paragraphs 7.11.2 to 7.11.9 on pages 105 to 108 of the KPMG report), certain equipment is listed and described, but no evidence is provided that it was the unit that acquired such equipment and used it. The reference to and reliance by the Public Protector in the notice to the statement by KPMG that "the possibility cannot be excluded that the equipment and software was availed to them" is mischievous.
209. In Mr Pillay’s second affidavit in response to the notice he specifically explained that the matters recorded in paragraphs 14.2.3 to 14.2.6 of the notice relate to a completely different unit that existed at SARS, and have absolutely nothing to do with the unit in any manner or form. He stated that para 14.2.10 of the notice “seeks to disingenuously shoehorn selective matters into the rogue unit narrative", where the paragraph specifically refers to an internal memorandum dated 12 December 2014 relating to a procurement process. During December 2014, former Commissioner Tom Moyane was the accounting officer of SARS and the unit had already been shut down. Mr Pillay stated that none of the equipment in relation to any of these documents listed are capable of the "interception of communications". All are commercially available and commonly in use by multiple government departments and corporate companies as well as private investigators, companies and journalists. The purpose of this internal memorandum was solely intended to assist the unit overseen by Mr Clifford Collings, 74 namely ACAS, to safeguard SARS’ property, assets, officials, records, and to facilitate security at ports of entry and warehouses under control of SARS. The memorandum had nothing to do with the by then disbanded unit.
210. The findings and recommendations of the Public Protector in relation to equipment issue of the unit is accordingly the product of a fatally flawed and incompetent investigation.
“The employment issue”
211. The Public Protector found in the Report that the “allegation that SARS failed to follow proper recruitment processes in appointing employees who worked for the intelligence unit, is substantiated.” She stated that although SARS failed to provide her with a policy regulating the transfer of staff within SARS branches, as well as a policy which regulates headhunting for positions at SARS, evidence at her disposal point to some irregularity in the recruitment of personnel for the unit.
212. The Public Protector then listed a mishmash of factors that apparently informed her findings:
i. An investigation conducted by her office into staff complaints raised by certain employees within the unit in 2014;
ii. The failure to advertise positions externally is a violation of paragraph 8.7 of the SARS Recruitment and Selection Policy;
iii. Minister Gordhan’s denial in any involvement or participation in the recruitment process of one or more of the unit’s employees is improbable as the Sikhakane report confirmed that Minister Gordhan played a role in the recruitment of Mr Van Loggerenberg;
iv. Mr Magashula's denial of the existence of the unit and recruitment of employees thereof is a foul misrepresentation, because at the time the 75
members of the unit were transferred within SARS to form the CBCU and the appointment of external staff members, he was the Chief Operations Officer: Corporate Services. He approved the memorandum submitted by Mr Pillay relating to employees of this newly formed unit.
v. When Minister Gordhan submitted a memorandum to the former Minister of Finance, Mr Trevor Manuel, Mr Pillay had already began recruiting members to partake in operations of surveillance;
vi. Minister Gordhan’s conduct in approving the memorandum for the establishment and recruitment of staff for the unit in the manner described is improper and thus amounted to improper conduct as envisaged in section 182(1) of the Constitution and maladministration as envisaged in section 6(4)(ii) of the Public Protector Act.
213. The Public Protector implicates Minister Gordhan and Mr Pillay in participating in the recruitment process. She, however, limits Minister Gordhan participation to the recruitment of Mr Van Loggerenberg. Minister Gordhan is not implicated in the recruitment of any other employee of the unit.
214. In response Minister Gordhan reiterates that he approved the establishment of the unit but denies any involvement in the recruitment of staff for the unit. He points out that it is the responsibility of management of the unit to do so within the applicable legal and regulatory framework and was dictated by its specific needs. He argues that to find that he was responsible for any irregularities in the recruitment process merely because he approved the establishment of the unit, is absurd.
215. The Public Protector dismisses the denial of Minister Gordhan on the basis that it is “improbable” and relies on the Sikhakhane report and the Gene Ravele report that confirmed the participation of Minister Gordhan in the recruitment of employees.
216. Apart from the fact, as already pointed out, that any reliance on the discredited Sikhakhane report is irrational, the Public Protector on the one hand relies on Mr Ravele’s evidence when it supports her findings on the employment issue, but on the 76 other hand states that his evidence before the Nugent Commission in relation to the lawfulness of the unit, which does not support her findings, was irrelevant and not binding on her. This is a clear example of the Public Protector fallacious approach to the evidence and is indicative of the mindset with which she approached the investigation.
217. In any event, Mr Van Loggerenberg was recruited in 1998, almost a decade before becoming the manager of the unit and years before Minister Gordhan even became the Commissioner of SARS.
218. Mr Pillay dealt with the allegation in paragraph 7.1.7 of the subpoena relating to the appointment of employees to the unit in the first affidavit. In this regard he reiterated that this had been the subject of a previous investigation by the Public Protector. He stated that the Public Protector was satisfied with the response given by SARS during August 2014 in regard to her requests for information concerning the recruitment processes involved in relation to employees who worked for the NRG. He invited the Public Protector to inspect her own records in this regard, as he does not have access to the records. He stated that the records relating to operations and employees of SARS fall within the ambit of Chapter 6 of the Tax Administration Act, and that the relevant records must be in the possession of SARS.
219. It is clear that the Public Protector had plainly refused to have regard to any of these records and evidence and seemingly made no effort to obtain any records from SARS. As with the evidence relating to the establishment of the alleged rogue unit and the equipment, the Public Protector simply ignored the evidence relating to the recruitment of SARS officials and employees. There is no rational basis for her findings in this regard.
The interception issue
220. The Public Protector’s finding that the unit conducted illegal activities is an extremely serious allegation which affected many lives. The question is, did she conduct a proper investigation before she came to this conclusion or did she just 77 scratch the surface? Was her investigation not too superficial to make a finding? What was the extent of her investigation?
221. The Public Protector ascribed in the notice identical allegations contained in "Project Snowman" to "submissions" supposedly made to her by Mr Manyike. There is no indication in the Rule 53 record that the Public Protector interviewed Mr Manyike or Mr Peega or that they have provided any testimony to her. The truthfulness of these “submissions” have been the subject of debate for many years and the credibility of the person or persons that allegedly laid the complaint has been questioned since these allegations first surfaced. In fact, Mr Pillay stated that the rogue unit narrative, has its roots here. One would have expected the Public Protector to carefully evaluate these allegations and to reflect or pronounce on the role of Mr Manyike and Mr Peega. She did not. She made no effort to obtain relevant facts, records and documents to substantiate any of the allegations contained in “Project Snowman”.
222. On the strength of SARS’ line- by- line refutations alone, the Public Protector should have approached SARS, the Directorate of Priority Crime Investigations and SSA and sought access to what is described in the papers as "significant and credible evidence showing incidents of spying, double agents, dirty tricks, leaking of false allegations and the discrediting of officials", but she failed to do so. This was directly and materially relevant to the content of the notice and ultimately her findings. It is unfortunate that the Public Protector, instead appeared to prefer to advance the very same rogue unit narrative as if fact.
223. In order to consider if the investigative unit functioned illegally and unlawfully, one has to reflect on what they did and how they did it. The Public Protector failed to reflect on any of the 81 investigations and the manner in which the unit investigated, acquired evidence or how this was used in courts, tax inquiries, and in seizures. Much is made of the recordings of Mr Janse van Rensburg, Mr Lombaard and Mr De Waal. The recordings are clearly a contentious issue, but concerns 3-unit members out of 26 employees at the time. The NPA ultimately refused to prosecute any of the members involved or implicated in these recordings. The Public Protector did not conduct any investigations of her own to verify the recordings and did not conduct any interviews with any of the people concerned. Of all the “witnesses”, the person best suited to tell 78 the Public Protector what the unit did, was Mr Van Loggerenberg. She failed to interview him. And when he filed an affidavit in the review proceedings, she simply ignored his evidence.
224. The Report must be based on a proper, objectively reasonable, factual basis and if competing evidence is presented to the Public Protector she must deal with it rationally. Fairness demands that there must be a proper investigation. The Public Protector did not act in the manner required in our law of someone fulfilling this extremely important and responsible position. The Report is indicative of her mindset with which she approached the investigation. She postulated herself as a judge, receiving and dismissing evidence at a whim, and then closed her mind to the actual facts available to her to consider.
225. Although not part and parcel of the Report of the Public Protector, Mr Malema states in his affidavit on behalf of the EFF, that the purpose of the unit was to gather covert intelligence which he says, means “spying on citizens without the need for warrants which are overseen by Judges” which in turn “violates a range of constitutionally protected rights”. The implication thereof is that the interception of communications between citizens would take place in breach of the Interception Act.
226. As discussed above, these allegations have no merit. Not only is there no evidence in the record to substantiate the allegation that the unit was established to engage in the unlawful interception of communications or indeed the interception of communications at all, no evidence is contained in the record to support a finding that Minister Gordhan or Mr Pillay approved the establishment of the unit for such a purpose or knew that it would engage in unlawful activities of this kind.
The qualification issue
227. In relation to the Public Protector’s findings in the notice regarding Mr Pillay’s qualifications to be appointed as the Deputy Commissioner of SARS, the issue, as defined by the Public Protector was "Whether Mr Pillay was appointed to these positions whilst not in possession of the necessary qualifications required". The Public 79
Protector did not, however, state in the notice what the "necessary qualifications" for "these positions" in fact are.
228. Whilst recognising that the appointment of a Commissioner is regulated by the South African Revenue Services Act (which prescribes no particular qualifications for the appointment) the Public Protector refers to section 195 of the Constitution and in particular that the Constitution requires that "a high standard of professional ethics must be promoted and maintained" in public administration. It is not clear why reference was made to section 195 of the Constitution, but it seems as if the Public Protector equate "a high standard of professional ethics" to the holding of a degree, as her analysis appears to be founded solely on the consideration that Mr Pillay does not hold a degree. This is also apparent from the conclusion the Public Protector reached in paragraph 14.5.30 of the notice where she stated that "It is however apparent that SARS did not take the qualifications of Mr Pillay into consideration in the appointment of Mr Pillay as Deputy SARS Commissioner".
229. Firstly, there is no requirement that only the holder of a degree can be appointed as a Deputy Commissioner of SARS or hold an acting appointment as the Commissioner. Secondly, there is no rational basis for this conclusion as Mr Pillay’s qualifications for appointment as Deputy Commissioner were clearly taken into account and it was found that he was suitably qualified for the appointment. What the Public Protector presumably meant by her statement is that the fact that Mr Pillay does not possess a degree was not taken into consideration. But inasmuch as the possession of a degree is not a precondition for the appointment as Deputy Commissioner, the Public Protector’s reasoning is fallacious.
230. The Public Protector then proceeded to disparage the "Goodness of Fit" process that SARS carried out. Her basis for doing so is not rational. She states that "The argument by Mr Gordhan that the decision to appoint Mr Pillay to the position of Deputy SARS Commissioner was solely based on Mr Pillay’s previous experience and acquired skill is vague considering the level of the position". By this single irrational sentence, the skills, equivalent experience and leadership experience that Mr Pillay has accumulated over a lifetime, including the leadership role he held during the armed 80 struggle for the liberation of South Africa, have been dismissed and negated by the Public Protector.
231. But the Public Protector, in the Report, proceeded to even deny that Mr Pillay had a school qualification. In paragraph 5.6.4 of the Report the Public Protector states that "SARS in their response dated 05 February 2019 did not dispute that Mr Pillay did not have a degree and that he did not possess a Matric certificate." In paragraph 5.6.26 it is stated that "SARS and Mr Gordhan conceded that Mr Pillay did not possess a Degree qualification nor a Matric certificate".
232. There are three difficulties with these statements. Firstly, it is doubtful that SARS would have stated that Mr Pillay did not matriculate, as that would have been a false statement, as Mr Pillay matriculated in 1970 having completed his secondary school studies at Merebank High School. Secondly, nowhere in Minister Gordhan’s affidavit is it stated that Mr Pillay does not possess a matric certificate. What Minister Gordhan recorded was that "Mr Pillay, like many other South African’s who dedicated their lives to the struggle against apartheid, does not have any tertiary qualification". Thirdly, the statements are contradictory to the evidence the Public Protector had in her possession at the time of the release of the Report. Mr Pillay was in fact questioned about his qualifications by the Public Protector during an interview with him, under oath, on 25 March 2019, when she subpoenaed him regarding an investigation into the circumstances of his retirement from SARS.
233. In the course of this interview, the Public Protector also specifically asked Mr Pillay what his educational qualifications were and he stated that he had passed matric in 1970. She proceeded to specifically ask him to confirm that when he joined SARS in 1990 his highest qualification was a matric certificate. Mr Pillay confirmed that this was so. Accordingly, even before the investigation and the Report presently under review was made public, the Public Protector had ascertained directly from Mr Pillay, under oath, that he had a matric certificate. For no apparent reason, the Public Protector disregarded his evidence. In fact, she doubled down on this issue by finding that Mr Pillay possessed neither a tertiary qualification nor a matric certificate. In her answering affidavit she blames, inter alia, Mr Pillay for her coming to this wholly wrong finding and at paragraph 334 of her answering affidavit she states the following: 81
“It is denied that the Public Protector made a malicious slur against Mr Pillay. The issue of the matric certificate could have simply been resolved by Mr Pillay providing that information to the Public Protector when he was asked to give information about his qualifications. He failed to do so, as SARS failed to answer questions on Mr Pillay’s qualifications. In any event there is nothing in the report of the Public Protector to support the contention that she concluded that Mr Pillay had no matric. What the Public Protector said was that it was not denied by Gordhan or SARS that Mr Pillay did not possess a tertiary education including matric.”
234. Counsel for the Public Protector in addition submitted during argument that Mr Pillay: “In his long and verbose affidavit dated 14 April 2019, Mr Pillay does not disclose what his qualifications are except that he has some experience which amongst others come from the fact that he was in the struggle for the liberation of South Africa”.
235. The contention in the answering affidavit and submissions made on behalf of the Public Protector that the Public Protector made no finding that Mr Pillay “had no matric” and that Mr Pillay did not provide the information about his qualifications when he was asked to do so, is disingenuous. Firstly, the “conclusion” that Mr Pillay had no degree and no matric was central to the Public Protector’s finding that Mr Pillay was not qualified to be appointed as the Deputy Commissioner of SARS. Secondly, it is an indisputable fact that Mr Pillay made a full and accurate disclosure of the extent of his academic qualifications as at the time when he first joined SARS when he testified under oath to the Public Protector on 24 March 2019. Thirdly, in the subpoena which was delivered to Mr Pillay by the Public Protector on 10 April 2019, Mr Pillay was called upon to respond to 12 complaints. Notably Mr Pillay was not required in the subpoena to deal with or to provide any information whatsoever on his qualifications.
236. Accordingly, at the time of the Report, the Public Protector well knew that Mr Pillay has a matric certificate. Her conclusion in the Report that Mr Pillay does not hold even that basic qualification, notwithstanding the fact that on 25 March 2019 she accepted that this was a matter of public record and was within her knowledge, is 82 astounding. In doing this she has manifested clear bias against Mr Pillay and material irrationality in arriving at her findings. In her answering affidavit, the Public Protector has put up no evidence supporting her findings in this regard. We submit that this further demonstrates that the Public Protector closed her mind and adopted a process of irrational reasoning.
THE MAGASHULA APPLICATION
237. Mr Magashula is the ninth respondent and filed a notice to support the application and to abide the decision of the court.
238. Mr Magashula joined SARS in 2006 when he was appointed as Head of Corporate Services and was inter alia responsible for Human Resources and financial aspects of the corporate management of SARS. During 2009 he became the Acting Commissioner of SARS and was later that year appointed as Commissioner and remained in that position until 2013 when he left the services of SARS to put up a private business venture in which he is still involved.
239. The Public Protector served a subpoena on Mr Magashula on 9 April 2019.The only complaint in the subpoena relevant to Mr Magashula and which led to an adverse finding against him was contained in paragraph 7.1.3 of the subpoena. It reads as follows:
"7.1.3 During the tenure of the then Commissioner of SARS, Minister Pravin Gordhan, MP (Minister Gordhan), SARS established an Intelligence Unit in violation of the South African Intelligence Prescript. The establishment and existence of the Intelligence Unit was confirmed by a SARS investigation report compiled by Adv Sikhakhane.”
240. On receipt of the subpoena Mr Magashula responded under oath as follows:
"This complaint pre-dates my appointment as Commissioner of SARS and accordingly falls outside the scope of my knowledge. I am unaware of the existence of any so-called 'Rogue Unit' during my tenure as Commissioner of 83
SARS. The Sikhakhane report referred to post-dates my employment at SARS and was compiled without my input.”
241. Consequently, the notice was issued by the Public Protector, in which there is no indication that Mr Magashula was involved in the establishment or operations of a so-called “rogue unit”. However, the Public Protector found that he approved the establishment of what was then known as the Customs and Border Control Unit (the CBCU) in his capacity as Chief Officer: Corporate Services. Subsequent to this finding, Mr Magashula made a further affidavit dated 20 June 2019 in which he gave a full and comprehensive explanation for his answer. More in particular, he indicated that the CBCU was intended to do investigations to combat elicit trading as is explained in the document that he approved of. He indicated that his perception of the CBCU and subsequent intelligence units were that they were strictly intended for investigations regarding tax invasion and elicit trade over the borders of South Africa, and was never an unlawful or "Rogue Intelligence Unit". He stated that he did not have the slightest intention of misleading the Public Protector or to commit perjury as was suggested in the Interim Report. He also informed the Public Protector that the reference made to a document entitled "Rules of Play" dated 14 May 2008, allegedly under the heading of "Affidavit of Mister George (Oupa) Magashula", did not emanate from him, was not attached to his affidavit and the reference to it in the Report was the first time that he ever saw such a document or a quote from such a report.
242. In the Report, the Public Protector did not consider Mr Magashula’s explanation at all and did not even deal with the so-called "memo" under the heading "Rules of Play" to which Mr Magashula stated he was not the author thereof. The Public Protector however still maintained that Mr Magashula committed perjury and ordered under the remedial action, that the SAPS and the NDPP investigate his “perjury” and act thereupon.
243. An allegation of perjury is of a very serious nature. It infringes upon Mr Magashula's constitutional rights and subjects him to criminal investigations by the highest authorities. No foundation for such a finding was laid in the Report and was not warranted by either the facts or the law. There is no indication in the Report or otherwise that Mr Magashula took part in any mal-administration or illegal activities 84 within SARS during his tenure of office with that institution. Thus, there is no factual foundation for the Public Protector to even refer this issue to the SAPS and the NDPP for remedial action. Her finding in this regard is illogical, unfounded and irrational.
THE REMEDIAL ACTION
244. The remedial action ordered by the Public Protector in respect of Mr Gordhan, Mr Pillay and Mr Magashula is dealt with in this section.
245. The Public Protector has a duty and is obliged to grant an opportunity to a person adversely affected by proposed remedial action to make representations in terms of section 7(9)(a) of the Public Protector Act which reads as follows:
“If it appears to the Public Protector during the course of an investigation that any person is being implicated in the matter being investigated and that such implication may be to the detriment of that person or that an adverse finding pertaining to that person may result, the Public Protector shall afford such person an opportunity to respond in connection therewith, in any manner that may be expedient under the circumstances.”
246. This duty is thus firstly triggered by the Public Protector Act when an adverse finding is made against a person. In such circumstances the Public Protector is then obliged to give that person an opportunity to respond “in connection therewith”.
247. Secondly, the Public Protector’s duty further rises under the common law principle of audi alteram partem which was described in Administrator, Transvaal v Traub47 as follows:
“The maxim expresses a principle of natural justice which is part of our law. The classic formulations of the principle state that, when a statute empowers a public official or body to give a decision prejudicially affecting an individual in his liberty or property or existing rights, the latter has a right to be heard
47 1989 (4) SA 731 (AD) ad 748. 85
before the decision is taken (or in some instances thereafter - see Chikane's case supra at 379G), unless the statute expressly or by implication indicates the contrary.”
248. Lastly, the Rule of Law also requires procedural rationality in the exercise of all public power. This includes an opportunity to be heard when it is rationally required. In President of the Republic of South Africa and Another v Public Protector and Others,48 the full court held that the right to just administrative action placed an obligation on the Public Protector to allow persons affected by remedial action the opportunity to make representations.
249. Given the far-reaching consequences the remedial action has for Minister Gordhan, Mr Pillay, Mr Magashula, and any of the other parties implicated in the Report, it was imperative upon the Public Protector to have granted them a reasonable opportunity to make any representations in respect of the proposed remedial action. Minister Gordhan and Mr Pillay had in fact requested such an opportunity. Mr Pillay’s second affidavit was delivered to the Public Protector under cover of a letter dated 19 June 2019 in which his attorneys expressly and specifically requested on his behalf the opportunity to make representations to the Public Protector on any remedial action that she may have had in mind which might impact upon Mr Pillay. That request was simply ignored. This is a serious oversight. Given the importance of the office of the Public Protector it is difficult to envision that the Public Protector was oblivious of her constitutional duties in ensuring that she exercises her duties without fear, favour or prejudice. She had an obligation to extend the audi alteram partem principles to the implicated parties before imposing the remedial action. Her failure to do so not only resulted in a flagrant disregard of her constitutional duties and the obligations imposed upon her in terms of the Public Protector Act and the common law, but also tarnished the reputation of the office of the Public Protector.
250. Given her failure to comply with her obligations, and her failure to engage with Minister Gordhan, Mr Pillay and Mr Magashula, and for that matter any of the parties directly affected by her intended remedial action, before she published the Report, is
48 2020 JDR 0406 (GP) ad paras [154] to [162] 86 conduct which falls far short of the high standards demanded of her office. There has been a failure on the part of the Public Protector to afford the parties implicated in the remedial action their basic right to a fair hearing.
251. The remedial action furthermore imposes incompetent, inappropriate and improper remedial action on the Minister of State Security, the NDPP and the Commissioner. This is so for the following reasons: The Public Protector, in demanding as she did that the NDPP expedite the then pending criminal trial against Mr Pillay and other former SARS officials, intruded improperly into the area of specific competence and responsibility of the NPA.49 The Constitution enjoins the NPA to act without fear, favour or prejudice and her demand on the NDPP undermines the independence of the NPA. The Public Protector effectively pronounced upon Mr Pillay’s guilt. She made extremely serious findings against him without regard to any evidence, without revealing who her informants were and without affording Mr Pillay the benefit of a hearing. Similarly, the demand made on the Commissioner to investigate, within 60 days, what the Public Protector has erroneously labelled as "criminal conduct of Messrs Gordhan, Pillay and officials involved in the SARS intelligence unit" amounts to an unwarranted intrusion into the area of competence of the police service. The initial complaint lodged by Mr Moyane, in May 2015, already requested the police to investigate what the Public Protector now refers to as "the criminal conduct of Messrs Gordhan, Pillay and officials involved in the SARS intelligence unit". That investigation was confirmed to have been concluded by both the SAPS and NPA on 2 September 2016. The remedial action demanded by the Public Protector therefore serves no purpose in these circumstances.
252. But, the demand made on the Minister of State Security to implement "in totality the OIGI report dated 31 October 2014" is the most astounding of all the remedial action contemplated by the Public Protector. Firstly, the possession or use of a classified report would clearly constitute criminal conduct on the part of Advocate Mkhwebane who, as a former State Security Agency operative, remains bound by national security and intelligence legislation. As stated above, a redacted version of the OIGI report was declassified but has subsequently been reviewed by the court and
49 See President of the Republic of South Africa supra ad paras [154] to [162] and paras [176] to [189]. 87 set aside. The remedial action demanded by the Public Protector is not only irrational but is also unreasonable and in fact unlawful. Secondly, the remedial action against the Minister of State Security as provided for in paragraph 8.3.2 of the Report to the effect that all intelligence equipment utilised by unit be returned, audited and placed into the custody of the SSA is incapable of being implemented because the remedial action arises from the impugned OIGI report which has since been reviewed and set aside. In any event, the alleged intelligence equipment, on the supposition that same exists, cannot be returned to SSA, because SSA never acquired ownership thereof. The executive authority responsible for SARS is the Minister of Finance and not the Minister of State Security. Therefore, it is the Minister of Finance and/or the Commissioner of SARS who has the powers to direct that an audit of assets be conducted and give instructions on the disposal and/or handling of the SARS assets. Thirdly, the remedial action in the OIGI report is inconsistent with the remedial action provided for in paragraph 8.5.1 of the Report. The OIGI report makes provision that if an investigation against Minister Gordhan and others is to be conducted, then the aforementioned equipment should be confiscated and impounded in the SAP 1350 pending the outcome of the investigation and court processes.
253. The Public Protector's remedial action therefore falls short of the appropriate standard in that it is ineffective and incapable of being implemented. On this basis, the Public Protector's remedial action ought to be reviewed and set aside.
254. We deal with the concerns expressed by the President about the obligation to take disciplinary action against Minister Gordhan herein below.
THE PRESIDENT OF THE REPUBLIC OF SOUTH AFRICA
255. Reference has already been made to the instruction issued by the Public Protector in the Report to the President to take note of the findings in the Report in as far as they relate to Minister Gordhan and to take appropriate disciplinary action against him for his violation of the Constitution and the Executive Ethics Code within 30 days of issuing of the Report. The President is further ordered to, within 30 days
50 The Exhibit Room at SAP stations. 88 from the date of the issuing of the Report, and for the approval of the Public Protector to submit an implementation plan to her indicating how the remedial action referred to in the Report, will be implemented.
256. In his supporting affidavit filed in his capacity as the Head of State and the Head of the National Executive, the President accepts that, as the President, he is bound by any remedial action of the Public Protector that survives the review proceedings and states that he will therefore await the outcome of the present review proceedings before deciding what disciplinary action, if any, be taken against Minister Gordhan.
257. The President does, however, take issue with one aspect of the Report and that is the obligation imposed on him to, within 30 days and “for approval of the Public Protector” submit an implementation plan to her indicating how the remedial action will be implemented.
258. With reference to principle of the separation of powers, the President refers to the trite principle that the judiciary is barred from intruding into executive or legislative matters unless the intrusion constitutionally mandated. This means that the Constitution requires courts to ensure that all branches of government act within the law. However, in keeping with the principles of the separation of power, courts must refrain from entering the exclusive terrain of the executive and the legislative branches of government unless the intrusion is mandated by the Constitution itself.51 This was confirmed by the Constitutional Court in National Treasury and Others v Opposition to Urban Tolling Alliance and others52 as follows:
“[44] … Beyond the common law, separation of powers is an even more vital tenet of our constitutional democracy. This means that the Constitution requires courts to ensure that all branches of government act within the law. However, courts in turn must refrain from entering the exclusive terrain of the
51 Electoral Commission v Mhlope 2016 (6) SA 1 (CC) ad para [113]. 52 2012 (6) SA 223 ad para [44]. 89
executive and the legislative branches of government unless the intrusion is mandated by the Constitution itself.”
259. If the courts, which are the ultimate guardians of the Constitution, are enjoined to show deference to the exclusive domain of the executive government, so too should the powers of the Public Protector be interpreted to restrain her from venturing into the exclusive domain of the executive branch of government. The Office of the Public Protector is therefore similarly enjoined to show the required deference to the exclusive domain of the executive branch. Consequently, the Public Protector’s powers cannot be interpreted to allow her to direct the President to implement remedial action that the separation of powers reserves under the Constitution for the President himself.
260. Even though the remedial action against Minister Gordhan did not survive, the remedial action imposed by the Public Protector must be read in such a manner that it leaves it to the President to determine what disciplinary action, if any, is appropriate to take upon conclusion of the review proceedings. To this end it would then be necessary to strike out the words “and for the approval of the Public Protector” from paragraph 9.1 of the Report.
INTERACTION WITH THE PUBLIC PROTECTOR
261. We have already referred to the interaction between Minister Gordhan and Mr Pillay and the Public Protector elsewhere in the judgment.
262. The manner in which the Public Protector interacted with Minister Gordhan and Mr Pillay during the investigation, is, in our view, indicative of her failure to uphold the decorum demanded by the important constitutional institution she serves. Not only did she fail in her duty to afford Minister Gordhan and Mr Pillay an opportunity to make representations regarding any proposed remedial action, her conduct in specifically circumventing Minister Gordhan’s legal representatives is improper and contrary to trite legal principles. 90
263. The Public Protector’s conduct in informing the media of her intention to serve Minister Gordhan with a section 7(9) notice prior to him or his legal representatives being officially served with such notice is equally improper and highly prejudicial to Minister Gordhan, and is not in keeping with the high standards required of the office of the Public Protector. As remarked by the court in Absa Bank Ltd v Public Protector53:
“[120] The Public Protector did not conduct herself in a manner which it 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 office requires her to be objective, honest and deal with matters according to the law and that a higher standard is expected of her. She felt to explain her actions adequately.”
264. Also disconcerting is the fact that the Public Protector’s released the Report to the media, before the Report was made available to Minister Gordhan. Releasing the Report which contained various adverse findings against Minister Gordhan and which had enormous personal and political impact, to the media before releasing it to the person (Minister Gordhan) affected by the Report, is not in keeping with the high standards required by her office.
THE STRIKING OUT APPLICATION
265. The Public Protector seeks the striking out of certain portions of Minister’s Gordhan's founding affidavit. She contends that the allegations made in paragraphs 228 to 233 of his founding affidavit are scandalous, vexatious, threatening and largely irrelevant and that these allegations do not belong in court papers by a “self-respecting member of the National Executive.” She says that Minister Gordhan describes her as corrupt, illiterate, rogue, incompetent, irrational, and unreasonable and unfit to occupy the position of Public Protector. The relevant paragraphs in the founding affidavit are under a heading “Improper Motive” and read as follows:
53 [2018] JDR 0190 (GP). 91
“228 Finally, whilst I have great respect for the office of the Public Protector, I doubt the competence, integrity, legal literacy and constitutional grasp of its incumbent of her powers, duties and functions.
229 Whilst it is unfortunate that these sentiments must be expressed, I maintain that the suspension and interdict will be in the overall interests of justice because I strongly doubt the bona fides of the Public Protector in investigating and issuing this Report. The Public Protector has confirmed that I am the subject of three ongoing investigations by her office, I am not aware of anyone who has been singled out and pursued by her Office in this way.
230 It is a matter of public record that the Office of the Public Protector has severe backlogs and faces considerable financial constraints. Its latest Annual Report confirms that it had a caseload of 18 388 in the 2017/I 8 financial year, of which 4390 complaints were rolled ever into the next year. The Auditor General concluded that, as at 31 March 2018, the institution’s current liabilities exceeded its total assets by R25 052 084. This is attached and marked as 'PG32."
231 Instead of dealing with the pressing complaints by citizens, she is using the office for ulterior motives or the political motives of others. My belief is that the resources of this esteemed office are best employed doing what it was constitutionally envisioned to do i.e, protect the public from ongoing maladministration and not abused for improper and blatantly political motives.
232 The competence and credibility of the Public Protector and her understanding of the Constitution have already been negatively pronounced on by Courts. Above, I discuss in detail the adverse costs order that has been made in respect of her, the scathing critique by the Courts made against her and the applicants who have successfully interdicted the release of her reports, because she denied them procedural fairness, or have had those reports set aside on the basis that her findings were unconstitutional and unlawful.” 92
233 On the basis of the above considerations, I am entitled to have these issues adjudicated upon by a court of law in the pending judicial review before being compelled to endure the prejudicial and punitive processes required by the remedial action. “
266. In Helen Suzman Foundation v President of the Republic of South Africa and Others54 the Constitutional Court confirmed that two requirements must be met before a striking-out application can succeed: (i) the matter sought to be struck out must be scandalous, vexatious or irrelevant; and (ii) the court must be satisfied that if such a matter is not struck out the party seeking such relief would be prejudiced. The court held that scandalous allegations are those which may or may not be relevant but which are so worded as to be abusive or defamatory; a “vexatious” matter refers to allegations which may or may not be relevant but are so worded as to convey an intention to harass or annoy; and “irrelevant allegations” are those allegations that do not apply to the matter at hand and do not contribute one way or the other to a decision of that matter. 55 The test for determining relevance is whether the evidence objected to is relevant to an issue in the litigation.
267. The allegations in paragraphs 228 and 232, namely that Advocate Mkhwebane competence, integrity, legal literacy and constitutional grasp of her powers, duties and functions are doubtful, as well as setting out what other courts had said about her understanding of the Constitution are irrelevant, scandalous and vexatious. The Constitutional Court in Helen Suzman supra warned that courts should not lightly allow vitriolic statements to form part of the record or as evidence and should never be seen to be condoning this kind of inappropriate behaviour, embarked upon under the guise of robustness.56
268. Except for paragraphs 228 and 232, which we agree are irrelevant and scandalous and prejudicial, the allegations made in the remainder of the paragraphs are directed at one of the grounds of review, namely that the Public Protector acted with an improper motive and was biased.
54 2015 (2) SA 1 (CC) ad para [27]. 55 Ad para [28] 56 Helen Suzman supra ad para [30] 93
269. Accordingly, paragraphs 228 and 232 of Minister Gordhan’s founding affidavit are struck out.
THE COUNTER- APPLICATION
270. The Public Protector seeks an order in the following terms:
1. “Declaring that Mr. Gordhan has a constitutional duty under section 181 (3) of the Constitution of the Republic of South Africa, 1996 to assist and protect the independence, impartiality, dignity and effectiveness of the Public Protector in the performance of her obligations as required in the Constitution, read together with section 7 of the Public Protector Act 23 of 1994;
2. Declaring that Mr Gordhan failed to comply with his constitutional duty to assist and protect the Public Protector as required in section 181(3) of the Constitution of the Republic of South Africa, 1996, during her investigation of the complaint against him;
3. Directing Mr. Gordhan to pay the costs of this counter-application on the scale of attorney and own client, including costs occasioned by the employment of two Counsel.”
271. The Public Protector alleges that Minister Gordhan violated his constitutional duties by “hurling insults and litigation threats” and submits that the language used by Minister Gordhan in his founding affidavit was contemptuous and unjustified. She contends that he therefore made himself guilty of contempt. She further alleges that Mr Gordhan adopted an “obstructionist strategy” during the investigation, and in so doing breached his duties in terms of section 181(1) of the Constitution and section 6(9) of the Public Protector Act by refusing to allow Public Protector the requisite information to determine whether “special circumstances” existed.
272. A declaratory order is an order by which a dispute over the existence of some legal right or obligation is resolved. The right can be existing, prospective or contingent 94 and no specific consequential relief need be claimed.57 It is trite that a court has a discretion whether to grant or refuse an application for a declaratory order. A court will not grant a declaratory order where the legal position has already been clearly laid down by statute.58
273. Minister Gordhan does not dispute that he has a constitutional duty under section 181 (3) of the Constitution to assist and protect the independence, impartiality, dignity and effectiveness of the Public Protector in the performance of her obligations. The granting of a declarator as sought by the Public Protector in paragraph 1 of the Notice of Motion would therefore serve no purpose.
274. In paragraph 2 of the Notice of Motion the Public Protector seeks an order that Minister Gordhan has failed to comply with his constitutional duty to assist and protect the Public Protector as required in section 181(3) of the Constitution, during her investigation of the complaint against him.
275. Firstly, there is no doubt that Minister Gordhan complied with his constitutional duties. He has complied with the investigation by the Public Protector by submitting two affidavits when directed to, supported by documents. Secondly, Minister Gordhan is entitled to disagree with the Report and exercise his rights to challenge it in these proceedings. By challenging the report he is not in contravention of any constitutional obligation. Based on the information available, there is no evidence to support the granting of the relief claimed by the Public Protector.
276. As far as the contempt allegations are concerned: Section 9 of the Public Protector Act provides as follows:
“9 Contempt of Public Protector (1) No person shall- (a) insult the Public Protector or the Deputy Public Protector;
57 See Herbstein & Van Winsen. The Civil Practice of the High Courts and the Supreme Court of Appeal of South Africa Fifth Edition at page 1428. See also Naptosa v Minister of Education WC 2001 (2) SA 112 (C) at 125. 58 Ex parte Noriskin 1962 (1) SA 856 (D). 95
(b) in connection with an investigation do anything which, if the said investigation had been proceedings in a court of law, would have constituted contempt of court. (2) Nothing contained in this Act shall prohibit the discussion in Parliament of a matter being investigated or which has been investigated in terms of this Act by the Public Protector.”
277. Rule 26 of the “Rules relating to Investigations by the Public Protector and Matters Incidental”59 provides as follows:
“(1) If the Public Protector is satisfied that a person has acted in a manner that constitutes contempt of the Public Protector as envisaged in terms of section 9(1) of the Act, he or she may report the matter to the South African Police Service or apply to the High Court, by notice of motion supported by an affidavit in terms of the Uniform Rules of Court- (a) for an order that the person(s) be declared in contempt of Court/ the Public Protector; and (b) that the Court deals with him or her in terms of section 9(1)(b) of the Act in any manner in which it could have dealt with him or her if he or she had committed contempt in relation to the High Court.
(2) The condition is that the person- (a) has insulted the Public Protector or the Deputy Public Protector; (b) has done an act in connection with an investigation which, if the said investigation had been proceedings in a court of law, would have constituted contempt of court.
(3) If the Public Protector lodges an application under subrule (1), the proceedings shall commence by- (a) a notice in terms of the Uniform Rules of Court served upon the person(s) concerned;
59 GN 945 in GG 41903 dated 14 September 2018. 96
(b) containing particulars of conduct alleged to constitute contempt of the Public Protector; (c) calling on the person to appear before the court; and (d) to show just cause why he or she should not be punished summarily for the alleged action as contempt of the Public Protector.”
278. As alluded to in the striking out application above, the majority of the allegations complained about in the founding affidavit of Minister Gordhan, was directed at one of the grounds of review, namely that the Public Protector acted with an improper motive and that she was biased. But, although it was irrelevant for the purposes of this application, Minister Gordhan also thought it necessary to express his personal views about Adv Mkwebane’s competence, integrity, legal literacy and constitutional grasp of the Public Protector’s powers, duties and functions. As stated in the striking out application, these statements are irrelevant and scandalous and are struck from the founding affidavit. There are however no contempt proceedings that have been launched against Minister Gordhan as contemplated in Rule 26, and no relief has been sought against Minister Gordhan in the Notice of Motion to find him guilty of contempt. We are therefore not at liberty to deal with the allegations of contempt.
279. The counter- application is therefore dismissed.
ALLEGATION OF BIAS AND ULTERIOR PURPOSE
280. Both Minister Gordhan and Mr Pillay accuse the Public Protector of bias. They submit that the Report and the manner in which the extensive evidence (supported by documentary evidence) under oath to the contrary was considered, show that the Public Protector was determined to make adverse findings against them, irrespective of the evidence to the contrary before her. We have already referred to Mr Pillay’s submissions in the Pillay application that the Public Protector’s persistent reliance on fundamentally flawed and discredited reports; her failure to deal with the evidence produced by Mr Pillay and Mr Van Loggerenberg; as well as the scorn and dismissiveness with which she rejected the evidence of Mr Pillay, shows a clear pattern of bias. This perception is compounded by the fact that the Public Protector 97 made no attempt to afford both Minister Gordhan and Mr Pillay an opportunity to make submissions before adverse findings were made against them.
281. That the Office of the Public Protector must act independently and impartially is trite, and was emphasised by the Supreme Court of Appeal in Public Protector v Mail & Guardian Ltd and Others:60
“[8] The office of the Public Protector is declared by the Constitution to be one that is independent and impartial, and the Constitution demands that its powers must be exercised 'without fear, favour or prejudice'. Those words are not mere material for rhetoric, as words of that kind are often used. The words mean what they say. Fulfilling their demands will call for courage at times, but it will always call for vigilance and conviction of purpose.”
282. It is accepted that an allegation of bias against the office of the Public Protector is unquestionably serious and, if proven to have a ring of truth to it, would undoubtedly have far-reaching constitutional consequences for the constitutional integrity, public trust as well as for the proper constitutional functioning of the Office of the Public Protector and its present incumbent. A consideration of an allegation of bias should therefore be approached with circumspection.
283. Although Minister Gordhan states that he is mindful of the consequences these allegations of bias may have, he nonetheless persists with them. He further acknowledges that he does not make these allegations lightly and acknowledges that he must respect the Office of the Public Protector. But, says he, his position as a member of Cabinet nonetheless enjoins him to make this court aware of bias on the part of the current incumbent of that office and of her abuse of its powers for political objectives in the Report now under review.
284. The Public Protector deals with Minister Gordhan’s allegation of bias and ulterior purpose in her answering affidavit. She correctly points out that such allegations have far-reaching constitutional ramifications for the constitutional integrity,
60 Supra. 98 public trust and the proper constitutional functioning of the Office of the Public Protector. She, however, dismisses these allegations made by Minister Gordhan as unsubstantiated and labels it as an unconstitutional attempt by him to undermine the office of the Public Protector. She further accuses Minister Gordhan as having mounted a bad faith attack on her and the Office of the Public Protector which undermines the independence, impartiality, dignity and effectiveness of the Public Protector. She also states that these “insults” have been made to harass and demean the constitutional significance of the work of the Public Protector. Although she submitted that the “attacks and insults are not legitimate criticism which a court would tolerate if they were directed at it [the Court]”, she herself, as already pointed out, had no hesitation to mount such an attack against Potterill J of this division.
285. Whilst the concerns expressed by the Public Protector with regard to the effect that criticism of her office and of her as the incumbent may have, undoubtedly has merit, it is equally important that the public and those being investigated by the Office of the Public Protector have faith in the Public Protector as “the constitutionally appointed custodian of legality and due process in the public administration”.61 In a recent judgment the Supreme Court of Appeal in Government Employees Medical Scheme and Others v The Public Protector of the Republic of South Africa and Others,62 the court not only confirmed the important role of the Office of the Public Protector, but also confirmed the equally important principle of accountability which requires of the Public Protector to act in accordance with the law and the Constitution:
“[1] To be sure, the office of the Public Protector, which has been described as ‘an indispensable constitutional guarantee’, is afforded sweeping powers of investigation. But, those powers are not unconstrained. Prof Martin Krygier points out, the rule of law ‘requires that there be no privileged groups or institutions exempt from the scope of the law’. Indeed, as Prof Woolman observes, the rule of law doctrine, which is ‘juridical, political and foundational’, and its twin, ‘the principle of accountability, cannot function solely as
61 South African Reserve Bank v Public Protector and others supra ad para [59]. 62 (1000/2019 and 31514/2018 and 33401/2018) [2020] ZASCA 111 (29 September 2020). 99
constitutional values. They must form part of the daily lived experience of most citizens and public officials’.
[2] The rule of law and the principle of accountability require the Public Protector to act in accordance with the law and the Constitution…”
286. Where the conduct of the Public Protector falls short of the high standards required of her office, a court reviewing her actions should not shy away from holding the Office of the Public Protector and its incumbent to the constitutional values underlying this institution and express criticism where warranted. In doing so, a court should, however, always be mindful of the constitutional ramifications thereof. As stated by the Constitutional Court in Economic Freedom Fighters v Gordhan and Others; Public Protector and Another v Gordhan and Others:63
“[99] Similarly, the Public Protector is a constitutional servant, like the courts, and her Office should be afforded respect. It is an office of fundamental constitutional significance and her powers are not only desirable but also necessary for the purpose, inter alia, of holding public office bearers accountable. Her role in our constitutional democracy cannot be gainsaid. While she may be criticised, these comments should not be perceived as undermining her Office and its constitutional powers. To mount a bad faith attack on her Office would surely work to undermine the constitutional project of the Republic.”
287. In Government Employees Medical Scheme and Others v The Public Protector of the Republic of South Africa and Others64 the court did not shy away from criticising the Public Protector where it was found that she had failed in the exercise of her powers:
“[50] Finally, as I have already pointed out, not only did the Public Protector misconceive her powers, but in many respects her approach is regrettable.
63 Supra. 64 Supra. 100
The Constitutional Court has emphasised that the Public Protector is bound, in terms of s 195(1) of the Constitution, by the basic values and principles governing public administration, including, amongst others: (a) a high standard of professional ethics; (b) the constitutional imperative to use resources efficiently, economically and effectively; (c) accountability; and, (d) the constitutional imperative to foster transparency by providing the public with timely, accessible and accurate information. In that, it seems to me, the Public Protector has failed.”
288. Recently, in the matter of Public Protector v South African Reserve Bank65 the Constitutional Court had the occasion to consider the High Court’s finding of bias against the Public Protector. The Constitutional Court found that the context in which a public official conducts themselves in a procedurally unfair manner, may indicate bias on the part of that official:
“[169] In the second review, both the Reserve Bank and Absa successfully reviewed the final report on the independent grounds that the Public Protector was biased against them and that she had failed to conduct a fair investigation. In finding that the Public Protector was reasonably suspected of bias, the High Court had regard to various considerations, including the circumstances in which she had failed to afford either the Reserve Bank or Absa an opportunity to comment on the new adverse findings that were made against them in the final report. The High Court found that the Public Protector had met with the Presidency and the State Security Agency to provide them with an opportunity to consult with her in this regard. The High Court also found that the Public Protector was perspicuously aware of her obligation under s 7(9) of the Public Protector Act to provide the Reserve Bank and Absa with an opportunity to respond to the adverse findings against them. The High Court also considered these circumstances to be relevant to the question whether the procedure adopted by the Public Protector in concluding the final report was fair.
65 2019 (6) SA 253 (CC). 101
[170] The fact that the Public Protector did not afford the Reserve Bank or Absa an opportunity to respond to the new adverse findings against them does not in itself justify an inference of bias. This is because procedural unfairness and bias are two independent grounds of review under PAJA. It does not, however, follow that the High Court wrongly conflated these principles when it found that the Public Protector was reasonably suspected of bias in light of factors which are also relevant to procedural unfairness. The High Court was cognisant that it would be wrong 'to assume that a fundamental breach of administrative justice necessarily indicates bias on the part of the administrator'. The context in which a public official conducts themselves in a procedurally unfair manner may, however, indicate bias on the part of that official. That the High Court used this as evidence of bias does not mean that it conflated the two grounds of review. In our view, the High Court did not conflate the principles of bias and audi alteram partem.”
289. Returning to the present matter. The Public Protector did not grant Minister Gordhan, Mr Pillay and Mr Magashula an opportunity to make representations in respect of the proposed remedial action. It is accepted, as it was in Public Protector v South African Reserve Bank66 that the failure to grant an opportunity to respond to the new adverse findings against them does not in itself justify an inference of bias. It is, however, not our finding that this failure on its own warrants an inference of bias. What we have considered as indicative of bias is the general manner in which the Public Protector conducted herself in conducting the investigation and her interaction with the individuals subject to her investigation that indicates bias on her part. We are alive to the fact that it would be wrong to assume that a fundamental breach of administrative justice necessarily indicates bias on the part of the administrator.67 However, we are also alive to the fact that the context in which a public official conducts themselves in a procedurally unfair manner may indicate bias on the part of that official.68
290. We have already alluded throughout the judgment why we say that the Public Protector has not only failed in the exercise of her duties but displayed bias towards
66 Ibid ad para [170]. 67 Ibid. 68 Ibid. 102
Minister Gordhan and Mr Pillay. We conclude that taking into account the following, a conclusion of bias is warranted:
(i) The investigation and the Report fell outside of the jurisdiction of the Public Protector as it related to events dating back to 2009/2010. No exceptional circumstances have been presented by the Public Protector justifying the investigation after an extraordinary lapse of time. Also, despite the fact that the previous incumbent had already, in 2014, received a complaint about the alleged unlawful establishment of the unit but elected not to investigate the complaint, the Public Protector nonetheless proceeded with the investigation.
(ii) The manner in which the Public Protector interacted with Minister Gordhan during the investigation and in releasing the Report: Not only did the Public Protector elect to not engage with Minister Gordhan’s attorneys on record, the section 7(9) notice was publicly posted on YouTube before giving any notice to him and his attorneys. Similarly, the Report was presented to the media without any prior notice to Minister Gordhan nor his legal representatives.
(iii) The reliance on the discredited KPMG report despite it having been disavowed and the Sikhakhane report despite it having been widely discredited. She also failed to engage with the findings made in the Nugent report.
(iv) The blatant dishonesty of the Public Protector with regard to the OIGI report and her insistence on ordering the Minister of State Security to implement, in totality, a report that she has, according to the Report, never seen.
(v) The Public Protectors pandering of the rogue-unit narrative and her public reference to the unit as the “rogue unit” and as a “monster” and her stated desire to “defeat the monster” display a profound bias towards Minister Gordhan and Minister Pillay. 103
(vi) The Public Protectors complete disregard of the Sunday Times apology and the Kroon apology.
(vii) The Public Protector’s scurrilous allegations that Minister Gordhan deliberately mislead Parliament.
(viii) The Public Protector’s unwarranted and slanderous attack on Potteril, J.
(ix) The Public Protector’s relentless pandering of the untruths of Mr Pillay’s qualification.
CONCLUSION
291. The conclusion by the Public Protector “that the allegation that Minister Gordhan during his tenure as the Commissioner of SARS established an intelligence unit in violation of the South African Intelligence prescripts is substantiated”, is without foundation particularly as this conclusion is based on discredited reports and unsubstantiated facts. This finding is further wrong in law. As set out above, section 3 of the NSI Act does not apply to the unit established by SARS for the reasons set out above. The Public Protector provides no reason as to why she persists in relying on an interpretation of section 3 of the NIA Act that has been considered to be wrong.
292. The finding of the Public Protector that Minister Gordhan mislead Parliament when he was unable to remember that a member of the Gupta family was present at the Ambani meeting, is simply wrong. The Public Protector’s conclusion on the evidence in that the Code can be violated even inadvertently, is based on an error of law.
293. The Public Protector’s bias against Mr Gordhan and Mr Pillay is manifest. Having regard to the manner in which the Public Protector simply dismissed out of hand and completely ignored and irrationally discarded hard facts and clear evidence, it is clear that she approached her investigation with a preconceived notion, 104 determined to make adverse findings against Minister Gordhan and Mr Pillay, thereby promoting the false rogue unit narrative.
294. There is no indication in the Report that the Public Protector had attempted to investigate the truth of the assertions against Mr Pillay. She ignored the bulk of the evidence provided to her and only took into consideration allegations, however discredited and untested, that she believed supports the continuation of the rogue unit narrative and dismissed or ignored everything that proved the lawfulness of the unit in question.
295. The Public Protector has in our view not undertaken, as is required by her office, a fair and credible investigation and an open-minded consideration of the extensive body of evidence that was placed before her in order to confirm the truth.69
296. The Report fails at every point. We are satisfied that the Report is the product of a wholly irrational process, bereft of any sound legal or factual basis. It cannot stand and must be set aside. Had the Public Protector undertaken a fair and credible investigation and considered the extensive body of evidence in an open-minded manner, the report may have been an opportunity to confirm the facts and the truth thereof. Instead, she allowed her important office to be used to try and resuscitate a long-dead fake news propaganda fiction.
COSTS
297. The applicants seek a costs order against the Public Protector and Adv. Busisiwe Mkhwebane personally, jointly and severally, on an attorney client scale, provided that Adv. Mkhwebane’s liability is limited to 15% of those costs. After some deliberation during the hearing of the matter, no costs order was sought against the EFF.
298. It is trite that costs are a matter within the discretion of the court which must be exercised judicially, having regard to all the relevant facts and circumstances of
69 See Public Protector v Mail & Guardian Ltd and Others supra. 105 each case. The factors relevant to the exercise of the court’s discretion are, inter alia, whether or not the costs order could hinder or advance constitutional justice; whether a party could be said to have had only a technical success; whether the litigation is considered vexatious or frivolous; the nature of the litigation; the conduct of the legal representatives; and the conduct of the parties.70
299. In Public Protector v South African Reserve Bank 71 the Constitutional Court recognised that constitutional office-bearers, such as the Public Protector, should not be allowed to abuse their power with impunity,72 and that there should be “no hesitation in visiting a public office-bearer with costs even on a highly punitive or attorney and client scale in an official or personal capacity when circumstances plainly justify this extreme censure. But when that has been done, the reasons for doing so and the gravity of the underlying conduct should never be difficult to make out or understand”.73
300. Personal liability for costs would, for example, be warranted where a public official is “guilty of bad faith or gross negligence in the conduct of litigation”.74 With reference to the decision in the South African Social Security Agency and Another v Minister of Social Development and Others,75 the Constitutional Court76 accepted that the “Constitution endows courts with the responsibility to uphold and enforce the Constitution, and the imposition of personal liability for costs on public officials who act contrary to their constitutional obligations is an important tool to be used for this purpose.”77
301. It is accepted that the award of a personal costs order against a public office- bearer must be considered on a case to case basis. In Black Sash Trust v Minister of Social Development78 the Constitutional Court took into consideration that the office which the Public Protector occupies “demands a greater commitment to ethical
70 Biowatch Trust v Registrar, Genetic Resources 2009 (6) SA 232 (CC) at paras [7] – [9]. 71 Supra. 72 Ibid ad para [48]. 73 Ibid ad para [49] 74 Ibid ad para [148]. 75 2018 (10) BCLR 1291 (CC) (SASSA) ad para [37]. 76 Public Protector v South African Reserve Bank supra. 77 Ibid ad [148]. 78 2018 ZACC 36 (Black Sash III) ad para [15] - [16]. 106 behaviour and requires a high commitment to public service” in ultimately deciding in favour of a personal costs order against the Public Protector.
302. In our view, this matter demonstrates that the Public Protector has failed to conduct her investigations in a manner befitting that office. In so doing the Public Protector acted in total disregard of the values enshrined in Sections 181(1)(a) and 182 of the Constitution which call upon the Public Protector to be impartial and exercise her powers and perform her functions without fear, favour or prejudice. In Public Protector v South African Reserve Bank,79 the court said:
“[153] The purpose of a personal costs order against a public official is to vindicate the Constitution. These orders are not inconsistent with the Constitution; they are required for its protection because public officials who flout their constitutional obligations must be held to account. And when their defiance of their constitutional obligations is egregious, it is they who should pay the costs of the litigation brought against them, and not the taxpayer. This Court has repeatedly affirmed the principle that a public official who acts in a representative capacity may be ordered to pay costs out of their own pockets in certain circumstances…
[158] The imposition of a personal costs order on a public official, like the Public Protector, whose bad faith or grossly negligent conduct falls short of what is required, vindicates the Constitution. The Supreme Court of Appeal in Gauteng Gambling Board opined that public officials who act improperly in 'flagrant disregard of constitutional norms' should be personally liable for legal costs incurred by the state. The Supreme Court of Appeal reasoned that the imposition of personal liability might have a 'sobering effect on truant public office bearers' and would avoid the taxpayer ultimately having to bear those costs.
[159] The fears that the Public Protector has about the impact of a personal costs order on the institution of the Public Protector are unwarranted.
79 Supra. 107
Personal costs orders are not granted against public officials who conduct themselves appropriately. They are granted when public officials fall egregiously short of what is required of them. There can be no fear or danger of a personal costs award where a public official act in accordance with the standard of conduct required of them by the law and the Constitution.”
303. Where a public-office bearer does not hold herself to this high commitment to public service, as we have found this to be in this matter, a personal costs order is warranted. In the present case we hold the considered view that the Public Protector has not met the requisite standards. The fact that the Public Protector displayed dishonesty in respect of the OIGI report is, on its own, deserving of censure by this court in the form of a personal costs order against her.
304. Finally, we are of the view that costs on a punitive scale is warranted in this matter. Although we are mindful of the chilling effect a costs order on this scale may have, we are nonetheless, of the view that such a costs order is warranted in this matter where the conduct of the Public Protector can only be described as egregious. This court must, in our view, show its displeasure. In arriving at our decision, we took due cognisance of what the Constitutional Court pointed out in Public Protector v South African Reserve Bank:80
“[220] It does not follow that a punitive costs order will always be justified in circumstances where a personal costs order is warranted. An order for personal costs against a person acting in a representative capacity is in itself inherently punitive. The imposition of costs on an attorney and client scale is an additional punitive measure. This could, as pointed out in the first judgment, be viewed as 'double punishment'. While the test for awarding a personal costs order or costs on a punitive scale may overlap, an independent, separate enquiry should be carried out by a court in respect of each order. Both personal and punitive costs orders are extraordinary in nature and should not be awarded 'willy-nilly', but rather only in exceptional circumstances.
80 Supra. 108
[222] The question whether a party should bear the full brunt of a costs order on an attorney and own client scale must be answered with reference to what would be just and equitable in the circumstances of a particular case. A court is bound to secure a just and fair outcome.
[226] A punitive costs order is justified where the conduct concerned is 'extraordinary' and worthy of a court's rebuke. In SS, the 'extraordinary' conduct included compromising the best interests of a minor child and this court's integrity by failing to comply with an order of this court. Similarly, in Mtuze, it was the conduct of the applicant which justified a costs award against him on an attorney and own client scale, de bonis propriis. The double punitive award (personal costs on an attorney and client scale) made in this matter by the High Court, while rare and extraordinary, is not unprecedented.”
305. In the result, the following orders are made:
The application to strike out
The application to strike out is granted in respect of paragraphs 228 and 232 of Minister Gordhan’s founding affidavit with costs.
The counter-application
The counter-application by the first and second respondents is dismissed with costs.
Part B of the review application
(i) The Public Protector’s decision in terms of Section 6 (9) of the Public Protector Act 23 of 1994, to entertain the complaints upon which she reported in the Report, is reviewed, declared unlawful and set aside;
(ii) The Report is reviewed, declared unlawful and set aside; 109
(iii) The Public Protector and Advocate Mkhwebane are ordered, jointly and severally, to pay Minister Pravin Jamnadas Gordhan, Mr Visvanathan Pillay and Mr George Ngakane Virgil Magashula’s costs on the scale between attorney and client such costs to include the costs of two Counsel where so employed. It is further ordered that Advocate Mkhwebane shall pay such costs personally with her liability limited to 15% of those costs.
SELBY BAQWA JUDGE OF THE HIGH COURT GAUTENG DIVISION OF THE HIGH COURT, PRETORIA Electronically submitted therefore unsigned
L WINDELL JUDGE OF THE HIGH COURT GAUTENG DIVISION OF THE HIGH COURT, PRETORIA Electronically submitted therefore unsigned
A C BASSON JUDGE OF THE HIGH COURT GAUTENG DIVISION OF THE HIGH COURT, PRETORIA Electronically submitted therefore unsigned
Delivered: This judgement was prepared and authored by the Judge whose name is reflected and is handed down electronically by circulation to the Parties/their legal representatives by email and by uploading it to the electronic file of this matter on CaseLines. The date for hand-down is deemed to be 7 December 2020. 110
Date of hearing: 6 & 7 August 2020 Date of judgment: 7 December 2020
Appearances:
Attorneys for the Applicant: Malatji & Co T Malatji/B Masia Counsel for the Applicant: Adv. W Trengove SC Adv M Le Roux Adv. O. Motlhasedi
Attorneys for the 1st Respondent: Seanego Attorneys T Seanego Counsel for the 1st Respondent: Adv T Masuku SC Adv BH Matlhape
Attorneys for the 3rd Respondent: State Attorney R Sebelemetsa Counsel for the 3rd Respondent: Adv M Chaskalson SC Adv B Lekokotla
Attorneys for the 5th Respondent: State Attorney
R Sebelemetsa
Counsel for the 5th Respondent: Adv KD Moroka SC
Adv HOR Modisa
Adv M Seti-Baza 111
Attorneys for the 8th Respondent: Werksmans Attorneys
B Hotz
Counsel for the 8th Respondent: Adv. R. Hutton SC
Adv. C. Van Castricum
Attorneys for the 9th Respondent: Savage Jooste Inc
Mr Viljoen
Counsel for the 9th Respondent: Adv P De Jager SC
Attorneys for the EFF: Ian Levitt Attorneys
Ms Charalambous
Counsel for the EFF: Adv T Ngcukaitobi SC
Adv P J Daniell
Adv D C Ainslie