Public Protector v Commissioner for the South African Revenue Service and Others

In 2017, following publication of a book alleging that former President Zuma received a salary from Royal Security CC for four months after becoming President in 2009 and failed to pay income tax on it, opposition leader Mmusi Maimane lodged a complaint with the Public Protector. In 2018, during her investigation, the Public Protector issued a subpoena to the Commissioner for SARS to produce former President Zuma's taxpayer information. The Commissioner objected, citing section 69(1) of the Tax Administration Act 28 of 2011, which prohibits disclosure of confidential taxpayer information. The parties jointly obtained senior counsel's opinion (Advocate Maenetje SC), which concluded the Public Protector's subpoena powers do not extend to compelling disclosure of taxpayer information. The Public Protector, dissatisfied, obtained a second opinion (Advocate Sikhakhane SC) which concluded her constitutional powers trump the statutory prohibition. She did not share this opinion with the Commissioner but issued a second subpoena. The Commissioner then approached the High Court for declaratory relief and sought a personal costs order (de bonis propriis) against the Public Protector.

• Does the Public Protector's constitutional power to subpoena under section 182(1) and (2) of the Constitution and section 7(4) of the Public Protector Act 23 of 1994 override the prohibition on disclosure of taxpayer information under section 69(1) of the Tax Administration Act 28 of 2011?
• Was the Public Protector required to bring a direct constitutional challenge to section 69(1) of the Tax Administration Act rather than rely on its invalidity as a foundation for relief?
• Was the High Court justified in ordering the Public Protector to pay 15% of the Commissioner's costs de bonis propriis (in her personal capacity)?
• What are the proper grounds for granting personal costs orders against the Public Protector and other public officials?
• Should this Court grant direct leave to appeal from the High Court?

1. Leave to appeal against the High Court's declarator that SARS officials are entitled to withhold taxpayer information under section 11(3) of the Public Protector Act read with section 69(1) of the Tax Administration Act is refused. 2. Leave to appeal against the dismissal of the Public Protector's counter-application is refused. 3. Leave to appeal against the High Court order that the Public Protector pay de bonis propriis 15% of the Commissioner's taxed costs is granted. 4. The appeal is upheld and the personal costs order is set aside. 5. Each party must pay her or his costs in the Constitutional Court.

The binding legal principles established are: (1) A party may not obtain relief that effectively flows from the constitutional invalidity of legislation without formally bringing a direct challenge to that legislation's validity - section 172(1) of the Constitution requires a court to declare invalid any statutory provision inconsistent with the Constitution. (2) Personal costs orders against public officials, including the Public Protector, are punitive in nature and justified only when conduct shows gross disregard for professional responsibilities or is inappropriate and egregious - mere error or failure to meet a standard of 'perfection' is insufficient. (3) The prohibition on disclosure of taxpayer information in section 69(1) of the Tax Administration Act applies to the Public Protector's subpoena powers under section 7(4) of the Public Protector Act read with section 11(3), unless an exception applies (such as taxpayer consent under section 69(6)(b) or High Court order under section 69(2)(c)). (4) Courts must be cautious not to treat the Public Protector as 'fair game' for automatic personal costs awards, given the potential chilling effect on the exercise of constitutional powers by Chapter 9 institutions.

The Court made several important non-binding observations: (1) There appears to be a developing trend of seeking personal costs orders in most if not all matters involving the Public Protector, which is concerning. (2) Out of four applications involving personal costs orders against the Public Protector that reached the Constitutional Court, only one was upheld, demonstrating that such applications are not always justified. (3) Courts must not contribute to weakening the office of the Public Protector - its potency, attractiveness, and effectiveness must be preserved for posterity as it is an important cog in constitutional democracy. (4) The Public Protector could have avoided litigation by obtaining the taxpayer's written consent under section 69(6)(b) or seeking a High Court order under section 69(2)(c), which would have been more direct approaches. (5) The Court declined to address submissions about a constitutional hierarchy within Chapter 9 institutions as it was unnecessary for the decision. (6) The Court noted that an appellate court should only interfere with a true discretion (including costs orders) in circumscribed circumstances, preserving judicial comity and finality. (7) While not saying personal costs orders must be made sparingly, courts must apply existing law properly and make such awards only where warranted.

This case is significant in South African constitutional law for several reasons: (1) It clarifies that parties cannot rely on the constitutional invalidity of legislation as a foundation for relief without formally challenging that legislation's validity (following MEC for Development Planning principle). (2) It sets important parameters for when personal costs orders (de bonis propriis) may be granted against the Public Protector and other public officials, requiring conduct that is reprehensible, egregious, or shows gross disregard for professional responsibilities - not merely being wrong or falling short of 'perfection'. (3) It cautions courts about the chilling effect that unwarranted personal costs orders may have on the exercise of constitutional powers by Chapter 9 institutions. (4) It confirms that the prohibition on disclosure of taxpayer information under the Tax Administration Act applies to the Public Protector unless she obtains taxpayer consent or a High Court order. (5) It demonstrates judicial restraint in protecting the institutional integrity of constitutional bodies while holding individual office-holders accountable when warranted.