News24 Wire
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3 minute read
2 Aug 2020
3:13 pm

Parties to pay own costs in DA, Mboweni spat over SAA

News24 Wire

The ruling was made late in July after arguments were heard via Microsoft Teams.

Finance Minister Tito Mboweni. Picture: Twitter/ @treasuryRSA

The High Court has ruled that both parties are to pay their own costs, after an application by the DA that sought to block Finance Minister Tito Mboweni from bailing out South African Airways using his emergency powers started “with a bang and ended with a whimper”.

The two-part application, launched in mid-July, was removed from the roll.

In a short but scathing judgment, Judge Norman Davis wrote: “[This] urgent application started with a bang and ended with a whimper. It kicked off with allegations of constitutional impropriety being levelled against the Minister of Finance and ended with a simple costs argument.”

Davis added that while the DA had acknowledged “interdictory relief, at least on an urgent basis” once it received a response from Mboweni to its questions – and while it had sought to have the matter removed from the roll – the urgent roll had already been amended to accommodate the matter, and time devoted to reading the papers.

It would be “unfair” to burden another court with a dispute over the costs order, Davis said.

‘Equally to blame’

He, therefore, split the cost between the two parties, adding that they were “equally to blame”. Escalation could have been avoided had the DA not “jumped the gun” and had the minister provided a “simple explanation”, he said.

“Transparency on the part of the Minister rather than taunting ‘tweets’ would have prevented further litigation,” Davis argued.

But he added that the DA had rushed to court “without factual basis”.

The ruling was made late in July after arguments were heard via Microsoft Teams.

SAA went into business rescue in December 2019 following years of losses and repeated state bailouts. Months later, the airline’s creditors eventually voted to proceed with its proposed business rescue plan. However, a condition of the plan requires government or a strategic equity partner to provide an additional R10.3 billion in funding.

This prompted the DA to write Mboweni a letter asking whether he had authorised use of funds from the National Revenue Fund for any purpose relating to SAA in terms of section 16 of the Public Finance Managing Act, which gives the minister powers to authorise the use of these funds in emergency situations.

The DA gave the minister a deadline to respond the same day. When they did not receive a response by the deadline, which Mboweni described as unreasonable, they attempted to interdict the minister from using said funds. Should the funds have been disbursed already, they wanted the airline’s business rescue practitioners, Siviwe Dongwana and Les Matuson, blocked from using them.

In the initial court papers, DA finance spokesperson Geordin Hill-Lewis stated that “to the best of [his] knowledge”, the government was “sourcing, or planning to source” bailout funds for SAA from the NRF under section 16 of the PFMA, which would be unconstitutional and unlawful.

Mboweni has stated that he did not authorise the use of emergency funds from the National Revenue Fund, but that “various options” were being considered, Fin24 previously reported.

Before reaching a resolution, the matter resulted in correspondence between the parties’ attorneys as well as public debates on social media.

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