Minister of International Relations v Simeka Group (Pty) Ltd (73526/2018) [2021] ZAGPPHC 253 (10 April 2021)

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[2021] ZAGPPHC 253
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Minister of International Relations v Simeka Group (Pty) Ltd (73526/2018) [2021] ZAGPPHC 253 (10 April 2021)

IN
THE HIGH COURT OF SOUTH AFRICA
GAUTENG,
PRETORIA
Case
No: 73526/2018
In
the matter between:
MINISTER OF INTERNATIONAL
RELATIONS &
FIRST APPLICANT COOPERATION
DIRECTOR
GENERAL: DEPARTMENT OF
SECOND RESPONDENT INTERNATIONAL RELATIONS AND COOPERATION
DEPARTMENT
OF INTERNATIONAL
THIRD RESPONDENT RELATIONS AND COOPERATIONS
And
SIMEKA
GROUP (PTY)
LTD
FIRST RESPONDENT
REGIMENTS
CAPITAL (PTY) LTD
SECOND RESPONDENT [REGISTRATION NUMBER 004/023761/07]
LEMASCENE
(PTY)
LTD
THIRD RESPONDENT [REGISTRATION NUMBER 2016/390768/07]
SERENDIPITY
INVESTMENTS SA LLC
FOURTH RESPONDENT [REGISTRATION NUMBER 5944694]
SIMEKA
INVESTMENT GROUP (PTY) LTD
FIFTH RESPONDENT [REGISTRATION NUMBER 2006/013111/07]
JUDGMENT
HUGHES,
J
Introduction
[1]
This case concerns an organ of State seeking to review its own
decision. The applicants are the Minister of International Relations
and Cooperation, the Director- General, of the Department of
International Relations and Cooperation and the Department itself.
Hereafter, collectively referred to as ‘the Department’. The
first respondent, Simeka Group (Pty) Ltd (Simeka) and Regiments
Capital (Pty) Ltd (Regiments), the second respondent, were in a Joint
Venture, which was awarded a tender by the Department. The Department
appointed the Simeka-Regiments JV as development partners to
design,
construct, operate, maintain and finance suitable office and
accommodation for a diplomatic mission of South Africans, in
Manhattan, New York City, New York. In this judgment the respondents
are at times collectively referred to as ‘Simeka’.
[2]
In this self-review the order sought by the Department reads
as
follows:
‘
1.
Declaring the award of the tender for the appointment of a
development partner for the design, construction, operation,
maintenance
and financing of a suitable and sustainable office and
residential accommodation for South African diplomatic missions in
Manhattan,
New York City, New York (DIRCQ 10/2015/16) to the joint
venture comprising the first and second respondents to be unlawful
and /
or unconstitutional and / or invalid;
2.
Setting aside the award of the aforesaid tender to the joint venture
comprising the first and second respondents;
3.
Setting aside the Project Preparation Agreement concluded between the
third applicant and the third respondent pursuant to
the awarding of
the tender to the first and second respondents;
4.
Directing the first, second, third and / or fourth respondents to
repay to the third applicant the Rand equivalent of US
$9 million,
together with interest thereon at the prescribed rate of interest
calculated from the date of this order to date of payment.’
[3]
At the commencement of the proceedings the Department submitted
that
prayer 4 of the order above was not being pursued at this stage and
sought that it be adjourned
sine die
. There was no opposition
to the granting of the order.
[4]
The Constitutional Court has made it clear in
State
Information Technology Agency SOC Limited v Gijima Holdings
(Pty)Limited
,
that a review of a State organ’s own decision falls to be
determined under the principle of legality and not PAJA. The
Constitutional
Court was emphatic that there is ‘no choice [is]
available to an organ of state wanting to have its own decision
reviewed: PAJA
is simply not available.’
[1]
Background
[5]
On 4 March 2016 the Department issued a Request for Proposals
by way
of a Government Tender Bulletin, in the following terms:
‘
DIRCO
30/203 5'16:
Request
for Proposals: Appointment of a Development Partner for the Design,
Construction, Operation, Maintenance and Finance of suitable
and
sustainable office and residential accommodation for the South
African diplomatic missions in Manhattan, New York City’
[6]
Essentially, the Department required of the successful bidder
to
identify and procure land in New York for accommodation and offices
for South African diplomats. The bidder would also have to
design and
develop the facilities as per the specifications of the Department,
maintain the property and act as the landlord. Performance
in terms
of the aforesaid mandate was necessary for the successful bidder to
raise the required funds.
[7]
Only two bidders, namely Lephuting (Pty) Ltd (Lephuting) and
Simeka-
Regiments JV (the Joint Venture) responded to the Request for
Proposals. On 17 May 2016 the Joint Venture was appointed as
Lephuting was disqualified.
[8]
The business model proposed by the Joint Venture was the
incorporation
and use of Lemascene (Pty) Ltd (Lemascene) as a
corporate vehicle on the South African(SA) end to execute the project
on behalf of
the Department. On the other end, in the United States
of America (USA), and under the laws of Deleware, the Joint Venture
incorporated
Serendipity SA Investments LLC (Serendipity) as the
special purpose vehicle, that would execute the project in the USA.
The Joint
Venture contends that both Lemascene and Serendipity were
appointed with the approval of the Department.
[9]
The business model set out above as adopted by the Joint Venture,
was
contemplated in the Department’s Request for Proposals, as is
evident from the extract set out below:
‘
At
paragraph 1 under the heading "INTRODUCTION", the following
is stated:
“
DIRCO
will appoint a South African registered company that has presence or
collaboration in the State of New York, USA to provide
and maintain
such serviced accommodation to enable DIRCO to execute its mandate in
an effective, efficient and cost-effective manner”.’
[10]
After the tender was awarded to the Joint Venture a steering
committee was formed to
carry out and monitor the proposed lease
implementation of the property to be attained. This committee
comprised of members of the
Department, the National Treasury and the
Joint Venture.
[11]
On 21 June 2016 the steering committee made the following proposals:
-
Government will make a ‘potential capital contribution’
to the
project;
-
The conclusion of a Public-Private Partnership (PPP)
and project
timelines were to be put in place.
According
to the Department the proposals advanced by the steering committee
deviated from that which was mandated in the Request
for Proposals.
Another, problem was that, before the adoption of these proposals the
National Treasury’s approval was required
in terms of Regulation 16
of the Treasury Regulation.
[2]
The Department contends that none of these approvals from the
National Treasury were obtained, as National Treasury had not been
involved from the inception.
[12]
According to the Department, on 15 December 2016, the National
Treasury granted exemptions
in an effort to comply with Treasury
Regulations. These exemptions were Treasury Approval I (TA I) and
Treasury Approval IIA (TA
IIA) and Treasury Approval IIB (TA IIB).
[13]
However, in respect of the final approval, Treasury Approval lll, the
National Treasury
sought of the Department to provide it with the
following: the draft PPP agreement; the draft nominee agreement; the
final financial
model for the project; the PPP contract management
plan; proof of Serendipity’s capacity and track record in the
financing, designing
and construction of the buildings, and
Lemascene’s capacity and track record in facilities management.
[14]
On 24 March 2017 the Department concluded a Project Preparation
Agreement (PPA) with
Lemascene. In terms of this agreement, Lemascene
was to act on behalf of the Department to locate land in Manhattan
that could be
acquired. In addition, Lemascene had to negotiate the
purchase price of the land with the owner.
[15]
On 28 March 2017 the project site was identified by Serendipity and
approved by the
Department. In terms of the PPA, on 31 March 2017,
the Department provided Lemascene with USD 9 000 000.00, of which an
amount of
USD 5 000 000.00 was to be paid for the deposit for the
purchase of the land and the balance of USD 4 000 000.00 was to be
used for
preparatory work to be effected.
[16]
On 29 June 2017, the purchase and sales agreement for the project
site in the USA was
concluded between Serendipity and Clark 38
th
Street LLC and Kent 38
th
Street LLC. This agreement
records that Serendipity would purchase the land in New York in its
own name for a total amount of USD
47 850 000.00. The deposit of USD
5 000 000.00 was paid over by Serendipity on 30 June 2017.
[17]
On 11 October 2017 Simeka addressed correspondence to the Department
in response to
their concerns regarding the corruption allegations
involving Regiments. Following up on the aforesaid further
correspondence was
sent on 8 November 2017 informing the Department,
specifically Ms Bernice Africa, that Simeka was formally notifying
the Department
of Regiments exit from the project. The termination
agreement was attached thereto.
[18]
All the while, in correspondence dated 16 October 2017 the National
Treasury advised
the Department that the appointment of Simeka was an
irregularity. In the same correspondence, the Department alleges that
National
Treasury posed various questions which were to be addressed
in respect of the Simeka bid. Conspicuously, the correspondence of 16
October 2017 has not been annexed to the pleadings by the Department.
Simeka drew this to the Department’s attention, at paragraph
19 of
their answering affidavit, which the Department has yet to advance a
response to.
[19]
Discussions were held on 19 January 2018 between the Department and
the National Treasury
to take action in respect of the Simeka bid.
Following these discussions, on 26 January 2018, the Department was
advised by the National
Treasury that they were not going to issue
the Treasury Approval III (TA III), as a result of the
‘insurmountable’ difficulties
the Department was confronted with
in respect of the Simeka bid and the various deviations from the
Request for Proposals.
[20]
Consequently, the National Treasury gave the Department the following
ultimatum:
‘
As
accounting officer, you should decide whether either-
(a)
to continue with procuring the land through the appointed service
provider which is likely to entail irregular expenditure
given the
procurement issues raised by the OCPO and/or the Treasury Approval
III for the PPP; or
(b)
to cancel the transaction with the service provider, which will
result in fruitless and wasteful expenditure if the deposit
for the
purchasing of the land is forfeited.’
[21]
The Department then sought legal advice from senior counsel on 7
February 2018, and
counsel was consulted on 12 February 2018. It was
on 25 February 2018 that counsel informed the Department that the
tender process
was flawed and irregular.
[22]
The Department states, that since the members of the Bid Evaluation
Committee are stationed
all over the world, they could only convene a
meeting of the Bid Evaluation Committee. The National Treasury’s
concerns could only
be attended to after the Bid Evaluation Committee
convened on 19 April 2018. Hence, the delay in responding.
[23]
The Department contends that on 26 April 2018 they responded to
National Treasury’s
concerns in their correspondence of 16 October
2017. In doing so, the Department acknowledged that the concerns
raised by National
Treasury had been ‘sufficiently addressed’.
Hereafter find the relevant extract:
‘
On
the perusal of the report [of the Bid Evaluation Committee] and my
assessment, I am satisfied that matters raised are sufficiently
addressed.’
Even
so, on 18 May 2018, the National Treasury reaffirmed their decision
not to grant the TA III approval.
[24]
On 22 June 2018 the Department informed the Joint Venture that it
would be proceeding
to set aside the tender, as Simeka’s bid was
lacking and the Joint Venture had failed to reach a substantial
portion of the bid
requirements.
[25]
On 19 July 2018, the sellers cancelled the agreement due to
non-payment of the balance
of the purchase price of USD 42 850
000.00, which was to be paid on 27 October 2017. Notably there were
seven addendums to the purchase
and sale agreement, which primarily
extended the payment of the balance of the purchase price. The last
of such extensions was for
a payment in good faith to be made 30 days
from 4 April 2018. Serendipity breached the agreement, in that it
failed to pay the balance.
In terms of the agreement, this resulted
in the deposit being forfeited.
[26]
On 22 June 2018 counsel on behalf of the Department conducted a
meeting, with Simeka
to communicate the Department’s view that
Simeka’s bid was irrational. The review application was only issued
on 10 October 2018.
Patently, the explanation for the delay in filing
this self-review was only submitted by the Department on 8 November
2019.
[27]
The Department took issue with the bid submitted by Simeka saying
that this bid did
not comply with some of the terms of the Request
for Proposals. Their main concerns being that this bid did not meet
certain requirements
and I set same out below:
(a)
The financial statements of Simeka were not audited, as opposed to
the requirement that these be audited;
(b)
The bid documents were to be completed in the name of the Joint
Venture but the documents submitted were only
completed in the name
of Simeka;
(c)
Confidentiality statements were to be submitted by each member of the
Joint Venture, however Simeka’s bid
did not contain a
confidentiality statement from Regiments who was part of the
Simeka-Regiments JV;
(d)
With respect to the issue of the Joint Venture’s ability to raise
funds no letter from a financial institution
was submitted. The only
letter submitted was in respect of Simeka’s ability to raise funds;
(e)
The bid did not demonstrate the bidder’s ability to finance the
model it proposed, in fact it demonstrated
the Joint Venture’s
inability;
(f)
The bid did not show a clear indication of the relationship between
Simeka and Regiments.
[28]
Other concerns raised was that the bid submitted by Simeka was a
finance lease proposal,
whilst the Department sought an operational
lease proposal. In addition, in terms of the Request for Proposals,
Government was to
be a contributor of the land. However, in terms of
the proposal of the steering committee, the Government was sought to
purchase
the land. Clearly contrary to the prescripts of the Request
for Proposals.
The Delay
[29]
It is trite, that where there is an issue of delay and no condonation
has been sought,
this court is not entitled to entertain the merits
of the review application.
[3]
[30]
It is common cause that this is a legality review and as such there
is
no fixed period within which it ought to be launched. I refer to
the Constitutional Court judgment of
Khumalo
and Another V MEC for Education
,
Kwazulu-Natal
.
[4]
[31]
The test regarding delay in bringing a legality review was pronounced
in
Khumalo.
Essentially,
it highlights that the first enquiry when dealing with a delay, is to
determine whether the delay was unreasonable or
undue. This enquiry
was a factual one and entails a value judgment, having regard to the
circumstances of each case. If there is
an unreasonable delay the
second leg of the enquiry comes to the fore. This requires a
determination, whether in light of such unreasonable
delay, a court
ought to exercise its discretion to overlook such delay, and proceed
to deal with the merits of the application.
[5]
[32]
In
Buffalo
City Metropolitan Municipality v Asla Construction (Pty) Ltd
the
Constitutional Court went further to explain that the approach to
delay in the context of a legality challenge involves a broader
discretion than that under PAJA. The exercising of this broad
discretion involves a ‘factual, multi-factor, context-sensitive
framework’
approach. Although there is no prescribed time period of
180 days as is with PAJA to launch proceedings, in a legality review,
the
time starts running from when an applicant would have become
aware or reasonably ought to have been aware.
[6]
[33]
The prerequisite of a condonation application is absent in legality
review proceedings.
However, an explanation is necessary in line with
the necessary considerations in respect of the delay as outline in
Khumalo
above.
An explanation must be offered for the delay, covering the entire
period pertaining to the delay, or the delay will be considered
to be
unreasonable. If an explanation is advanced that justifies the delay,
then the delay is deemed to be reasonable and the merits
of the
review may be entertained.
[7]
The Department in
addressing the issue of delay
[34]
The issue of delay in bringing this review application was raised by
Simeka in their
answering affidavit. The Department then filed a
replying affidavit without addressing the issue of delay at all.
[35]
Simeka then filed a fourth affidavit, pointing out that though the
issue of delay had
been raised, the Department had failed to proffer
an explanation. Ironically, the Department sought that Simeka seek
condonation
for the late filing of their answering affidavit. It was
after receipt of this fourth affidavit that the Department filed a
condonation
application with an explanation for the delay in filing
the review timeously.
Was the delay
unreasonable?
[36]
The factual background of a case is a decisive factor in determining
the issue of delay.
In assessing same and especially so in a legality
review, the pertinent question is when the provable clock ought to
start ticking.
In this instance, the question would be, when would
the clock start ticking for the Department, to institute these review
proceedings.
[37]
It is trite that courts should not tolerate undue delay as pointed
out in
Department
of Transport v Tasima (Pty) Limited.
[8]
This is especially so, as a court’s ability to deal with the merits
is much weaker once there is a delay. Further, it is sensible
that
clarity and finality is attainable if there are no delays.
[38]
In a review of the State’s own decision, the explanation advanced
for the delay is
very important, especially so, in assessing its
reasonableness. Cameron J in the minority judgment of
Buffalo City
stated the following:
‘
It
is an opportunity for the state to demonstrate that its self-review
seeks to promote open, responsive and accountable government
rather
than the self-interest of state officials seeking to evade the
consequences of their prior decisions.’
[9]
[39]
Significantly, at paragraph 124 Cameron J states:
‘
In
this, the first judgment reflects the ambivalence that emerges from
this Court’s own previous decisions. These have insisted
that where
delay is unreasonable and unexplained, the nature of the application
and its merits would not favour overlooking it (
Khumalo
),
and indeed that undue delay should not be overlooked (
Tasima
I
).
These decisions have also asserted that a government actor must
afford a court a basis for overlooking inordinate delay (
Gijima
),
in the absence of which there can be no possible basis for exercising
the court’s discretion to assist the actor by affording
it the
relief it seeks.’
[10]
[40]
Purely to summaries, the Department awarded the tender to Simeka-
Regiments JV on 17
May 2016. On 16 October 2017 the National Treasury
alerted the Department to the fact that the tender was irregular. The
review application
was launched on 10 October 2018 and an explanation
for the delay in respect of filing this review was only forthcoming
on 8 November
2019.
[41]
The Department seeks this court to consider that the clock only
started ticking on
18 May 2018 when the National Treasury
‘affirmed…its earlier decision’ that the tender was irregular.
Why so? This being after
the Bid Evaluation Committee met on 19 April
2018 to respond to the correspondence of 16 October 2017.
[42]
Conspicuously, the Department approached senior counsel for advice as
early as February
2018. This was way before the Bid Evaluation
Committee provided the National Treasury with a response.
Pertinently, the Department
only saw fit to advise Simeka of National
Treasury’s stance on 22 June 2018.
[43]
The Department having quoted portions of the correspondence of 16
October 2017 in their
affidavit for condonation prompted Simeka to
filed a rule 35(12), in an attempt to obtain the correspondence
concerned. To date the
Department has failed to comply with the rule
35(12) request. Evidently, this correspondence is available, but for
whatever reason,
the Department has opted not to make it available to
Simeka or the court.
[44]
The chronology set out above together with the Department authorising
and consenting
to the various addendum, seven to be exact, clearly
indicating an unyielding continuation of the project. Particularly
as, these
addendums only came to ahead sometime in May 2018.
[45]
The conduct of the Department is unacceptable. This is apparent from
the fact that National Treasury
on 26 January 2018 actually placed
the Department on terms to take action in light of the irregularity
they had determined. The Department,
in my view, was dogmatic when it
did not heed the advice of the irregularity provided on 16 October
2017. In fact, it proceeded ahead
as though the pronouncement by
National Treasury had not been made and that the Department was
correct in awarding the tender to
Simeka.
[46]
Visible from the aforesaid conduct, is the fact that the Department
has failed to be open, responsive,
forthright and accountable, as a
State organ ought to be, who seeks a self-review. I say so as, the
Department has not taken this
court into its confidence, and by not
doing so, it has not submitted a full explanation for the
unreasonable delay in launching this
review application.
[47]
The crucial correspondence of 16 October 2017 has been omitted and no
reason is advanced for such
omission. There is no information
regarding how the decision was researched to do an about turn after
it had been persisting with
the project even in light of the
irregular pronouncement. In essence, the conduct of the Department
from the beginning was that they
need not seek condonation and when
called to explain just provided a weak response. Thus, where there is
no full explanation this
amounts to no explanation to explain the
delay.
[11]
[48]
Therefore, there is no basis upon which I can overlook the inordinate
delay, that being
the case, I therefore cannot be expected to
exercise my discretion to afford the Department the relief it
seeks.
[12]
In any event, should the
delay be overlooked?
[49]
It is judicious to bear in mind the
dicta
of
Khumalo
and
Tasima
when dealing with overlooking the delay, which I set
out below for easy reference:
‘
[47]
Khumalo
also
says that courts have a ‘discretion to overlook a delay’. Here is
what we said:
‘
[A]
court should be slow to allow procedural obstacles to prevent it from
looking into a challenge to the lawfulness of an exercise
of public
power. But that does not mean that the Constitution has dispensed
with the basic procedural requirement that review proceedings
are to
be brought without undue delay or
with
a court’s discretion to overlook a delay
.’
[48]
Tasima
explained that this discretion should not be exercised
lightly:
‘
While
a court ‘should be slow to allow procedural obstacles to prevent it
from looking into a challenge to the lawfulness of an
exercise of
public power’, it is equally a feature of the rule of law that
undue delay should not be tolerated. Delay can prejudice
the
respondent, weaken the ability of a court to consider the merits of a
review, and undermine the public interest in bringing certainty
and
finality to administrative action. A court should therefore exhibit
vigilance, consideration and propriety before overlooking
a late
review, reactive or otherwise.’
[13]
[50]
The Department’s entire case depends
on a finding that the delay is
reasonable, and worst case scenario, if it is found not to be
reasonable, then I should exercise my
discretion to overlook such
delay.
[51]
The decision of National Treasury in
refusing to issue the TA III for
the project is monumental. It results in the lease of the land
already secured in the United States
of America not materialising and
brings the entire project to an abrupt halt. Concerning, is the fact
that the Department did not
heed National Treasury’s conclusion of
irregularity in respect of Simeka’s tender promptly. The Department
stood by its decision
to grant the tender to Simeka and sought to
ignore National Treasury, u ntil of course they were placed on terms.
[52]
In reality, what the Department sought
of this self-review, was
redemption from the stance, that in awarding the tender to Simeka,
resulted in fruitless and wasteful expenditure.
Thus, in my view, the
only avenue opened to the Department to avoid a fruitless and
wasteful declaration, was to seek a do over in
the form of a
self-review. In my view, the allegations of corruption and the issue
of deviating from the fundamental terms of the
Request for Proposals,
as grounds to justify the self-review, are unfounded and
unsubstantiated.
[53]
I turn to deal with the allegations
of corruption. The Department’s
assertion that there were undertones of corruption on the part of
Simeka are not substantiated.
The corruption allegation emanates from
National Treasury having received allegations that Regiments were
linked to the Gupta family
and are guilty of corruption. Ironically,
in the Department’s heads of argument, the submission is made that
there is no direct
evidence of corruption established.
[54]
According to Simeka, the refusal of National Treasury to grant the TA
III approval on 26 January 2018, came
about after the Department had
already expended the USD 9 million and Simeka did not gain anything
from the project. There is no
evidence advanced by the Department to
substantiate these corruption allegations and therefore it must fail.
[55]
The assertion that Simeka changed the
fundamentals of the Request for
Proposals, is also fatally flawed. The model adopted by Simeka was in
terms of the prescripts of
the PPA and the PPA was concluded with the
blessing of the steering committee, whose composition was inclusive
of members of the
Department, National Treasury and Simeka. Bearing
in mind that the PPP and the PPA were concluded with the input,
consideration and
consent of the Department.
[56]
Significantly, there was no objection from the Department on the
model proposed and
adopted by Simeka, until the TA III approval was
sought by National Treasury. It was on the basis of the very same
model, that National
Treasury granted the TA I, TA IIA and TA IIB
approvals. The Department actively took part in the procurement
process and cannot now
turn around and seek this court to nullify
same on the basis of alleged corruption that has not been proven and
implementation of
a model approved.
[57]
Of concern, is the fact that there are no facts before this court
to
establish what the deciding factor or factors were that influenced
National Treasury to take the stance that it did. I am certain,
this
would have been set out in the correspondence of 16 October 2017,
which the Department sought to withhold. Unfortunately, the
result is
that the Department failed to make out a case for its self-review.
[58]
The Department contends that the Joint
Venture could not be trusted
or believed to have complied with the requirements for their
appointment. This contention is absurd
and is contrary to the facts
before me. The entire process of attaining the land, leasing thereof,
paying of the deposit and payment
of preparatory works and costs,
occurred within the prescripts of the Request for Proposals, the PPA
and with the cooperation and
consent of the Department.
[59]
I reiterate that the Department found
nothing untoward with the
tender submitted by Simeka, even in the face of the irrationality
pronouncement, they did not agree with
National Treasury’s
findings. The Department went so far as to seek legal advice,
indicative of the fact that they were adamant,
that the tender was
correctly pronounced and complied with the requirements of section
217 of the Constitution, that it was transparent,
cost effective and
competitive.
[60]
The Department has clearly failed to
demonstrate that it has
reasonable prospects of success, in confirming that the awarding of
the tender to Simeka was irrational and
invalid. The Department’s
failure to be open, frank and transparent in producing the
correspondence of National Treasury of 16
October 2017 cannot be
overlooked. It is only when the Department is put on terms and is
faced with a declaration from National Treasury
that it instigated
fruitless and wasteful expenditure, that the Department look to
self-review.
[61]
Thus, I am forfeited that there is
no evidence, no reasons advanced
and no case made out for me to exercise my discretion to overlook the
inordinate delay. For the
reasons set out above the condonation
application must be dismissed.
Conclusion
[62]
In this case, the delay outweighs the
possible breach of legality,
primarily so for lack of evidence and absent a full explanation.
Therefore, no basis exists to invoke
one’s remedial powers in terms
of section 172 of the Constitution. The lack of a full explanation
and evidence, notwithstanding
the delay precludes the exercise of my
discretion, to provide equitable refuge, for the Department in terms
of section 172.
[63]
Looking at the position that the parties
find themselves currently.
First, it is the Department which awarded the tender to
Simeka-Regiments JV, and it was the Joint Venture
who performed in
respect of the project, with the knowledge and consent of the
Department. Secondly, it is the Department that asserts
that the
corruption allegations in respect of Regiments were not
substantiated. It is also the Department which accepted Simeka’s
termination of Regiments involvement in the Joint Venture. Thirdly,
it is the Department which failed to be open, frank and transparent.
Fourthly, it is Department that advanced an unconvincing, insincere
explanation. Lastly, it is evident that Simeka is the innocent
party,
having complied with its obligations in good faith. Simeka is now at
the short end of the stick, due to the Department seeking
to avoid a
declaration that it is responsible for fruitless and wasteful
expenditure.
[64]
The interest of justice
would not be served when the Department, in
fact, endorsed the proposed model and the steps taken by Simeka, from
the inception of
the project. It is now, Simeka who is prejudiced by
the Department’s about turn, in respect of the tender. Simeka
surely expected
the Department to adhere to its procedures and
protocols in accessing and awarding the tender. Simeka would not have
anticipated
that the Department would turn on it and ‘nit-pick’
on aspects relating to its proposal submitted, having accepted and
awarded
the tender. Especially so with regards to implementing the
model proposed by the steering committee, of which, the Department
and
National Treasury were members. This is clearly a case where the
Department seeks to evade its constitutional obligation by way of
a
self-review.
[14]
[65]
In the particular circumstances of this matter and the fact that the
enrichment claim, in prayer 4, is
still to be determined, it would be
unfair to intervene, when there are absolutely no proper grounds, to
vindicate any principles
of contract or that of section 217 of
transparency and fairness.
[66]
I align myself with the sentiments expressed by Cameron J in the
passage below:
‘
In
the absence of explanation, it is opportunistic and arbitrary for the
very person who made the decision to shrink back when the
review of
the decision pans out. And in these proceedings, all this falls right
into the Municipality’s lap. The Municipality claims
to assert
legality yet its actions are antithetical to it. To overlook the
unreasonable delay in this context is to give the Municipality
a free
pass. To do so would be counter to the purpose of legality review.
Thus we do not consider a definitive pronouncement on the
lawfulness
of the action under review essential to the determination of the
matter.’
[15]
[67]
In conclusion, the possible breach of legality does not outweigh the
undue delay absent an explanation.
Order
[68]
Consequently, the application for condonation is dismissed
with
costs. Such, costs are to include the costs of two counsel where so
employed.
W.
Hughes
Judge
of the High Court
Virtually
Heard: 12 October 2020
Electronically
Delivered: 10 April 2021
Appearances:
For
the Applicants: Adv. Hulley SC
Adv.
Marker
Instructed
by: State Attorney
For
the 1
st
and 2
nd
Respondent: Adv. Bham SC
Adv.
Sisalana
Instructed
by: Mkhabela Huntley Attorneys
[1]
State
Information Technology Agency SOC Limited v Gijima Holdings
(Pty)Limited
2018
(2) SA 23
(CC) at para [37].
[2]
The
Treasury
Regulations
,
General Notice No. R225 in Government Gazette No. 27388 of 15 March
2005, as amended.
[3]
Sanral
v Cape Town City
2017(1)
SA 468 (SCA) at para [79]- [81];
Aurecon
SA(Pty) Ltd V Cape Town City
2016(2)
SA 199 at para [16].
[4]
Khumalo
and Another V MEC for Education
,
Kwazulu-Natal
2014
(5) SA 579 (CC).
[5]
Ibid at paras [48] and [49].
[6]
Buffalo
City Metropolitan Municipality V Asla Construction (Pty) Ltd
2019
(4) SA 331
(CC) at paras [48]- [54].
[7]
Department
of Transport v Tasima (Pty) Limited
2017
(2) SA 622
(CC) at para [153] (
Tasima
I)
.
[8]
Ibid
Tasima
at
para [48].
[9]
Buffalo
City
at
para [120].
[10]
Ibid at [124].
[11]
Buffalo
City
at
[123].
[12]
Gijima
at
para [49].
[13]
Gijima
at
para [47] and [48].
[14]
Altech
Radio Holdings (Pty) Limited and Others v City of Tshwane
Metropolitan Municipality
(1104/2019)
[2020] ZASCA 122
(5 October2020) at [69]- [70].
[15]
Buffalo
City
at
para [146].