Bovicon Consulting Engineers CC v Member of the Executive Council: Police, Roads and Transport (Free State Provincial Government) (3797/2014) [2019] ZAFSHC 263 (5 December 2019)

About SAFLII
Databases
Search
Terms of Use
RSS Feeds
South Africa: Free State High Court, Bloemfontein
SAFLII
>>
Databases
>>
South Africa: Free State High Court, Bloemfontein
>>
2019
>>
[2019] ZAFSHC 263
|

|

Bovicon Consulting Engineers CC v Member of the Executive Council: Police, Roads and Transport (Free State Provincial Government) (3797/2014) [2019] ZAFSHC 263 (5 December 2019)

IN
THE HIGH COURT OF SOUTH AFRICA,
FREE
STATE DIVISION, BLOEMFONTEIN
Case
number: 3797/2014
In
the matter between:
BOVICON
CONSULTING ENGINEERS
CC

PLAINTIFF
and
THE
MEMBER OF EXECUTIVE COUNCIL:
POLICE,

DEFENDANT
ROADS
AND TRANSPORT
(FREE
STATE PROVINCIAL GOVERNMENT)
HEARD
ON:
14, 15 & 17 MAY 2019 &
02 AUGUST 2019
JUDGMENT
BY:          S CHESIWE
DELIVERED
ON:          5 DECEMBER
2019
[1]
The plaintiff issued summons against the defendant for payment in the
amount of R1 171 774.83 (one million one hundred and seventy
one
thousand seven hundred and seventy four rand and eighty three cents)
for services rendered to the Department of Police, Roads
and
Transport during the period May 2012 to 31 March 2013.
THE
PARTIES
[2]
The plaintiff is Bovicon Consulting Engineers CC, a close corporation
duly registered in terms of the Close Corporation Act
No 69 of 1984
with its principle place of business at Suite 48, Meditas Centre,
Mudd Square Universitas, Bloemfontein.
[3]
The defendant is the member of the Executive Council of Police Roads
and Transport (Free State Provincial Government). Contemplated
in
section 7(2) of the Public Service Act 1994. (Promulgated under
Proclamation No. 103 of 1994) read with Schedule 2 thereof (as

amended) and with its principle place of business at 45 Charlotte
Maxeke Street Bloemfontein Free State.
[4]
The amended particulars of claim in this matter reflected the
background as follows:  That on or about 7 July 2011 the

plaintiff duly represented by Mr H.A. Schoeman and the defendant duly
represented by Mr Mokhesi concluded a Service Level Agreement
(SLA)
in terms of which, the plaintiff was appointed to assist the
defendant in the implementation of the Contractor Development

Programme (CDP).  Such service would be rendered from time to
time as set out in the SLA.
[5]
The relevant and/or expressed terms of the SLA are that:
a) The effective date of
the agreement was 18 May 2011 and the SLA would expire on the first
anniversary of the effective date unless
extended to a later date at
the sole instance of the defendant.
b) Whereupon the
plaintiff shall upon completion of any specific component services or
having made progress towards completion,
submit to the defendant an
invoice and certificate detailing the amounts payable in respect of
the services.
c) The defendant would
then settle the invoice within 30 days after submission and delivery
thereof.
[6]
During the period between May 2012 and November 2012, the plaintiff
continued to perform services that were performed prior
to 18 May
2012.  On the 16 August 2013 the defendant made a partial
payment of the invoice for services that were rendered
after the
anniversary date of the SLA.
[7]
The defendant pleaded that the SLA does not provide for an extension,
nor does the SLA have any provision for an extension clause,
whether
expressly, by conduct or tacitly.  The defendant further pleaded
that the plaintiff is indebted to the defendant in
an amount of R596
627.84, which amount was irregularly, unlawfully and fraudulently
paid to the plaintiff.
[8]
The common cause facts between the parties are that the parties
entered into a written Service Level agreement (the SLA) on
7 July
2011, the effective date of the SLA was 18 May 2011, and it expired
on the first anniversary of the effective date, unless
extended to a
later date at the sole instruction of the defendant.
ISSUES
IN DISPUTE
[9]
The court has to determine whether the SLA of 2011 was extended by
way of conduct or necessary implication; or whether the terms
of the
SLA were extended by way of oral agreement in that the Head of the
Department (HOD) the late Mr Msibi, gave oral instruction
to Mr
Werner Van Wyk to extend the SLA; and whether the defendant was
unjustly enriched and the plaintiff was impoverish by the
value of
the services rendered.
THE
EVIDENCE
[10]
The plaintiff led the evidence of Mr Schoeman.  He testified
that he performed and rendered services for the department
up until
the conclusion of the SLA in 2011 without any other written
agreement, except in terms of appointment letters. He said
in January
2011 he was asked by the department to put together a program that
identified new contractors. He thereafter authored
the Contract
Development Programme (CDP). He said the SLA was signed on 7 July
2011 and he was under the impression that the anniversary
date would
be 7 July 2012 and not the effective date of 18 May 2012.  He
Mentioned that in different meetings and presentations,
Mr Msibi
delegated Mr Van Wyk (Program Manager from the Department) to extend
the SLA. However, he did not received the final extended
SLA
document. He continued to render services trusting that the extension
of the SLA will be approved, but nothing came forth.
[11]
Under cross-exam, Mr Schoeman, said he trusted the department will
pay him as he had a long history with the department and
had no
reason to doubt that the contract will be extended. He mentioned that
his focus was on getting the CPD program to be a success.
He
said after Ms Kekana informed him the contract had expired, he
stopped to work as soon he heard that there was no agreement
coming
forth nor an extension of the contract.
[12]
Mr Van Wyk testified on behalf of the defendant that he was under the
impression that the SLA was to be terminated on 7 July
2012. He
mentioned that in a meeting called by the HOD on 29 June 2012, he was
given instructions by the HOD to do submissions
for the extension of
the SLA contract.  He drafted the submission and submitted it to
Ms Kekana.  He did not receive
any feedback from Ms Kekana on
whether the extension of the SLA was approved or declined.
[13]
Ms Helen Kekana testified that she started to work at the department
from 2012 as a Chief Director.  She discovered that
the
department had a bad audit record and there was non-compliance with
treasury regulations.  The officials signed documents
without
authorisation.  She had to put a system in place to ensure that
due process was followed in respect of tender procurement.
She said
when she started to work at the department, she was not aware of the
SLA contract between the plaintiff and the department,
nor was she
aware that the SLA had expired. She confirmed that she had to sort
out the department procurement documents as the
officials did not
keep proper records and she struggled to get the documents from the
officials.
[14]
She had attended several meetings where the HOD (the late Mr Msibi)
was present.  She mentioned that the meeting of 29
June 2012,
the HOD and Mr Schoeman were present.  She indicated that she
was not aware of any instruction that the contract
of Bovicon must be
extended nor was she aware that the contract of Bovicon had expired.
She said Mr Van Wyk and Mr Schoeman
were not supposed to have
communicated with each other during the process of the extension of
the contract. She said none of the
meetings she attended, was there
ever a discussion of the extension of the contract of Bovicon. She
indicated that on the 6 December
2012, she received the submission
for the extension of the SLA.  She asked for the tender
documents of Bovicon, but these
documents could not be found.
She requested Mr Schoeman  to change the date on the invoices
while waiting for the extension
of the contract.  Mr Schoeman
informed her that the dates on the invoices cannot be changed.
[15]
Ms Kekana said she does not dispute that Bovicon did perform  the
work for the department, but said, had she known the
contract had
expired she would have informed Bovicon, and if the contract was
extended  the department would have done it
in writing.
She said she was not aware of any oral extension of the contract, and
nor was there deviation by the department.
She testified that
the monitoring of the contract was the responsibility of both parties
that is, the department and the service
provider.
[16]
Under-cross examination Ms Kekana said she did not dispute that
Bovicon rendered services to the department during contract
term, as
she was at that time not employed by the department.   She said
payments made to Bovicon after the expiry of the
contract, was for
work that was done during the period when the contract was valid. She
does not recall if she read the SLA, because
if she had read it, she
would have seen that the contract had expired.  She said on 6
December 2012 she informed the HOD that
the contract of Bovicon had
expired.
[17]
Adv. Botha Counsel on behalf of the plaintiff submitted in oral
arguments that, in the past Bovicon on numerous occasions,
worked
with the department on  written appointment letters by the HOD.
Counsel submitted that Ms Kekana and Mr Van Wyk’s
evidence was
full of discrepancies to the extent that Mr Van Wyk called Ms Kekana
a liar.  He submitted that in all the meetings
that were held,
the HOD was present.  He requested the court to take cognisance
of the fact that the department increased
the budget for the
financial year of 2012 and showed no clear intention as to why the
budget was increased.  Counsel submitted
that if there was no
oral agreement of the extension of the contract then the plaintiff is
entitled to claim for unjust enrichment.
Counsel further, submitted
that the department’s counter-claim cannot succeed based on the
defence of the fraudulent conduct
of the officials as the department
has not shown if any disciplinary action was taken against the
officials.
[18]
Adv Georgiades, Senior Counsel on behalf of the defendant submitted
in oral arguments that there was no extension of the contract,
as Ms
Kekana could not find any paper trail to show that the extension was
approved by the HOD.  Counsel submitted that the
letter of the
HOD dated 18 June 2013 showed that the HOD referred the matter for a
legal opinion and reprimanded Mr Du Pisane for
approving an
unauthorised payment.  He submitted that the HOD had not at any
occasion given an oral extension neither gave
instructions to Mr Van
Wyk to draft submissions for extension.
[19]
Section 217 (1) of the Constitution of Republic of South Africa,
[1]
provides that:
“
When an organ of
state in the national, provincial or local sphere of government or
any other institution identified in national
legislation, contracts
for goods or services it must do so in accordance with a system which
is fair, equitable, transparent, competitive
and cost effective.”
[20]
Section 51(1) (a) of the Public Finance Management Act,
[2]
states that: accounting authorities must ensure that public entity
has and maintains –
(i) an effective and
transparent system of financial and risk  management and
internal control;
(ii) …………………
(iii) an appropriate
procurement and provisioning system which is fair, equitable,
transparent, competitive and cost effective.
(iv) a system for
property evaluating all major capital projects prior to a final
decision.
[21]
The Service Level Agreement (SLA), annexure “HS1”
attached to the particulars of claim, the following clauses states

that:
“
3.2.11 References
to “this agreement” shall include this agreement as
amended varied, novated or substituted in writing
from time to time.
7.4 The department shall
at all reasonable times with prior written notice have access to
(including the right to reproduce) all
records, and documentation
required by the consultant to be kept in relation to the service for
purposes of auditing quality control,
and monitoring of the services
by the Department.”
13.3.4 If the department
disputes in good faith, any amount, or the calculation, competing or
supporting information evidencing
any amount set out in the invoice
or if the department disputes in good faith the completion of a
component of the services or
the significant progress made towards
the completion of a component of the service, the department should
be entitled to withhold
payment of the amount so disputed (the
disputed amount).”
[22]
The plaintiff’s contention is that the defendant by its conduct
and implication extended the SLA during the period May
2012 and
November 2012 in that the defendant continued to instruct the
plaintiff to perform the same services that were performed
by the
plaintiff prior to 18 May 2012. The plaintiff’s further
contention is that the defendant on 13 August 2013 made partial

payment of the services that were rendered by the plaintiff.
Furthermore, the plaintiff claimed that the defendant’s conduct

by implication was an extension of the SLA.  Alternatively, the
plaintiff claimed that the defendant was unjustly  enriched
by
the services rendered to the defendant.
[23]
The defendant’s contention is that the SLA was terminated by
effluxion of time on the 18 May 2012 and that the defendant
did not
conclude any further agreement to extend the SLA, nor does the SLA
have any provision for its extension by conduct and/or
by
implication, and that any such variation or extension would have to
be reduced to writing an signed by both parties as contemplated
in
clause 21.1 of the SLA.
[24]
The Supreme Court of Appeal in the matter of
MEC
for Health
,
Gauteng
v 3P Consulting (Pty) Ltd,
[3]
The court with approval referred to the case of
Qaukeni
judgment and remarked as follows:
“
[17] Relying on
Municipal Manager : Qaukeni Local Municipality and Another v FV
General Trading CC; and Eastern Cape Provincial
Government and Others
v Contractprops 25 (Pty) Ltd.  The department argued that
failure to comply with any of the abovementioned
constitutional and
legislative provisions renders any contract concluded in
contravention thereof void ab initio.  The court
does not, so
the argument went, have a discretion whether or not to enforce a
contract which does not comply with the prescribed
procedures.”
[25]
With regard to the interpretation of documents, including contracts,
in
Natal
Joint Municipality and Pension Fund v Endumeni Municipality,
[4]
Wallis
JA, said
“
Interpretation is
the process of attributing meaning to the words used in a document,
be it legislative, some other statutory instrument,
or contract,
having regard to the context provided by reading the particular
provision or provision in the light of the document
as a whole and
the circumstances attendant upon its coming into existence.
Whatever the nature of the document, consideration
must be given to
the language used in the light of the ordinary rules of grammar and
syntax; the context in which the provision
appears; the apparent
purpose to which it is directed; and the material known to those
responsible for its production.  Where
more than one meaning is
possible, each possibility must be weighed in the light of all these
factors.  The process is objective,
not subjective.  A
sensible meaning is to be preferred to one that leads to insensible
or unbusinesslike results or undermines
the apparent purpose of the
document.”
[26]
In
BP
Southern Africa (Pty) Ltd v Mahmood Investments (Pty) Ltd,
[5]
Lewis JA stated as follows:
“
It is settled law
that a contractual provision must be interpreted in its context,
having regard to the relevant circumstances known
to the parties at
the time of entering in the contract…. It is also clear that
the provision must be given a commercially
sensible meaning…”
[27]
The SLA between the parties is common cause.  The dispute is
more about the extension of the SLA and when it expired.
Thus
the interpretation of the SLA is not an issue. There were various
correspondence between the officials of the defendant and
the
plaintiff.  The officials of the defendant, impressed on the
plaintiff that the SLA was extended.  The update version
of the
SLA on page 47-49 Exhibit “A”  recommended that:
“
In view of the
above-mentioned, it is therefore recommended that Bovicon consulting
Engineers CC’s services Agreement entered
into with the
Department of Police Roads, and Transport be extended for a period of
twelve months (one year) 07 July to 7 July
2013.”
This
document was send to Mr Schoeman by Mr Ntsane Moroka on July 2012.
In this instance the only inference the court has
is that the conduct
of the department’s officials had extended the contract.
But there is no written proof that the
SLA was extended, neither is
there evidence that the HOD had approved the extension of the SLA.
[28]
There were several meetings in which Mr Schoeman made presentations
in the presence of the HOD (the late Mr Msibi).  One
such
presentation was on the 11
th
of July 2012 and in this
meeting according to the attendance register the HOD was present.
According to Mr Van Wyk it is
at one such meeting that the HOD
instructed the plaintiff to continue with its work. The minutes of a
meeting held on the 5 November
2012 at Kroonstad on (page 157 of
Exhibit A) state:
“
The mentor
(Bovicon) should be hands on at all times, must improve in that area,
especially at the commencement of the prospects
involving the Aera
Engineers……… Mentor (Mr Herman) will look at the
demonstration and shall assist on site.”
[29]
In a letter dated 13 December 2012 (Page 182) addressed to Bovicon
Consulting Engineers it reads that:
“
3. The extension
of Bovicon contract is still in progress.”
In
a follow-up correspondence dated 18 December 2012, an email was sent
by Ms Kekana in which it is indicated that the contract
had expired
and that the dates of the invoices should be changed.  A further
email was sent to Mr Schoeman, dated 18 December
2012 (page 188,
Exhibit A) that the dates on the invoices be revised. No mention was
made in these correspondence that the extension
of contract has been
approved by the HOD.
[30]
Instead Ms Kekana wrote an email stating that: “The invoice
dates must be changed because your contract expired in May
2012.
You continued to work without a contract or approval to proceed.
I requested that the invoice dates be changed
in case we get an
approval.”
Ms
Kekana followed up with another email dated 19 December 2012 which
reads as follows:
“
I did not approve
all you invoices because your contract had expired.  You will
have to resubmit all the invoices if we get
an approval to extend the
contract.
I was not aware that your
contract expired until Werner gave me a submission, requesting that
your contract be extended.  Your
contract expired long before I
joined the department. If I knew that your contract expired, I would
not have given you any instructions.
You should have mentioned that
your contract expired.”
[31]
The Treasury Regulations and National Supply Chain Practice Note No
SCM 3 of 2003,
[6]
Section 217 of
the Constitution and the Public Finance Management Act of 1999 (PFMA)
are in place to avoid or prevent any
conduct by government
officials
[7]
, who will conduct
transactions without the proper authorisation.  If a party
contracts with an organ of state, one would expect
such a party to
request that the contract must be in writing.  A written
contract to the benefit of all will serve as evidentiary
proof that
there was a contract.  Mr Schoeman testified that:  “In
hindsight that a verbal agreement with the department
is a dangerous
thing because officials don’t own up to it.”
This
should be clear to any reasonable person that contracting with a
state organ, any agreement should be in writing, in order
to protect
the interest of both parties.  Ms Kekana testified that any
agreement or contract with government must be in writing.
[32]
Indeed any oral contract whether expressed, implied or by conduct is
a risky action.  To prevent any fraudulent contract
by any
party, it is for those reasons that the Supply Chain Policy, National
Treasury and PFMA requires that any contract with
a state organ must
be in writing.  Furthermore, the SLA between the parties clause
21.4 states that: “No provision of
this agreement including
without limitations, the provisions of this clause may be amended,
substituted or otherwise varied and
no provisions may be added to or
incorporated in this agreement, except (in any such case) by an
agreement in writing signed by the duly authorised representatives
of the party.”
(Emphasis added)
[33]
The various emails between the Plaintiff and the officials of the
defendant was mostly to follow up on the progress of the
extension of
the SLA.  Indeed it is such that the SLA agreement was effective
from 18 May 2011 and expiry date was the first
anniversary of the
effective date, unless the date was at the sole instance of the
department extended at a later date. The SLA
has no provision that,
it will be extended by an oral agreement.  It is also
unthinkable that an organ of state will enter
into any such agreement
without doing it in writing. The SLA clearly stated that the
agreement will be terminated on the expiry
date.  It is still
questionable as to how instructions were given for the extension of
the SLA to the plaintiff but these
instructions were not in writing.
Unfortunately the HOD is deceased and no clarity can be obtained from
the deceased. Except one
letter dated 1 July 2010 (p. 292 of Exhibit
A) in which the HOD wrote to the plaintiff that:
“…
I indeed
referred to your services as being satisfactory.  I however need
to point out to you that, this does not bar the department
from
investigating your claims and the work done.  The investigation
hereunder to include amongst others, payment in excess
or otherwise.”
[34]
Based on the correspondence of the HOD, the officials, that is Mr Van
Wyk and Du Pisane their conduct to give the plaintiff
the impression
that the contract was in the process of being extended, was indeed
wrong.  It was not their responsibility
do give through
information to the plaintiff without the HOD’s go ahead or Ms
Kekana.    Ms Kekana confirmed
in her testimony that
the officials had no authority to discuss the progress of the
extension. Even if Mr Van Wyk was the one who
did the submission for
the extension, they had to wait for the HOD to approve the
extension.  Ms Kekana specifically mentioned
that she requested
documents in respect of the SLA, and these were not forth coming. Mr
Schoeman might have been familiar with
the work of the department as
he has worked with the department over a long period, he cannot be
faulted for having believed that
the contract will be extended.
As he explained that in the past he was given an appointment letter
to continue with the work.
[35]
However, having perused through the file and documents filed,
there is no document that indicated that the HOD gave the
go ahead
after the expiry of the SLA, whether it be in writing, expressed or
implied. The
Shifren
Principle
,
[8]
specifically deals with policy considerations in order to avoid
disputes and/or evidential difficulties often associated with oral

agreements. This principle has been affirmed in
Brisley
v Drosky,
[9]
that contracting parties may validly agree in writing to an
enumeration of their rights, duties and powers in relation to the
subject matter  of a contract, which they may alter only by
resorting to  that it must be in writing. The principle simply

binds the parties to their non-variation clause.
[36]
In the matter
of
Barkhuizen v Napier,
[10]
the
court confirmed that the general rule is that agreements must be
honoured, but cannot apply to immoral agreements that violate
public
policy. In this instance the parties did not have a variation clause
in their agreement that allowed for an oral agreement.
The SLA
neither had any
proviso
that the extension of the contract will be acceptable if it was oral.
[37]
Indeed it is such, that the contract while it existed was valid and
binding, but the crux of the matter is that it was not
extended,
there is neither  sufficient evidence that the SLA was extended,
nor can it be said it was extended by implication
or orally.  I
am satisfied that the SLA was terminated by the expiry date, and that
there was no extension whether implied,
tacit or expressed.
UNJUST
ENRICHMENT
[38]
The plaintiff in the alternative avers that it complied with its
obligations and rendered the services in compliance with the
SLA to
the defendant.  According to the plaintiff it acted in the
bona
fide
and reasonable yet mistaken belief that the plaintiff was
obliged to comply with its obligations. Thus the defendant was
enriched
at the expense of the plaintiff by the aforesaid compliance
and services to the extent that the value of the services rendered
being R1 171 774.83.
[39]
The defendant disputed that the plaintiff was entitled to the relief
sought under unjust enrichment as Mr Schoeman is well
verse with the
tender process in the department and that he has a long standing
relationship with the department.  Furthermore
the plaintiff
ought to have reasonably known that the agreement has not been
extended orally or in writing; thus the plaintiff’s
actions
were not
bona fide
and should not have continued to work
without an approved extended SLA.
[40]
Unjustified enrichment has no general enrichment in our law.
The principles is simply that no person’s estate must

unjustifiably be increased at the expense of another.  The four
principles being; enrichment, impoverishment, enrichment of
the
defendant must be at the expense of the plaintiff and the enrichment
must be unjustified.  In
McCarthy
Retail Ltd v ShortDistance Carriers CC,
[11]
the appeal court stated that on the general action for
enrichment, there must be a belief, or fear that a tide of litigation

will be let loose.
[41]
The questions is, was the enrichment on the part of the defendant and
was the enrichment at the expense of the plaintiff and
if it was
unjust.  The South African Law of Unjustified Enrichment, page
40 paragraph 2.2.7 states that: The burden of proof
of enrichment, as
with other elements of enrichment liability, rests with the
plaintiff.  However the burden of proof regarding
the defence of
loss of enrichment rests on the defendant.”
[42]
In spite of the SLA having terminated on the effective date of 18 May
2012. Exhibit A and B showed several correspondence and
memorandum
that gave continued instructions to the plaintiff to attend meetings
and make presentations at some of these meeting.
Mr Schoeman
submitted that by using his machines, transport in the form of a
bakkie and time spend on preparing for the presentations,
mentoring
the new contractors and time based fees. Ms Kekana in her testimony
acknowledged that the department received value for
money, which is
one of the pillars on supply chain policy.  In a correspondence
dated 7 August 2013 (page 313 exhibit A) addressed
to  Ms Kekana
and was signed by Mr Du Pisane, Mr Van Wyk and Ms Masemola, the
document confirmed that: “It can be accepted
that value for
money was received for the contracted amount.”   The
document in conclusion confirmed that the skills
contributed by
Bovicon was not and still is not available.
[43]
The memorandum dated 7 August 2013 by Mr Du Pisani, paragraph 3.3
value for money, paragraph 4 reads as follows:
“
Bovicon continued
to deliver a service to the contractors and the department after the
programme was delayed due to cash shortages.
However no
increase on the original Bovicon project amount was approved.”
Paragraph
6 - Recommendation
“
It is recommended
that accounting officer authorises the payment of the project
coordinator/Mentor Bovicon for time worked after
the expiry of the
contract in May 2012 on outstanding invoices 12, 13, 14 and a portion
of certificate 15 for a total payment of
R816 670, 19 not to exceed
the total project appointment.”
[44]
It is common cause that Bovicon continued to deliver services in
terms of the SLA.  Bovicon and its staff members was
available
to mentor the learner contractors and that service was the key to the
success of the program. Bovicon services were not
available within
the department. The value for the amount claimed was received by the
defendant and thus the delivery of these
services had indeed
impoverished. The defendant’s desperate plea for the services
of the plaintiff are noted in Mr Johny
Mosai’s email dated 10
August 2012, page 105 Exhibit ‘A’:
“
Mr Herman you have
heard the concerns, will you please assist ASAP.  This learner
contractors are not working at this stage.
I need your help please
Sir!”
[45]
The presumption is that money was paid and goods were delivered.
The plaintiff went as far as to continue to deliver
the services in
spite of the cash shortage of the defendant.  Ms Kekana
confirmed in her testimony that the defendant received
value for
money, and had the documents been in place, the defendant would have
paid the plaintiff for the services rendered. It
is fair that the
plaintiff be paid for the services rendered, as the defendant does
acknowledge that it received value for money.
The HOD, the late Mr
Msibi, in his letter dated 01 July 2010 said: “I indeed
referred to your services as being satisfactory.”
[45]
In respect of unjust enrichment the plaintiff’s claim clearly
occurred
sine causa
.  It has been stated by the courts
that identification of the specific
conditio
is not of
importance, as long as the requirement of
sine causa
has been
met.  It cannot be ignored that the plaintiff rendered the
service to the defendant and the defendant confirmed that
value for
money was received by the defendant, and the consequence thereof the
plaintiff was impoverished.
[46]
The plaintiff acted in a
bona fide
belief and reasonable
belief, though mistaken that the plaintiff was obliged to comply with
the obligation of the SLA and to render
services in compliance of the
SLA.  The defendant was indeed enriched at the expense of the
plaintiff for the services that
were rendered, and thus impoverished
the plaintiff.
[47]
The defendant raised a counter-claim against the plaintiff that
claims 13, 14 and a portion of claim 15 were payments made
as a
result of the fraudulent conduct of the official.  However, the
defendant did not lead any evidence in respect of this
allegation.
As correctly stated by the defendant, the department did not take any
disciplinary actions against the officials.
In terms of section
38 (1) (h) of the PFMA which provides that:
“
38 General
Responsibility of Accounting Officers
(1) The accounting
officer for a department, trading entity or constitutional
institution-
(a)
…….
(b)
…….
(h)
must take effective and appropriate disciplinary steps against any
official in the service of the department, trading entity
or
constitutional institution who-
(i) contravenes or fails
to comply with a provision of this Act;
(ii) commits an act which
undermines the financial management and internal control system of
the department, trading entity or constitutional
institution; or;
(iii) makes or permits an
unauthorised expenditure, irregular expenditure or fruitless and
wasteful expenditure.”
[48]
The defendant in its evidence made no mention that the involved
officials were discipline or disciplinary action was taken
in terms
of section 38 (1) (h) of the PFMA.  The same officials are still
in the employment of the defendant.  The inference
drawn is that
the defendant raised the counter-claim as an afterthought in order to
frustrate the claim of the plaintiff. It is
expected that a
well-managed administration will take action against any official who
does not comply with the provisions of the
PFMA. As correctly stated
by the plaintiff that the accounting officer who is guilty of an
offence, such an officer wilfully or
grossly failed to comply with
the PFMA provisions.
[49]
In the matter of
Free
State Province v Terra Graphics (Pty) Ltd
and
Another,
[12]
the
court question the department’s failure to take disciplinary
action against officials who had not complied with the provisions
of
the PFMA.  Thus in my view the counterclaim of the defendant
ought to be dismissed.
[50]
It would be just and equitable that the plaintiff be paid for the
work done, to the extent that the defendant acknowledged
that the
plaintiff is the only service provider for the CPD. Thus the
plaintiff ought to succeed on the claim in respect of unjustified

enrichment.
ORDER
[51]
I accordingly grant the following order.
1. The defendant is
ordered to pay the plaintiff the amount of
R1 171 774.83.
2. Interest on the said
amount at
15.5%
per annum from the due date of each invoice to
date of final payment.
3. The defendant is
ordered to pay the costs that stood over as per the court order dated
6 November 2014
4. The defendant is
ordered to pay the costs as per the court order dated
11 December
2014.
5. The defendant to pay
the costs that stood over as per the court order dated
21 February
2019.
6. The defendant’s
counterclaim is dismissed.
_________________
S.
CHESIWE, J
APPEARANCES
For
the Plaintiff: Adv PA Botha
Instructed
by: (Schoeman Law Inc Cape Town)
C/O
Hill ,McHardy & Herbst
Bloemfontein
For
the Defendant: Adv. C Georgiades
Instructed
by: Lebea & Associates
C/O
Phatsoane Henny Inc.
BLOEMFONTEIN
[1]
The Constitution Act 108 of 1996.
[2]
Act No. 1 of 1999 (PFMA)
[3]
2012 (2) SA 542
(SCA).
[4]
2012 (4) SA 593
(SCA) at para [18].
[5]
[2010] 2 ALL SA 295
(SCA) at para [11].
[6]
General
Procurement guidelines are issued by the Government not only as a
prescription of standards of behavior, ethics and accountability,

these guidelines are the five pillars; namely, value for money, open
effective completion, ethics  and fair dealing accountability

and reporting ; equity.
[7]
Robison
v Randfontein Estate GM Co. Ltd
1925 A.D. 172
, where the court held
that in addition to the requirement of fraud o deceitful conduct,
there may be circumstances under which
a contract will not be
enforced because it offends public policy
[8]
SA
Sentrale Ko-op Graanmaatskappy BpK v Shifren
1964 (4) SA 760
, the
court held that where the contractual parties inserted a
non-variation clause in their contract, they should be bound to
the
non-
variation
clause to which they both agreed.hm
[9]
2002 (4) SA 1
SCA.
[10]
2007 (5) SA 323 (CC).
[11]
McCarthy
Retail  Ltd v Shortdistance Carriers CC
2001
(3) SA 482 (SCA)
[12]
2016
(3) SA 130
(SCA)