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[2018] ZAGPPHC 7
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Corruption Watch (NPC) (RF) v Chief Executive Officer of the South African Social Services and Others (21904/2015) [2018] ZAGPPHC 7 (23 March 2018)

REPUBLIC
OF SOUTH
AFRICA
I
N
THE
H
I
GH
COURT
OF
SOUTH
AFR
I
CA
GAUTENG
D
I
VISION,
PRETORIA
CASE
NUMBER:
21904/2015
In
the
matter
between:
CORRUPTION
WATCH (NPC)
(RF)
APPLICANT
And
THE
C
H
I
EF
EXECUTIVE
OFF
I
CER
OF THE                                                 1
st
RESPONDENT
SOUTH
AFRICAN SOCIAL SERVICES
THE
SOUTH
AFRICAN
SOCIAL
SECURITY
2
nd
RESPONDENT
AGENCY
CASH
PAYMASTER SERVICES (PTY)
LTD
3
rd
RESPONDENT
JUDGMENT
TSOKA,
J
[
1]
The applicant
,
Corruption
Watch (NPC) (RF) (Corruption Watch) applied to
this court
to review
two dec
i
sions
by
the
first respondent,
the
Chief
Executive
Officer
of the South African
Social
Security Agency
and
the
second
respondent
,
the South African Social  Security
Agency,  conven
i
ently
and  collectively
called
(SASSA). The first decision relates to
an alleged Variation .Agreeme
n
t
concluded by SASSA and the third respondent, Cash Paymaster Services
(Pty) Ltd
(Cash
Paymaster) at a meeting held on 15 June 2012 at Kyalami, Johannesburg
while the second decision relates to the
payment of the amount of R316 447
361.41, which payment was the result of
the Variation Agreement.
[2]
Corruption Watch contends that the two decisions fall foul of the
provisions of section 6(a)(
i
)
of the Promotion of Administrative Justice Act 3 of 2000 (PAJA)
in that, in concluding the agreement and
effecting the payment,
SASSA
contravened the provisions of its then existing Supply Chain
Management Policy of 2008 (SCM Policy) thus rendering
the decisions unlawful.
[3]
The application
i
s
opposed by both SASSA and Cash Paymaster
who
filed
affidavits res
i
sting
the order sought by Corruption Watch
.
At the hearing of the appl
i
cation,
only Cash Paymaster persisted
i
n
i
ts
opposition while
SASSA
did not and,
i
n
fact,
i
ndicated
that they abide the decision of this court.
[
4]
The facts giving rise to this national saga
are the
following.
On
17
January 2012 SASSA en
l
i
sted
CPS to distribute social
welfare
grants
on
i
ts
behalf
.
For
reasons that are not relevant to this application, on 29 November
2013, the Constitutional
Court
declared
the
agreement
between   SASSA   and   CPS
unlawful
[1]
.
The
declaration
of
un
l
awfulness
was
suspended
pending
confirmation
of
a
just  and equitable remedy.
On 17
April
2014,
the
Constitutional Court
ordered
S
ASSA
to
i
n
i
tiate
a
n
e
w
tender
process
for
the
payment  of
social
grants  within
30
days.
Again,
the
court
suspen
d
ed
the
declaration  of invalidity  of
the
tender
pending
compl
i
ance
with the new
tender
process
to
be
i
n
i
tiated.
To date, no new tender has been awarded
with the resu
l
t
that the declaration of
i
nvalidity
still remains.
[5]
Before
the
tender
was
s
e
t
as
i
de,
SASSA
and
CPS
concluded
a
Service
Level Agreement (SLA) and an agreement
i
n
terms of wh
i
ch
the
l
atter
was to pay social grants on behalf of the former
on 3 February 2012 (the Contract).
In
terms
of
the SLA,  CPS
was
responsib
l
e
for
two
distinct  phases  of
enrolment,
namely
bulk. enrolment  and  on-going  enrolment  of
new  recipients.  The enrolment  process
entails
the
capturing and
registration of the
data
relating
to
the
name,
surname,
digital
photograph  (excluding children) and
identification
··
number
of the
recipient.
In
addition, SASSA requested CPS to capture and register the current
address
(physical and postal), cell phone
numbers, alternate contact
numbers,
employment,
name
and
address of
school
attended
by
the
child.
This
request
was
considered to
be
an additional function
to
be
performed by CPS at
a
fee
to
be
agreed
to
between
the
parties.
In
the
event
the
parties
did
not
reach
any
agreement
on
the
fee
payable,
the
time and the deliverables, CPS
was
not
obliged
to
render
such
additional
services
.
[6]
In
terms
of
the
Contract, the parties agreed on a
firm price
of R16.44, inclusive of
VAT, to be paid
by
SASSA to CPS per recipient of a social
grant: In
·
terms
of
clause
6.3
of
the
contract
the
parties
agreed
that
-
'
I
n
the
event
that
SASSA
may
require
the
contractor
(CPS)
to
render
social
grant
payment
re
l
ated
services
additional
to  the services,
this
shall  be
subject
to
a written
agreement
between
the
parties
i
n
ter
alia
as
to
a
negotiated
service
fee
for
such
services
.
.
.'
[7]
During June 2014, Corruption Watch
l
earnt
through an exchange
a
nnouncement
made by Net
1
UEPS  Technologies
I
ncorporated
(Net
1
),
a.  Un
i
ted
States
company
l
i
sted
on
the
Johannesburg
Stock
Exchange    the
parent
company
of
CPS    that
SASSA
engaged
CPS
to
perform
approximately
1
1
mil
l
i
on
ad
d
i
tional
reg
i
strations
that
d
i
d
not form
part
of
i
ts
monthly
service
fee.
And
that
after
the addit
i
onal
registrations wh
i
ch
were
i
ndependently
verified
,
SASSA agreed to pay CPS ZAR 275 mill
i
on
as full settlement of the additional costs
i
ncurred.
[8]
The  announcement  of  payment  of  such
a  substantial  amount,  aroused
the
interest  of  Corruption
Watch,  whose  interest,  amongst  others,
is  to
act  as
a
watchdog
i
n
ensuring
that
procurement
systems
are
tightened
so
as
to
reduce
their vulnerability to corruption
i
n
order
to
foster transparency
and
accountabi
l
i
ty
,
not
on
l
y
i
n
r
espect
of
public
entit
i
es
but
pr
i
vate
entities
as
well.
Sens
i
ng
that
public
resources
i
ntended
for  use
by
millions
of
d
i
sadvantaged
South
Africans
may
have
been
directed
for
the
benef
i
t
of t
h
e
few
,
by
non-compliance
with
the
procurement  requ
i
rements
and
the
expend
i
ture
of  publ
i
c
funds,
i
t
approached
S
ASSA
to   co
n
firm
t
hat
i
t$
suspicions
were
unfounded
.
The
l
atter
i
nv
i
ted
Corrupt
i
on
Watch
to
i
ts
offices
to
i
nspect
the
documentation
pertaining
to
the payment.
Corrupt
i
on
Watch
was
however
given
restricted
access
to
the
l
i
m
i
ted
docume
n
tation
regarding the said
payment.
From its assessment,
i
t
was
unable
to locate any documentation evidencing that the said payment
was made pursuant to the SLA  or  in terms of a further
agreement
as envisaged  in  clause
6.3
of
the
contract. It
was
,
however
,
informed
that
the
said
payment
was
made
as a
result
of
the
discussion
between
SASSA and
CPS.
[9]
Cor
r
uption
Watch
then
w
r
ote
severa
l
letters
to
SASSA
requesting
the
minutes
of the meeting at which the payment was
d
i
scussed
but the lette
r
s
remained unanswered
.
It
was
a
result
of
lack
of
i
nformation
o
r
clarification
regarding
the payment
that
Corrupt
i
on
Watch in
2015 instituted the present  application
seeking
access
in
terms of
Rule
53
to the
full
information regarding
the
payment. Instead of SASSA filing the complete reco
r
d,
it
fi
led an
incomplete one
.
Later
SASSA
supplemented the record with the necessary information
that should have been furnished earlier on.
[10]
From
the
records
furn
i
shed,
Corrupt
i
on
Watch  noticed
that
on
10
M
arch
2014,
CPS rendered an
i
nvoice
to SASSA
i
n
the amount of R3
1
6
447 361.41 (including VAT)
.
The  said
i
nvoice
was headed
'
'F
i
na
n
cial
Consideration  for
Bulk
Re­
reg
i
stration"
but  instead  of  reflecting
the
ag
r
eed
firm  price
i
n
the
amount  of R
1
6.44
(including
VAT)  per
registration,
i
t
reflected
a
higher
amount
of
R23.20
(excluding
VAT)
per
reg
i
stration.
I
t
further
transpired
that
three  days
l
ater,
on
13
March 2014, one Mt Frank Earl, who has since resigned from SASSA
;
the
Executive Manager of Benefits Transfer,
submitted a document to SASSA's Bid Adjudication
Committee
(BAC)
headed
''Variation
Order
r
eimbursement
of costs
incurred
by
Cash
Paymaster
Services
(Pty)
Ltd
(CPS)
in
respect
of
additional
resources procured for re registration
project for the period of 01 January 2013."
The purpose of the document was to seek
BAC's recommendation for  variation of
the 3 February 2012 contract. BAC was
further requested to recommend to the CEO of
SASSA to grant approval to process part
payment
of
the said
amount
of R316 447
3
61.41
.
The remai
n
der
of the
payment
was to be paid after verification by
an
i
n
dependent
au
d
i
tor
i
n
the
ensu
i
ng
financial year.
The
motivation
for
the
payment
was
the
elimination
of
ghost
dependants,
dupl
i
cate
chi
l
dren
and
non­
qualifying dependants.
The
document further ref
l
ected
that SASSA and CPS
had
agreed  to  re-register
9
.
2
million
socia
l
grant  beneficiaries  and
recipients
for
a per
i
od
of
six
months
at
CPS's
costs. The document further revealed
that
at
the
discuss
i
ons
he
l
d
between
SASSA  and  CPS,  the
total
number  of  social
grant
recipients as well as dependants  was  unknown resulting in
the re-registration
of
additional grant recipients of 11
.
9
million by CPS
.
In
justifying the payment,
Mr
Earl pointed out that the said figure of R316 447 361.41 was audited
by
KPMG.
This information was to Mr  Earl's knowledge
i
ncorrect
as the figure  of R316   447 361.41 was not audited by
KPMG. Th
i
s
is common cause
.
The
figure was
not
audited
.
SASSA, in
its answering
aff
i
dav
i
t,
justified the payment as representing
re
-
registration
of
ch
i
ldren
which
re-registration
was not
catered
for
in
the
SLA
and
the
Contract
which
only
speak
of
grant
recipients,
excluding
children.
[11]
Pursuant to the sa
i
d
BAC's recommendat
i
on
,
SASSA
CEO,
Ms Virginia Petersen approved
part
payment of the
i
nvoice
as recommended.  CPS,
on the
advice
of
their auditors,
rejected
the part payment. Surprising
l
y,
on 25 April 2014 SASSA's Supp
l
y
Chain
Management
submitted a
document
to
Ms
Peterson
to
consider
the
BAC's
r
ecommendation
and
pay
CPS
the
full
amount
of
R316
447
361
.
41
being
in
respect of "costs
i
ncurred
by Cash
Paymaster
Services
(Pty)
Ltd
to
re-
register
all
the
grant
recipients
as
well
as
outstanding
beneficiaries." Simu
l
taneously,
i
t was
recommended
that
the
completeness and
correctness
of CPS's  audited  claim
be
submitted
to  an
i
ndependent
auditor  for  verification
.
Ostensib
l
y,
the
purpose
of
referral
of the
i
nvoice
to an
i
ndependent
auditor
was
to
co
n
firm
KPMG's conclusions
.
I
t was
pointed
out
i
n the
document
that
should any  discrepancy
be
uncovered
by
the
i
ndependent
auditor
,
CPS  would
be
afforded   an
opportun
i
ty
to
respond   thereto
.
Should
the
latter
accept
the discrepancies,
it
was
to
refund
to
SASSA such
discrepancy
amount. On
22
May 2014 Ms Peterson approved BAC's recommendations to
pay
CPS in full. The payment
was
made
in
June
2014.
[
1
2]
I
t
emerged
for
the
first
time
i
n
S
ASSA's and
CPS's
answering
affidavit
that
the
payment
was
i
n
fact
made
pursuant to
the
variation
of the
SLA,
which variation was
agreed
to
i
n
a meeting he
l
d
on
1
5
June 2012 between SASSA
and
CPS.
I
n
the  res
u
l
t
i
t
is  necessary  to  exami
n
e
the  said  SLA  variation  agreement  to
determine whether the alleged agreement
and
payment
were
i
n
compliance with section
217
of
the
Constitution,
the  Publ
i
c
Fina
n
ce
Management
Act  1 of
1999
(PFMA),
the
Social
Assistance
Act
1
3
of
2004,
the
Treasury  Regulations,
the
SLA, the
Contract
and the Supp
l
y
Chain Management
Pol
i
cy
No. 8
(1).
I
t wou
l
d
be
recalled
that
i
n
terms
of
section
217
of
the
Constitution,
any
organ
of
state when  it
contracts
for
goods  or  services,
i
t
must
do
so
i
n
accordance
with  a system wh
i
ch
is fair, equitable, transparent, competitive and cost effective.
I
f
not, such
contracts
are u
n
l
awful
and fall foul of the
provisions
of
PAJA
and
must be
set aside
.
Similarly,
i
n terms of
the
PFMA,
the Social Assistance Act
13
of 2004, the
Treasury
Regulations,
the SLA, the
Contract
and the SCM
Pol
i
cy
8 (1),
any
procurement of goods or services must be   fair,
equitable,   transparent, compet
i
t
i
ve
and cost effective.
THE
SLA VARIATION AGREEMENT OF
15
JUNE 2012
[13]
The  alleged  Variation  Agreement
is
headed
"M
i
n
utes
of  enrolment  day
run
feedback
meeti
n
g
he
l
d
between SASSA and CPS (Pty) Ltd at the Castle Kyalami on
Fr
i
day
1
5
June
20
1
2."
I
t
records
the
persons
who
attended
the
meeting
on that day
.
I
t
i
s
signed by Ms
P
eterson
and Dr Serge Belamant on behalf of CPS.
I
t records
the
i
ssues
d
i
scussed
between  SASSA  and  CPS.  Of
i
mportance
and
r
elevance
to
the
present
matter
i
t
records:
'The
SASSA CEO confirmed that the enrolment of dependants  should
proceed
as specified at
the
outset
and agreed during the SLA negotiations. At the
request
of the SASSA CEO, the CEO of CPS agreed that the payment of
costs
associated
with
the
enrolment of dependants
would
only
be
effected
at
the
conclusion
of  the  bulk  enrolment
process.
The  SASSA  CEO   requested
an
i
ndependent
report
i
n
respect  of  the  costs  associated  with
the  enrolment  of
d
ependants
to be tabled at the conclusion of the
B
ulk
Enrolme
n
t
Process..
.
'
[
1
4]
As
there
i
s
a
dispute
b
etween
the
parties  as  to  whether
the
above
quoted document
i
s
a
variation agreement
or
not,
i
t
is
apt
to
restate
what
the
Supreme
Court
of
Appeal
sa
i
d
i
n
Natal
Joint
Municipal
Pension
Fund
v
Endumeni
Municipality
[2]
i
n
i
nterpreting
l
e9islation
and
agreements
such
as
the
one
i
n
this matter.
I
n
that
matter,
the Supreme Court of Appeal said the following:
'....
I
nterpretation
is
the
p
rocess
of
attributing
meaning
to
the
words
used
i
n
a document,  be
i
t
l
egislation,
some
other
statutory
i
nstrument
,
or
contract,
having
regard
to
the
context
provided by
reading
the
particular provision or provisions
i
n
the
l
i
ght
of the
docume
n
t
as
a
whole and the
circumstances
attendant
u
pon
i
ts coming
i
n
to
existence. Whatever
the
nature of the document,
consideration must
be
given
to
the
l
anguage
used
i
n
the
lig
h
t
of the ordinary
rules
of
grammar
and syntax;
the
context
i
n
which
the
provision  appears;  the  apparent  purpose
to wh
i
ch
i
t is
directed and the material known to those responsib
l
e
for
its
production. Where
more than
one
meaning
i
s
possib
l
e
each
possibil
i
ty
must
be
weighed
i
n
the
light
of
all
these factors.
The
process
i
s
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.  Judges  must be alert to, and guard against, the
temptation to substitute
what they regard
as reasonable,  sensible  or
businesslike  for  the  words  actually
used
.
To
do  so
in
regard
to  a  statute
or
statutory
i
nstrument
i
s
to
cross
the
d
i
v
i
de
between
i
nterpretation
and
l
egislation.
In
a
contractual
context
i
t
i
s
to
make
a
contract
for
·
the
parties
other  than  the  one  they
i
n
fact  made
.
The
'inevitable  point  of
departure is the language
of
the provision itself', read in context and
having
regard
to
the
purpose
of
the
provision
and
the
background
to
the
preparation
and
production
of
the
document.'
[15]
The ordinary and grammatical language
of
the alleged "Variation
SLA
Agreement" of 15
June
2012 having regard to
its
context and
the
intention of the parties
reveal
that
-
15.1
the contended variation of the SLA is
nothing other than the recordal  of the minutes held between the
parties on that
day;
15.2
no var
i
ation
of the
SLA
was
i
ntended
but confirmation
that
the
enrolme
n
t
of dependants would proceed as per the SLA;
15.3
payment of the enrolment in terms of the
SLA would only be effected
at
the conclusion of the bulk enrolment of all
dependants
;
15.4
the costs of
the bulk
enrolment
would only be
known at
the end of the bulk enrolment whereafter
such costs would be tabled for discussion
and agreement;
15.5
once an agreement is reached at the
conclusion of the bu
l
k
enrolment process, payment would be
effected;
15.6
no variation of the terms
of SLA were
discussed
and agreed
upon on that day justifying payment of
the amount of R316 447 361.41 to CPS.
[16]
According to SASSA the decision to vary the SLA was that of Ms
Peterson.
In
paragraph
38
of
SASSA's
answering
affidavit
she
states
-
'.
.
.
I took a decision to consider the variation of the agreement at
the
meeting of
15
June
2012.'
That
th
i
s was a
u
ni
l
ate
ra
Idecision
by
SASSA
and n
o
t an
agreement between the parties
could
not
be
clearer.
This unilateral decision
cannot
be
the basis of
the
variation of the SL
A
.
The
uni
l
ateral
variation cannot therefore be e
l
evated
to the status of an agreement
between
the parties
.
[17]
To contend and argue as SASSA and CPS
do, would be to strain the language of the minutes of 15 June 2012. I
conclude therefore that
on 15 June 2012
at Kyalami SASSA and CPS did not agree
to vary the terms of SLA
justifying
the payment of R316 447 361.41 to CPS.
The payment was without any basis and
is
therefore unlawful.
[18]
There
is
a
further
basis
upon
which
the
meeting
of
15 June
2012
could
not
be
regarded
as
an agreement. The alleged variation agreement is vague with
regard
to
CPS's
costs
which
were
to
be
investigated
independently
and
then
tabled
,
possibly
for
discussion
and
agreement.
In
ALLPay
1
[3]
the
Constitutional
Court
reasoned
-
'Vagueness
and
uncertainty
are
grounds
for
review
under
section
62(1)
of
PAJA.
Certainty
in
legislation
and
administrative
action
has
been
linked
with
the
rule
of
law...'
The
Constitutional Court
went
further and
stated
that
-
vagueness
can render a procurement process, or administrative
act
i
on,
procedurally
unfair under section 6(2)(c) of PAJA. After all an element
of
procedural
fairness
-
which
applies
to
decision-making
process
-
is
that
persons
are
entitled
to
know
the
case
they
must meet.'
[19]
In the
instant
matter,
the purported variation of the
SLA
is
not envisaged in the Request for Proposal (RFP)
.
The exclusion of all other bidders in
preference of
CPS
i
s
therefore
unfair
and
contrary
to
the
ru
l
e
of
l
aw
which
i
s
a
fundamental value of our Constitution.
I
t being
u
n
fair
and contrary to the rule of
l
aw,
i
t ought to
be rev
i
ewed
and set aside
i
n
terms of PAJA.
[20]
Furthermore,
in
terms
of the PFMA an organ of state such as SASSA must determine
its
procurement
policies.
It
was
on
this
basis that
the
Supply
Chain Management Policy (1) of 2008 (SCMP) was promulgated. Clause
4
.
5
.
2
of
that
Policy provides -
'In
the
event that
there
is
a need to extend the existing or concluded contracts
or
agreements approval must be sought from
the
Bid
Committee with valid reasons
forwarded.
Continu
i
ty
should not  be  advanced as reason  to  extend
projects using same supplier  and service providers
.
..'
[21]
In
addition,
clause
4.7.8
of
the
Policy
is
of
paramount
importance.
It
reads
-
'The
Bid
Adjudication Committee must also consider and
rule
on
all recommendations
I
reports
regarding
the
amendment, variation,
extension,
cancellation or transfer of contracts awarded.'
[22]
In
the
present matter, the alleged variation
agreement was
concluded
without the
approval,
consideration and ruling of the BAC. In the
result,
the
alleged variation agreement
is
hit by the provisions of section
6(2)(a)(i) of PAJA in that it was
not
authorised by
the
SCMP
.
It
is
accordingly unlawful and reviewable.
[23]
Having
found
that
the
variation
of
the SLA is
unlawful
and ought to be
set aside
,
it
stands
to reason
that
the
payment that
flows
from
this
unlawful
decision
is
also unlawful.
It
cannot
stand
.
I
t
must
also
be
reviewed
and
set
aside.
[24]
In
addition,
the payment
falls
foul
of the provisions of section 6(2)(e)(ii)
in
that
it
was
effected for ulterior purposes or motive;
the
payment
is
also not rationally connected with
the
purpose for which
it
was made; - section 6(2)(f)(ii);
the payment was unreasonable
i
n
that
no
reasonable
person
in
the
position
of SASSA could have effected such
payment without any valid
reasons -
section 6(2)(h) of PAJA.
[25]
CPS
i
n
i
ts written
submissions argues that on the
basis
of
the
d
e
fin
i
tions
of
"
the
Firm  Price",
i
n
the
RFP
and  the  defi
n
i
tion
of  a
"
Beneficiary"
i
n
the  Social Assistance
Act
1
3
of
2004,
which
also
does
not
i
nclude
chi
l
dren,
the
variation
agreement was concluded by SASSA and CPS for
i
nclusion
of chi
l
dren,
i
n order to
al
i
gn
the
concluded SLA and the
Co
n
tract
with these defi
n
i
tions
.
According
to
CPS, the Variation Agreement   not
being
an
extension
of
the
existing
or conclu
d
ed
agreement,
cannot
be
a
victim
of
clauses
4.5.2
and
4.7
.
8
of
the
Supply
Chain
Management
Pol
i
cy
(1)
of
2008.
I
n
support
of
this
submission heavy
rel
i
ance
was based on clause 5
.
3.
1
O
of the SLA which provides that
-
'The
parties record that the capturing of
the
information
recorded
i
n
clause
5
.
3
.
1
.
2
is
an
additional function
requested
by
SASSA.
The
parties
shall discuss the obligations arising
from
such function and agree on
the
remuneration
payable
to
the contractor by SASSA in respect thereof as well as the impact on
t
i
ming
I
delivery
schedules.
If
the
parties
are
unable
to
agree on a suitable
remuneration
and
time
I
delivery
variations, the contractor shall not be requested to
render
such
additional
duties
or
functions.
'
[26]
It
is
therefore
the
contention of CPS that the additional duties performed by
it
in
terms
of
the
Var
i
ation
Agreement was accordingly not
a
variation
or
extension
of the concluded agreement resulting in it performing this additional
function
for
SASSA at cost.
It
being
further contended that when CPS priced
its bid with the projected beneficiary
numbers as
per the
RFP,
it
only bid to enrol
9
082 250 beneficiaries at the firm price.
The number of the beneficiaries having
escalated to more than the original number, CPS was to be reimbursed
the costs incurred in
enrolling  the  additional
numbers.   I disagree  with  this
submission   and
i
n
terpretation
of c
l
ause
5.3
.
1
0
.
I
see the matter d
i
fferently.
[27]
The
argument
and
contention
i
s far
from
the
truth.
I
n
terms
of
the
definitions
of
"Beneficiaries"
i
n
the
SLA
and
the
Contract,
the
definition
"Beneficiaries"
"
shall
bear the
meaning
assigned
to
i
t
i
n
the
Act
(Act
No.
1
3
of
2004)
and
i
ncludes
children
.
"
I
n
concluding the SLA and the Contract,
the
parties were
ad idem
that
"Beneficiaries"   shall
i
nclude
chi
l
dren
.
That   being
the
case   the   Variation Agreement,
i
n
my view,
i
s
an additional function wh
i
ch
shou
l
d have
been
i
n
strict compl
i
ance
w
i
th
clause
6.3
of
the
Co
n
tract.
There
being
no written
agreement, the purported Variation
Agreement
i
s
noth
i
ng
else but an extension of existing o
r
concluded
contract.  Resu
l
tantl
y
,
the
purported
Variation
Agreement
i
s
unlawful from which no lawful payment may be made
.
[28]
Clause
5.3
of the Contract deals with the
information to
be
captured
by
CPS
dur
i
n9 the
enrolment process
.
In
terms of clause
5.3.1
.
2
the name and
address of
the
school
each
child
attends,
must
be captured.
This is in addition
of the current address (physical and
postal), cell phone numbers
,
alternative contact numbers, employment
of each grant recipient. In terms of the Contract, the parties agreed
that
the
capturing
of
this information is "an additional
function
"
to
be
performed by CPS on behalf of SASSA for an agreed price.
If
the parties did not agree
on the
remuneration,
CPS was
not
obliged
to
perform
this
additional
function.
In
the
present
matter,
although the parties had not agreed on
the
remuneration
for
the
additional work
,
CPS
performed this additional work
on
the
basis
that
it
would
be
remunerated
at
cost.
Nowhere
in
the
papers
are
CPS's
costs agreed upon
.
That the performance
of this additional work
was
a
unilateral
decision by CPS, which in the absence of
agreement to remuneration, was
not
obliged
to
perform,
cannot be more obvious
.
The
unilateral
performance
by CPS
cannot
be
the justification
for
the
payment
of
R316
447
361.41
.
The
payment
is
contrary
to
the
provisions
of section
217 of the
Constitution
and
all
legal
prescripts. It is therefore reviewable
in terms of
PAJA.
[29]
CPS's contention that the reference in
clause 5
.
3.10
to clause 5
.
3
.
1.2
is an
error
and should be 5
.
3.1.4
is of no assistance to it. Clause 5.3
.
1.4
requires not
only
the capturing of "all
1
O
fingerprints
where
possible or two
palm
prints"
of the grant recipie
n
ts
but
"two
footprints
(new
born
to
6
years)
..."
of
children
.
That  both c
l
auses
require
the
capturing
of
i
nformation
relating
to
children,
which
i
s
additional
i
nformation
i
n terms
of
clause
5.3
.
1
O
admits no doubt.
In
the absence of
an
agreement
as
to
CPS's
remuneration,
i
ts
rem1.
,
meration
i
n
the
amount
of
R3
1
6 44
7
361.41
is
thus
unjustified
and
u
n
l
awful.
The payment
i
s
reviewable in
terms
of PAJA.
[30]
Even if
one
were
to
read
clause 5.3.1
.
2
in
clause
5
.
3.10
to
be referring
to clause 5
.
3.1
.
4,
the
subm
i
ssion
by
CPS,
i
s
still
wrong
.
I
n
terms
of
c
l
ause
5.3.10
,
i
f
the parties d
i
d
not
reach
agreement
on the remuneration of the additional work,
CPS was   not
obliged
to
render
such
services
without
agreement   on   suitable remuneration
having
been
reached.
I
n
the
present
matter,
it
rendered
services
w
i
thout
an agreement
having been
reached
on
i
ts
remuneration.
I
n
the
absence
of agreement with
r
egard
to
remuneration,
the
process was skewed
i
n
favour
of
CPS.
I
t
was
unfair,
i
nequ
i
table,
opaque, anti-competitive
and,
probably,
not
cost
­
effective
.
On
the
authority
of
ALLPay1,
as
pointed
out
above,
the
process
was flawed.
I
t
is reviewable
i
n
terms
of
PAJA.
[31]
International
authority
and
experience
[4]
teach
us
that
deviations
from fair
process
may
themselves,
quite often, be the
symptoms
of
corruption or malfeasance
in
that
the
process
is
skewed
in
favour
of
one
party
to
the
exclusion
of
others
.
Such
process is invariably unfair and therefore reviewable in
terms
of PAJA. The
fact
that clause 5.3
.
10
envisages the discussion and future agreement on remuneration of
costs payable to CPS, reveal that there was indeed
no
agreement between the
parties
for
CPS to perform the additional functions at all or at
cost.
In
any
event,
the
contended
"at
cost"
remuneration
to
CPS
is
doubted
by the independent auditing firm Nexia SAB & T (Nexia) engaged by
SASSA to verify
the
correctness of
the
payment to CPS. Nexla points
out
that as a result of the
Variation
Agreement,
SASSA overpaid CPS by
an
additional
amount of
over
R13
million
.
It
also,
correctly,
in
my view, called
into
question
the
inclusion
of salaries, bonuses, legal fees and expended assets in the payment
made by SASSA
to
CPS
as
constituting
"at
cost"
as
contended
for
by
CPS
.
[32]
I conclude that the contended Variation Agreement of 15 June 2012 was
thus unfair and unlawful. It was skewed
in favour of CPS. The alleged
Variation
Agreement
tainted
the
process
followed by
SASSA and
the
consequent payment resulting
therefrom.
The
tainted
process
is
reviewable
in
terms
of
PAJA.
REMEDY
[33]
What  then,
i
s
the  r
e
medy?
I
n
terms
of  section  8  of  PAJA
,
a
court  may,
i
n
proceed
i
ngs
for jud
i
cial
review
i
n
terms of section 6(1) grant any order that
is
just and equ
i
table
.
I
n
Bengwenyama
Minerals  (Pty) Ltd
v
Genorah
Resources
(Pty) Ltd
[5]
the
Constitutional
Court
pointed
out
that the
granting
of
a
just
and
equitable
remedy
is
discretionary
based
on
a
pragmatic
blend
of
logic
and
experience
.
[34]
In
Steenkamp
NO
v
Provincial
Tender
Board,
Eastern
Cape
[6]
Moseneke
DCJ
reasoned
that
-
'...the
remedy must be
fair
to
those affected by it and
yet
vindicate effectively the
right
violated.
It
must be
just
and equitable in
the
light of the facts, the implicated constitutional principles, if any,
and the controlling law ... and at a broader level, to
entrench the
rule
of
law
.
'
[
35]
I
n the
i
nstant
matter,
as
a
resu
l
t
of
SASSA's
u
n
l
awful
conduct,
the
fiscus  tias been robbed
of
a
substantial amount of
money
i
ntended
for the most vulnerable and
poor
people
of
our
country.
The
fiscus
is
poorer
as
i
t
did
not
receive
fair
value   for   what
i
t
paid
.
I
t
is
just
and
equitable   that
the
payment   of R3
1
6
447
361
.
41
m
ade by
SASSA to CPS, together with
i
nterest,
be returned to the fiscus for the benef
i
t
o
f those
for whom
i
t
was
i
ntended
i
n
the first p
l
ace.
Th
i
s,
i
n
my view, is a
just
and equitable remedy that wou
l
d
effectively vindicate the fair process violated by the parties. The
remedy would
entrench
the ru
l
e of
l
aw.
[36]
Having regard
to
the aforesaid,
the
following
order
is
granted
-
36.1
The Variation Agreement between SASSA
and CPS made on 15
June
2012,
and
the resultant
payment made
in
the
sum
of
R316
447
361.41
are
reviewed and set
aside;
36.2
CPS is
ordered to refund
the said amount of R316
447 361.41 to SASSA, with interest from
June
2014
to date of payment
;
36.3
The respondents are, jo
i
nt
l
y
and severally,
o
r
dered
to pay the costs of the appl
i
cation,
i
ncluding
the costs of two counsel.
____________________________________
M
TSOKA
JUDGE
OF THE HIGH COURT
DATE
OF HEARING
:
22
FEBRUARY 2018
DATE
OF JUDGMENT
:
23
MARCH 2018
Appearances:
Counsel
for  the applicant:

Adv Budlender Adv Kelly
Instructed
by:

MacRobert
Attorneys
Counsel
for the third respondent:

Adv Cockrell SC Adv Bleazard
Instructed
by:

Smit Sewgoolam
Incorporated
[1]
Al1Pay
Consolidated
Investment
Holdings
(Pty)
Ltd
and
Others
v
Chief
Executive
Officer
of
the
South
African
Social Security
Agency
and
Others
2014
(I)
SA
604
(CC)
(AllPayl),
and
AllPay Consolidated Investment
Holdings
(Pty)
Ltd
and
Others
v
Chief
Executive
of
the
South
African
Social
Security
Agency
and
Others
(No.
2)
2014
(4)
SA
179
(CC)
(Al1Pay2).
[2]
Natal
Joint
Municipal
Pension
Fund v Endumeni Municipality
2012 (4) SA
593
(SCA)
para
18
[3]
AllPay
Consolidated Investment Holdings
(Pty)
Ltd
and Others v Chief Executive Officer
of
the
South African
Social
Security
Agency and Others
2014
(1)
SA 604
(CC) paras
87-88
[4]
Transparency
International: Handbook for
Curbing
Corruption
in
Public
Procurement
(Transparency International,
Berlin
2006)
[5]
Bengwenyama
Minerals (Pty) Ltd v Genorah Resources
(Pty)
Ltd
2011
(4)
SA
113
(CC) paras 84-8S
[6]
Steenkamp
N.O v Provincial Tender Boards, Eastern Cape 2007 (3) SA  121
(CC)
para
29