REPUBLIC OF SOUTH AFRICA
IN THE HIGH COURT OF SOUTH AFRICA
GAUTENG DIVISION, PRETORIA
Case Number: 024313/23
(1) REPORTABLE : NO
(2) OF INTERES T TO OTHER JUDGES: NO
(3) REVISED : YES ~-SIGNATURE
In the matter between:
FOURSIGHT IT BUSINESS SOLUTIONS (PTY) LTD
and
DEPARTMENT OF HOME AFFAIRS
DIRECTOR -GENERAL: DEPARTMENT OF
HOME AFFAIRS Applicant
First Respondent
Second Respondent
Delivered : This judgment was prepared and authored by the Judge whose name is
reflected and is handed down electronically by circulation to the parties/their legal
representatives by e-mail and by uploading it to the electronic file of this matter on
Caselines . The date and for hand-down is deemed to be 3 March 2025.
Summary: A party faced with an exercise of public power has as an option a
PAJA or Legality review. Where a simple declaratory relief is sought, a Court
bound by the pleaded case cannot order a review relief where one was not
1
sought. The remedies for breach of a contract are well known. The trite principle
is that a party is bound by its pleaded case, it being the case the other party is
called upon to meet. A suggestion that fraud as defined in law is absent, is a
suggestion that the Department had exercised statutory power in the absence
of the necessary jurisdictional requirements . Where the evidence demonstrates
the known elements of fraud, namely; (a) misrepresentation; (b) intention to
defraud; (c) the action was against the law; and (d) there was prejudice or
potential prejudice, then fraud exists by whatever name it may be labelled or not
labelled. Held: (1) The application is dismissed with no order as to costs.
JUDGMENT
MOSHOANA , J
Introduction
[1] In the present application , which was midway dubbed a PAJA review, it is
common cause that the applicant before me, Foursight IT Business Solutions
(Pty) Ltd (Foursight) was awarded a contract by the Department of Home Affairs
to render certain IT-related services over a period of five years. It also, was
common cause that midway the tenure of the agreement , the Department
prematurely cancelled the agreement for reasons outlined in the Treasury
Regulations. The said termination gave birth to the present application . In
opposing the application , the Department launched what it termed a conditional
application seeking, for different reasons, to review and set aside the awarded
contract.
[2] It must be mentioned that on the allocated day of the hearing, the arguments
commenced after 1 0h00 for reasons that on Case lines there was a notice
indicating that the application was removed from the roll. As the allocated judge,
I did not read the papers owing to the purported removal from the roll. It was only
on the morning of the hearing day that I was alerted to the fact that the application
had not been removed and was proceeding. Under those constrained
2
circumstances , I availed myself to the parties, in order to hear arguments ,
disadvantaged as I was.
The relief sought
[3] It is significant to, at this embryonic stage, set out what the applicant sought as
reliefs in its notice of motion. This will be the reliefs that will navigate this Court
in this judgment. It must be indicated that, initially, the applicant wished to obtain
the reliefs sought now on an urgent basis. Therefore , for the purposes of this
judgment , the relief to have the matter heard as one of urgency in terms of rule
6(12)(a) and (b) of the Uniform Rules shall be omitted from the reliefs sought by
the applicant before me.
[4] The reliefs sought are:
1. Declaring the decision of the respondents to terminate the Master Service
Agreement with the applicant unlawful and invalid.
2. It be ordered that the Master Service Agreement is restored with
immediate effect.
3. Alternative to prayer 2 above, that it be ordered that the respondent subject
itself to the dispute to mediation process as required by the Master
Service Agreement.
4. Costs of suit;
5. Further and or alternative relief.
[5] This Court must immediately remark that other than seeking a declarator that the
termination is unlawful and invalid, no relief is sought that the decision to be so
declared, must be judicially reviewed. The restoration of the Master Service
Agreement must mean a contractual remedy of specific performance , a
discretionary remedy, this Court must mention. Also, the alternative relief is
contractual in nature and in a form of specific performance .
[6] During argument , it was pointed out to counsel for the applicant, Mr Amm SC,
that regard being had to the fact that in cancelling the contract, the Department
3
clearly exercised statutory power and or public power, the competent and
available remedy for the applicant is a judicial review. In retort, and with sufficient
confidence, this Court must state, he submitted that the present application is a
PAJA review, even though, not a single section of PAJA was referenced
anywhere in the papers. Of course, at that time, this Court was on its back foot,
having not read the papers in advance, for reasons outlined above, had to accept
a submission from a senior officer of the Court.
[7] This Court must state that regard being had to the notice of motion referenced
above, it turns out that the submission by counsel that this is a PAJA review is,
with respect, not correct. It is unclear to this Court whether, the submission was
made with an honest error, in a genuine believe that it is a correct one or was
intended to mislead this Court. This Court will leave it at that. That
notwithstanding , this Court takes a firm view that this is not a PAJA review. Even
if this Court were to consider the mere verbiage of further and or alternative relief,
the allegations made in the founding affidavit, do not justify a judicial review
remedy.
[8] For the sake of completeness , however, section 6(1) of PAJA provides that any
person may institute proceedings in a Court or a tribunal for the judicial review of
an administrative action. An administrative action is defined in section 1 of PAJA.
Nowhere in the founding affidavit does the deponent of the applicant state that
the cancellation of the contract decision by the Department amounts to an
administrative action. Undoubtedly , nowhere in the notice of motion does the
applicant seek a judicial review relief.
Relevant background facts
[9] As indicated above, it is common cause that Foursight was awarded a contract
to perform certain services. This was a culmination of the bid adjudication
process that unfolded. It is unnecessary for the purpose of this judgment to
recount the bid adjudication process. It suffices though to mention that a bid
adjudication process was undertaken .
[1 O] Of particular relevance , it is common cause that Foursight appointed a
subcontractor , aptly named Aim-Right. In the course of the delivery of the
4
services, it turned out that Aim-Right had failed to meet the required deliverables.
Aim-Right used the employees of the Department to perform the subcontracted
work. This happened on the instruction of one Mr Khuzwayo, an official of the
Department who was intimately involved in the bid adjudication process. The
director of Foursight, considered what was happening with Aim-Right and the
employees of the Department, through Mr Khuzwayo , to be extremely offensive,
and she instructed her attorneys of record to report the incident and to terminate
Aim-Right as a subcontractor. In the letter seeking to terminate Aim-Right , it was
mentioned that Foursight was aware that Aim-Right used the personnel of the
Department at certain places and misusing taxpayers ' money.
[11] Ultimately , on 13 August 2021, the director of Foursight reported the observed
irregularities attached to the execution of the contract. Such prompted the
Department to conduct an investigation into the alleged irregularities . The
investigations revealed various irregularities in the bid adjudication process. For
the sake of brevity, the investigations were conducted by a company known as
BOO Advisory Services (Pty) Ltd (BOO). On or about 6 September 2022, BOO
produced a report of the investigations and furnished it to the Department for
consideration . The report is about 11 O pages long. The contents of the report
were not, in these proceedings , challenged by Foursight.
[12] The BOO report revealed amongst others that an invoice of R45 000.00 was
raised by Foursight, which invoice represented that at Bloemfontein SITA certain
services were performed . However, it turned out that payment of that invoice was
made before the installation of the device. The author of the report considered
the payment to constitute an irregular expenditure since Foursight did not render
the alleged services. A number of other invoices raised by Foursight were
questioned for validity. BOO recommended that the Department should consider
referring the matter, they investigated , to the SAPS for an investigation into
contravention of Prevention and Com batting of Corrupt Activities Act (PRECCA).
This recommendation simply suggested to the Department that corruption was
involved in the tender process that the BOO was tasked to investigate .
5
[13] Having studied the report, the Department on 09 March 2023 wrote a letter of
cancellation directed to Foursight and referenced the provisions of the Treasury
Regulation 16A.9.1. In parts, the letter read:
"The accounting officer or accounting authority must -
(f) Cancel a contract awarded to a supplier of goods or services -
(ii) If any official or other role players committed any corrupt or
fraudulent act during the bidding process or the execution of that
contract that benefitted that supplier.
6 Consequent to the above, and in carrying out the DHA's duties and
obligations in terms of the Treasury Regulations referred to above, the
DHA has no other option but to cancel the Master Services Agreement with
immediate effect.
[14] This cancellation gave rise to the urgent application which was launched on or
about 15 March 2023. By agreement , the urgent application was removed from
the roll on 4 April 2023. Ultimately , the application emerged before me as a
special motion allocation .
Evaluation
[15] This Court has already found that, despite desperate pleas from counsel for the
applicant, this is not a PAJA review. The relief sought by the applicant is not one
competent under PAJA. There is no legal basis upon which this Court can declare
that the cancellation is unlawful and or invalid on the strength of the present
papers. With respect, the submission that these papers presents a PAJA review,
lame as it is, appears to be an afterthought, in order to address a fundamental
problem highlighted by this Court during oral submissions . There is no doubt that
in terms of the law, the TR 16A.9.1, the Director General was obliged to cancel
the agreement in the circumstances where, any official or other role player
committed a corrupt or fraudulent act at any of the two stages. Either during the
bidding process or execution of the contract stages. Not seized with a review
application , it is unnecessary for this Court to express a view whether the
fraudulent or corrupt acts occurred at any of the mentioned stages. It may be true
6
that presence of fraud or corruption at any of the stages is a jurisdictional
requirement for the exercise of the cancellation power. Not seized with a review
application , it is academic for this Court to answer the question whether the
necessary jurisdictional requirements were present or not. Therefore , the
cancellation at play here is not one that is contractual in nature, but an exercise
of statutory power.
[16] Therefore , the competent relief available to the applicant is a PAJA or legality
review. There is no doubt in my mind that in cancelling the Master Service
Agreement , the Director General was performing an administrative action which
is certainly reviewable under PAJA. A careful and proper read of the founding
papers, other than fortuitous reference to unlawfulness and invalidity, the
applicant does not make a case for judicial review. Its case was one of a simple
declaratory relief, which, on its own admission is a discretionary relief. The
deponent of the founding affidavit had the following to say in pinning the
applicant's colours to the mast:
"51 In the premises, the grant or refusal of declaratory orders lies in the
discretion of the Court which must be exercised judicially given the facts
pertaining to a particular matter and the facts of this matter are (i) there is no
misconduct or impropriety on the part of the applicant (and it is not alleged), (ii)
the applicant has been forthcoming in respect of the improprieties and
misconduct of the respondent's employees (iii) and that public policy (pacta
sunt servanda) demands that contracts must be honoured at all levels unless
the Court of law decides otherwise. "
[17] Contrary to the repeated submissions by counsel for the applicant that this is a
PAJAjudicial review, launched in a complete disregard of the rule 53 procedure ,
the present application has, written all over it, a declaration of rights and a breach
of contract. I reiterate, it is not a PAJA judicial review. On application of the
Oudekraal principle, the decision to cancel the contract factually remains and is
adorned with legal consequences until set aside by a Court of law by way of a
judicial review. In the present constitutional order, there are only two judicial
review pathways available for the exercise of public power, namely; PAJA or
Legality/Rationality review. The applicant chose neither. The net effect of this is
7
that the cancelation remain as a valid administrative decision capable of
producing legal consequences.
[18] It was not contended before me that the TR 16A. 9.1 was in any manner or shape
unconstitutional. I suggested to counsel for the applicant that perhaps that should
have been the case. On application of the principles of contract law, a party faced
with a repudiation , has an election to make. Either to cancel the contract and sue
for damages or to ignore the repudiation (in this instance the cancellation) and
approach a competent Court for a relief of specific performance . Even if this
Court were to accept that, put at its lowest ebb, the case for the applicant is one
for specific performance , in the exercise of its discretion this Court would refuse
to grant that relief. The contract has been cancelled , thus, the only competent
contractual remedy available is that of damages claim. There is no damages
claim before me.
[19] As I conclude, counsel for the applicant persistently beat the drum of absence of
fraud as legally defined. In his heads of arguments, he referenced Amler's,
Snyman and other sources just to demonstrate that there was no legally defined
fraud involved. The ad nauseam beating of the fraud drum was unhelpful to the
applicant's pleaded case. Counsel baldly and with sufficient perspicacity
submitted that having scoured the 110 paged report of BMO, he could not find
the word fraud imprinted in the report. It is indeed so that the report does not, in
print form, mention the word fraud. But, what is certainly replete in the report is
the evidence of presentation of invoices that were neither due nor payable. One
such invoice of R45 000.00 was, as reported and not disputed in these
proceedings , presented by Foursight. The elements of the offence of fraud are
(a) misrepresentation ; (b) intention to defraud; (c) unlawfulness; and (d) prejudice
or potential prejudice .
[20] If regard is had to the R45 000.00 which was paid to Foursight and Aim-Right,
when the duo issued the invoices, they were seeking to represent to the
Department that the invoices were due and payable, whilst knowing fully well that
the services were not performed . Intention (mens rea) is all about a state of mind.
Knowing that the services were not performed , by invoicing, the duo intended to
defraud the department (make it look like the services were performed). Their
8
actions are clearly unlawful and had prejudiced the Department -effecting an
irregular expenditure contrary to the law. If fraudulent acts are not apparent in
the report, then there is certainly something wrong with our law of identifying the
elements of a particular offence. To my mind, it was not required of BMO, without
legally trained mind to imprint the word fraud in their report. But, they, indeed
reported what clearly constituted fraud and or corruption , regard being had to the
elements of the offences. Corruption and fraud are generally joined to the heap.
They are offences involving an element of dishonesty . Often times, they are
inextricably intertwined .
[21] Given the conclusions this Court reached, consideration of the conditional self
review application is unnecessary . It was, ex abudandi cautela, argued before
me. With regard to costs, although the application was jumbled up, it appears to
be one that falls under the Biowatch principle. For that reason alone, this Court
will not make a costs order against the applicant.
[22] For all the above reasons, I am constrained to make the following order:
Order
1. The application is dismissed.
2. There is no order as to costs.
9
APPEARANCES:
For the Applicant:
Instructed by:
For the Respondents :
Instructed by:
Date of the hearing:
Date of judgment: GN MOSHOANA
JUDGE OF THE
HIGH COURT GAUTENG DIVISION, PRETORIA
Mr G W Amm SC and Mr M Maphuta
K Montjane Inc Attorneys, Tembisa
Mr J Hershensohn SC and Mr E van As
State Attorney, Pretoria
26 February 2025
3 March 2025
10