IN THE HIGH COURT OF SOUTH AFRICA
(GAUTENG DIVISION, PRETORIA )
APPEAL CASE NUMBER : A374/2023
ORIG INAL CASE NUMBER : 93999/2015
DATE: 30 July 2025
DELETE WHICHEVER IS NOT APPLICABLE
(1) REPORTABLE; 'l!ii/N O
(2) OF INTEREST TO OTH ERS JUDGES: ~ /NO
1
.~::1::.rM~.? ....... ~
In the matter between:
MANY ELETI CO N SULTING SA (PTY ) LTD
anc
SOMAOODA PA TR ICK M AY IBONGWE FIKEN I N .O.
G C WALISILE CYNTHIA KABANYANE N.O.
MOROKA ISAAC BUTCHER MA TUTLE N .O .
ZANDILE QUEENETTE LAVINIA MDHLADHLA N .O .
MZAMO MICHAEL MLENGANA N .O .
MATSHIPSANA MERIAM MOLALA N .O .
TLHOSTE ENOCH MOTSWALEDI N.O.
NANDISELE FLAVOUR THOKO MPUMLWANA N .O .
PHELISA KHOMO N.O .
Appellant
1 st Respondent
2nd Resp ondent
3rd Res pondent
4th Respondent
51h Respond ent
6th Resp ondent
7th Respondent
8th Re spondent
9th R espondent
2
RASHID AMOD SADECK PATEL N.O.
ZAKHELE ALEX TUMMY ZITHA N.0.
REMAINING TRUSTEES INDEPENDENT
DEVELOPMENT TRUST
10th Respondent
11 th Respondent
121h Respondent
This order is made an Order of Court by the Judge whose name is reflected
herein, duly stamped by the Registrar of the Court and is submitted
electronically to the Parties/their legal representatives by e-mail. This Order is
further uploaded to the electronic file of this matter on Case Lines by the Judge
or his/her secretary. The date of this Order is deemed to be ................ 2025 .
•
JUDGMENT
DU PLESSIS, AJ (WITH MAKHOBA J AND THOBANE AJ CONCURRING)
1.
1.1. Public procurement remains one of the primary points at which
public administration mee ts the private economy . The lawfuJ and
transparent spending of public funds is a matter of legitimate public
concern. The courts have repeatedly emphasised that section 217
of the Constitution 1996 demands a system that is fair, equitable,
transparent, competitive, and cost-effective. Yet the intersection
between the constitutional imperative of legality and the private-law
doctrines of contract continues to generate difficult cases.
1.2. This appeal exemplifies that tension. It lies at the confluence of two
well-established but sometimes competing lines of authority: on the
one hand, Oudekraal Estates (Pty) Ltd v City of C ape Town 2004
(6) SA 222 (SCA ) and its progeny, which hold that even an invalid
3
administrative act remains operative until set aside by a court; and
on the other, Lepogo Construction (Pty) Ltd v Govan Mbeki
Municipality [2015] 1 All SA 153 (SCA), which underscores that
public bodies cannot be bound by acts performed outside their legal
authority. The present matter requires this Court to determine
where, on those principles, an "appointmenf' made after a tender
had lapsed and unsupported by written authority properly falls.
2.
2.1. The appellant, Manyelethi Consulting (Pty) Ltd, instituted action in
2015 against the Independent Development Trust ("IDT')
(collectively the trustees of the IDT) claiming payment of R
18 930 560.40 for professional services allegedly rendered under
tender PSP 03. The claim was founded on a "letter of appointmenf'
dated 20 June 2012 , said to flow from IDT Tender PSP03 . It
concedes there was no concluded agreement (no executed PSP
contract), but says the appointment nevertheless conferred
enforceable rights; alternatively, that a later "compromise"
(Annexure POC 10) fixed payment at R 17 .1 million.
2.2. The respondents denied liability, contending that the tender had
expired (1 May 2012) prior to the letter of appointment (20 June
2012), that the letter of appointment was issued irregularly and
without authority, and that the appellant had not proved
performance. The matter was tried in this Division before Bokako
4
AJ, who dismissed the claim with costs on 20 January 2023.
2.3. The present appeal, with leave granted, is directed against that
judgment.
3.
3.1. The principal issues to be determined in this appeal arise from the
opposing contentions of the parties as to the legal effect of the "letter
of appointment' dated 20 June 2012 (Annexure "POC3"). The
appellant contends that the letter constituted a valid and binding
"appointment' that remained extant and enforceable until lawfully
set aside by review proceedings, whereas the respondents maintain
that the purported appointment was a nullity ab initio, made in
contravention of the constitutional and statutory procurement
framework governing the IDT, and therefore produced no legal
rights or obligations capable of being "set aside."
3.2. The appellant's argument, grounded in the Oudekraal Estates (Pty)
Ltd v City of Cape Town 2004 (6) SA 222 (SCA) line of authority, is
that until such administrative act is reviewed and qeclared invalid, it
stands and must be given effect to, relying further on Buffalo City
Metropolitan Municipality v Asia Construction (Pty) Ltd 2019 (4) SA
331 (CC) and MEC for Health, EC v Kirland Investments (Pty) Ltd
t/a Eye & Lazer Institute 2014 (3) SA 481 (CC).
3.3. The respondents, by contrast, invoke the principles articulated in
Lepogo Construction (Pty) Ltd v Govan Mbeki Municipality (623/13)
5
[2014] ZASCA 154 (29 September 2014) and Fraser & Chalmers
(SA) (Pty) Ltd v Cape Town Municipality 1964 (3) SA 303 (C ),
contending that where prescribed procurement formalities have not
been complied w ith, no lawful contract arises, no review is
necessary and there is accordingly "nothing to set aside."
3.4. The respondents further subm it that, applying the interpretative
principles in Natal Joint Municipal Pension Fund v Endumeni
Municipality 2012 (4) SA 593 (SCA ) and KPMG Chartered
Accountants (SA) v Securefin Ltd 2009 (4) SA 399 (SCA ), the so
called "appointment letter' lacks the requisite consensus ad idem
and does not, by its terms or context, evidence a concluded
agreement. This despite the appellant conceding that the
"appointment" letter is not an agreement.
3.5. Against this matrix, the appellant also complains that the court a quo
erred in finding that the IDT derived no benefit from its services and
failed to draw an adverse inference from the respondents' failure to
call witnesses to contradict the evidence of Mr Lamola, the CEO of
the appellant.
3.6. The factual findings of the court a quo were that the appellant had
failed to prove performance under any lawful mandate, that the
"compromise" pleaded (Annexure POC 10) lacked mutual assent,
and that there was no basis for relief or compensation.
3.7. It follows that the key issue before this Court is whether the letter of
20 June 2012 gave rise to any legally enforceable right, standing
6
until set aside, or whether, as the respondents contend; it was void
ab initio, producing no legal effect and requiring no review for its
invalidity to operate.
ASSESSMENT OF THE MERITS AND EVALUATION OF THE EVIDENCE
4.
4.1.
The Appellate Standard
The approach to interference with factual findings is settled by R v
Dhlumayo and Another 1948 (2) SA 677 (A) at 705-706 and
reaffirmed in Santam Bpk v Biddulph 2004 (5) SA 586 (SCA) para
5. Unless the record reveals a material misdirection or the finding
is plainly wrong, an appellate court will not substitute its own view
for that of the trial judge who observed the witnesses.
4.2. From the initial pleadings, the following is clear:
4.2.1. The IDT pleaded that the alleged appointment of the
appellant under PSP 03 was fraudulent and void, arising
from "fraud, collusion and corruption" between the
appellant (represented by Mr Lamola) and Mr Stephen
Ntsandeni, an IDT official.
4.2.2. Because of that, any "award' of PSP 03 through the
"appointmenf' was "void ab origine and of no force and
effect."
4.2.3. The plea thus emphasised illegality through fraud and
7
collusion, not the expiry of the tender validity period.
4.2.4. It did not expressly plead the tender validity period (60
days) or the legal consequence of lapse before 20 June
2012.
4.3. So the initial defence was broadly that the appointment was
fraudulent, irregular, and beyond authority, hence null and void.
4.4. On 31 March 2022, the day of the trial, the Defendant amended its
plea and introduced a technical but decisive new ground:
4.4.1. that the tender offer had expired (lapsed) before the 20
June 2012 "appointment letter, and therefore no valid
tender could be accepted.
4.4.2. Specifically, it inserted the following allegations (as
paraphrased from the record):
"The tender offer validity period [of tender PSP 03]
w as 90 days calculated from 1 March 2012.
Accordingly the tender offer had lapsed on or
before 1 June 2012."
Accordingly by 20 June 2012 the tender had lapsed, and
no valid offer existed to be accepted. The purported letter
of appointment therefore did not create any rights or
obligations.
4.5. The amendment thus:
4.5.1. Reframed the unlawfulness of the appointment from
8
being based solely on "fraud and collusion" to being
based additionally on lapse of the tender offer under SCM
rules;
4.5.2. Introduced the explicit reference to the 90-day validity
period in clause 5.6.6 of the IDT SCM Procedures
(evidence later revealed that the actual validity period is
60 days); and
4.5.3. Linked that expiry to the absence of a valid "offer"
capable of acceptance on 20 June 2012.
4.6. In the court a quo, Bokako AJ summarised the amendment and its
effect:
"During the course of the trial and on 3.1 March 2022, the
defendants amended their plea to include a defence that the
tender offer validity period was for 90 days calculated from 1
March 2012."
4.7. The amendment was not opposed. The appellant had full
opportunity to deal with the point. The evidence of Mr Lamela
confirmed the relevant dates. The Court accordingly allowed the
amendment.
4.8. The judge a quo then relied inter alia on that amended defence as
one of the central grounds for dismissal, holding that:
"By 20 June 2012, when the Jetter of appointment was issued, the
tender offer had already lapsed; there was no valid offer to
accept."
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AN ASSESSMENT OF THE EVIDENCE
5.
The Evidence of Mr Solly Lamola
5.1. Mr Lamola, the managing director of the appellant, was its principal
witness. He testified that the appellant had, pursuant to a lawful
tender process designated PSP 03, been appointed as transactional
adviser to the IDT under a letter of appointment dated 20 June 2012.
He asserted that the appellant duly performed the work described in
the letter, for which it rendered invoices (POC 4 - POC 8) covering
the period January 2014 - March 2014. He said the IDT accepted
those services, and that the failure to pay was unjustified.
5.2. Under cross-examination, his version could not withstand scrutiny.
5.3. First, chronology and internal inconsistency. The invoices relied
upon by the appellant reflected work allegedly done between March
and May 2012, predating the very letter on which the cause of action
rests. When confronted with this inconsistency he conceded that
the work fell outside the scope of the alleged appointment. That
admission contradicted his pleaded case that performance occurred
pursuant to the appointment of 20 June 2012.
5.4. Second, the absence of written task orders. Mr Lamola accepted
that no task orders or written instructions were ever issued by the
IDT. He said that instructions were "telephonic or ora/1/y from Mr
Ntsandeni." The NEC 3 Professional Services Contract, however,
10
required every assignment to be authorised by a written task order.
His concession that none existed, or could be provided, destroyed
the factual basis of his claim that he acted under the IDT's authority.
5.5. Third, scope and geographical incongruity. The tender spreadsheet
(RFP-X) which he produced listed 93 projects across several
provinces, including Department of Justice and Mpumalanga
schools - plainly unrelated to the KZN and Eastern-Cape projects
pleaded in the particulars of claim. He conceded that some of that
work pre-dated PSP 03 and involved different clients. These
contradictions demonstrated that the invoices aggregated unrelated
work. His only stated reaction for pre-June 2012 work, was the
alleged existence of an earlier, separate appointment by the IDT -
an explanation the record shows was never supported by
documentation or credible corroboration.
5.6. Fourth, knowledge of SCM requirements. He professed ignorance
of the IDT's "tender periods and all thaf'. This one may accept
includes the 60-day validity period and dual-signature rule. He
admitted never having seen any Bid Adjudication Committee
approval or Form of Acceptance before the trial. His ignorance of
these basic procurement requirements undermined the assertion
that he believed the appointment lawful.
5.7. Fifth, documentary corroboration. When asked to produce reports,
e-mails, or deliverables evidencing performance, he was unable to
do so. He acknowledged that the RFP-X schedule and his invoices
11
were prepared after the fact. There was thus no contemporaneous
proof of any services rendered.
5.8. Sixth, payments received. He conceded that payments to the
appellant related to the Clarinet and Netherlands school projects
under an earlier appointment (PSP 02) and were made before 20
June 2012. That admission confirmed the respondents' version that
any monies paid were unrelated to PSP 03.
5.9. Finally, the trial judge recorded that Mr Lamola's recollection of
dates was poor, that he altered years during his testimony and that
no written task orders or instructions existed. None of his
concessions were trivial; each struck at the core of the case he was
required to prove.
5.10. In the result, Mr Lamola's evidence failed to establish the existence
of any binding appointment, lawful instruction, or verified
performance. His concessions under cross-examination were fatal
to the appellant's claim, and the trial court was plainly justified in
rejecting his version as unreliable.
The Evidence of Mr Tshepo Teffo
5.11. Mr Teffo, an employee of Lamola and occasional consultant of the
appellant, was called to corroborate the tender process. He testified
that he signed and submitted the tender documents on behalf of the
appellant and assumed that the IDT had validly awarded the
contract. His participation ended after submission of the bid.
5.12. In cross-examination he admitted that he did not read the tender
12
documents or the NEC 3 contract data before signing them.
5.13. He acknowledged that the documents he signed still bore
references to "DCS 02," an earlier project, and that he made no
effort to correct those references. He further conceded that the
appellant's submission lacked mandatory attachments such as a
tax-clearance certificate, VAT certificate, and professional
indemnity insurance, and that he was unaware these were required.
He had no knowledge of any Task Orders, instructions, or payments
issued after the alleged appointment, and no personal involvement
in any project work.
5.14. The trial court described him as honest but uninformed -a witness
whose evidence was candid yet immaterial. His concessions
corroborated the respondents' version that the bid was defective
and the appointment irregular. His testimony added nothing of
substance to the appellant's case and, if anything, strengthened the
respondents' narrative of procedural non-compliance.
The Evidence of Mr Tshepo Rapetswa
5.15. Mr Rapetswa, the IDT's Acting Head : Legal and Compliance, was
the only witness for the respondents. His function was to explain the
procurement framework, the IDT's internal delegations, and the
legal significance of the documents relied on by the appellant.
5.16. He confirmed that the letter dated 20 June 2012 was issued and that
no formal Professional Service Provider (PSP) contract or service
level agreement followed, as was expressly required by the letter
13
itself. He testified that the letter was signed solely by Mr Ntsandeni.
Under the IDT's SCM policy all contracts required dual signatures
and prior Bid Adjudication Committee approval, neither of which
existed.
5.17. He further explained that the scope of work and fee structure were
never approved or defined. The tender documents contemplated
that services would be rendered only when the IDT issued written
Task Orders, each specifying deliverables, timelines, and the fee
formula. No such task orders were ever issued to Manyelethi. He
emphasised that the appellant's invoices could not be matched to
any approved project budget and that no record existed of
authorised instructions. The few payments made were processed
under earlier, unrelated projects and later recorded as irregular
expenditure.
Cross-examination
5.18. Counsel for the appellant sought to undermine Mr Rapetswa's
evidence on four fronts: that he was not personally involved in 2012;
that the letter of appointment appeared regular on its face; that the
IDT made certain payments; and that the IDT never launched review
proceedings.
5.19. He readily conceded that he was not personally present during the
2012 events and that his knowledge derived from the official
records. He agreed that, outwardly, a letter on IDT letterhead m ight
appear regular to a contractor, but maintained that internal
14
authorisation was absent and that external appearance could not
convert an unlawful act into a lawful one. He accepted that
payments had been made , but stated that they were irregular and
later categorised as fruitless expenditure. He further acknowledged
that no formal review had been brought to set aside the
appointment, explaining that the IDT regarded the letter as a nullity
requiring no review.
5.20. These limited concessions did not detract from his central evidence
that:
5.20.1. the letter of appointment was ultra vires the IDT's
procurement delegations;
5.20.2. no Task Orders or approved scope and fee structure
existed; and
5.20.3. all payments were unauthorised.
5.21 . Bokako AJ recorded that "nothing emerged in cross-examination to
dislodge his evidence," and accepted him as a credible and reliable
witness.
Comparative Assessment
5.22. Taken together, the evidential picture is clear. The appellant's
witnesses were unable to establish the existence of a lawful
appointment or to substantiate the performance allegedly rendered.
Mr Lamola's testimony was internally contradictory and evasive; Mr
Teffo's was candid but immaterial. By contrast, Mr Rapetswa's
evidence was documentary, consistent with the IDT's SCM
15
framework, and unshaken under cross-examination.
5.23. Counsel for the Appellant criticises the respondent's counsel's
conduct in the court a qua for "giving evidence from the bar'' and for
not calling available IDT witnesses (notably Mr Ntsandeni). He also
submits the court a qua wrongly preferred "unsupported
submissions" including allegations of fraud, to the "only direct
evidence" (Lamola and Teffo), denying fraudulent corJduct in
obtaining the letter of appointment.
5.24. Counsel must not give evidence from the bar. But what matters is
whether the court a quo decided facts on counsel's say-so. The
judgment a quo did not turn on fraud. It turned on lack of authority
and non-compliance with formalities. The fraud cases referred to by
the Appellant therefore do not advance the appeal. The ratio rested
on documents and the appellant's own version: no executed PSP ,
no task orders, and invoices that do not align with PSP03 in time or
subject. Even if one accepted every word of Mr Lamola and Mr
Teffo, their testimony cannot conjure a contract where procurement
formalities were a precondition to validity.
5.25. One of the appellant's complaints on appeal is that the court a quo
erred in not drawing an adverse inference against the respondents
for failing to call Mr Mokhethi and Mr Ntsandeni, both former IDT
officials.
5.26. It was argued that these individuals were central to the events of
2012 and could have confirmed the appellant's version of its
16
appointment under PSP 03.
5.27. The record shows that the appellant itself initially indicated that it
intended to call Mr Ntsandeni as a witness. He was , after all, the
signatory of the disputed letter of appointment dated 20 June 2012
and had been a senior IDT official at the time.
5.28. However, when the trial commenced , the appellant's counsel
informed the court that they would no longer call Mr Ntsandeni.
5.29. No request was made that the IDT ensure his attendance.
5.30. It was only after judgment went against the appellant that the failure
of the respondents to call him was elevated to a supposed basis for
appeal. The same applies to Mr Mokhethi, who was never
mentioned in the respondents' original witness list.
5.31. The respondents dealt with the point comprehensively:
5.31 .1. Mr Mokhethi was a regional project manager with no role
in the Bid Evaluation or Adjudication Committees.
Moketheti was extensively implicated ex facie the
available documents and could hardly be expected to
"own up" or confess to his offences.
5.31 .2. Mr Ntsandeni, by contrast, had indeed signed the 20
June 2012 letter, but he had left the IDT's employ by the
time of trial and was facing internal disciplinary and
criminal investigations relating to the very conduct at
issue. The IDT regarded him as a discredited and
unreliable witness whose evidence would be self-serving
., , .
17
and potentially inconsistent with the documentary record.
5.31.3. Counsel submitted that all material facts were proved
through contemporaneous documentation - the SCM
policy, delegation schedules, tender validity clauses, and
task-order records-and through the oral evidence of Mr
Rapetswa, the Acting Head : Legal and Compliance.
Nothing of consequence could have been added by
calling either of the absent officials.
5.32. The court a quo accepted these explanations and, in my view, was
correct to do so, based on the following:
5.33. First, availability and control. It was established that Mr Ntsandeni
had departed from the IDT's employ and was the subject of
investigations. The IDT was not obliged to call a witness whose
integrity was compromised and who was no longer under its control.
As to Mr Mokhethi, his role was peripheral; he could not have
advanced the factual inquiry into the lawfulness of the appointment.
5.34. Second, materiality. The issues that decided the case-whether the
tender had lapsed, whether any delegation authorised the letter of
appointment, and whether valid task orders existed-were
determined on objective records, not on recollection. Neither
Mokhethi nor Ntsandeni could have altered those facts. Their
absence, therefore, was immaterial.
5.35. Third, onus and procedural fairness. The appellant bore the onus
of proving the existence of a valid and enforceable contract. The
18
respondents were under no duty to fill evidential gaps in the
appellant's case. Crucially, the appellant itself had initially proposed
calling Mr Ntsandeni and later elected not to do so. Having
abandoned that course, it cannot now shift the evidential burden by
insisting that the respondents should have produced him. This
alone disposes of the complaint.
5.36. Fourth, documentary sufficiency. The documentary record - the
SCM delegation matrix, the SAC minutes, and the unsigned service
level agreement, was comprehensive and uncontested. It provided
far more reliable evidence than the uncertain recollection of a
discredited former official. The trial judge was entitled to prefer the
objective evidence.
5.37. Finally, legal principle. As articulated in Munster Estates (Pty) Ltd v
Killarney Hills (Pty) Ltd 1979 (1) SA 621 (A) at 624 A-C , an adverse
inference may be drawn only where the witness was available to the
party, his evidence would be material to the issue, and no
explanation is given for his absence. Although they may have been
available, none of the other conditions were satisfied here. Both
witnesses were doubtful or peripheral, and cogent explanations
were provided for not calling them.
5.38. The court a quo's refusal to draw an adverse inference was entirely
correct.
CONTRADICTIONS AND DOCUMENT ARY WEAKNESSES
19
6.
6.1. The judgment catalogues material inconsistencies in Mr Lamola's
testimony:
6.1.1. Invoices (Annexures POC 4-7) reflect work performed
between March and May 2012, preceding the 20 June
2012 "appointmenf' letter. These invoices are the
evidential hinge. The appellant's own annexures show
that entries for at least two projects namely the Clarinet
and Netherlands school projects are dated February
March 2012 (Annexures POC4-POC5) i.e., before the 20
June 2012 appointment and linked to projects outside
PSP03 ; and that later entries (Annexures POC7-POC8)
. are narrated as "transaction advisory' in January-March
2014 without any accompanying task orders connecting
that work to PSP03.
6.1.2. Several items relate to projects of other departments,
inconsistent with the pleaded focus on the KZN and
Eastern Cape programmes.
6.1.3. Under cross-examination, Mr Lamela conceded that no
task orders or written instructions existed.
6.1.4. He produced no contemporaneous correspondence
confirming authorisation.
6.2. These defects go to the heart of the claim. The appellant's own
RFP-X schedule listed 93 projects, many unrelated to PSP 03, and
20
no corresponding payment vouchers or Treasury approvals were
traceable.
6.3. The judge a quo's conclusion that the appellant failed to discharge
its onus was therefore justified.
THE LETTER OF APPOINTMENT
7.
7.1. The appellant's principal criticism of the judgment a qua concerns
the conclusion that the "letter of appointmenf' dated 20 June 2012
(annexure POC3) did not give rise to a binding and enforceable
contract between the appellant and the Independent Development
Trust ("the IDT"). It is contended that the court a qua erred in finding
an absence of consensus ad idem. According to the appellant, the
letter constituted an unequivocal acceptance by the IDT of the
appellant's tender under IDT PSP 03, and on its proper
interpretation reflected the parties' mutual assent to the essential
terms of appointment. The appellant further argues that any
omission to execute a formal Professional Service Provider ("PSP ")
contract or to issue task orders is immaterial; that the parties'
subsequent conduct, allowing the appellant to perform and invoice,
objectively confirms their consensus; and that the court a quo's
insistence upon compliance with internal procurement formalities
elevated form over substance. This despite conceding that the
"appointment' is not an agreement between the parties.
21
7 .2. Bokako AJ rejected these submissions. The court held that the letter
of 20 June 2012 could not constitute a valid or enforceable contract
because, on its face, it expressly recorded that it was subject to the
conclusion of a formal PSP contract. That contract was never
concluded. The judge a quo found that the tender PSP 03, which
closed on 1 March 2012, had a prescribed validity period of sixty
days; by 20 June 2012, the tender had therefore lapsed and no offer
remained capable of acceptance. Moreover, the letter lacked the
authorising signatures required by the IDT's Supply Chain
Management policy, and the essential terms of scope, deliverables
and remuneration were not settled. In consequence there was ,
objectively, no consensus between parties capable of giving rise to
contractual obligations. The learned judge further held that any
services allegedly rendered were performed without valid task
orders and without lawful authority, and that an unlawful
appointment could not be validated ex post facto by performance.
7.3. The respondents support the reasoning of the court a qua. They
submit that the document upon which the appellant relies was , by
its own terms, a provisional administrative step within an unlawfully
tainted procurement process. It was issued after the tender validity
period had expired and in direct contravention of the I DT's SCM
prescripts. Consequently, even if the parties subjectively believed
they were appointed, no lawful contract could arise. They contend
further that the letter itself anticipated the conclusion of a future PSP
agreement and thus negatives any inference of final consensus. In
22
short, the appellant sought to elevate a void act into a contract; the
learned judge was correct to hold that the law will not recognise
consensus founded upon illegality.
7.4. We find no misdirection in the approach of the court a quo. The
issue was one of objective construction of the written instrument and
not of subjective belief. The appellant's argument that consensus
can be inferred from context, conduct, or the commercial sense of
the transaction, is contrary to settled principle. In KPMG Chartered
Accountants (SA) v Securefin Ltd 2009 (4) SA 399 (SCA) at paras
[38]-[39], Harms DP reaffirmed that:
"The integration (or parol evidence) rule remains part of our law.
If a document was intended to provide a complete memorial of a
jural act, extrinsic evidence may not contradict, add to or modify
its meaning. Interpretation is a matter of law and not of fact and,
accordingly, it is for the court, and not for witnesses, to determine
the meaning of the document."
7.5. Applying that principle, the learned judge a quo correctly treated the
"letter of appointmenf' as the document embodying the parties'
alleged consensus and asked whether, ex facie the writing, it
contained the essentials of a concluded agreement. It plainly did
not. The letter itself envisaged the later execution of a formal PSP
contract; it was therefore conditional and incomplete. Under KPMG ,
courts may not receive extrinsic evidence or post-contractual
conduct to supplement or contradict such a document. The
23
appellant's reliance on subsequent dealings with IDT officials or
alleged performance cannot create a contract that the written terms
show was still to come into being.
7.6. Moreover, the tender process, which produced the letter, was itself
void for non-compliance with section 217 of the Constitution, the
Public Finance Management Act 1 of 1999, and the IDT's own SCM
policy. In these circumstances, the appellant's ass~rtion of
"consensus" collapses: a meeting of minds cannot validate that
which the law declares a nullity. Public bodies are bound to contract
only through lawful procedures, and a defective process precludes
any inference of enforceable agreement, however genuine the
parties' subjective intentions may have been.
7.7. The complaint that the court a quo erred in finding no consensus is
without merit.
ASSESSMENT OF THE LEGAL GROUNDS OF APPEAL
8.
8.1. The appellant argued that the court below erred by treating the
appointment as void ab initio instead of presumptively valid until set
aside, contrary to Oudekraal Estates (Pty) Ltd v City of Cape Town
2004 (6) SA 222 (SCA).
9.
24
9.1. The evidence established that:
9.1.1. the tender PSP 03 had lapsed before 20 June 2012;
9.1.2. no Bid Adjudication Committee resolution or approval
memorandum existed;
9.1.3. the signatory lacked delegated authority; and
9.1.4. no task orders or budgets followed.
9.2. On these facts, the "letter of appointment" was ultra vires and legally
ineffective. The Oudekraal doctrine presupposes an existing
administrative act; it cannot resuscitate a non-existent one.
9.3. In Lepogo Construction (Pty) Ltd v Govan Mbeki Municipality
(623/13) [2014] ZASCA 154 (29 September 2014), the Supreme
Court of Appeal dealt squarely with a case almost identical to the
present. The contractor, like the appellant here, relied on a letter of
appointment issued by mun icipal officials. The SCA held that,
because statutory procurement formalities had not been complied
with, no vinculum juris ever came into existence.
9.4. Ponnan JA stated at para [4] (p 79-4) that the municipality denied
liability "inter alia, because one of its former employees, through his
fraudulent conduct, purported to appoint Lepogo w hen he lacked the
authority so to do."
9.5. The Court emphasised that s 217(1) of the Constitution and the
Local Government: Municipal Finance Man agement Act 56 of 2003
require that an organ of state "contract for goods or services ... in
25
accordance with a system which is fair, equitable, transparent,
competitive and cost-effective" (para [5], p 79-4). Because those
statutory and policy requirements were not followed, the letter of
appointment was void. The SCA concluded at para [12]-[13] (p 79-
6-79-7) that the purported appointment, even though reduced to
writing and acted upon, "was without lawful authority'' and could not
bind the municipality.
9.6. The ratio is directly applicable. Like Lepogo, the appellant's "letter
of appointment was issued outside the IDT's prescribed supply
chain procedures. The court a quo therefore correctly found that no
lawful and binding contract arose.
9.7. The principle of strict compliance with the written tender instrument
was long ago settled in Fraser and Chalmers (SA) (Pty) Ltd v Cape
Town Municipality 1964 (3) SA 303 (C). Van Winsen J held that the
tender conditions themselves defined the contractual boundary, and
that a court must give effect to the language used and not to
equitable considerations or supposed intentions extrinsic to the
document.
At p 306 E-F the learned Judge observed:
"Unless the terms of the contract expressly or by necessary
implication free the Council of the liability imposed upon it by sec
81(1), the obligation must lie where it is placed by the Legislature .
. . . It is common cause that the contract in question does not do
so expressly, but it is contended that it does so implicitly .... "
26
and at p 307 B-C he continued:
"The conditions of tender go on to provide that if the tenderer
does not choose to contract on that basis then the price which he
has quoted in the tender is the one to which he is bound .... As I
read these latter provisions they are intended to convey that if the
tenderer does not choose to enter into a contract embodying
clause 15 then he can enjoy none of the benefits of adjustment
of prices which would have followed had that clause been
embodied in the contract."
9.8. Fraser thus requires that courts give primacy to the text of the tender
conditions themselves and exclude extraneous or equitable
variations. The "letter of appointmenf' on which the appellant relies
expressly stipulated that a formal PSP contract would follow; under
Fraser, that written term is decisive.
9.9. The appellant sought to invoke notions of "consensus by conduct."
However, Pillay and Another v Shaik and Others 2009 (4) SA 74
(SCA) confines the doctrine of quasi-mutual assent to situations
where the parties' conduct unequivocally manifests consent within
a lawful framework. It cannot override statutory formality.
9.10. Farlam JA, delivering the unanimous judgment of the Court,
described the doctrine:
"Contract - formalities - whether agreements of sale between
parties invalid because prospective seller did not sign -
application of doctrine of quasi-mutual assent."
27
and at para [4]-[5] recorded that although the developers had not
signed, their conduct in marketing and allocating units "constituted
acceptance by conduct, instead of signature."
9.11. The crucial distinction lies in the fact that Pillay involved private
parties and no statutory requirement for written form. Here, by
contrast, s 217 of the Constitution, the PFMA and the IDT's SCM
policies prescribe a formal, written and authorised contract. As the
court a quo correctly held, where legislation demands formal
execution, quasi-mutual assent cannot apply.
9.12. The interpretive method adopted by the court a quo accords with the
now-settled approach in Natal Joint Municipal Pension Fund v
Endumeni Municipality (920/2010) [2012] ZASCA 13 (15 March
2012). Wallis JA (para [18], p 79-85) formulated the modern test:
"Interpretation is the process of attributing meaning to the words
used in a document ... having regard to the context provided by
reading the particular provision or provisions in the light of the
document as a whole and the circumstances attendant upon its
coming into existence .... A sensible meaning is to be preferred
to one that leads to insensible or unbusinesslike results or
undermines the apparent purpose of the document."
9.13. The court a quo, applying that very approach, considered the letter
of appointment within its statutory context, the constitutional
procurement framework and the IDT's internal procedures and
concluded that it was a conditional communication of intended
28
appointment, not a concluded contract. The appellant's attempt to
rely on isolated wording, divorced from that context, offends the
Endumeni methodology.
9.14. When these authorities are read together, they reveal a coherent
body of principle that vindicates the findings of the court a quo:
9.14.1. Strict compliance with procurement formalities is
mandatory.
9.14.2. The written instrument governs, and no extrinsic or
equitable claim can override its terms.
9.14.3. Consensus by conduct cannot substitute for compliance
with statutory or policy-prescribed formalities.
9.14.4. Interpretation is objective, contextual, and purposive,
requiring that the document be construed within its legal
and factual setting.
9.15. The judge a quo's conclusion that no valid or binding contract
existed is accordingly unimpeachable.
ALTERNATIVE CLAIM: COMPROMISE AND JUST AND EQUITABLE
RELIEF
10.
10.1. The appellant's particulars of claim contained, in the alternative to
the alleged contractual entitlement, a plea that an agreement of
compromise had been reached with the IDT whereby its invoices
29
would be paid. This rested on internal communications in 2014 and
the signing of the payment certificate by certain IDT officials.
10.2. The court a quo rejected that contention, finding that no valid
compromise was ever concluded. Even if an informal understanding
was reached between the appellant and individual IDT officials, such
understanding could not override the statutory and policy framework
governing IDT's financial obligations.
10.3. That finding is consistent with the Lepogo Construction (supra)
principle that unlawful acts by officials cannot be ratified or validated
through subsequent correspondence or compromise. In Lepogo
(supra) para [4]-[5] (p 79-4) Ponnan JA held that the official "lacked
the authority so to do" and that no subsequent conduct could bind
the Municipality. The same applies here: the IDT officials who
signed the so-called "settlemenf' letters had no delegated authority
to contract outside the approved procurement process.
10.4. In paragraphs 60 to 63 of the appellant's heads, the appellant cites
Sekoko Mametja Incorporated Attorneys v Fetakgomo Tubatse
Local Municipality (Case No . 60/2021) [2022] ZASCA 28 (18 March
2022) and Buffalo City Metropolitan Municipality v Asia Construction
(Pty) Ltd [2019] ZACC 15; 2019 (4) SA 331 (CC); 2019 (6) BCLR
661 (CC), without explaining the relevance of these authorities to
the dispute before this Court. Properly interpreted, both decisions
address the narrow remedial jurisdiction under section 172(1 )(b) of
the Constitution to award just and equitable compensation, but only
30
after a declaration of constitutional invalidity has been made
pursuant to a properly-constituted legality review. In Sekoko, the
Supreme Court of Appeal ordered compensation solely because the
municipality had benefited from services lawfully rendered, and
because "no fault lay at the door of Sekoko Attorneys" in
circumstances where the court had already held the award invalid.
10.5. In Buffalo City, the Constitutional Court preserved accrued rights
only after declaring the underlying contract unconstitutional,
emphasising that such preservation "does not permit a party to
obtain further rights under the invalid agreement." These authorities
therefore do not assist the appellant: they clarify that just-and
equitable compensation is exceptional, arises only within the
framework of a review accompanied by a declaration of invalidity,
and presupposes either lawful performance or accrued rights, which
the appellant neither pleaded nor proved, and do not arise on the
facts of this matter.
COSTS
11.
11 .1. Neither in the court a quo nor in this Court were any cogent reasons
advanced why the usual rule that costs follow the result should not
apply. The appeal is a straightforward commercial dispute arising
from a claim for payment under an alleged appointment; it raises no
public-interest or constitutional issues that would justify a departure
31
from the general principle.
11.2. The court a quo, correctly applied the ordinary rule. It observed that
the litigation was private in nature, that the Biowatch principle had
no application, and that the respondents, as a public entity, were
entitled to defend the claim to protect public funds. There is no basis
upon which this Court could interfere with that exercise of discretion.
11.3. The costs of the appeal must therefore follow the outcome. The
appellant, having been unsuccessful, is liable for the respondents'
costs, including the costs of two counsel where so employed.
12.
For the reasons advanced above, the following order is made:
12.1. The appeal is dismissed.
12.2. The judgment and order of Bokako AJ dated 20 January 2023 are
confirmed.
12.3. The appellant is to pay the costs of the appoal, including the co::its
of two counsel where engaged.
MA OBAJ
IAGREE
111111
THOBANEAJ
I AGREE
APPELLANT'S COUNSEL
AOVPMARX
Instructed by Marc Sischy
Tracy Sischy Attorneys
RESPONDENTS'COUNSEL
ADV SJ BEKKER SC
ASSISTED BY AOV IE TSHOMA
Instructed by Majang Inc Attorneys
32
Judgement delivered on: ~ 7 / r \ } :tO'd-5