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[2026] ZAGPPHC 87
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Special Investigating Unit v Gekkonomics Proprietary Limited t/a Infonomix and Another (A19/2024; 90545/18) [2026] ZAGPPHC 87 (18 February 2026)
IN THE HIGH COURT OF SOUTH AFRICA
GAUTENG DIVISION, PRETORIA
Full Court Appeal Case No:
A19/2024
Court
a quo
Case No:
90545/18
(1)
REPORTABLE:
YES
/NO
(2)
OF INTEREST TO OTHER JUDGES:
YES
/NO
(3)
REVISED.
SIGNATURE
DATE
18/02/2026
In
the Full Court Appeal of:
SPECIAL
INVESTIGATING UNIT
Appellant
and
GEKKONOMICS
PROPRIETARY LIMITED
t/a
INFONOMIX
First Respondent
SOUTH
AFRICAN BROADCASTING CORPORATION
SOC
LIMITED
Second Respondent
JUDGMENT
LABUSCHAGNE
J
This
is an appeal against part of a judgment granted by Tlhapi J in the
Court
a quo
. The appeal is with leave of the Court
a
quo
.
[1]
The appellant is the Special Investigating Unit (SIU) which was
established
in terms of the Special Investigating Units and Tribunals
Act, 74 of 1996 (“the SIU Act”). Its purpose is to
investigate malpractices and maladministration associated with state
institutions. Its statutory powers include the following:
“
4(1)
(c)
to institute and conduct civil proceedings in a Special Tribunal
or any court of law for-
(i)
any relief to which the State institution concerned is entitled,
including
the recovery of any damages or losses and the prevention of
potential damages or losses which may be suffered by such a State
institution;
(ii)
any relief relevant to any investigation; or
(iii)
any relief relevant to the interests of a Special Investigating
Unit;”
[2]
The SABC, the national broadcaster, is a public entity which was
referred for
investigation by the SIU under section 2(2). The
authorisation of the investigation was published in Government
Gazette No.
41086 of 1 September 2017 under Regulation Gazette No.
10754, Proclamation No. R29 of 2917.
[3]
The SIU, through its investigations, obtained evidence that a tender
awarded
by the SABC to the first respondent (“Infonomix”)
was tainted by illegality in the procurement of its services.
[4]
The SIU instituted review proceedings for the setting aside of the
decision
of the SABC to award the tender to the Infonomix and to
declare the contract between the SABC and Infonomix concluded on 07
December
2016 void
ab initio
.
[5]
The SIU also sought the following orders, which are relevant to this
appeal:
“
3.
Ordering the first respondent to repay all the payments made to the
first respondent
by the second respondent under the said contract.
4.
In the alternative to prayer 3 above, that this Honourable Court
orders:
4.1 The first respondent
to render a full account of all payments it received under the
impugned contract and its reasonable
expenses, supported by necessary
vouchers;
4.2 The debate of the said
accounts;
4.3 Payment to the second
respondent of whatever profits earned by the first respondent upon
debate of the account.”
THE FACTS
[6]
Infonomics made a proposal, according to an affidavit of Mr T
Mulaudzi, addressing
the following:
“
1.
The SABC was battling with a digital strategy and the first
respondent undertook to
develop a media proposition which would be
commercialised. The first respondent identified seven websites
that would be suitable
for revenue creation.
2.
The websites would be repurposed and changed from their current
platforms to
attract consumer interactivity to commercial platforms
to create revenue generation. The first respondent would assist
the
SABC and commercialising the seven websites, transforming the
websites into the SABC’s immediate digital medial proposition.
3.
The first respondent would implement Value Added Services on the
seven websites.”
[7]
A financial partnership would ensue between the SABC and Infonomix on
a 70/30 share of revenue derived from digital sales and value added
services (i.e. 70% in favour of the SABC).
[8]
However, the proposition required set up funding of R4,5 million for
implementing
of “a new responsive design of seven websites
chosen by the SABC. The costs are for website skinning/platform
development
…”, according to the Business Case presented
for consideration.
[9]
The business case document was signed by the author, Mr T Mulaudzi
and officials of
the SABC in mid-November 2016.
[10]
The SIU’s contention is that this was not sufficient to warrant
a deviation for a
single source service provider, as there may have
been others with better products. The facts will demonstrate that the
first respondent
was not selected for its skills as it had no track
record in the field or even a bank account at the time.
[11]
The R4,5 million was paid by the SABC to Infonomix. Only one of
the websites was
developed.
[12]
The SIU’s contention was that there was no justification for
the payment of R4,5
million. Infonomix did not indicate the
nature of the services it rendered which justified the payment and it
did not explain
how the monies were utilised for set up costs within
the premises of the SABC.
[13]
There was no prior bidding process before the award and there was
also no compliance
with the pre-deviation processes required by the
policies of the SABC.
[14]
The Supply Chain Management Manual of the SABC provided for
deviations from SCM procedures
of inviting competitive bids where it
is impractical to invite interested parties at short notice and where
such procurement of
goods or services needed immediate attention by
the Executive Directors.
[15]
The SIU contended that there was no basis to deviate in respect of
Infonomix.
It was only registered as a company in 2015, and it
opened up a bank account for the first time on 12 November 2016,
which was
the first time it ever received payment from the SABC.
It was therefore clearly not an established entity within that field.
[16]
At the time of its appointment, Infonomix was not yet registered as a
service provider
of the SABC on the SABC database. It was only
registered on 18 November 2016 on the SABC database and only on 12
December
2016 was it registered on the Central Supplier database.
[17]
The SCM manual provided that the SABC could consider an unsolicited
bid, only if
the product or service offered is a unique or innovative
concept that will be exceptionally beneficial to, or have exceptional
cost advantages for the SABC; that the person who made the bid
is the sole provider of the product and service; that
the need
for the product or service by the SABC has been established during
its strategic planning and budgeting process;
and the reasons
for not going through the normal bidding processes are found to be
sound by the Bid Adjudication Committee or a
level as per the DAF.
[18]
The Court
a quo
found that the SABC did not comply with its
own manual. The Court found in para [67]:
“
In as far as the SABC failed to
comply with the law, such conduct was reviewable, and the award may
consequently be set aside and
the contract entered into declared void
ab initio.”
[19]
The SABC did not provide evidence that the product was unique and
innovative. That
would have required prior strategic planning
involving a needs analysis and an evaluation whether the need has
been budgeted for.
In exceptional cases it needed to be
established whether there were costs advantages for the SABC
warranting such deviation.
Those reasons had to be provided to
the Bid Evaluation Committee to explain why a normal bidding process
was not followed.
[20]
As none of the aforesaid took place, the Court granted prayers 1 and
2 of the notice of
motion. It ordered that a decision of the
SABC of 15 November 2016 to award the tender to Infonomix be reviewed
and set aside.
It also declared that the contract entered into
between Infonomix and the SABC on 07 December 2016 is void
ab
initio
.
THE COURT
A QUO
’S
FINDING ON A JUST AND EQUITABLE REMEDY
[21]
The Court
a quo
declined to grant prayers 3 and 4 of the
notice of motion, quoted above, and it is against this part of the
order that leave to
appeal was sought and obtained.
[22] In
dealing with prayers 3 and 4 of the notice of motion, the Court
stated the following:
“
[82] In as
far as prayers 3 and 4 are concerned, I am of the view that both
Infonomix and the SABC flouted the
SCM procedures, the SABC being the
most guilty party by failing to follow a competitive bidding process
as envisaged in section
217 of the Constitution and the PFMA and, for
engaging an unsolicited bid with an entity which did not qualify as a
sole source
provider.
[83]
None of the employees involved in the malfeasance have been joined
individually to this application
which would probably have made them
liable in their personal capacities for the loss the SIU wishes to
recover. The prayers
suggest there is probably more to the
initial payment of R4,5 million which the SIU wishes to uncover, for
example as suggested
in the alternative prayer. The SABC has
not opposed the application and in my view an order cannot be made in
the circumstances
of this case that only Infonomix repay the loss the
SIU wishes to recover where the SIU has not shown that the SABC had
not derived
any benefit from the payment it made.
[84]
While it is trite that Infonomix should not benefit out of a contract
which is void ab initio,
in this instance the SABC may have
benefitted from whatever service it received from Infonomix before
the contract was terminated
and probably extending beyond that
period. By declaring the agreement void ab initio Infonomix
would be prevented from deriving
further benefit from the SABC
derived out of the contract.
[85] The
SIU has not determined in its investigations what the value of such
benefit might be and
it has not made out a case why it should be
determined that it is entitled to an order in the alternative, if in
its investigations
it did not go further in determining what gains or
losses the SABC suffered as a result of the impugned decision or what
profits
were earned. The SIU had full access to information of
the SABC from which it could establish that more than the R4,5
million
was paid out. The SIU has made no demand for repayment
of the sum of R4,5 million and additional amounts it might have
uncovered
prior to the launch of this application. The SIU does
not make out a case that the SABC itself was not playing open cards
and was refusing to avail information from its books regarding its
dealings with Infonomix justifying an order in the alternative
against Infonomix only. Infonomix has not been approached by
the SIU prior to the launch of this application to give an account
of
its services to the SABC and payment received or profits paid out and
that Infonomix declined to give such information.”
[23]
In the judgment in respect of leave to appeal, the Court
a quo
reasoned that the aforesaid may demonstrate an error warranting
the matter to proceed on appeal.
[24]
The notice of appeal reflects that the appellant wishes to insert
prayers 3 and 4
of the original notice of motion into the order of
the Court
a quo
. This provides for a repayment of all
amounts paid by the SABC to the first respondent, with an alternative
for an accounting,
and a debatement of all such payments and payment
to the SABC of whatever profits were earned by Infonomix.
[25]
In the grounds of appeal, the SIU contends in essence that Infonomix
was not innocent,
and as the agreement had been declared void, there
was no legal
causa
for payments to it to be retained. It
was contended that the order of the Court
a quo
is at odds
with the “
no profit, no loss”
principle that has
developed in the jurisprudence pertaining to remedies that are just
and equitable in review proceedings.
CONTENTIONS ON APPEAL
[26]
The SIU contends that the Court
a quo
erred in failing to
direct repayment of the amount of R4,5 million received by
Infonomix. At the time when Infonomix’s
bid was
considered and accepted, it was a company which had just been
established, did not have a bank account, was not registered
as a
service provider on either of the SABC database or the Central
Supplier database and the aforesaid payment was the first ever
payment it received into its recently established bank account.
The payment was pursuant to an approved request for set up
costs for
the implementation of a new responsive design of seven websites
chosen by the SABC. However, only one website was
ever designed
by Infonomix.
[27]
The SIU correctly points out that it must be accepted that the Court
a quo
correctly found the contract to be unlawful and void
ab
initio
. There is no cross-appeal.
[28]
Argument on behalf of the Infonomix on appeal did not contradict the
correctness of the
Court’s finding that the contract was void
ab initio
. Argument for Infonomix suggested that it
would be more appropriate to have a debatement after an accounting
had taken place
to determine what the aforesaid R4,5 million payment
was expended on.
WAS THERE A MISDIRECTION BY THE
COURT
A QUO?
[29] The
exercise of the Court
a quo
’s remedial discretion under
section 172(1)(b) of the Constitution constitutes a discretion in the
true sense, which an Appeal
Court would only interfere with if that
discretion was not exercised judicially, or that it had been
influenced by wrong principles
or a misdirection on the facts, or
that it had reached a decision, which in the result could not
reasonably have been made by a
Court properly directing itself to all
the relevant facts and principles (see
Trencon Construction (Pty)
Ltd v Industrial Corporation of South Africa Limited and Another
[2015] ZACC 22
;
2015 (5) SA 245
(CC) at para
[88]
).
[30]
Where a party is complicit in maladministration, impropriety or
corruption, justice and
equity dictates that such a party be
precluded from profiting from an unlawful tender. A complicit party
may also be required to
suffer losses (see
PRASA v Swifambo Rail
Agency (Pty) Ltd
2017 (6) SA 223
(GJ) at para [118], confirmed on
appeal in
Swifambo v PRASA
2020 (1) SA 76
(SCA)).
[31]
The “
no profit, no loss”
principle was described
by the Constitutional Court in
Allpay Consolidated Investment
Holdings (Pty) Ltd and Others v CEO of the South African Social
Security Agency and Others
2014 (4) SA 179
(CC) at para [67] as
follows:
“
[67] It
is true that any invalidation of the existing contract as a result of
the invalid tender should
not result in any loss to Cash Paymaster.
The converse, however, is also true. It has no right to benefit
from an unlawful
contract.”
[32]
The SIU correctly contends that Infonomix was complicit. It
approached the
SABC with its proposal. It knew it was dealing with an
organ of state under constitutional strictures to act lawfully,
following
a procurement system that is fair, equitable, transparent,
competitive and cost effective (sec 217 of the Constitution). It had
no track record or special skills to justify making an unsolicited
bid.
[33]
The complicity within the SABC is evident. The internal request for a
deviation from legal
prescripts and the SABC Supply Chain Management
Policy and Manual was approved on 11 November 2016. This was
before the approval
of the business case, which was required to
motivate a deviation. That business plan was only approved on
15 November 2016.
In the premises, the deviation was approved
without justification.
[34] The
Court
a quo
declined the request for an accounting or a
debatement, contending that the SIU had not placed sufficient facts
before the Court
to demand a debatement. The Court effectively
placed the SIU in the position of the SABC as though the complainant
SIU had
been the SABC.
[35]
The SIU is a statutory organ with a statutory mandate to recover
losses incurred by the
State due to corruption and financial
misconduct. Because it is removed from the ambit of those sharing
privity of contract, the
SIU cannot be treated as though it were one
of the contracting parties when it comes to placing information
relevant to remedy
before the Review Court.
[36]
This oversight on the part of the Court
a quo
in this regard
constitutes a misdirection which leaves the Court of Appeal free to
intervene.
[37]
In
Steenkamp NO v Provincial Tender Board of the Eastern Cape
2007 (3) SA 121
(CC) the Constitutional Court explained:
"[29] It
goes without saying that every improper performance of an
administrative function would implicate
the Constitution and entitle
the aggrieved party to appropriate relief. In each case the remedy
must fit the injury. 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. It is nonetheless
appropriate to note
that ordinarily a breach of administrative
justice attracts public-law remedies and not private-law remedies.
The purpose of a
public-law remedy is to pre-empt or correct or
reverse an improper administrative function. In some instances, the
remedy takes
the form of an order to make or not to make a particular
decision or an order declaring rights or an injunction to furnish
reasons
for an adverse decision. Ultimately the purpose of a public
remedy is to afford the prejudiced party administrative justice, to
advance efficient and effective public administration compelled by
constitutional precepts and at a broader level, to entrench
the rule
of law.”
[38]
Usually, a remedy crafted in terms of sec 172(1)(b) of the
Constitution must have
at least the following qualities. It must
vindicate the constitutional right wronged, i.e. the right of
a party aggrieved
by the unlawful exercise of public power. It must
uphold the rule of law, and it be just and equitable to all parties.
This has
been crystallised in the “no profit, no loss”
approach in respect of innocent tenderers.
[39]
As the SIU is a statutory recovery agent of the State for the return
of ill-gotten
gains, it is not in the position of an immediate party
who was wronged. It recovers losses in terms of an empowering
statute. A
just and equitable remedy in such circumstances would
focus on disgorgement of profits and recovery of unlawful payments.
[40]
The R4,5 million paid to Infonomix is all the SIU seeks to recover.
It is a single
payment which it sought to be paid to the SABC in its
Notice of Motion. However, as the SABC is complicit in the affair, it
would
not be just and equitable to direct Infonomix to repay this
amount to the SABC. The first respondent has been in possession of
the funds for almost ten years. Repayment to the SIU with interest is
just and equitable in these circumstances.
[41]
In the premises the following order is made:
1.
The appeal succeeds with
costs, such costs to include the costs of
two counsel, where so employed, on Scale C.
2.
The Court
a quo
’s decision declining an order in terms
of prayer 3 of the Notice of Motion is set aside.
3.
The following order is added
to the order of the court a quo:
“
The first respondent is
directed to repay R4,5 million to the appellant, with interest at the
prescribed mora rate from date of
receipt to date of repayment.”
LABUSCHAGNE
J
JUDGE
OF THE HIGH COURT
I
agree
POTTERILL
J
JUDGE
OF THE HIGH COURT
I agree
VAN DER WESTHUIZEN J
JUDGE
OF THE HIGH COURT