eZaga Holdings (Pty) Ltd v National Student Financial Aid Scheme and Others (9526/2024) [2026] ZAWCHC 309 (11 June 2026)

IN THE HIGH COURT OF SOUTH AFRICA
(WESTERN CAPE HIGH COURT, CAPE TOWN)

JUDGMENT

Reportable

Case No. 9526/2024

In the matter between:

EZAGA HOLDINGS (PTY) LTD APPLICANT

and


NATIONAL STUDENT FINANCIAL AID SCHEME FIRST RESPONDENT
COINVEST AFRICA (PTY) LTD SECOND RESPONDENT
NORACCO CORPORATION (PTY) LTD THIRD RESPONDENT
TENET TECHNOLOGY (PTY) LTD FOURTH RESPONDENT
MINISTER OF HIGHER EDUCATION,
SCIENCE AND TECHNOLOGY
FIFTH RESPONDENT
SPECIAL INVESTIGATING UNIT SIXTH RESPONDENT

CORAM : FORTUIN et CLOETE JJ et ADHIKARI AJ
Heard: 16-18 March 2026
Delivered electronically: 11 June 2026


ORDER

1. The decision to appoint the applicant and the second to fourth respondents
(collectively, ‘the service providers ’) to provide direct payments of allowances
to the students of the first respondent ( NSFAS’) pursuant to Bid Number:
SCM022/2021 (‘the tender ’) is declared to be unconstitutional, unlawful and
invalid, and is reviewed and set aside;

2. The service level agreements concluded between NSFAS and the service
providers pursuant to the award of the tender (‘the service level agreements ’)
are declared to be unconstitutional, unlawful and invalid, and are reviewed and
set aside;
3. Subject to the process of determination set out in paragraphs 4 to 9.7 below,
each of the service providers is entitled to just and equitable relief under
s 172(1)(b) of the Constitution from NSFAS in the form of monetary
compensation on the following terms:
3.1. Compensation for all proven reasonable losses and necessary
expenses actually and demonstrably incurred by each of t he service
providers respectively pursuant to, or in reasonable anticipation of,
their respective service level agreement s, and attributable to the
service level agreements including, but not limited to, capital
expenditure, operational costs, staff costs, the costs of terminating
student accounts, and third-party contractual obligations; and
3.2. Compensation for the proven reasonable profit that each service
provider would have earned from their respective service level
agreements as if the service level agreements had continued to the
date of this Order , calculated as if the service level agreement s had
remained in full force and effect and had been implemented, up to
the date of this Order;
4. The service providers shall present their statements of account to NSFAS’
attorneys within 30 days of the date of this Order setting out their claimed
expenditure, earnings and alleged loss of profits, with all supporting
documentation (‘the accounting’);
5. NSFAS shall within three months from the date of the receipt of the accounting
from the relevant service provider:
5.1. consider the accounting , and debate the accounting with the service
provider; and

5.2. advise the service provider of which claims NSFAS will agree to pay,
in what amounts and on what terms, and provide reasons for the
offer(s) made;
6. The service providers shall within a period of one month from the date of
receipt of NSFAS’ response as contemplated by paragraph 5 above, advise
NSFAS’ attorneys whether they accept or decline the amounts tendered by
NSFAS;
7. In the event of NSFAS and a ny service provider failing to reach agreement as
contemplated in paragraph 6 above, NSFAS and any service providers that
have not reached agreement shall jointly appoint, within one month after the
time period referred to in paragraph 6 above, a duly qualified and independent
expert with appropriate experience, to assess and verify the reasonable losses
and expenses incurred and reasonable profit claimed by each service provider
to the extent that such claims arise from, or are directly attributable to, the
relevant service level agreement , based on the evidence provided by each
party;
8. Subject to the provisions of, and process set out, in paragraph 9 below, there
shall be one expert only who may, if necessary, be substituted if they are
unable or unwilling to act for any reason;
9. To give effect to the above:
9.1. Failing agreement about the identity of the expert within the time
period provided for in paragraph 7 above within which an expert must
be jointly appointed, the parties shall, within 20 days of such
disagreement, approach the South African Institute of Chartered
Accountants ( ‘SAICA’) and request a list of names of three suitably
qualified persons to act as an expert and from which list of names the
parties shall agree, within five further days, a person to act as an
expert;

9.2. Should the parties be unable to appoint an expert by agreement
within such time, the parties shall request SAICA to determine which
of the three experts should be appointed in accordance with SAICA’s
appointment guidelines and procedures within 10 days of such
request;
9.3. The costs of the expert's appointment and services shall be borne
equally between NSFAS, on the one hand, and the service providers,
on the other, with the service providers being jointly and severally
liable for their respective half portions;
9.4. The participating parties shall, prior to the commencement of the
expert’s services, pay such a reasonable estimate of such costs into
trust with their respective attorneys, or into such other agreed trust
account, to secure the payment of the expert’s fees and
disbursements;
9.5. The appointed expert shall determine the procedure to be followed to
determine the amount of compensation payable by NSFAS to each
service provider. In doing so, the expert shall be empowered to:
9.5.1. require the parties to deliver written submissions and
supporting documentation within specified time periods;
9.5.2. conduct interviews or hearings as the expert deems
necessary;
9.5.3. appoint specialist sub-experts or consultants, with the prior
written consent of both NSFAS and the relevant service
provider (such consent not to be unreasonably withheld);
and
9.5.4. issue procedural directions to the parties;

9.6. The parties shall co-operate fully and comply promptly wit h all
directions and requests of the expert with the view to completing the
expert determination with all service providers within three months of
the date of the expert’s appointment;
9.7. If for any reason, additional time is required, any party or the expert,
on notice to all other parties, may approach a Judge by way of a
chamber book application for such additional time;
10. In the event of any of the parties accepting the settlement contemplated by
paragraph 6 above, or the expert’s assessment in respect of their
compensation, they may approach the Court, which will decide whether to
confirm such settlement or assessment;
11. In the event of any disagreement in respect of the expert’s assessment the
parties who are still in dispute are granted leave to approach the Judge
President for the allocation of an expedited date(s) for hearing and
determination of the disputed issues by way of oral evidence before one or
three judges as directed by the Judge President;
12. In the event of any deadlock or inability to perform in accordance with this
Order, the parties are permitted to approach this Court, on application and on
notice to the other parties, for appropriate relief;
13. NSFAS shall pay each service provider the amount decided by the Court
within 60 days of the Court’s order on the amount of compensation payable to
that service provider;
14. NSFAS and the service providers shall take the necessary steps to close
students’ accounts and secure regulatory compliance;
15. Subject to the provisions of paragraph s 11 and 12 above , each party shall
bear its own costs; and
16. All references to days in this order are court days.

___________________________________________________________________

JUDGMENT


ADHIKARI, AJ ( FORTUIN et CLOETE JJ concurring) :
INTRODUCTION AND RELIEF SOUGHT
[1] This application has its genesis in a decision of the first respondent, the
National Student Financial Aid Scheme (‘NSFAS’) during or about
October 2023 to terminate the service level agreements (‘the SLAs‘)
concluded with the applicant eZaga Holdings (Pty) Ltd (‘eZaga’), the second
respondent Coinvest Africa (Pty) Ltd (‘Coinvest’), the third respondent Noracco
Corporation (Pty) Ltd (‘Noracco’), and the fourth respondent Tenet Technology
(Pty) Ltd (‘Tenetech’) 1 pursuant to the award of Tender Number SCMN022
(‘the tender’) for direct payment of disbursement allowances to NSFAS -funded
students at public universities and TVET colleges for a 5 -year renewable
period. For convenience and unless otherwise indicated, I will refer to the
applicant and the second to fourth respondents collectively as the ‘service
providers’ and to NSFAS and the service providers as ‘the parties’.
[2] On 6 May 2024 eZaga instituted proceedings in this Court (‘the main review
application’) seeking, inter alia:

1 In the remainder of this judgment the second to fourth respondents are collectively referred to as
‘the service providers’.

[2.1] Orders reviewing and setting aside, and declaring invalid, unlawful
and unconstitutional the following decisions taken by NSFAS (‘the
impugned decisions’):
[2.1.1] The decision taken on or about 18 October 2023 to
terminate the SLA concluded with eZaga pursuant to the
tender;
[2.1.2] The decision taken on or about 12 April 2024 to extend the
payment of allowances to NSFAS funded students through
universities as opposed to the direct payment solution
provided by eZaga;
[2.1.3] The decision taken on or about 24 April 2024 to stop
issuing payments instructions and making associated
payments to eZaga for the direct disbursement of
allowances into the bank accounts of NSFAS -funded
students which eZaga had onboarded;
[2.1.4] The decision taken on or about 26 April 2024 to implement
a payment mechanism with the assistance of NSFAS
banker to distribute allowances directly to students’ bank
accounts; and
[2.2] An order condoning as far as necessary the late institution of the
main review application.
[3] In addition, eZaga had sought certain interim interdictory relief.2

2 The application which came before this Court related to the review relief only.

[4] The sixth respondent, the Special Investigating Unit (‘the SIU’) applied to join
the main review application and its application for joinder was unopposed.3
[5] On 6 May 2024 the SIU and NSFAS instructed their attorneys, Werksmans Inc
Attorneys (‘Werksmans’) to institute proceedings in the Special Tribunal to
review and set aside the award of the tender to the service providers and to
interdict the implementation of the SLAs pending the outcome of the main
review application.
[6] Those proceedings were instituted in the Special Tribunal on 24 May 2024 by
the SIU in its own name and on behalf of NSFAS in which the following relief
was sought:
[6.1] In Part A , the SIU and NSFAS sought an order interdicting and
restraining the service providers from implementing the SLAs
pending the determination of the relief sought in Part B;4 and
[6.2] In Part B, the SIU and NSFAS sought orders declaring:
[6.2.1] the award of the tender to each of the service providers to
be unlawful and invalid and setting the awards aside; and
[6.2.2] the SLAs to be unlawful and invalid and setting the
agreements aside,
[7] When the interim interdictory relief sought by eZaga came before this Court on
12 June 2024 the explanatory affidavits delivered by the other service
providers were struck out and the Part A relief was struck from the roll for lack

3 The SIU ultimately did not participate in the proceedings before this Court. The fifth respondent did
not participate in these proceedings either.
4 The Special Tribunal dismissed the Part A relief sought by the SIU and NSFAS.

of urgency. The interim interdictory relief was re-enrolled on the semi -urgent
roll for hearing.
[8] This Court o n 15 July 2024 granted an interim order interdicting NSFAS from
taking any steps to implement the impugned decisions and directing NSFAS to
implement the SLAs, pending the final determination of the main review
application.5
[9] On 25 July 2024 NSFAS sought leave to appeal the interim order and leave to
appeal was granted by this Court on 22 August 2024.
[10] NSFAS took the view that the interim order was suspended as a consequence
of the delivery of the application for leave to appeal . eZaga took the view that
the interim order was not suspended and consequently on 13 August 2024
eZaga launched contempt proceedings in respect of NSFAS’ failure to
implement the interim order. The contempt proceedings were struck from the
roll for lack of urgency on 17 September 2024.
[11] The appeal against the interim order was subsequently withdrawn by
agreement between the parties.
[12] On 25 May 2025 NSFAS instituted a counter application in this Court in the
form of a self-review (‘the counter application’) in which it sought orders:
[12.1] Declaring the decision to appoint the service providers pursuant to
the tender to be unconstitutional and invalid;

5 Ezaga Holdings (Pty) Ltd v National Student Financial Aid Scheme Coinvest Africa (Pty) Ltd and
Others (9526/24) [2024] ZAWCHC 190 (15 July 2024).

[12.2] Reviewing and setting aside the aforementioned decision in terms of
the provisions of the Promotion of Administrative Justice Act 3 of
2000 (‘PAJA’) and s 1(c) of the Constitution;
[12.3] Declaring the SLAs to be unlawful and invalid in terms of s 172 of the
Constitution and s 8 of PAJA;
[12.4] Divesting the service providers of all profit accrued to them as a
result of the bid award;
[12.5] Directing that the service providers are entitled to retain from the
payments advanced to them in terms of the SLAs only reasonable
expenses incurred in the fulfilling of the SLAs; and
[12.6] Directing that:
[12.6.1] the service providers provide NSFAS with a detailed
breakdown of the reasonable expenses incurred in
fulfilling the SLAs together with supporting documents
within 30 days to be verified by an expert;
[12.6.2] NSFAS, within 30 days after the service providers had
complied with the above, appoint a duly qualified expert to
assess the reasonableness of the service providers ’
expenses and debate the financial data provided by the
services providers; and
[12.6.3] The service providers pay NSFAS the amounts found to
be due by the expert within 60 days of demand by NSFAS.
[13] All of the service providers oppose the counter application and seek just and
equitable relief in the event that the review relief sought in the counter
application is granted.
[14] eZaga contends that in the event that the review relief in the counter
application is granted, it would be entitled to compensation from NSFAS which

would cover eZaga's costs and expenses in implementing its SLA and the
reasonable profits eZaga would have obtained in implementing the SLA.
Given the dispute raised by NSFAS concerning the figures provided by eZaga,
the latter seeks an order that an expert or referee be appointed to determine
the losses and expenses incurred by eZaga in implementing the SLA, the
reasonable profits eZaga would have obtained in implementing the SLA, and
an order that NSFAS pay eZaga the compensation amount determined by the
independent expert or referee.
[15] Coinvest contends that in the event that the review relief in the counter
application is granted, the just and equitable remedy would be for the C ourt to
suspend the order of invalidity either wholly or for a limited time period so as to
preserve the service providers ’ rights to pursue a claim for damages ,
alternatively that the Court as part of these proceedings grant an order
allowing for the determination of both their out -of-pocket expenses and fair
profit.

[16] Norraco contends that in the event that the review relief in the counter
application is granted, the just and equitable remedy would be for the Court to
grant an order limiting the retrospective effect of the declaration of invalidity,
and/or an order suspending the declaration of invalidity of the SLA for five
years subject to such conditions as the Court may wish to impose, including
the condition that in calculating the period of five years, the time period from
April 2024 to the date of the final order not be taken into account, as well as ,
or in the alternative , an order that Norraco be compensated for any losses it
suffered as a result.
[17] Norraco further contends that j ust and equitable relief must not equated with
damages but that it would be just and equitable that it be compensated for the
costs it has already incurred , its ongoing costs, and for the loss of a business
opportunity to generate income over the period of the contract , as well as to
pay the outstanding debt owed by NSFAS to Norraco which it contends
amounts to R3 million.
[18] Tenetech contends in the first place that in the event that the counter
application is dismissed , NSFAS be directed to immediately implement the
SLA concluded with it. Tenetech is the only service provider that instituted a
formal counter application for certain just and equitable relief in the event that
the review relief in the counter application is granted. Tenetech seeks the
following just and equitable relief:
[18.1] An order compensating Tenetech for all of the losses and expenses
incurred pursuant to , or in anticipation o f, the SLA including all
product development costs and all expenses that Tenetech will incur
to third parties as a result of termination of the SLA; and
[18.2] An order incorporating a reasonable profit for the services rendered
including services tendered to be performed by Tenetech under the
SLA, from the date of inception of the SLA to the date of the final

SLA, from the date of inception of the SLA to the date of the final
setting aside of the SLA, including any appeals;

[18.3] That the parties are required to jointly appoint a duly qualified expert
to assess and verify the expenses incurred and reasonable profits
claimed together with all supporting documents and to determine:
[18.3.1] the reasonableness of all expenses incurred and claimed
by Tenetech;
[18.3.2] the value of the compensation to which Tenetech is
entitled for reasonable expenses;
[18.3.3] the amount or means of calculating the reasonable profit
to which Tenetech is entitled;
[18.3.4] the amount and/or value of the reasonable profit to which
Tenetech is entitled;
[18.3.5] the amount due to Tenetech as just and equitable relief;
and
[18.4] Tenetech set out a proposed mechanism to give effect to the relief
sought.
[19] By the time the matter came before this Court, the parties had agreed that the
main issues in dispute related to the contentions raised in the counter
application. The parties correctly accepted that if the counter application
succeeds the main review application cannot succeed. The parties, prior to
the hearing , delivered a joint practice note setting out the main issues for
determination as follows:
[19.1] Whether NSFAS' decision to appoint the service providers for the
provision of payment of allowances to NSFAS students was lawful
and in accordance with the s 217 of the Constitution, the Public
Finance Management Act 1 of 1999 (‘PFMA’), the Preferential
Procurement Policy Framework Act 5 of 2000 (‘PPPFA’) and the
Preferential Procurement Regulations, 2022

(‘the PPPFA Regulations’), the Treasury Regulations, and the
2021 National Student Financial Aid Scheme Supply Chain
Management Policy (‘2021 NSFAS SCM Policy’);
[19.2] Whether the SLAs concluded between NSFAS and the service
providers are valid, binding, and enforceable, or whether the SLAs
are unlawful and invalid as a result of the material irregularities in the
tender process;
[19.3] Whether the historical relationships between NSFAS officials and the
directors of the appointed service providers, including prior irregular
performance at the Safety and Security Sector Education and
Training Authority (‘SSETA’), created a reasonable apprehension of
bias, gave rise to preferential treatment, or otherwise compromised
the integrity and independence of the procurement process;
[19.4] Whether NSFAS suffered or is likely to suffer financial prejudice as a
result of the irregular and unlawful procurement process, including
the risk of irregular expenditure exceeding R49 billion, and whether
the cumulative effect of the identified irregularities renders the entire
procurement process constitutionally invalid;
[19.5] Whether any delay in instituting these proceedings has been
adequately explained and should be condoned, having regard to the
interests of justice, the seriousness of the alleged maladministration,
the findings contained in the Werksmans Attorneys investigation
report and the Special Investigating Unit (‘the SIU’) investigation
report, the constitutional obligations resting on NSFAS, and the
broader imperatives of good governance and the rule of law;
[19.6] In the event that invalidity is declared, the appropriate just and
equitable remedy under s 172(1)(b) of the Constitution, including:
[19.6.1] whether the service providers are entitled to retain profit
earned under the SLAs;

[19.6.2] whether the projected future income or expectation
damages is cognisable in legality review proceedings; and
[19.6.3] whether, on the present record, this Court is in a position
to determine complex financial and actuarial claims
advanced for the first time in answering affidavits;
[19.7] Even if there is no basis for the Court to overlook any unreasonable
delay, whether the Court should nevertheless be constitutionally
compelled to declare the impugned NSFAS decisions unlawful;
[19.8] Whether the service providers are entitled to retain or be awarded
compensation for their reasonable costs in implementing the SLAs;
[19.9] If this Court is not in a position to determine complex financial and
actuarial claims advanced for the first time in answering affidavits,
what just and equitable mechanism to impose to facilitate the
calculation of what the service providers are entitled to retain or be
awarded;
[19.10] Whether the service providers should be allowed to keep their profits;
[19.11] Whether s uch claims are, in substance, contractual expectation
damages and are not cognisable within a legality review;
[19.12] Whether the appropriate remedy is corrective and restitutionary in
character, permitting the recovery of proven and reasonable
expenditure actually incurred, subject to independent verification, but
not retention of profit derived from an unlawful award;
[19.13] Whether the appropriate remedy is for the Court to suspend the
operation of the order of invalidity in toto, alternatively for a limited
time to enable the service providers to recover both their out -of-
pocket expenses and a fair profit;

[19.14] Whether service providers who are innocent of any wrongdoing and
who have continued to render services under the SLAs should be
entitled to payment of a reasonable profit for such services, in
addition to all incurred costs in servicing the SLAs, and the
appropriate means by which to determine such amounts.
RELEVANT BACKGROUND FACTS
[20] Pursuant to a review process, a decision was taken by NSFAS to advertise a
tender for the direct payment of allowances to NSFAS student bank accounts
for five years under bid number SCMN006/2020 (‘the first tender’). The first
tender was subsequently cancelled as it was deemed non -responsive. On
20 November 2020, NSFAS published a second tender under bid number
SCMN01 4/2020 (‘the second tender’) for the provision of direct payments of
allowances to NSFAS student bank accounts for 5 years. The second tender
was also cancelled.
[21] On 25 January 2022, NSFAS advertised the tender for direct payment of
disbursement allowances to NSFAS-funded students at public universities and
TVET colleges for a 5 -year renewable period. The service providers all
submitted bids in response to the tender advertisement.
[22] On 15 June 2022 NSFAS advised the service providers that their respective
bids were successful, subject to price negotiations . On 12 July 2022, NSFAS
appointed the service providers in terms of the tender.
[23] On 15 August 2022 NSFAS concluded SLAs with each of the service
providers pursuant to those awards.
[24] On 17 October 2023 the service providers were called to a meeting with
NSFAS where they were informed that NSFAS had received an investigative
report prepared by NSFAS’ attorneys, Werksmans (‘the Werksmans report’),
which had advised NSFAS to terminate the SLAs with all four of the service
providers and to cancel the award of the tender. It is not in dispute that at that
meeting the NSFAS Chairman acknowledged that NSFAS was at fault for the

irregularities identified in the procurement processes and stated that the
Werksmans report did not make adverse findings about the guilt of the service
providers.
[25] The following day, 18 October 2023, NSFAS issued a media statement, in
which it stated, inter alia, that upon reviewing the Werksmans Report, it would
be ‘cancelling’ the SLAs concluded with the service providers . However for
some time thereafter NSFAS continued to implement the SLAs with various
service providers.
[26] By way of example, NSFAS continued implementing the SLA with eZaga by
sending onboarding files, payment files, and making monthly payments to
eZaga during the period November 2023 to March 2024 , and between
October 2023 and February 2024, Tenetech continued to receive payment
instructions from NSFAS. On 31 January 2024, the NSFAS board passed a
resolution requiring universities to maintain their collaboration with the service
providers designated for their particular institutions. On 8 February 2024
NSFAS issue d a notice confirming that the service providers remained
enlisted by NSFAS to disburse funds to students.
[27] However, in February 2024 and March 2024, following student registration
drives, NSFAS also distributed funds directly to universities for onward
distribution to NSFAS funded students at universities , and directly to NSFAS
funded students at TVET colleges, and did so for the months of February 2024
and March 2024, bypassing the service providers. At the time NSFAS stated
that it had done so because of delays in the 2024 academic year caused by
registration delays and that once the situation was corrected it would again
honour the terms of the SLAs.
[28] On 12 April 2024 NSFAS wrote to university vice chancellors directing them to
pay students allowances directly for the months of April 2024 to July 2024. On
24 April 2024 , NSFAS failed to send eZaga and Coinvest onboarding or
payment files or make payments to them for purposes of disbursing funds to
students.

[29] On 26 April 2024 NSFAS issue d a media statement announcing a new
payment mechanism through First National Bank which had been an
unsuccessful bidder in the tender process. The media statement advised that
students were to open their own bank accounts into which NSFAS would be
making payments directly and further recorded that there would be an
offboarding process for students who had accounts through any one of the
service providers.
[30] The decisions taken by NSFAS in April 2024 were the catalyst for the
institution of the main review application. The essence of the dispute between
the parties relates to the lawfulness of the procurement process and the
consequences of any unlawfulness.
RELEVANT LEGAL PROVISIONS
[31] It is trite that the principle of legality governs the exercise of all public power.
There is very little distinction between the grounds of review of administrative
action under PAJA and the review of executive action under the principle of
legality.6
[32] Decisions made by organs of State which are not challenged in the
appropriate proceedings, by the right parties seeking the right remedy, at the
right time, are treated as effective and binding, unless they are set aside by a
court – even if the decisions may be vitiated by some irregularity. 7 As the
Supreme Court of Appeal has observed ‘until a court is appropriately approached

6 Minister of Home Affairs and Another v Public Protector 2018 (3) SA 380 (SCA) (‘Minister of Home
Affairs’), para 38.
7 Oudekraal Estates (Pty) Ltd v City of cape Town 2004 (6) SA 222 (SCA) , paras 26 - 31;
Magnificent Mile Trading 30 (Pty) Ltd v Charmaine Celliers 2020 (4) SA 375 (CC), para 1.

and an allegedly unlawful exercise of public power is adjudicated upon, it has binding
effect merely because of its factual existence’. 8
[33] Organs of State are not entitled to simply disregard administrative actions,
even if they believe the decisions to be unlawful, unless and until those
decisions are set aside by a competent court. To do otherwise, would be
impermissible self-help, which is contrary to the rule of law. 9 Organs of State
have a higher duty to respect the law, to fulfil procedural requirements, and to
respect rights when doing so.
[34] It is not in dispute that NSFAS is a public entity listed in Schedule 3A of the
PFMA and that it is an organ of State as contemplated by s 239 of the
Constitution. Hence NSFAS seeks to review its decisions in terms of the
principle of legality. 10 Moreover, it is well settled that organs of State are
enjoined to uphold and protect the rule of law by, inter alia , seeking the
redress of their unlawful decisions , and are in fact under a positive obligation
to rectify any identified unlawfulness.11
[35] Section 217(1) of the Constitution requires that an organ of State like NSFAS
must contract for goods or services in accordance with a system that is fair,
equitable, transparent, competitive and cost-effective. This duty is given effect
to in the case of NSFAS through, inter alia, the PFMA; the PPPFA; the PPPFA
Regulations; the Treasury Regulations; and the 2021 NSFAS SCM Policy .
These statutory and regulatory provisions form the procurement framework or
system as contemplated by s 217(1). It is trite that the enquiry that a review

8 Minister of Home Affairs, para [38].
9 MEC for Health, Eastern Cape and Another v Kirland Investments (Pty) Ltd t/a Eye & Lazer
Institute 2014 (3) SA 481 (CC), paras 89 and 103.
10 State Information Technology Agency SOC Ltd v Gijima Holdings (Pty) Ltd ZACC 40; 2018 (2) 23
(CC) (‘Gijima’), para 37 – 40.

(CC) (‘Gijima’), para 37 – 40.
11 Buffalo City Metropolitan Municipality v As la Construction (Pty) Limited ZACC 15; 2019 (4) SA 331
(CC) (‘Buffalo City’), para 61.

court is required to engage in is whether the procurement process that was
followed complies with the applicable procurement framework.12 Compliance
with this constitutionally mandated framework is a necessary requirement for a
valid procurement process 13 and the consequence of non -compliance is that
any contract concluded in breach thereof is invalid.14
[36] The Constitutional Court in AllPay I explained the proper approach to be
followed in matters where material irregularities were alleged in a tender
award as follows – first it must be established, factually, whether an irregularity
occurred, and thereafter (as the second step) the irregularity must be legally
evaluated, taking into account the materiality of any deviance from legal
requirements, to determine whether it amounts to a ground of review. 15 The
materiality of compliance with legal requirements depends on the extent to
which the purpose of the requirements is attained and whether the purposes
the tender requirements are intended to serve have been substantively
achieved. 16 In a legality review the enquiry to be undertaken is whether the
adopted procurement framework/system was complied with and whether the
process followed was compliant with s 217 of the Constitution.17

12 AllPay Consolidated Investment Holdings (Pty) Ltd v Chief Executive Officer South African Social
Security Agency (Corruption Watch and Centre for Child Law as Amici Curiae) ZACC 42; 2014 (1)
SA 604 (CC), (‘AllPay I’), para 40.
13 AllPay I, para 40.
14 Municipal Manager: Qaukeni Local Municipality and Another v FV General Trading CC, [2009]
ZASCA 66, 2010 (1) SA 356 (SCA), para 16; Eastern Cape Provincial Government and Others v
Contractprops 25 (Pty) Ltd 2001 (4) SA 142 (SCA) , [2001] 4 All SA 273, paras 8 – 9.
15 AllPay I, para 28.
16 AllPay I, para 58.
17 Gijima, para 40-41.

THE SCOPE OF THE SELF-REVIEW
[37] The decisions sought to be reviewed in the counter application are the
decisions of NSFAS to award the tender to the service providers and the
resultant conclusion of the SLAs pursuant to the tender awards.
[38] There can be no dispute that the decisions to award the tender constitute the
exercise of a public power by NSFAS in terms of s 217(1) of the Constitution
read with s 51(1)(a)(iii) of the PFMA . Given the averments in NSFAS’
founding affidavit in support of the counter application that there were material
irregularities in, inter alia, the bid specification committee (‘BSC’) processes,
the bid evaluation committee (‘BEC’) processes, the bid adjudication
committee (‘BAC’) processes, and the contract negotiation processes , it
follows that a review of these decisions by NSFAS falls squarely within the
scope of a review in terms of the principle of legality.
[39] Given the trite legal principle that a public procurement contract concluded in
breach of legal provisions designed to ensure a transparent, cost-effective and
competitive tendering process in the public interest is invalid and will not be
enforced,18 there can similarly be no question that the conclusion of the SLAs
is part of and flows directly from the aforementioned public procurement
process and thus properly forms part of the scope of a review in terms of the
principle of legality.
[40] The crisp issue that this Court must determine for purposes of the counter
application is whether the procurement process undertaken by NSFAS in the
awarding of the tenders complied with the relevant statutory and regulatory
framework. However, before dealing with whether NSFAS has made out a

18 Ferrostaal GmbH and Another v Transnet SOC Ltd and Another 2021 (5) SA 493 (SCA), para 31.

case for review, all of the service providers raise the issue of undue delay. In
essence they all contend that NSFAS has delayed unreasonably in seeking to
review the decisions that form the subject of the counter application and that
the counter application should be dismissed for this reason.
DELAY
[41] The Constitutional Court has cautioned courts to be slow to allow procedural
obstacles to prevent them from looking into a challenge to the lawfulness of an
exercise of public power. 19 Ultimately, the overriding factor is whether it is in
the interests of justice to grant condonation. 20 Unlike a review in terms of
PAJA, a review under the principle of legality is not subject to a 180 -day time
bar. The guiding factor is whether the application has been brought within a
reasonable time.21
[42] The Constitutional Court in Khumalo22 in considering the delay rule in the
context of the principle of legality, endorsed the test enunciated by the
Supreme Court of Appeal in Gqwetha for assessing undue delay in bringing a
legality review application.23
[43] The issue of delay is determined by using a two-stage process.24
[44] First, it must be determined whether the delay is unreasonable or undue. This
is a factual enquiry upon which a value judgment is made, having regard to

19 Khumalo and Another v Member of the Executive Council for Education: Kwa -Zulu Natal 2014 (5)
SA 579 (CC) (‘Khumalo’), para 45.
20 Van Wyk v Unitas Hospital and another 2008 (2) SA 472 (CC) at 477 A-B.
21 Buffalo City, para 50.
22 Khumalo, para 49.
23 Gqwetha v Transkei Development Corporation Ltd and Others 2006 (2) SA 603 (SCA), para 33.
24 Buffalo City, para 43, 48, 52 -53.

the circumstances of the matter. 25 The court will consider the explanation
provided for the delay and the explanation should cover the entire period of
the delay. Where there is no explanation, the delay will necessarily be
unreasonable.26
[45] Second, if the delay is unreasonable, the question becomes whether the
court's discretion should nevertheless be exercised to overlook the delay to
entertain the application. 27 There must be a good reason for the court to do
so, based on objective facts. 28 The approach to overlooking delay is flexibl e,
and entails a legal evaluation taking into account a variety of factors including:
[45.1] The potential prejudice to affected parties as well as the possible
consequences of setting aside the impugned decision, and any
prejudice that may be ameliorated by the court’s power to grant just
and equitable remedies.29
[45.2] The nature of the impugned decision. This requires a court to
somewhat consider the merits of the challenge.30
[45.3] The conduct of the party bringing the review , in particular for State
litigants seeking to review their own decisions as they are best
placed to explain the delay.31
[46] In summary, the standard to be applied in assessing delay under the principle
of legality remains whether the delay was unreasonable , and in assessing the
delay the proverbial clock starts running from the date that the applicant

25 Buffalo City, para 48.
26 Buffalo City, para 52.
27 Buffalo City, para 48.
28 Gijima, para 49.
29 Buffalo City, para 54.
30 Buffalo City, para 55.
31 Buffalo City, para 59.

became aware or reasonably ought to have become aware of the action
taken.32
[47] Certain of the service providers contend that the delay ought to be calculated
from 12 July 2022 when NSFAS appointed the service providers in terms of
the tender. NSFAS contends that it first became aware of certain irregularities
on 15 October 2023 when it received the Werksmans report. NSFAS further
avers that it had to await the outcome of the SIU investigation which was
concluded on 23 April 2024. These averments are not meaningfully disputed
by any of the service providers. NSFAS contends that the parties engaged in
various litigious proceedings from May 2024 onwards as set out above and
that in the circumstances its delay of some 19 months from October 2023 to
May 2025 was reasonable, alternatively that the delay ought to be condoned
as it is in the interests of justice to do so.
[48] I am in agreement with the service providers that the explanation for the delay
provided by NSFAS is less than convincing. By its own account NSFAS
became aware of at least some of the irregularities when it received the
Werksmans report on 15 October 2023. NSFAS makes no effort to explain in
its founding affidavit why it had to wait for the completion of the SIU
investigation to approach the court . It bears emphasis that NSFAS does not
state that the full nature and scope of the irregularities only came to light after
it received the results of the SIU investigation. Even if the SIU investigation
could be relied on, tha t only accounts for the delay up to April 2024. The
contention that the remaining 13 month delay from April 2024 to May 2025 can
be explained with reference to the other litigation in which the parties were
involved is not convincing.

32 Buffalo City, para 48. City of Cape Town v Aurecon South Africa (Pty) Limited 2017 (4) SA 223
(CC), para 37 and 41.

[49] In the circumstances I am in agr eement with the respondents that the delay is
unreasonable. However, that is not the end of the enquiry as an unreasonable
delay may still be condoned if it is in the interests of justice to do so.
[50] There can be no meaningful dispute that the decisions sought to be reviewed
involve a procurement process of substantial financial scale . NSFAS
contends that if the delay is not condoned it will incur some R49 billion in
irregular expend iture, as this is the value of the tender . The prejudice
asserted by the service providers is primarily commercial and operational in
nature. The procurement decisions sought to be reviewed directly impact the
livelihood, dignity, and academic survival of vulnerable students across the
country. The appointment of the service providers directly affects the secure,
timely, and efficient distribution of student allowances.
[51] Moreover, the approach to condonation in legality reviews requires that the
Court consider the nature of the impugned decisions and in so doing to
consider the merits to some degree. On a prima facie basis, the review
grounds relied on by NSFAS are largely undisputed on the merits.
Consequently, t o refuse condonation would mean immunising a potentially
fundamentally flawed procurement process that has sparked widespread
public concern from judicial scrutiny.
[52] Furthermore, the impugned decisions carry profound implications for the
national fiscus. NSFAS administers billions of rands in public funds . The
procurement decisions involve the disbursement of public funds on a national
scale and implicate the integrity of the procurement system adopted by
NSFAS in compliance with s 217 of the Constitution. The irregularities alleged
by NSFAS are substantive and go to the heart of the procurement process.
The prejudice of refusing condonation would directly and adversely impact not
only the public purse but also public trust. Conversely, the prejudice to the

only the public purse but also public trust. Conversely, the prejudice to the
service providers who are commercial entities seeking to profit from what
appears to be an irregular tender process is heavily outweighed by the public
interest in ensuring fiscal accountability by deciding the merits of the counter
application.

[53] I am satisfied that the interests of justice demand that the legality of the
decisions sought to be reviewed in the counter application be decided for all
these reasons.
THE GROUNDS OF SELF-REVIEW
[54] The irregularities identified in the founding affidavit in the counter application
are not meaningfully disputed by the service providers.
[55] Paragraph 10.21.4 of the 2021 NSFAS SCM Policy requires NSFAS to obtain
prior approval from the National Treasury before cancelling a tender for a
second time. This requirement ensures independent oversight, to prevent
arbitrary or unjustified cancellation of tenders, and to safeguard the integrity of
the procurement process. The evidence demonstrates that the second tender
was cancelled at the behest of Mr Nongogo, the former NSFAS CEO , without
prior approval of the National Treasury , and consequently the cancellation of
the second tender constituted a deviation from a mandatory procurement
prescript.
[56] Tenetech’s contention that failing to obtain National Treasury approval does
not affect the validity of the tender (being the third tender advertised after the
cancellation of the second tender), and that it only renders the second tender’s
cancellation reviewable, overlooks the NSFAS SCM Policy requirement for
prior approval, which is undisputed and was not complied with. The
cancellation of the second tender was therefore materially unlawful, and
because it directly enabled the third tender, the unlawfulness taints the third
tender process as well.
[57] The 2021 NSFAS SCM Policy required that bid specifications be compiled and
deliberated upon by a properly constituted BSC in consultation with the end -
user and in accordance with an agreed evaluation methodology. In this
matter, however, the specifications for the third tender were drafted by the
former CEO, Mr Nongogo, and submitted to the BSC for urgent approval via
round robin, without a formal meeting, without disclosure of their origin, and

round robin, without a formal meeting, without disclosure of their origin, and
without explanation for the urgency. These facts are undisputed . Although

Tenetech relies on an alleged ‘standard practice ’ in which the BSC merely
approves completed specifications, that practice cannot override mandatory
procurement prescripts. The failure of the BSC to properly compile and
deliberate on the specifications in accordance with the 2021 NSFAS SCM
Policy constitutes non -compliance with the prescribed procurement
framework, fundamentally undermining objectivity and the integrity of the
process at the specification stage.
[58] The purpose, mandatory requirements and evaluation specifications of the
tender deviated materially from the first and second tenders . The tender
introduced material changes to both eligibility and evaluation. The requirement
that bidders hold their own banking licence was relaxed. The evaluation
framework was also significantly altered: a new presentation phase was
added, the functional threshold was reduced from 80% to 70%, the preference
point system shifted from 80/20 to 90/10, and mandatory requireme nts were
reduced from 18 to 5. The changes to the mandatory requirements are not in
dispute.
[59] The reconfiguration materially altered the competitive landscape by lowering
eligibility thresholds and shifting from a bank ‑based framework to a fintech
model, thereby enabling previously ineligible fintech entities to qualify. This
occurred against the backdrop of Mr Nongogo’s prior professional
relationships with entities linked to successful bidders, raising concerns about
undisclosed connections. In such circumstances where safeguards were
relaxed, strict compliance with due diligence and conflict ‑management
obligations was essential. Taken cumulatively, the irregular compilation of
specifications, reduction of mandatory requirements, altered evaluation
criteria, and lack of proper due diligence constitute material non ‑compliance
with s 217 of the Constitution and the 2021 NSFAS SCM Policy, undermining
the fairness, transparency, and integrity of the procurement process.

the fairness, transparency, and integrity of the procurement process.
[60] Paragraphs 1.7(e) and (i) of the 2021 NSFAS SCM Policy assigned to the
end-user the responsibility to develop draft specifications in areas requiring
technical skills and programme -specific needs; and provide technical input
and presentations to the BSC and the BAC. Paragraph 2.2.2. of the 2021

NSFAS SCM Policy provides that the CEO appoints members of the BSC.
The end -user is to be co -opted to provide technical input. The structure
envisages distinct roles with internal checks and balances, contemplating that
specifications originate from operational expertise and are subjected to
independent scrutiny by the BSC. Where the executive drafts specifications
and oversees their approval, that safeguard is substantially weakened.
[61] Mr Nongogo described himself as the end -user in response to questions
posed by Werksmans and stated that his involvement in drafting specifications
was in that capacity. There is no dispute that Mr Nongogo drafted or
materially amended the bid specifications; that he exercised oversight over the
BSC; and there was uncertainty within the bid committees regarding the
identity of the end-user. Clearly the conflation of executive oversight and end-
user input significantly compromised the integrity of the specification stage.
[62] The 2021 NSFAS SCM Policy required that a needs analysis be conducted to
identify the goods and services required to achieve the outcomes envisaged in
the NSFAS annual performance plan, which would then form the basis for
specification development (paragraph 5.6.1 of the 2021 NSFAS SCM Policy )
for each procurement process, thereby ensuring value for money and
compliance with s 217 of the Constitution.
[63] Following the cancellation of the second tender on the basis that the services
were no longer needed, no evidence exists that a fresh needs analysis was
conducted before issuing the third tender. This is undisputed. Tenetech’s
reliance on an earlier needs analys is does not address the mandatory
requirement that each procurement process , particularly one materially
reconfigured, be supported by its own needs analysis. The third tender
departed significantly from its predecessors, including a shift to a fintech
model and altered requirements, which required justification through a

model and altered requirements, which required justification through a
compliant needs analysis. The absence of such an analysis constitutes a
failure to comply with a foundational procurement requirement under the 2021
NSFAS SCM Policy, undermining the lawfulness of the process.

[64] Tenetech’s contention that defects in the tender specifications are irrelevant
because they are not separately challenged misconceives the nature of a
self‑review. The impugned decision is the award of the tender and the
resulting contracts, and the specification stage forms an integral part of the
process leading to that decision A legality review requires an assessment of
the procurement process as a whole. Defects arising at the specification
stage, such as in the formulation of requirements and evaluation criteria, are
directly relevant where they materially affect the integrity of the process. It is
therefore unnecessary to seek a discrete order setting aside the specifications
in isolation. Tenetech’s argument impermissibly fragments the procurement
process.
[65] The 2021 NSFAS SCM Policy required each BEC member to independently
evaluate and score every bid, sign score sheets, and justify discrepancies to
ensure internal checks and comparability. However, the bids were divided
among members of the BEC, with each member evaluating only two bids
each, resulting in a single score sheet per bidder prepared by a single BEC
member rather than independent scoring by all BEC members. These facts
are undisputed.
[66] This process did not comply with paragraph 10.12.2(d) of the 2021 NSFAS
SCM Policy, as it eliminated the safeguards inherent in independent scoring ,
namely the ability to detect discrepancies and ensure objective assessment.
The recorded uncertainties in applying evaluation criteria further underscore
the necessity of ful l independent evaluation. Accordingly, the adopted
approach constituted a deviation from the prescribed evaluation methodology,
undermined the comparability and integrity of the scoring process, and
rendered the evaluation materially irregular and non -compliant with the
procurement framework.

[67] Paragraph 10.11.3 of the 2021 NSFAS SCM Policy required a phased
evaluation process, in terms of which only bids that met all mandatory
requirements in Phases 1 and 2 could advance. Compliance with those
requirements such as proof of a banking licence or equivalent sponsorship,
PCI DSS certification, cyber ‑security documentation, professional indemnity
cover of at least R20 million, and subcontracting obligations thus constituted a
threshold qualification for further evaluation.
[68] Neither Tenetech nor eZaga demonstrated compliance with the mandatory
professional indemnity insurance requirement at bid stage. Notwithstanding
this non‑compliance, both bidders were treated as compliant and permitted to
proceed. The subsequent procurement of insurance does not cure this defect,
as compliance falls to be assessed at the time of evaluation and not
retrospectively. In permitting non ‑compliant bidders to proceed, while
disqualifying another bidder on the basis of similar deficiencies, the evaluation
process departed from the mandatory requirements of paragraph 10.11.3 of
the 2021 NSFAS SCM Policy . This inconsistent application of threshold
criteria constitutes material non‑compliance with the 2021 NSFAS SCM Policy
and undermines the fairness, transparency and legality of the procurement
process under s 217 of the Constitution.
[69] The tender required that a minimum of 30% of the awarded contract be
subcontracted to an EME or QSE that is at least 51% black ‑owned, with the
subcontractor clearly identified and supported by valid B ‑BBEE credentials.
This requirement was directed at securing genuine and independent
participation by qualifying entities.
[70] At the time of the award, there were overlapping directorships between
Tenetech and its subcontractor, Coralite. This gave rise to a substantive
question as to whether the arrangement satisfied the purpose of promoting
independent participation, as opposed to a merely formal compliance. In

independent participation, as opposed to a merely formal compliance. In
these circumstances, the BEC was required to interrogate both the formal
compliance and the substantive integrity of the subcontracting arrangement.
The proper enquiry is whether the arrangement fulfilled the underlying purpose
of the requirement, namely meaningful participation by an independent EME

or QSE. The failure to properly interrogate compliance with a mandatory
subcontracting requirement undermines the integrity of the evaluation process.
Compliance with such requirements must be established at bid stage, in
accordance with paragraph 10.11.3 of the 2021 NSFAS SCM Policy . Where
this is not done, the process is rendered materially irregular and inconsistent
with the prescribed procurement framework.
[71] Bidders who progressed to the presentation phase were required to present
before the BEC. Although recorded as an ‘observer’, the former CEO,
Mr Nongogo, attended these presentations, posed substantive questions to
bidders, and made remarks indicative of a view on the appointment.
[72] Paragraph 2.6.5 of the 2021 NSFAS SCM Policy permits observers to attend
proceedings but prohibits participation, save to advise if permitted. The record
demonstrates that Mr Nongogo’s conduct exceeded that of a passive observer
and instead formed part of the evaluative process. This must be considered in
the context of the SCM Policy’s prescribed separation of roles between
specification, evaluation, adjudication and approval. However the CEO, who
ultimately exercises oversight over the award recommendation, participated in
the evaluation phase after having been involved in the drafting of
specifications.
[73] The CEO’s involvement in the evaluation phase had a material impact on the
validity of the tender because it breached mandatory separation -of-functions
requirements in the SCM Policy. Although characterised as an ‘observer’, the
CEO actively participated by posing evaluative questions and engaging with
bidders during presentations , conduct which went beyond the limited role
permitted to observers. This occurred after his involvement in the drafting of
specifications and before exercising oversight over the award
recommendation.
[74] Such participation compromised the institutional safeguards designed to

recommendation.
[74] Such participation compromised the institutional safeguards designed to
ensure independence, objectivity and impartiality in the evaluation process.
The SCM framework requires a clear separation between specification,
evaluation and adjudication functions; the CEO’s involvement collapsed those

safeguards. Under the principle of legality, compliance with these prescribed
roles is mandatory, and the enquiry is not whether the outcome was actually
influenced, but whether the procurement system as prescribed was adhered
to.
[75] Accordingly, the CEO’s involvement constituted a material irregularity that
tainted t he integrity of the evaluation process and, when assessed
cumulatively with the other defects, undermined the lawfulness and validity of
the tender award.
[76] The tender fell to be evaluated under the 90/10 preference point system,
which requires that price operate as a decisive competitive differentiator, with
90 points allocated to cost in order to advance the constitutional objectives of
competitiveness and cost ‑effectiveness under s 217. However, the pricing
methodology adopted fundamentally undermined that framework. All qualifying
bidders were awarded the full 90 points for price on the basis that they
accepted NSFAS’ pricing schedule. As a result, the BEC failed to meaningfully
differentiate between bidders on the basis of price and did not utilise price as a
ranking or elimination mechanism.
[77] This approach was compounded by the exclusion of material pricing
components, most notably the charges to students, from the evaluation
process. These components, despite varying significantly between bidders,
were deferred to post ‑award negotiation and standardisation. The practical
effect was that the core competitive components of pricing were removed from
the evaluation stage altogether and only addressed after the award had
already been made.
[78] A valid procurement process requires that adjudicators be presented with
comparable offers capable of meaningful evaluation, so as to enable objective
comparison between bidders . Where a pricing structure eliminates
comparability, the competitive mechanism inherent in the tender process is
neutralised. In these circumstances, the evaluation of price ceased to function

neutralised. In these circumstances, the evaluation of price ceased to function
as a substantive criterion and was reduced to a formal and mechanical
exercise, with bidders effectively distinguished only by their B ‑BBEE scores.

This is inconsistent with the purpose and structure of the 90/10 system and
fails to give effect to the constitutional imperatives of fairness, transparency,
competitiveness and cost‑effectiveness in public procurement.
[79] Crucially, the fact that this pricing model was contained in the tender
documentation does not cure its unlawfulness. A procurement process that is
itself structured in a manner that prevents any meaningful competition is
inherently inconsistent with s 217, irrespective of formal compliance with its
own terms. Accordingly, the pricing evaluation adopted in Phase 4 constituted
a material irregularity. It undermined the integrity and competitiveness of the
procurement process and contributed to the unlawfulness of the award
decisions.
[80] The appointment and participation of Dr Chirwa in the BEC constituted a clear
and material deviation from the 2021 NSFAS SCM Policy, rendering the
evaluation process unlawful.
[81] Paragraph 2.2.3 of the 2021 NSFAS SCM Policy permits the inclusion of
external experts only at the BSC level for advisory purposes. No equivalent
provision authorises the appointment of an external expert to the BEC. The
2021 NSFAS SCM Policy instead limits participation in the BEC to its
prescribed members, with only the end -user permitted to be co -opted for
technical input.
[82] Dr Chirwa’s appointment as an ‘independent expert’ to the BEC therefore
lacked any lawful basis in the governing procurement framework. The
subsequent amendment of the 2023 SCM Policy to expressly provide for such
appointments underscores that no such authority existed at the relevant time.
The evidence demonstrates that Dr Chirwa’s appointment did not arise from
any structured or authorised procurement decision. Rather, he was selected at
the instance of the CEO, Mr Nongogo, without any recorded resolution,
justification, or request from the end -user. This ad hoc appointment process is
inconsistent with the requirements of the 2021 NSFAS SCM Policy.

[83] Although described as an advisor without voting rights, Dr Chirwa performed a
substantive evaluative function. He was engaged to guide the BEC on how
bids should be assessed, reviewed presentations and evaluation outcomes,
provided input on pricing, and endorsed the scoring. His participation therefore
went beyond passive advice and influenced the evaluation process itself. This
is material. The 2021 NSFAS SCM Policy contemplates that evaluation be
conducted by a properly constituted BEC, with built -in safeguards ensuring
independence, accountability, and comparability of scoring. The introduction of
an external participant exercising evaluative influence undermined those
safeguards. The 2021 NSFAS SCM Policy establishes a structured
separation between specification, evaluation, adjudication and approval. The
unlawful inclusion of Dr Chirwa into the BEC blurred these delineations and
altered the composition of the evaluation body. Compliance with prescribed
committee composition is not a procedural formality; it is a substantive
safeguard designed to ensure fairness, objectivity and institutional
accountability in public procurement.
[84] Organs of State are required to act strictly within the bounds of their
empowering framework. The enquiry is not whether the irregularity altered the
outcome, but whether the procurement system, as prescribed, was complied
with. A deviation in the composition and functioning of the BEC constitutes a
failure to comply with binding procurement prescripts. As such, it renders the
evaluation process defective and unlawful.
[85] The irregular appointment and substantive participation of Dr Chirwa must be
assessed in conjunction with the broader defects in the procurement process.
His involvement affected the manner in which bids were evaluated, the criteria
applied, and the integrity of the decision-making process.
[86] The appointment of Dr Chirwa to the BEC, absent lawful authority and coupled

[86] The appointment of Dr Chirwa to the BEC, absent lawful authority and coupled
with his substantive participation in the evaluation process, constituted a
material irregularity. It undermined the prescribed procurement framework,
compromised the integrity of the evaluation process, and contributed to the
unlawfulness and invalidity of the tender award.

[87] Dr Chirwa expressly undertook to disclose any direct, indirect or potential
interests and to recuse himself where his impartiality might reasonably be
questioned. Notwithstanding this, he repeatedly declared that he had no
interest in any bidder, while at the same time serving as a director of eZaga
Remit, a subsidiary of one of the bidders, eZaga. This relationship constituted,
at minimum, a potential and indirect interest falling squarely within the scope
of his recusal undertaking. His failure to disclose that interest, and his
continued participation in the evaluation process including reviewing
presentations, advising the BEC, and endorsing scoring outcomes amounted
to a breach of the prescribed conflict management safeguards. The
undisputed facts demonstrate non-disclosure, non-recusal, and participation in
evaluation despite a clear conflict of interest. Such conduct undermines the
integrity of the evaluation process and the safeguards designed to ensure
fairness, transparency and impartiality under s 217 of the Constitution. The
resulting taint is material and vitiates the validity of the BEC process and, by
extension, the tender award.
[88] Paragraph 10.11.1(e) of the 2021 NSFAS SCM Policy required the BEC, when
considering bids for acceptance and before a formal contract is concluded, to
conduct a due diligence process. That process must include: the use of a
service provider to perform sufficient and appropriate background checks on
the supplier and its directors; and the identification of any potential or actual
conflict of interest between NSFAS bid committee members, SCM officials,
and the supplier or its directors/shareholders.
[89] Paragraph 10.11.1(e) of the 2021 NSFAS SCM Policy imposed a mandatory
obligation on the BEC to conduct due diligence, including background checks
on bidders and the identification of any actual or potential conflicts of interest
between committee members and bidders. There is no evidence that the

between committee members and bidders. There is no evidence that the
prescribed due diligence process was conducted, including the use of a
service provider to perform background checks. The available documentation
such as eZaga’s CSD records and the association between Dr Chirwa and
entities linked to eZaga would, at a minimum, have triggered scrutiny under
such a process. A basic background check would have revealed Dr Chirwa’s
directorship in eZaga Remit and his connection to Ubits Holdings which was

associated with a bidder. This information was directly relevant to the SCM
Policy’s conflict management requirements.
[90] The failure to conduct due diligence therefore constituted a deviation from a
mandatory procurement prescript. When considered together with Dr Chirwa’s
undisclosed interest and participation in the evaluation process, this omission
materially undermined the integrity, fairness and transparency of the BEC
proceedings, and contributed to the unlawfulness of the tender award.
[91] Paragraph 2.4.1 of the 2021 NSFAS SCM Policy required the CEO to
establish and appoint a BAC to serve for a period of one financial year. It
further required that the BAC ‘must consist of at least four senior/executive
officials’. Paragraph 2.4.1 of the 2021 NSFAS SCM Policy required that the
BAC be properly constituted with at least four senior or executive officials.
Although the BAC was formally reconstituted, it is common cause that, at the
relevant time, key positions were vacant, leaving only three serving members.
The BAC accordingly did not meet the minimum composition requirement and
was not lawfully constituted. The quorum provisions of the SCM Policy do not
cure this defect, as a quorum presupposes a properly constituted body.
Compliance with the prescribed composition of procurement committees is a
mandatory requirement, not a procedural formality.
[92] Notwithstanding its defective constitution, the BAC considered the BEC’s
recommendations and made determinations that formed a necessary step in
the procurement chain leading to the award s. The BAC’s defective
composition therefore tainted its recommendations and the subsequent
approval process, rendering the award decisions invalid.
[93] The BAC minutes of 8 June 2022 expressly recorded a recommendation that
a risk assessment on the impact of student costs be conducted prior to the
final award. However, this safeguard was omitted from the subsequent
memorandum to the CEO and was not placed before the Board. The award

memorandum to the CEO and was not placed before the Board. The award
was ultimately approved without this condition, and there is no evidence that
any such risk assessment was conducted at any stage.

[94] This omission is material. The BAC itself identified the impact of student costs
as requiring further scrutiny before the award decision could properly be
taken. In circumstances where student charges varied significantly between
bidders, pricing was to be standardised post ‑award, and those costs were
excluded from the comparative evaluation. The failure to implement the
recommended risk assessment meant that a recognised risk was neither
interrogated nor mitigated. Where a procurement body recognises the need
for a pre ‑award safeguard but the award proceeds without it, the rationality,
integrity and lawfulness of the decision are undermined. The undisputed
omission of the risk assessment recommendation from the decision -making
chain accordingly forms part of the procedural defects that tainted the award.
[95] The BAC resolved on 8 June 2022 that all four recommended bidders would
be engaged in joint price negotiations to ensure fairness, and the award of the
tender proceeded subject to post-award negotiations to standardise pricing.
[96] Paragraph 2.5 of the 2021 NSFAS SCM Policy establishes a structured and
sequential process: a negotiation committee conducts negotiations and makes
recommendations; those recommendations are considered by the BAC; and
only thereafter are they approved by the Executive Officer. This framework is
designed to preserve a separation between negotiation, adjudication and
approval functions. Notwithstanding this structure, Mr Nongogo acted as
Chairperson of the negotiation committee, participated directly in formulating
the negotiated outcomes, and subsequently exercised his authority as Chief
Executive Officer to approve those outcomes. This collapsed the prescribed
separation of functions and undermined the chain of accountability
contemplated by the 2021 NSFAS SCM Policy.
[97] In terms of paragraph 2.5 of the 2021 NSFAS SCM Policy , the separation of
roles is not merely procedural but constitutes a binding procurement prescript.

roles is not merely procedural but constitutes a binding procurement prescript.
Where a single functionary participates in both the formulation of negotiated
terms and their ultimate approval, the integrity of the procurement system is
fundamentally compromised.

[98] Mr Nongogo’s involvement across specification, evaluation, negotiation and
approval stages resulted in a concentration of decision -making authority
inconsistent with the 2021 NSFAS SCM Policy’s safeguards. This overlap
materially undermined the fairness, transparency and independence of the
process and contributed to the overall unlawfulness of the tender award.
[99] During the negotiation phase, the BAC had expressly identified the risk posed
by student costs and recommended that a risk assessment be conducted prior
to the final award. Notwithstanding this, NSFAS adopted a negotiation
approach in which the four appointed service providers were invited to engage
collectively on student pricing. The providers were presented with the cost
structure together and afforded an opportunity to confer amongst themselves,
following which they agreed on a uniform bundled fee that was accepted by
NSFAS. This approach is impugned not only the basis of the resulting price,
but the lawfulness of the process. A constitutionally compliant procurement
framework requires that bidders compete against one another on price. It does
not contemplate a post -award process in which successful bidders are
permitted to eliminate competition by collectively agreeing on a consolidated
price.
[100] The effect of permitting such collective engagement was to extinguish price
competition and substitute competitive differentiation with consensus -based
pricing. Price was thus no longer determined through rivalry, but through
agreement between appointed bidders.
[101] The legality enquiry is whether the adopted negotiation structure complied with
s 217 of the Constitution and the governing procurement framework. Properly
understood, a process that permits competitors to agree on pricing after the
award is inconsistent with the requirements of fairness, transparency,
competitiveness and cost -effectiveness. This approach further compounded

competitiveness and cost -effectiveness. This approach further compounded
the earlier pricing irregularities at evaluation stage, where price had already
failed to operate as a differentiator. The negotiation process entrenched
uniform pricing through collective agreement, thereby reinforcing the absence
of competition. Accordingly, the adopted negotiation methodology constituted

a material irregularity which undermined the integrity of the procurement
process and contributed to the unlawfulness of the award decision.
[102] The tender process was thus materially non-compliant with the 2021 NSFAS
SCM Policy and s 217 of the Constitution, in multiple interrelated respects.
[103] To sum up: the 2021 NSFAS SCM Policy prescribed a structured
procurement system with distinct stages - specification, evaluation,
adjudication, negotiation and approval —each performed by separate
committees. This separation is a binding prescript designed to ensure
fairness, transparency and accountability. The process departed from this
framework in several respects, including the failure to conduct a mandatory
needs analysis; the failure of the BSC to properly compile and deliberate upon
specifications; the irregular assumption of end -user functions by the CEO; the
CEO’s participation in the evaluation phase; the unlawful appointment and
participation of Dr Chirwa in the BEC; the defective constitution of the BAC;
and. the CEO’s overlapping roles in negotiation and final approval. These
deviations collectively collapsed the separation of functions and completely
undermined the integrity of the procurement system.
[104] The 2021 NSFAS SCM Policy imposed mandatory obligations to identify and
manage conflicts of interest, supported by due diligence measures. These
safeguards were not complied with . Dr Chirwa participated in the evaluation
process while serving as a director of an entity associated with a bidder; he
failed to disclose that interest, falsely declared no conflict, and did not recuse
himself; and no due diligence was conducted to identify this relationship,
despite it being readily discoverable. This amounted to a failure of both
conflict management and due diligence mechanisms, undermining fairness
and transparency.
[105] The tender was evaluated under the 90/10 preference point system, which

[105] The tender was evaluated under the 90/10 preference point system, which
requires meaningful price competition. The adopted pricing methodology ,
however, awarded all bidders full price points; excluded material pricing
components (notably student costs); and deferred those components to post -
award negotiation. As a result, price was not used as a competitive

differentiator, rendering the evaluation inconsistent with the PPPFA framework
and s 217. The defects in price evaluation were compounded during the
negotiation phase. B idders were permitted to engage collectively and agree
on a uniform price . T his eliminated competition and replaced it with
consensus-based pricing . A pre-award risk assessment, identified as
necessary by the BAC, was not conducted. This approach entrenched the
absence of competition and undermined the cost -effectiveness and
competitiveness of the procurement. The cumulative effect of these
irregularities demonstrates systemic non -compliance with the prescribed
procurement framework. The process deviated from mandatory SCM
requirements at every stage, undermining the constitutional principles of
fairness, transparency, competitiveness and accountability.
[106] Accordingly, the award decisions are unlawful and fall to be set aside under
the principle of legality.
THE JUST AND EQUITABLE REMEDY
[107] NSFAS contends that the just and equitable remedy in this matter would entail
the unwinding of the financial consequences of invalid procurement by
providing for the divesture of profit accrued as a result of the impugned bid
award; and the retention of reasonable, proven expenditure actually incurred
by the service providers subject to an independent verification of those
expenses.
[108] NSFAS relies on Allpay (II)33 and Mafoko Security Patrols (Pty) Ltd and Others
v Mjayeli Security (Pty) Ltd and Others34 for the contention that the invalidation

33 Allpay Consolidated Investment Holdings (Pty) Ltd and Others v Chief Executive Officer of the
South African Social Security Agency and Others (No.2) (‘AllPay II’) [2014] ZACC 12; 2014 (4) SA
179 (CC), para 67.

of an existing procurement contract should not result in loss to the contractor
for value actually rendered, but that at the same time the contractor has no
right to benefit from an unlawful contract, and any benefit that it may derive
should not be beyond public scrutiny . NSFAS contends that th ese principles
in effect permit the service providers only to recover proven, reasonable out of
pocket expenditure but not to retain any profit.
[109] As the Supreme Court of Appeal has explained in Central Energy Fund SOC
Ltd and Another v Venus Rays Trade (Pty) Ltd and Others, 35 the law draws a
distinction between parties who are complicit in maladministration, impropriety,
or corruption on the one hand, and those who are not, on the other. Parties
who are complicit in maladministration, impropriety or corruption are not only
precluded from profiting from an unlawful tender, but they may also be
required to suffer losses. 36 On the other hand, although innocent parties are
not entitled to benefit from an unlawful contract, they are not required to suffer
any loss as a result of the invalidation of a contract.37
[110] Moreover, NSFAS’ reliance on Allpay (II) for the contention that a contractor
also no right to benefit from an unlawful contract is misplaced. In Special
Investigating Unit v Phomella Property Investments (Pty) Ltd and Another 38
the Supreme Court of Appeal held that a contextual reading of Allpay (II)
shows that the Constitutional Court did not hold that a party could derive no
benefit from an unlawful contract and that t he approach in Allpay (II) was to
allow a party to retain payments, and thus to benefit, under an unlawful
contract.

34 Mafoko Security Patrols (Pty) Ltd and Others v Mjayeli Security (Pty) Ltd and Others (590/2024)
[2025] ZASCA 179 (28 November 2025) (‘Mafoko’), para 12.
35 Central Energy Fund SOC Ltd and Another v Venus Rays Trade (Pty) Ltd and Others 2022 (5) SA
56 (SCA) (‘Central Energy Fund’), para 42.
36 Central Energy Fund, para 42;

56 (SCA) (‘Central Energy Fund’), para 42.
36 Central Energy Fund, para 42;
37 Central Energy Fund, para 42;
38 Special Investigating Unit v Phomella Property Investments (Pty) Ltd and Another 2023 (5) SA 601
(SCA) (‘Phomella’), para 18.

[111] In Allpay (II) in the exercise of its discretion, the Constitutional Court ordered
that a new tender be issued, but that '(i)f the tender is not awarded, the
declaration of invalidity of the contract in para 1 above will be further
suspended until completion of the five -year period for which the contract was
initially awarded'.39 When the tender was awarded within the five -year period,
in the follow -up matter of Black Sash Trust v Minister of Social Development
and Others40 the Constitutional Court granted an order further suspending the
order of invalidity for a period of 12 months and requiring the tenderer to
continue its services for that period, and the Court explained that ‘[the] order
below reflects that S assa and [the tenderer] should continue to fulfil their respective
constitutional obligations in the payment of social grants for a period of 12 months as
an extension of the current contract .'41 Clearly therefore the contractor in
Allpay (II) benefited, despite the initial contract having been found to be
unlawful, and t here was no order that the amounts paid should exclude the
profits it had factored into its price when tendering. 42 In fact the only order
concerning profits was that '[w]ithin 60 days of the completion of the five -year
period for which the contract was initially awarded, Cash Paymaster must file with this
court an audited statement of the expenses incurred, the income received and the net
profit earned under the completed contract’.43
[112] Moreover, the approach of allowing a party to retain payments, and thus to
benefit under an unlawful contract has been echoed in a number of matters ,
such as in Buffalo City where the contractor had performed its obligations

39 Allpay (II) Order para 4; Phomella, para 16.
40 Black Sash Trust v Minister of Social Development and Others (Freedom Under Law Intervening)
2017 (3) SA 335 (CC) (‘Black Sash Trust’).
41 Black Sash Trust, para 50; Phomella, para 16.
42 Phomella, para 17.

41 Black Sash Trust, para 50; Phomella, para 16.
42 Phomella, para 17.
43 Allpay (II) Order para 4.2; Phomella, para 17.

under the contract and the Constitutional Court held that the contractor was
entitled to payment for the work which had been done.44
[113] In Mafoko the Supreme Court of Appeal held that the interpretation of Allpay II
as set out in Phomella is correct, and confirmed that the principle of no loss,
but no gain, does not correctly reflect the position adopted in Allpay II, nor is it
consistent with the remedial latitude the Constitutional Court has applied in
other cases in which it has made a just and equitable order. 45 The principle in
Allpay II is that the award of a tender found to be unlawful and declared invalid
does not give rise to a right to benefit from an unlawful contract and there is
thus no duty on a court exercising its just and equitable discretion to order that
the benefit of the unlawful contract must be conferred, but the absence of such
a right and its correlative duty does not mean that the court in the exercise of
its discretion may not permit a party to enjoy the benefit of a contract,
including the profits that may accrue.46
[114] The Supreme Court of Appeal has made it clear that there are circumstances
in which a firm that secures the public good is entitled to accrue a private
return and that the exercise of a court’s just and equitable discretion is not
repugnant to the enjoyment of profit in every circumstance where a tenderer
has continued to render a service or provide goods .47 The matters to be
properly considered in the exercise of the court’s discretion to make a just and
equitable order include w hether a tenderer is entirely blameless; whether the
tenderer has enjoyed the considerable past benefits of incumbency; and what
might be a reasonable return under the discipline of competitive rivalry.48

44 Buffalo City, para 105; See also Gijima para 54.
45 Mafoko, para 13.
46 Mafoko, para 14.
47 Mafoko, para 19.
48 Mafoko, para 19.

[115] In this matter NSFAS put up no evidence to demonstrate that the service
providers were complicit in the unlawfulness.
[116] NSFAS accepts in its replying affidavit filed in response to eZaga’s answering
affidavit in the counter application that eZaga bears no culpability for the
irregularities and in fact states in terms that NSFAS does not allege that
eZaga procured the award through corruption.
[117] NSFAS does not dispute Coinvest’s contention in its answering affidavit in the
counter application that the Werksmans report contains no evidence of
wrongdoing by Coinvest. The highwater mark of the allegations in relation to
Coinvest are that Mr Nongogo had a prior relationship with a former director of
Coinvest, who had been a director of a different entity that had also been
unable to perform as required under a different tender. There is, however, no
averment that this constitutes evidence of wrongdoing by Coinvest.
[118] NSFAS does not dispute Noracco’s averment that although it is mentioned in
the SIU Investigation Memorandum , the founding affidavits in the Special
Tribunal, and the counter application, there are no adverse comments made
regarding Noracco’s conduct.
[119] NSFAS does not dispute Tenetech’s contention in its answering affidavit in the
counter application that there is no allegation that Tenetech was a wrongdoer
in the irregular process, that it was in any way complicit in the unlawful
procurement process , or that Tenetech knew about or had any untoward
relationship with NSFAS or any representative of NSFAS that caused or
participated in the irregularities.
[120] Given that there is no case made out on the papers that any of the service
providers were complicit in the irregularities complained of in the counter
application, there is no basis in NSFAS’ pleaded case to deprive the service
providers of all profits and to limit what they may recover to reasonable and
necessary expenses incurred.

[121] However, I agree with NSFAS that this Court is not in a position to determine
the quantum of the service providers’ claims for compensation which include
claims in respect of capital expenditure, operational costs, staff costs, the
costs of terminating student accounts, and third -party contractual obligations .
Such claims would require the leading of extensive evidence which is not
before this Court.
[122] In light of the findings on the merits of the counter application, this Court must
consider what would constitute just and equitable relief in circumstances
where the procurement process was fundamentally flawed for a myriad of
reasons, and as a consequence the awards made and contracts concluded
pursuant thereto are set aside , but where the service providers have provided
services in terms of those contracts in circumstances where there is no
evidence that the y are complicit in the irregularities, and it has been shown
that the irregularities arise from NSFAS’ internal processes.
[123] Given that this Court in deciding the counter application brought in terms of
the principle of legality is considering a constitutional matter within its power, it
is empowered to make any order that is just and equitable in terms of
s 172(1)(b) of the Constitution. Section 172(1)(b) confers wide remedial
powers on a court adjudicating a constitutional matter. The remedial power is
not only available when a court makes an order of constitutional invalidity
under s 172(1)(a). A just and equitable order may be made even in instances
where the outcome of a constitutional dispute does not hinge on the
constitutional invalidity of legislation or conduct.49
[124] Section 172(1)(b) grant s a Court exceptionally broad powers in order to
ensure that just and equitable relief is granted. As the Constitutional Court in

49 Head of Department, Mpumalanga Department of Education and Another v Hoërskool Ermelo and

49 Head of Department, Mpumalanga Department of Education and Another v Hoërskool Ermelo and
Another 2010 (2) SA 415 (CC) (2010 (3) BCLR 177; [2009] ZACC 32) , para 97; Minister of Safety
and Security v Van Der Merwe and Others 2011 (5) SA 61 (CC), para 59.

Electoral Commission v Mhlope and Others50 emphasised, ‘when conduct is
self-evidently inconsistent with a constitutional provision, s 2 of the Constitution,
which reinforces its supremacy, declares in unequivocal terms that such conduct is
invalid. A declaration of invalidity is thus a consequence of inconsistency of any
conduct with our supreme law.’
[125] The Constitutional Court explained the extent of the Court’s remedial powers
under s 172(1)(b) as follows:
‘Section 172(1)(b) clothes our courts with remedial powers so extensive that
they ought to be able to craft an appropriate or just remedy even for
exceptional, complex or apparently irresoluble situations. And the operative
words in this section are “an order that is just and equitable”. This means that
whatever considerations of justice and equity point to as the appropriate
solution for a particular problem, may justifiably be used to remedy that
problem. If justice and equity would best be served or advanced by that
remedy, then it ought to prevail as a constitutionally sanctioned order
contemplated in section 172(1)(b).51
[126] Similarly, in Economic Freedom Fighters and Others v Speaker of the National
Assembly and Another52 the Constitutional Court stated as follows:
‘However, this court's remedial power is not limited to declarations of invalidity. It is
much wider. Without any restrictions or conditions, s 172(1)(b) empowers courts to
make any order that is just and equitable. … The power to grant a just and
equitable order is so wide and flexible that it allows courts to formulate an order
that does not follow prayers in the notice of motion or some other pleading. This
power enables courts to address the real dispute between the parties by requiring

50 Electoral Commission v Mhlope and Others 2016 (5) SA 1 (CC) (‘Mhlope’), para 129.
51 Mhlope para 132.
52 Economic Freedom Fighters and Others v Speaker of the National Assembly and Another 2018 (2)
SA 571 (CC), para 210 – 211.

them to take steps aimed at making their conduct to be consistent with the
Constitution’.
[127] In Central Energy Fund,53 the Supreme Court of Appeal held that the power to
grant an appropriate remedy applies in review proceedings, whether under the
principle of legality or in terms of the provisions of PAJA. 54 The remedy must
be fair to all those affected by it, and it must effectively vindicate the rights
violated.55 In Bengwenyama Minerals (Pty) Ltd and Others v Genorah
Resources (Pty) Ltd and Others, 56 the Constitutional Court held that th e
discretionary power to grant just and equitable relief follows upon an order of
invalidity in terms of PAJA or the principle of legality.57
[128] Section 172(1)(b) has been used by the Courts as a basis to grant just and
equitable relief following the setting aside of a tender pursuant to a self-review.
[129] In Sekoko Mametja Incorporated Attorneys v Fetakgomo Tubatse Local
Municipality58 a firm of attorneys was awarded a tender for the provision of
debt collection services. It transpired that the firm had submitted a non -
responsive bid. The municipality applied to self-review the decision, and in the
answering affidavit, the firm counter -applied for the payment of outstanding
invoices. The High Court set aside the tender but dismissed the counterclaim.
The Supreme Court of Appeal upheld the appeal against the dismissal of the
counterclaim and ordered the municipality to pay the firm an amount

53 Central Energy Fund para 36. Allpay Consolidated Investment Holdings (Pty) Ltd and Others v Chief
Executive Officer of the South African Social Security Agency and Others (No.2) (‘AllPay II’) [2014]
ZACC 12; 2014 (4) SA 179 (CC), para 71.
54 Central Energy Fund, para 36; AllPay II, para 71.
55 Central Energy Fund, para 36; Steenkamp NO v Provincial Tender Board, Eastern Cape 2007 (3)
SA 121 (CC) (‘Steenkamp’), para 29.
56 Bengwenyama Minerals (Pty) Ltd and Others v Genorah Resources (Pty) Ltd and Others 2011 (4)

SA 113 (CC), para 84.
57 Bravospan SCA at para [17].
58 Sekoko Mametja Incorporated Attorneys v Fetakgomo Tubatse Local Municipality [2022] ZASCA
28 (18 March 2022) (‘Sekoko Mametja’).

equivalent to that which it would have been entitled under the void tender on
the basis that the municipality had received the full benefit of the services , the
firm had incurred expenses to enable it to render the services to the
municipality and the municipality did not dispute its entitlement to be paid for
services rendered.
[130] The Supreme Court of Appeal stated as follows:59
‘… It is appropriate, however, that where no fault lies at the door of Sekoko
Attorneys and it rendered services which redounded to the benefit of the
municipality, an order is granted for payment. In those circumstances, it is just
and equitable to order that the municipality pay to Sekoko Attorneys an amount
equivalent to that to which it would have been entitled under the void tender. The
municipality advanced no considerations against such an order. In the result, the
counter application for payment should have been upheld by the high court on
this basis.’
[131] In reaching this conclusion, the Supreme Court of Appeal was clear that it
could not enforce payment under a void tender, but that it could consider
whether an amount should be paid on the basis that it was just and equitable
to do so.
[132] Similar issues arose in Greater Tzaneen Municipality v Bravospan 252 CC. 60
In that matter the municipality and Bravospan had concluded a service level
agreement pursuant to a competitive tender process which was subsequently
extended, without a tender process. As a result of the extension the service
level agreement became a long -term contract which needed to be advertised

59 Sekoko Mametja, para 15.
60 Greater Tzaneen Municipality v Bravospan 252 CC [2022] ZASCA 155 (7 November 2022)
(‘Bravospan SCA’).

for a period of not less than 30 days .61 The m unicipality launched an
application in which it sought an order that the extension be declared null and
void, alternatively that the extension be reviewed and set aside. Bravospan
launched a counter application for payment for the security services rendered
in terms of the contract . Even after the municipality had commenced with
litigation it requested Bravospan to continue rendering services and continued
to accept and enjoyed the benefit of the services without any payment to
Bravospan.62
[133] The S upreme Court of Appeal held that it would be manifestly unjust for
Bravospan to be afforded no compensation for the services that it had
rendered as Bravospan was not responsible for the unconstitutionality of the
extension agreement and that on the contrary, the municipality had allayed its
concerns and had the benefit of Bravospan’s services for the full period.
Consequently the Supreme Court of Appeal held that Bravospan should be
afforded compensation for the services rendered as a just and equitable
remedy under s 172(1)(b) of the Constitution and referred the matter back to
the High Court to determine the quantum of the compensation.63
[134] The municipality sought leave to appeal from the Constitutional Court. The
majority of the Constitutional Court refused leave to appeal on the basis that
the judgment of the Supreme Court of Appeal would ensure that Bravospan
would finally receive just and equitable compensation for the services that it
had provided to the municipality, which was in the interests of justice , and that
to grant leave to appeal would delay compensation further and be contrary to
the interests of justice. 64 The majority judgment explained that the facts

61 Bravospan SCA, para 4.
62 Bravospan SCA, para 5.
63 Bravospan SCA, para 16, 22 and 23..
64 Greater Tzaneen Municipality v Bravospan 252 CC 2025 (1) SA 557 (CC) ( ‘Bravospan CC ’),
para 59.

showed that the municipality had behaved unconscionably ; it had wrongly
assured Bravospan that it could lawfully extend the contract without a new
tender process; it had accepted services from Bravospan under the extended
contract without paying for these services ; it even induced Bravospan to
continue providing services under the extended contract while the review
application was pendin g; and it took the benefit of those services , but still
failed to pay Bravospan for the m and resisted Bravospan's action for
compensation, and purely on the basis of technical defences.65
[135] Given that in this matter there is no evidence of complicity on the part of the
service providers, and they have provided services in terms of the SLAs, it is
just and equitable that they be entitled to c ompensation. There is no reason
why the service providers should not be entitled to compensation for all proven
reasonable losses and necessary expenses actually incurred and attributable
to the SLAs including, but not limited to, capital expenditure, operational costs,
staff costs, the costs of terminating student accounts, and third -party
contractual obligations; and also compensation for the proven reasonable
profit that they would have earned in terms of their respective SLAs.
[136] However, given that the decisions to ap point the service providers and thus
the SLAs concluded pursuant thereto resulted from a manifestly flawed
process which has had an enormous impact on public funds , it is not just and
equitable for the service providers to be compensated for the entirety of the
contractual period which is set to run to July 2027. In the circumstances , and
bearing in mind the nature of the irregularities that led to the conclusion of the
SLAs, in the exercise of my discretion I am of the view that it would be just and
equitable for the service providers to be compensated as if the SLAs had
continued and been implemented to the date of this Order . This is so because

continued and been implemented to the date of this Order . This is so because
until the SLAs have been set aside they remain presumptively lawful.

65 Bravospan CC, para 55.

COSTS
[137] The Biowatch principle embodies ‘a general rule’, that in litigation between the
State and private entit ies, if the State wins, each party should bear its own
costs, subject to recognised exceptions which do not apply in the present
case.66 The reason for the general rule is to prevent the chilling effect that
adverse costs orders might have on litigants seeking to assert constitutional
rights.67 Given that NSFAS has been substantially successful in the counter
application, there is no reason to depart from the general rule . For this reason
each party should bear its own costs, subject to the order which follows.

[138] In the result the following order is made:

1. The decision to appoint the applicant and the second to fourth respondents
(collectively, ‘the service providers’) to provide direct payments of allowances
to the students of the first respondent (‘NSFAS’) pursuant to Bid Number:
SCM022/2021 (‘the tender’) is declared to be unconstitutional, unlawful and
invalid, and is reviewed and set aside;
2. The service level agreements concluded between NSFAS and the service
providers pursuant to the award of the tender (‘the service level agreements’)
are declared to be unconstitutional, unlawful and invalid, and are reviewed and
set aside;

66 Biowatch Trust v Registrar Genetic Resources and Others 2009 (6) SA 232 (CC), para 22.
67 Harrielall v University of KwaZulu-Natal (CCT100/17) [2017] ZACC 38; 2018 (1) BCLR 12 (CC) (31
October 2017) para 11.

3. Subject to the process of determination set out in paragraphs 4 to 9.7 below,
each of the service providers is entitled to just and equitable relief under
s 172(1)(b) of the Constitution from NSFAS in the form of monetary
compensation on the following terms:
3.1. Compensation for all proven reasonable losses and necessary
expenses actually and demonstrably incurred by each of the service
providers respectively pursuant to, or in reasonable anticipation of,
their respective service level agreements, and attributable to the
service level agreements including, but not limited to, capital
expenditure, operational costs, staff costs, the costs of terminating
student accounts, and third-party contractual obligations; and
3.2. Compensation for the proven reasonable profit that each service
provider would have earned from their respective service level
agreements as if the service level agreements had continued to the
date of this Order, calculated as if the service level agreements had
remained in full force and effect and had been implemented, up to
the date of this Order;
4. The service providers shall present their statements of account to NSFAS’
attorneys within 30 days of the date of this Order setting out their claimed
expenditure, earnings and alleged loss of profits, with all supporting
documentation (‘the accounting’);
5. NSFAS shall within three months from the date of the receipt of the accounting
from the relevant service provider:
5.1. consider the accounting , and debate the accounting with the service
provider; and

5.2. advise the service provider of which claims NSFAS will agree to pay,
in what amounts and on what terms, and provide reasons for the
offer(s) made;
6. The service providers shall within a period of one month from the date of
receipt of NSFAS’ response as contemplated by paragraph 5 above, advise
NSFAS’ attorneys whether they accept or decline the amounts tendered by
NSFAS;
7. In the event of NSFAS and any service provider failing to reach agreement as
contemplated in paragraph 6 above, NSFAS and any service providers that
have not reached agreement shall jointly appoint, within one month after the
time period referred to in paragraph 6 above, a duly qualified and independent
expert with appropriate experience, to assess and verify the reasonable losses
and expenses incurred and reasonable profit claimed by each service provider
to the extent that such claims arise from, or are directly attributable to, the
relevant service level agreement, based on the evidence provided by each
party;
8. Subject to the provisions of, and process set out, in paragraph 9 below, there
shall be one expert only who may, if necessary, be substituted if they are
unable or unwilling to act for any reason;
9. To give effect to the above:
9.1. Failing agreement about the identity of the expert within the time
period provided for in paragraph 7 above within which an expert must
be jointly appointed, the parties shall, within 20 days of such
disagreement, approach the South African Institute of Chartered
Accountants ( ‘SAICA’) and request a list of names of three suitably
qualified persons to act as an expert and from which list of names the
parties shall agree, within five further days, a person to act as an
expert;

9.2. Should the parties be unable to appoint an expert by agreement
within such time, the parties shall request SAICA to determine which
of the three experts should be appointed in accordance with SAICA’s
appointment guidelines and procedures within 10 days of such
request;
9.3. The costs of the expert's appointment and services shall be borne
equally between NSFAS, on the one hand, and the service providers,
on the other, with the service providers being jointly and severally
liable for their respective half portions;
9.4. The participating parties shall, prior to the commencement of the
expert’s services, pay such a reasonable estimate of such costs into
trust with their respective attorneys, or into such other agreed trust
account, to secure the payment of the expert’s fees and
disbursements;
9.5. The appointed expert shall determine the procedure to be followed to
determine the amount of compensation payable by NSFAS to each
service provider. In doing so, the expert shall be empowered to:
9.5.1. require the parties to deliver written submissions and
supporting documentation within specified time periods;
9.5.2. conduct interviews or hearings as the expert deems
necessary;
9.5.3. appoint specialist sub-experts or consultants, with the prior
written consent of both NSFAS and the relevant service
provider (such consent not to be unreasonably withheld);
and
9.5.4. issue procedural directions to the parties;

9.6. The parties shall co -operate fully and comply promptly with all
directions and requests of the expert with the view to completing the
expert determination with all service providers within three months of
the date of the expert’s appointment;
9.7. If for any reason, additional time is required, any party or the expert,
on notice to all other parties, may approach a Judge by way of a
chamber book application for such additional time;
10. In the event of any of the parties accepting the settlement contemplated by
paragraph 6 above, or the expert’s assessment in respect of their
compensation, they may approach the Court, which will decide whether to
confirm such settlement or assessment;
11. In the event of any disagreement in respect of the expert’s assessment the
parties who are still in dispute are granted leave to approach the Judge
President for the allocation of an expedited date(s) for hearing and
determination of the disputed issues by way of oral evidence before one or
three judges as directed by the Judge President;
12. In the event of any deadlock or inability to perform in accordance with this
Order, the parties are permitted to approach this Court, on application and on
notice to the other parties, for appropriate relief;
13. NSFAS shall pay each service provider the amount decided by the Court
within 60 days of the Court’s order on the amount of compensation payable to
that service provider;
14. NSFAS and the service providers shall take the necessary steps to close
students’ accounts and secure regulatory compliance;
15. Subject to the provisions of paragraphs 11 and 12 above , each party shall
bear its own costs; and
16. All references to days in this order are court days.

___________________________________
M ADHIKARI
ACTING JUDGE OF THE HIGH COURT




I agree and so ordered.



___________________________________
C FORTUIN
JUDGE OF THE HIGH COURT


I agree



_________________________________
JI CLOETE
JUDGE OF THE HIGH COURT




Appearances:

For Applicant: A Botha SC
D Sive
Instructed by: Shaheed Dollie Inc.

For First Respondent: LJ Morison SC
T Ngcukaitobi SC (heads of argument)
N Chesi-Buthelezi
N Qwabe
Instructed by: Werksmans Attorneys

For Second Respondent: G Hulley SC
R Röthlisberger

Instructed by: Zwane Sambo Attorneys

For Third Respondent: J Moorcroft
Instructed by: Bennett McNaughton Attorneys

For Fourth Respondent: J Pammenter SC
T Palmer
Instructed by: Cox Yeats