CONSTITUTIONAL COURT OF SOUTH AFRICA
Case CCT 48/17
In the application of:
RAiN CHARTERED ACCOUNTANTS INCORPORATED Applicant
and
SOUTH AFRICAN SOCIAL SECURITY AGENCY Respondent
In the matter between:
BLACK SASH TRUST First Applicant
FREEDOM UNDER LAW (NPC) Second Applicant
and
MINISTER OF SOCIAL DEVELOPMENT First Respondent
CHIEF EXECUTIVE OFFICER OF THE SOUTH
AFRICAN SOCIAL SECURITY AGENCY Second Respondent
SOUTH AFRICAN SOCIAL SECURITY AGENCY Third Respondent
MINISTER OF FINANCE Fourth Respondent
NATIONAL TREASURY Fifth Respondent
CASH PAYMASTER SERVICES (PTY) LIMITED Sixth Respondent
INFORMATION REGULATOR Seventh Respondent
RAiN CHARTERED ACCOUNTANTS
INCORPORATED Eighth Respondent
KPMG SERVICES (PTY) LIMITED Ninth Respondent
MAZARS INCORPORATED Tenth Respondent
and
CORRUPTION WATCH (NPC) First Amicus Curiae
SOUTH AFRICAN POST OFFICE SOC
LIMITED Second Amicus Curiae
Neutral citation: RAiN Chartered Accountants Incorporated v South African Social
Security Agency [2021] ZACC 27
Coram: Zondo ACJ, Madlanga J, Madondo AJ, Majiedt J, Mhlantla J,
Pillay AJ, Rogers AJ, Theron J, Tlaletsi AJ, Tshiqi J
Judgments: Madlanga J (unanimous)
Decided on: 10 September 2021
ORDER
On application to the Constitutional Court:
1. It is declared that the South African Social Security Agency ( SASSA) is
responsible for paying reasonable fees for work which will be done to
comply with paragraphs 1 and 3 of this Court’s order of 1 April 2021
(April 2021 order).
2. For purposes of performance of the work referred to in paragraph 1,
SASSA must consider whether it is open to it to appoint RAiN Chartered
Accountants Inc orporated (RAiN) in accordance with the dev iation
process provided for in Treasury Regulation 16A.6.4 and, if it is, it must
appoint RAiN.
3. To facilitate SASSA’s decision under paragraph 2, SASSA and RAiN
must meet forthwith after this order and commence negotiations in good
faith in respect of the fees referred to in paragraph 1.
4. In the event of there being no agreement on the fees within four calendar
days of this order, the fees will be determined by the Chief Executive
Officer of the South African Institute of Chartered Accountants or a
chartered accountant nominated by him and any fees payable for this
purpose shall be borne by SASSA.
5. The Chief Executive Officer of SASSA must tak e all necessary steps
within her powers and functions to ensure that the deviation process
referred to in paragraph 2 of this order and appointment of RAiN, if it is
to be appointed, is finalised within 10 calendar d ays of agreement by
RAiN and SASSA on RAiN’s fees or of their determination under
paragraph 4.
6. SASSA’s attorneys of record must bring paragraph 5 t o the notice of
SASSA’s Chief Executive Officer.
7. If SASSA does not appoint RAiN, it must consider whether it is open to
it to appoint another suitably qualified service provider in accordance
with the deviation process provided for in Treasury Regulation 16A.6.4
and, if it is, it must appoint that other service provider within 14 calendar
days of the date of this order.
8. Within 10 calendar days from the date of appointment, RAiN or any other
appointed service provider must submit to Cash Paymaster Services (Pty)
Limited, KPMG Services (Pty) Limited and Mazars Incorporated the list
of all outstanding documents relevant to the audit verification undertaken
by RAiN under the order of 17 March 2017.
9. Cash Paymaster Services (Pty) Limited, KPMG Services (Pty) Limited
and Mazars Incorporated must furnish RAiN or any other appointed
service provider with the listed documents in their possession, within
15 calendar days from the date of receipt of the list of outstanding
documents referred to in paragraph 8.
10. Within 30 calendar days of receipt of the outstanding documents referred
to in paragraph 8, RAiN or any other appointed service provider must
submit to the National Treasury, the updated verification report including:
(a) all issues raised by the National Treasury in its letter of
28 November 2019; and
(b) all issues arising from the documents referred to in paragraph 8.
11. Within 20 calendar days of receipt of the updated verification report, the
National Treasury must allow Cash Paymaster Services (Pty) Limited and
SASSA to make representations on the updated verification report, if they
so wish.
12. Within 40 calendar days of receipt of the updated verification report, the
National Treasury must consider and approve the updated verification
report and file its approval together with the updated verifi cation report
with the Registrar of this Court.
13. If the National Treasury is unable to approve the updated verification
report, it must file an affidavit setting out:
(a) its reasons for not approving the updated verification report; and
(b) its own determination of the profit made by Cash Paymaster
Services (Pty) Limited from the unlawful contract that was
declared invalid; or
(c) alternatively, what it requires to properly determine the profit
made by Cash Paymaster Services (Pty) Limited, in the e vent
that it is unable to make the determination referred to in
paragraph 13(b).
14. SASSA must pay the costs of this application.
15. Costs that were reserved in terms of the April 2021 order remain reserved.
1
JUDGMENT
MADLANGA J (Zondo ACJ, Madondo AJ, Majiedt J, Mhlantla J, Pillay AJ,
Rogers AJ, Theron J, Tlaletsi AJ and Tshiqi J concurring):
[1] This is another instalment in the unending sequels to the Allpay1 litigation. I will
not burden this judgment with that background.
[2] We are disposing of this matter without an oral hearing.
[3] In its last judgment handed down on 1 April 2021 part of this Court’s order (April
2021 order) requires RAiN Chartered Accountants Inc (RAiN), the applicant, to make
a final determination on the profits received by Cash Paymaster Services (Pty) Ltd2
(CPS).3 What is at issue relates to this part of the order. An earlier order granted by
1 Allpay Consolidated Investment Holdings (Pty) Ltd v Chief Executive Officer of the South African Social Security
Agency [2013] ZACC 42; 2014 (1) SA 604 (CC); 2014 (1) BCLR 1 (CC).
2 This entity is now in liquidation.
3 The order in Freedom Under Law NPC v Minister of Social Development (Corruption Watch (NPC) RF and
South African Post Office SOC Ltd Amicus Curiae) [2021] ZACC 5; 2021 (6) BCLR 575 reads:
1. Within 10 days from the date of this order, Rain Chartered Accountants Inc must
submit to Cash Paymaster Services (Pty) Limited, KPMG Services (Pty) Limited and
Mazars Inc the list of all outstanding documents relev ant to the audit verification
undertaken by Rain Chartered Accountants Inc under the order of 17 March 2017.
2. Cash Paymaster Services (Pty) Limited, KPMG Services (Pty) Limited and Mazars Inc
must furnish Rain Chartered Accountants Inc with the listed docum ents in their
possession, within 15 days from the date of receipt of the list of outstanding documents
referred to in paragraph 1.
3. Within 30 days of receipt of the outstanding documents referred to in paragraph 1, Rain
Chartered Accountants Inc must submit to the National Treasury, the updated
verification report including:
3.1. all issues raised by the National Treasury in its letter of 28 November 2019;
and
3.2. all issues arising from the documents referred to in paragraph 1.
MADLANGA J
2
this Court on 17 March 2017 required the South African Social Security Agency
(SASSA), an organ of state responsible for payment of social grants, to determine the
profits.4 SASSA chose to engage a firm of accountants to do this on its behalf. After a
competitive bidding process, it appointed RAiN to do the work.
[4] RAiN did do substantial work towards determining the profits, but was
hamstrung in its performance by the failure, if not refusal, by CPS and two other entities,
KPMG Services (Pty) Ltd (KPMG) and Mazars Inc (Mazars), to furnish it with certain
documents or information it required to make a proper determination. It is this that gave
rise to the litigation instituted by Freedom Under Law (FUL), a public interest and
non-profit organisation created to promote democracy and advance understanding of
and respect for the rule of law, and the principle of legality in Southern Africa. Of
course, RAiN can only make the final determination of CPS’s profits if it has been
provided with the outstanding information. The April 2021 order also required CPS,
KPMG and Mazars to furnish RAiN with the documents after all three firms have been
furnished with a list of what is required by RAiN.
4. Within 20 days of receipt of the updated verification report, the National Treasury must
allow Cash Paymaster Services (Pty) Limited and the South African Social Security
Agency to make representations on the updated verification report, if they so wish.
5. Within 40 days of receipt of the updated verification report, the National Treasury must
consider and approve the updated verification report and file its approval together with
the updated verified report with the Registrar of this Court.
6. If the National Treasury is unable to approve the updat ed verification report, the
National Treasury must file an affidavit setting out:
6.1. reasons for not approving the updated verification report; and
6.2. the National Treasury’s own determination of the profit made by Cash
Paymaster Services (Pty) Limited from the unlawful contract that was
declared invalid; or
6.3. alternatively, should the National Treasury be unable to make the
determination referred to in subparagraph 6.2, it must set out in its affidavit
what it requires to properly determine the profit made by Cash Paymaster
Services (Pty) Limited.
7. Costs are reserved.
4 See the order in Black Sash Trust v Minister of Social Development (Freedom Under Law intervening) [2017]
ZACC 8; 2017 (3) SA 335 (CC); 2017 (5) BCLR 543 (CC).
MADLANGA J
3
[5] An issue has now arisen: who must pay RAiN’s fees for the work it must do in
terms of the April 2021 order? SASSA which engaged RAiN says it is not liable to pay
the fees . RAiN is also asking for a declarator that SASSA is liable for any
disbursements, including legal fees, reasonably incurred to enable it to comply with the
order. So, the legal fees are distinct from costs incurred in the present proceedings.
SASSA will have none of this as well. It is these two qu estions that fall to be decided.
First, a brief background.
[6] The agreement between RAiN and SASSA was for a four -month period ending
30 September 2019. The contract price was calculated based on an estimate of hours
required to complete the assignment. The agreement provided that even if RAiN were
to require, and work for, more hours than what was estimated , it would not be entitled
to additional payment for the extra hours. In the event, RAiN worked for far more hours
than its estimate. Although the documents required by RAiN to carry out its task were
with other parties (mainly CPS), the agreement made it SASSA’s obligation to afford
RAiN “timeous access to information reasonably required to perform the service”. CPS
did not only delay in furnishing RAiN with information but also provided it with
incorrect information. For example, “[t]he heart of the problem” – as RAiN puts it –
was that CPS furnished it with a general ledger and trial balance which did not agree.
This necessitated requests to CPS for additional information and documents. And RAiN
solicited SASSA’s assistance as it was its obligation to obtain the information for RAiN.
This was met with more delays.
[7] After quite a struggle and significant delay, the information was eventually
received. RAiN avers that the toing and froing about the outstanding information and
the very fact of having to work with inaccurate information caused it to put in a lot more
hours than what had been budgeted for, “first initially and then subsequently when the
correct and complete information was finally provided”. I must emphasise that SASSA
acknowledged the impact of the delays in a complaint it lodged with Net1, CPS’s
holding company. In the complai nt SASSA said the failure by CPS to provide the
MADLANGA J
4
required information timeously resulted in RAiN having to perform unnecessary work
with the result that “[t]he budget [was] getting exhausted with not much progress”.
[8] RAiN did not – and still does not – claim additional payment for the extra hours
of work occasioned by the circumstances I have just explained.
[9] All these facts are either common cause or not disputed.
[10] RAiN avers that no one could have foreseen that a general ledger and trial
balance would not reconcile. Therefore, no one would have factored this
irreconcilability in determining a contract price. As we now know, that which was
unforeseeable did transpire.
[11] The information to which the delays related was not the information which is the
subject of the April 2021 order. It was only upon doing a verification process after
receipt of all the information referred to in the preceding paragraphs that RAiN
identified “critical issues” that required investigation. The se issues included whether
there was cost-shifting and profit-shifting which would have resulted in the over-stating
of expenditure and under-stating of income. Much as RAiN did all it could to get to the
bottom of this, it transpired that more information was required to get the true picture.
It is this information tha t CPS, KPMG and Mazars must furnish to RAiN in te rms of
the April 2021 order. Before I deal with what happened after the grant of this order, let
me mention something of some import.
[12] After all the delays – and the additional work occasioned by them – and the
inaccurate information, RAiN submitted its report. It sent its final invoice to SASSA.
In response SASSA said it would make the final payment upon acceptance of the report.
And its acceptance of the report would be indicated by filing it with this Court.
Subsequently, SASSA paid the final invoice and filed the report with the Court. SASSA
even paid the retention money. Of course, RAiN’s report did state that the full picture
MADLANGA J
5
could only be presented if the information withheld by CPS, KPMG and Mazars was
made available.
[13] Pursuant to the A pril 2021 order, RAiN sent an email to SASSA enquiring if
SASSA accepted liability for its fees for doing the work required by the order . A
Ms Mahlobogoana, SASSA’s General Manager: Legal Services, responded to the email
saying, “SASSA has a responsibility to pay for your ser vices as far as the Court has
ordered. SASSA is the one that appointed RAiN after a due process.” Another
response, this time by a Mr Mowa, SASSA’s Senior Manager: Internal Control , was
also receptive to the idea that SASSA was responsible for RAiN’s fee s for work to be
done in terms of the April 2021 order. It said, “Once RAiN has the information, then
the issue of fees can be discussed to enable a determination of the amount of work to be
done, which will inform the hours required and the fees.” So, e ven in terms of this
second response, the issue was the quantum, not whether SASSA was liable at all.
[14] Towards the end of April 2021 SASSA reneged on these positive responses. The
same Mr Mowa who had written the seco nd response said, “Kindly note that SASSA
does not have a responsibility to resolve the issue of fees as the Court has not placed
any liability on SASSA to pay the fees.” It is this stance that has brought RAiN before
us.
[15] In its efforts to parry RAiN’s offensive, SASSA contends that the work that must
be performed in terms of the April 2021 order falls within the scope of work covered
by the agreement between the parties. Therefore, RAiN cannot seek payment for it.
This entails no more than a determination – through a contractual interpre tative
exercise – of the scope of work provided for in the agreement. According to SASSA
that is so unexceptional a matter that it does not fall within this Court’s jurisdiction.
[16] In addition, SASSA argues that in response to the tender invitation, RAiN freely
tendered on the price that SASSA accepted. To agree to RAiN’s demand would
effectively be changing the contract price after the event. According to SASSA, if
MADLANGA J
6
granted, RAiN’s demand would constitute a violation of the provisions of section 217
of the Constitution. This section stipulates that organs of state must procure goods or
services in accordance with a system which is fair, equitable, transparent, competitive
and cost -effective. So, to allow payment in addition to the contract price which
influenced the award of the contract would not only be unfair to the bidders whose bids
did not succeed based on the quoted prices but would also flout the section 217 factors.
In short, SASSA wants RAiN to perform the task required by the April 2021 order
without any payment.
[17] SASSA also submits that – to the extent that CPS’s non -cooperation could not
be foreseen – a variation in terms of which the contract price may be increased can be
done only in terms of National Treasury SCM Instruction Note 3 of 2016/17 (Treasury
Instruction Note 3). 5 SASSA submits that in terms of this instrument, a fair price
variation can only be up to 15%.
[18] Regarding the claim for payment of legal fees, SASSA pleads that the agreement
made no provision for such payment.
[19] SASSA prays for the dismissal of the application or, alternatively, for an order
directing it and RAiN to negotiate in good faith to determine whether the work required
by the April 2021 order falls within the scope detailed in the agreement. And if it does,
that SASSA pay RAiN in accordance with the mentioned Treasury Instruction.
[20] RAiN responds that it is not seeking a variation of the agreement. A variation is
a legal impossibility as the agreement terminated in September 2019. And nothing in
the April 2021 order suggests that the Court had a variation in its collective mind. Nor,
5 National Treasury Instructions, of which Treasury Instruction Note 3 is one, are issued in terms of section 76 of
the Public Finance Management Act 1 of 1999 (PFMA). This particular Instruction provides:
“The Accounting Officer/Accounting Authority must ensure that contracts are not varied by
more than 20% or R20 million (including VAT) for construction related goods, works and or
services and 15% or R15 million (including VAT) for all other goods and or services of the
original contract value.”
MADLANGA J
7
continues RAiN’s argument, does SASSA suggest that the April 2021 order has
somehow revived the agreement. According to RAiN, the effect of the order is that a
new agreement must be concluded to facilitate performance in terms of the order.
[21] It founds its entitlement to the claimed relief on unconscionable state conduct
which breaches the constitutional principles of reliance, accountability and rationality.6
The facts that undergird this claim are:
(a) RAiN performed in terms of the agreement as best it could under the
constraints it faced as a result of SASSA’s failure to provide information
timeously in accordance with its contractual obligation.
(b) Relatedly, the incomplete, incorrect and late information furnished by
CPS resulted in RAiN expending considerably more time than had been
anticipated.
(c) As it was SASSA’s contractual obligation to provide all information
timeously, the consequences of the delay cannot be laid at RAiN’s door.
(d) If it was SASSA’s view that RAiN had failed to perform in accordance
with the agreement, it was entitled to cancel the agreement, which it never
did. Nor did it ever complain about the adequacy of RAiN’s work.
6 In KwaZulu-Natal Joint Liaison Committee v MEC for Education, KwaZulu-Natal [2013] ZACC 10; 2013 (4)
SA 262 (CC); 2013 (6) BCLR 615 (CC) at para 65 this Court held that the retroactive reduction of subsidies to
schools by the Department for Education was unlawful, legally and constitutionally uncon scionable when
measured against the public law principles of reliance, accountability and rationality. The Court held:
“Government officials must, in dealing with those who act in reliance on their undertakings, act
rationally. A budget cut announced in relation to payments promised but not yet made would
be regrettable. But it may be rational. Behaviour and expectations can be tailored to it. But it
is impossible to tailor behaviour and expectations to a promise made in relation to a period that
has already passed. Revoking a promise when the time for its fulfilment has already expired
does not constitute rational treatment of those affected by it.”
See also Pretorius v Transport Pension Fund [2018] ZACC 10; 2019 (2) SA 37 (CC); 2018 (7) BCLR 838 at
para 26.
MADLANGA J
8
(e) What SASSA did instead was to accept RAiN’s report, file it with the
Court and make the final invoiced payment , including payment of the
retention money.
[22] RAiN relies on the same facts to plead that SASSA is estopped from denying
that it performed under the agreement. SASSA’s acceptance of the report in the exact
manner indicated by SASSA itself 7 and the making of a final payment put it beyond
question that SASSA did not harbour any issues about RAiN’s performance. If
successful, pleading in this manner will mean the ordinary reward for rendering
professional services, namely professional fees, will follow as a matter of course. That
is, if RAiN gets to do the work.8 The reward will no longer be hamstrung by SASSA’s
claim that the work still to be done falls within the scope of the contract that has come
to an end. In sum, RAiN invokes estoppel to parry that claim.
[23] Proof of unconscionable state conduct which b reaches the constitutional
principles of reliance, accountability and rationality will have the same effect as success
on estoppel. Therefore, it is enough for RAiN to establish only one of these.
[24] In the Allpay matter and its sequels, this Court has reta ined the power to see to
compliance with its orders. On that basis alone, we are entitled to entertain this matter.
[25] I do not find it necessary to deal with SASSA’s contention that the work required
in terms of the April 2021 order falls within the scope of the agreement. That is not
necessary because SASSA represented to RAiN that it was accepting RAiN’s
performance. And it even paid the full contract price, including the retention money,
without demur. Since as far back as November 2019 when SASSA accepted the report
and made the final payment, RAiN has been under the impression that all its obligations
under the agreement were dead and buried. Even as late as after the April 2021 order
7 SASSA had said its acceptance of RAiN’s report would be signified by SASSA’s filing of the report at Court,
which SASSA did.
8 The reason for using “if” will become apparent later.
MADLANGA J
9
was granted, two of SASSA’s officials unequivocally accepted that SASSA bears the
duty to pay RAiN’s fees for the work to be performed in terms of the order. In the
context of estoppel, I raise this to buttress the point that it was SASSA’s understanding
that RAiN did not owe any work under the contract whose period had since expired.
[26] I am satisfied that the requirements of estoppel are met. 9 SASSA’s acceptance
of RAiN’s report and final payment to RAiN make plain that at the time of payment
SASSA was happy with RAiN’s performance and did not believe that any work was
owed under the contract. If SASSA’s insistence that the scope of work under the
contract entails the work required in terms of the April 2021 order were to be allowed,
RAiN would suffer prejudice. Thus, SASSA is estopped from denying that RAiN
performed fully under the contract. SASSA’s belated attempt to question RAiN’s
performance is reprehensible in the extreme. It is an attempt at snatching at a bargain,
but no bargain exists. Someone within SASSA must have had a sudden flash of
“brilliance” and d ecided that SASSA must renege on its unequivocal acceptance of
RAiN’s performance. That, of course, is totally misconceived and will not be
countenanced.
[27] This conclusion makes it unnecessary to grapple with RAiN’s assertion that
SASSA’s conduct is unconscionable and breaches the constitutional principles of
reliance, accountability and rationality.
[28] On RAiN’s own admission, this Court’s order has effectively created the need
for a new contract. This is not something that was apparent when the April 2021 order
was granted. What we were aware of was that there was work outstanding. We could
not readily have realised that any issue would arise with regard to SASSA’s liability to
9 In Concor Holdings (Pty) Ltd t/a Concor Technicrete v Potgieter [2004] ZASCA 59; 2004 (6) SA 491 (SCA) at
para 7 the Supreme Court of Appeal said this about the requirements for estoppel:
“Our law is that a person may be bound by a representation constituted by conduct if the
representor should reasonably have expected that the representee might be misled by his conduct
and if in addition the representee acted reasonably in construing the r epresentation in the sense
in which the representee did so.”
See also Makate v Vodacom Ltd [2016] ZACC 13; 2016 (4) SA 121 (CC); 2016 (6) BCLR 709 (CC) at paras 44-6.
MADLANGA J
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pay the fees . After all, the outstanding work went to the heart of establishing CPS’s
profits, something that relates to the original assignment. RAiN has now explained to
our satisfaction why – despite the centrality of the outstanding work to the original end
goal – there is a need for additional payment for that work. In that sense, I accept that
this effectively necessitates a new contract. For that reason, I do not consider it proper,
without ado, to order SASSA to pay RAiN’s fees for the work to be performed in terms
of the April 2021 order; not in the face of section 217 of the Constitution.
[29] The provisions of section 217 notwithstanding, I think we are where we are
because of some unexplained reluctance on the part of SASSA to facilitate RAiN’s
performance in terms of this Court’s order. I say so because SASSA is aware that – as
indicated by RAiN – in terms of Treasury Regulation 16A.6.410 an organ of state may
deviate from the requirement of a competitive bidding process. This regulation
provides:
“If in a specific case it is impractical to invite competitive bids, the accounting officer
or accounting authority may procure the required goods or services by other means,
provided that the reasons for deviating from inviting competitive bids must be recorded
and approved by the accounting officer or accounting authority.”
A disclaimer: my reference to this regulation does not serve as a pronouncement on its
constitutionality. That is not an issue before us. The point is: it exists.
[30] To use the hackneyed but useful legal phrase, what is impractical must surely
depend on the circumstances of each case. In some instances, impracticality may
manifest in absolute impossibilit y to engage in a competitive bidding process. Below
that there may be a range of what constitutes impracticality. At the centre though must
be the question whether a competitive bidding process is well and sensibly suited for
the circumstances. A dictio nary meaning of “impractical” is “not adapted for use or
10 Treasury Regulations, GN R225 GG 27388, 15 March 2005. Like National Treasury Instruct ions, Treasury
Regulations are issued in terms of section 76 of the PFMA.
MADLANGA J
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action; not sensible”.11 Ultimately what is impractical is a matter of a judg ement call
to be made by the organ of state concerned. But what the organ of state may decide is
not unbounded; it must be informed by the operative word – “impractical”. And that is
an objectively accessible notion.
[31] That said, paragraph 8 of Treasury Instruction Note 3 sheds light on what is
considered to be “impractical”. Paragraph 8 deals with deviations. “Impractical” must
be read in the light of this paragraph, which accords in some respects with what I have
just said. In paragraph 8.1 the note states that an accounting officer must only deviate
from a competitive bidding process “in cases of emergency and sole supp lier status”.
The first of these concepts is defined as occurring “when there is a serious and
unexpected situation that poses an immediate risk to health, life, property or
environment which calls an agency to action and there is insufficient time to inv ite
competitive bids”. The second occurs “when there is evidence that only one supplier
possesses the unique and singularly available capacity to meet the requirements of the
institution”. Paragraph 8.5 provides that “any other deviation will be allowed in
exceptional cases subject to the prior written approval from the relevant Treasury”.
Paragraph 8.5 serves to indicate that deviations may be done in situations that are wider
than just those typified in paragraph 8.1. And this harks back to the point that at its
widest impracticality, which – in terms of Treasury Regulation 16A.6.4 – is the
jurisdictional fact for deviation, is an objectively accessible notion.
[32] Although it is not for this Court to decide whether there must be a deviation in
this matter, I would be failing in this Court’s duty if I were not to make comments that
are of relevance to the subject. This Court’s duty stems from the fact that it is in its
interest that the issue of CPS’s profits be finally determined with expedition.
[33] It is worth noting that SASSA accepts that the work to be done in terms of the
April 2021 order “must be done without any further delays”. It does not require rocket
11 Waite Paperback Oxford English Dictionary 7 ed (Oxford University Press, Oxford 2012) at 363.
MADLANGA J
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science to realise that – on its own – a competitive bidding process will take a much
longer time than a deviation. To illustrate, take a scenario where a bridge has been
swept away by floods. The urgent engagement of a contractor to put up a makeshift
bridge so that school children may continue to attend a school on the other side of the
river is a worthy candidate for a deviation. And the deviation process is something that
can be finalised within a few days. What is before us may not compare with the urgent
need to erect a makeshift bridge. But – on SASSA’s own admission – the outstanding
work needs to be done expeditiously.
[34] A firm of accountants coming in cold will probably take more time than RAiN
to finalise the work that must still be done. The firm will first have to familiarise itself
with the available information and then chart a path that needs to be followed. That, of
course, will be a duplication of work that has already been done by RAiN. And one
cannot discount the possibility that – as a self-respecting firm – its view of the available
information may be different to that of RAiN. That may well entail engaging in
substantially more work. After all, it is not unheard of that firms of accountants have
taken views that are at odds on the e xact same task. But one thing is sure, all things
being equal, it is more likely that RAiN will finalise th e outstanding work with more
expedition than a firm coming in cold.
[35] These factors, i.e. what I deal with in the two preceding paragraphs, appear – and
I use “appear” advisedly – to indicate that going out on a competitive bidding process
is impractical in the circumstances facing us. That is not my call to make. That is
SASSA’s decision, which it must take acting properly. And it must do so well a ware
of the fact that – as “impracticality” is an objectively determinable concept – its decision
is subject to review and, in that sense, it enjoys no monopoly in this regard. I will add
this much. The CPS saga has been hanging over our people’s heads for far too long. It
needs to end sooner rather than later.
[36] Since it pre-eminently lies with the organ of state concerned – not this Court –
to do a deviation, an appropriate order is one that requires SASSA to consider whether
MADLANGA J
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it is open to it to appoint RAiN in accordance with the provision for deviation contained
in Treasury Regulation 16A.6.4. To avert a situation where – post the grant of the order
in the present application – there may be finger-pointing as to where further delays, if
any, occurred in carrying out the deviation process, I think it fit that the order must place
the responsibility of expediting the process on SASSA’s Chief Executive Officer. Even
though the Chief Executive Officer is not party to the proceedings, I cannot conceive of
any reason wh y she would object to performing this task. In the unlikely event of an
objection, she is at liberty to approach this Court for appropriate relief.
[37] Regarding the claim that SASSA is liable for disbursements, including legal fees,
reasonably incurred to enable RAiN to comply with the April 2021 order, I am not
convinced that RAiN is entitled to an order to recover these. These should perhaps be
some of the overheads it must meet out of its accounting fees. Also, it is not altogether
clear what the exact nature of these disbursements is.
[38] As a consequence of the instant litigation, the April 2021 order must be modified.
[39] RAiN enjoys substantial success and is thus entitled to costs.
[40] The following order is made:
1. It is declared that the South African Social Security Agency ( SASSA) is
responsible for paying reasonable fees for work which will be done to
comply with paragraphs 1 and 3 of this Court’s order of 1 April 2021
(April 2021 order).
2. For purposes of performance of the work referr ed to in paragraph 1,
SASSA must consider whether it is open to it to appoint RAiN Chartered
Accountants Inc orporated (RAiN) in accordance with the deviation
process provided for in Treasury Regulation 16A.6.4 and, if it is, it must
appoint RAiN.
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3. To fac ilitate SASSA’s decision under paragraph 2, SASSA and RAiN
must meet forthwith after this order and commence negotiations in good
faith in respect of the fees referred to in paragraph 1.
4. In the event of there being no agreement on the fees within four calendar
days of this order, the fees will be determined by the Chief Executive
Officer of the South African Institute of Chartered Accountants or a
chartered accountant nominated by him and any fees payable for this
purpose shall be borne by SASSA.
5. The Chief Executive Officer of SASSA must tak e all necessary steps
within her powers and functions to ensure that the deviation process
referred to in paragraph 2 of this order and appointment of RAiN, if it is
to be appointed, is finalised within 10 calendar days of agreement by
RAiN and SASSA on RAiN’s fees or of their determination under
paragraph 4.
6. SASSA’s attorneys of record must bring paragraph 5 to the notice of
SASSA’s Chief Executive Officer.
7. If SASSA does not appoint RAiN, it must consider whether it is open to
it to appoint another suitably qualified service provider in accordance
with the deviation process provided for in Treasury Regulation 16A.6.4
and, if it is, it must appoint that other service provider within 14 calendar
days of the date of this order.
8. Within 10 calendar days from the date of appointment, RAiN or any other
appointed service provider must submit to Cash Paymaster Services (Pty)
Limited, KPMG Services (Pty) Limited and Mazars Incorporated the list
of all outstanding documents relevant to the audit verification undertaken
by RAiN under the order of 17 March 2017.
9. Cash Paymaster Services (Pty) Limited, KPMG Services (Pty) Limited
and Mazars Incorporated must furnish RAiN or any other appointed
service provider with the listed documents in their possession, within
15 calendar days from the date of receipt of the list of outstanding
documents referred to in paragraph 8.
MADLANGA J
15
10. Within 30 calendar days of receipt of the outstanding documents referred
to in paragraph 8 , RAiN or any other appointed service provider must
submit to the National Treasury, the updated verification report including:
(c) all issues raised by the National Treasury in its letter of
28 November 2019; and
(d) all issues arising from the documents referred to in paragraph 8.
11. Within 20 calendar days of receipt of the updated verification report, the
National Treasury must allow Cash Paymaster Services (Pty) Limited and
SASSA to make representations on the updated verification report, if they
so wish.
12. Within 40 calendar days of receipt of the updated verification report, the
National Treasury must consider and approve the updated verification
report and file its approval together with the updated verifi cation report
with the Registrar of this Court.
13. If the National Treasury is unable to approve the updated verification
report, it must file an affidavit setting out:
(d) its reasons for not approving the updated verification report; and
(e) its own determination of the profit made by Cash Paymaster
Services (Pty) Limited from the unlawful contract that was
declared invalid; or
(f) alternatively, what it requires to properly determine the profit
made by Cash Paymaster Services (Pty) Limited, in the event
that it is unable to make the determination referr ed to in
paragraph 13(b).
14. SASSA must pay the costs of this application.
15. Costs that were reserved in terms of the April 2021 order remain reserved.
For the Applicant:
For the Respondent:
G Budlender SC instructed by Harris
Nupen Molebatsi Incorporated
M Mphaga SC and ME Manala
instructed by Renqe FY Incorporated