IN THE SPECIAL TRIBUNAL ESTABLISHED IN TERMS OF SECTION 2(1) OF
THE SPECIAL INVESTIGATING UNIT AND
SPECIAL TRIBUNALS ACT 74 OF 1996
(REPUBLIC OF SOUTH AFRICA)
In the matter between:
SPECIAL INVESTIGATING UNIT
and
FLYFOFA AIRWAYS (PTY) LIMITED
SOUTH AFRICAN AIRWAYS SOC LIMITED
THE MINISTER OF PUBLIC ENTERPRISES
JUDGMENT
FORTUIN J:
CASE NO: GP01/2023
Applicant
First Respondent
Second Respondent
Third Respondent
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A. INTRODUCTION AND RELIEF SOUGHT
1. This is an application by the Special Investigating Unit ("the SIU") to review and
set aside, on the ground of legality, the decision of the Second Respondent, South African
Airways SOC Limited ("SAA"), to conclude an addendum to a Dry Lease Agreement with
the First Respondent, Flyfofa Airways (Pty) Ltd ("Flyfofa"), and to recover R85,340,863.00
(Eighty Five Million Three Hundred and Forty Thousand Eight Hundred and Sixty Three
Rand) paid to Flyfofa under that addendum.
2. The addendum in question was signed on or about 1 July 2019. It extended, for a
further 36 months, an existing arrangement under which Flyfofa supplied SAA with a
B737-300F freighter aircraft ("MSN 24278"). It did, however, do more than extend a lease
term.
3. On the SIU's version, SAA ceded its own domestic overnight freighter operations
to Flyfofa. It restructured the arrangement so that SAA would purchase space on, and
compensate Flyfofa for the use of, an aircraft operating under Flyfofa's own Air Operator's
Certificate. This was done without a fresh, specifically recorded deviation from SAA's
ordinary competitive procurement processes and without the prior approval of the
National Treasury. It is the SIU's contention that the transaction required such approval.
4. In its amended Notice of Motion now before the Tribunal, the Applicant seeks the
following relief:
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a. an order reviewing and setting aside SAA's decision to conclude the
addendum on the ground of legality;
b. a just and equitable order under section 172(1 )(b) of the Constitution;
c. a declarator that SAA is not liable to Flyfofa for any further amount;
d. an order that Flyfofa render a full debatement of account of amounts
received and value rendered under the addendum , subject to audit by the
SIU's auditors, and repay any amount found to represent unjustified profit,
with interest; and
e. costs, including the costs of two counsel.
5. Flyfofa opposes the application in its entirety. It denies that the conclusion of the
addendum was unlawful and denies that it misrepresented anything to SAA. It contends
that it dealt with SAA in good faith and is not to be penalised for irregularities (if any) in
SAA's own internal processes. In its most recent papers, Flyfofa contends that the SIU's
application should fail, or at least the SIU's own explanation for its delay should not be
condoned , because of the length of time the SIU took to institute these proceedings after
the addendum was concluded .
6. SAA has filed a notice to abide the decision of the Tribunal. No relief is sought
against the Third Respondent, the Minister of Public Enterprises, who has neither
opposed the application nor filed a notice to abide.
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B. THE PARTIES
7. The applicant is the SIU, an independent statutory body established under section
2 of the Special Investigating Units and Special Tribunals Act 74 of 1996 ("the SIU Act"),
acting here pursuant to Proclamation R.2 of 2020 (Government Gazette No. 42979 of 31
January 2020).
8. The First Respondent is Flyfofa, a private company. SAA, the Second Respondent
is a Schedule 2 public entity under the Public Finance Management Act 1 of 1999 ("the
PFMA") and the Third Respondent is the Minister, cited in his capacity as the executive
authority responsible for SAA.
C. COMMON CAUSE BACKGROUND FACTS
9. The historical relationship between SAA and Flyfofa is central. SAA previously
needed cargo freighter capacity and its dealings with Flyfofa have a longer history than
the impugned addendum alone. It is necessary to sketch that history. The issue to be
determined before this tribunal is the dispute over whether SAA's 2015 authorisation to
deviate from ordinary procurement was lawfully extended to the 2019 transaction. The
following is common cause on the papers, save where I indicate otherwise.
10. From 2012, SAA experienced recurring difficulty sourcing suitable short-term
freighter aircraft through open tender. Between 2014 and 2015, at least three attempts to
procure freighter capacity through competitive processes (in August 2014, December
2014 and March 2015) failed to produce a compliant, deliverable aircraft.
4
11. On 17 September 2015, the SAA Board, by resolution 2015/B53, re-approved SAA
Cargo's fleet plan and approved a deviation from SAA's standard aircraft-procurement
process, described in the resolution as a risk-mitigation measure. The Company
Secretary's own contemporaneous note on that resolution records that she was "NOT
satisfied" that a maintenance plan was in place for the aircraft to be sourced under it.
12. In March 2016, Flyfofa was one of several parties invited to make presentations to
SAA's Cross Functional Sourcing Team. In terms of an affidavit by Mr Bertus Steyn, SAA's
then Manager of Operational Purchasing and Aircraft Acquisitions, it is common cause
that the other respondents' documents were reportedly stolen in a burglary at his office.
It is also common cause that Flyfofa's own financial position at the time was recorded by
SAA's own assessment as "high risk". They had no audited financial statements, a
solvency ratio of 0.1 , and losses in the two preceding financial years. Flyfofa's
Supplementary Affidavit does not dispute those figures.
13. SAA and Flyfofa concluded a series of short-term wet-lease arrangements during
2016. On 3 November 2016, the Dry Lease Agreement itself, for two B737-300F aircraft
over three years was concluded. This Dry Lease Agreement is not under review. What is
under review is the addendum concluded on 1 July 2019, extending the arrangement (in
respect of aircraft MSN 24278) for a further 36 months at a total value of R85,340,863.00,
and restructuring it along the lines described in paragraphs 2 and 3 above.
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14. It is common cause that no open, competitive tender preceded the conclusion of
the 2019 addendum. It is also common cause that no fresh National Treasury approval
was sought for it. What is disputed is whether either of those things was necessary.
15. Flyfofa's position, developed mostly in the Supplementary Affidavit of its director,
Mr Thabo Fisha, is that SAA's own Supply Chain Management Policy permitted deviation
for urgent operational needs. Moreover, the 2015 Board resolution's deviation authority
was appropriate to cover the 2019 addendum. Lastly, that National Treasury consent is
sometimes required for a deviation but was not required here because SAA's own internal
deviation process was properly followed.
16. The following further background fact is important and will be discussed further
below. Between December 2018 and August 2019, one of the leased aircraft (registration
ZS-TGG) was grounded for operational reasons, and Flyfofa is said to have continued
receiving payment during the grounding, sourcing a substitute aircraft from a third party,
Interlock Freight Services. Flyfofa now admits the grounding and the substitution.
17. The SIU's own position on the relevance of this episode has however not been
consistent. I deal with the consequence of that inconsistency in the discussion below.
18. It is further common cause that the procedural history of the application itself has
also been protracted.
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19. On 7 May 2026, Advocate A R van der Merwe withdrew as Flyfofa's counsel of
record. This occurred while this judgment was being edited. Nothing in Flyfofa's case is
therefore affected by it.
D. IN LIMINE ISSUES
20. The following in limine issues will be discussed below:
a. which of the several affidavits filed on each side are properly before the
Tribunal;
b. whether the SIU's delay in instituting these proceedings should be condoned;
c. whether the SIU's one-business-day-late Supplementary Founding Affidavit
should be condoned;
d. whether Flyfofa's own, informally sought condonation for the late filing of its
Supplementary Affidavit should be granted; and
e. Flyfofa's Rule 30(2)(b) objection to the Amended Notice of Motion.
a. Which papers are properly before the Tribunal
21 . The SIU's position, taken in its Supplementary Replying Affidavit, is that the
Supplementary Founding Affidavit "substitutes" the original Founding Affidavit in its
entirety. Flyfofa's own papers do not accept that premise.
22. I do not accept the SIU's "complete substitution" position. A party cannot
unilaterally render its own earlier sworn allegations pro non scripto by simply filing a
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further affidavit that covers similar ground in more detail, particularly where, as here, the
respondent has already filed a substantive answer to the original affidavit and would be
prejudiced by having that answer declared moot after the fact.
23. I am satisfied that fairness, and the interests of justice, are best served by treating
the original Founding Affidavit and the Supplementary Founding Affidavit as collective,
and, correspondingly, by treating Flyfofa's original Answering Affidavit and its
Supplementary Affidavit as together constituting Flyfofa's answer. I have accordingly read
the papers holistically rather than exclude any one of them.
b. The SIU's delay in instituting proceedings
24. The addendum was concluded on 1 July 2019. The application was lodged on 22
February 2023. This amounts to a delay, from conclusion of the impugned transaction to
institution of proceedings, of three years and eight months. Flyfofa, in Mr Fisha's
Supplementary Affidavit, opposes condonation of this delay, relying on Gqwetha v
Transkei Development Corporation Ltd1 for the proposition that unreasonable delay in
seeking review offends both the interest of the respondent in finality and the public interest
in the certainty of administrative action.
25. These principles were applied and further refined in Ferris v First Rand Bank2,
where the Constitutional Court held as follows:
'In Bertie Van Zyl this Court held that lateness is not the only consideration in determining
1 2006 (2) SA 603 (SCA)
2 2014 (3) SA 39 (CC)
8
whether condonation may be granted. It held further that the test for condonation is
whether it is in the interests of Justice to grant it. As the interests of Justice test is a
requirement for condonation and granting leave to appeal, there is an overlap between
these enquiries. For both enquiries, an applicant's prospects of success and the
importance of the issue to be determined are relevant factors.'
26. The principles later laid down in Buffulo City Municipality v Asia Construction
(Pty) ltd 3 are equally applicable. I find that I have to apply the following guiding principles:
'Even where a delay is found to be unreasonable, however, our precedents establish that
a court retains a discretion to overlook the delay provided it is in the interests of justice to
do so. This stage of the procedural enquiry should not take place in a "vacuum". It must
instead involve weighing (a) the effect of the delay on the parties and (b) the nature of the
impugned decision'.4
27. Gqwetha and all the abovementioned matters require me to enquire whether the
delay was unreasonable, and if so, whether it should nonetheless be condoned having
regard to the fullness of the explanation given, the extent of the delay, the prospects of
success, and the balance of prejudice. The SIU's explanation for the delay, as set out in
its Supplementary Founding Affidavit, accounts, month by month, for the period from
December 2019, through the disruption occasioned by the change in counsel between
2020 and 2021, the Covid-19 lockdown, at least six identified rounds of drafting and
redrafting of the application between October 2021 and December 2022, and the final
settling of the papers in January 2023.
3 2019 (4) SA 331 (CC)
4 Supra, at para 121
9
28. I am satisfied that this is a case of slow but continuous progress by the SIU. The
delay is substantial, and the explanation for parts of it, in particular, why the SIU's own
preliminary investigation was only completed by June 2022 from the December 2019
disclosure, is not fully spelled out.
29. Flyfofa has not identified any specific prejudice flowing from the delay. Weighed
against the public interest in examining the expenditure of R85 million of a public entity's
funds without a demonstrated competitive process, and having regard to the prospects of
success on the procurement-law grounds addressed below, I am satisfied that the
balance favours condonation.
30. I accordingly condone the delay in the institution of these proceedings.
c and d Condonation for the late supplementary affidavits
31. The SIU's Supplementary Founding Affidavit and Flyfofa's Supplementary Affidavit
were filed slightly late.
32. Both delays are minor set against the delay already condoned in paragraph 30
above, and no specific prejudice has been shown to flow from either.
e. The Rule 30(2)(b) objection
33. Flyfofa's notice in terms of Rule 30(2)(b), dated 4 June 2025, objects to the
Amended Notice of Motion filed on 26 May 2025 for the lack of a prior notice of intention
10
to amend. I do not consider the Rule 30(2)(b) objection to have any substance, and I do
not uphold it.
E. ISSUES FOR DETERMINATION
34. The issues remaining for determination are the following:
a. whether SAA's decision to conclude the 1 July 2019 addendum was lawful,
having regard to section 217 of the Constitution, the PFMA, the Treasury
Regulations and SAA's own Supply Chain Management Policy;
b. whether Flyfofa made material misrepresentations inducing SAA to contract;
c. if the addendum is reviewed and set aside, what remedy is just and equitable;
and
d. costs.
F. THE APPLICANT'S CASE
35. The SIU's case as pleaded, is that the 2019 addendum was concluded in breach
of section 217 of the Constitution, sections 38(1)(a)(iii) and 38(2) of the PFMA, Treasury
Regulations 16, 16.3, 16A.6.1, 16A.6.3 and 16A.6.4, and National Treasury Instruction
Note 3 of 2016/17. This because of the following:
a. no open or competitive process preceded it;
b. the 2015 Board deviation authorisation, granted for a different and materially
narrower transa ction . c ould not lawfully be stretc hed to cover the 2019
addendum;
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c. it was not specifically recorded, motivated and approved as a deviation in its
own right;
d. no National Treasury approval was sought, whether under Regulation
16A.6.1 or, on the SIU's characterisation of the addendum as effecting a
public-private partnership, under Regulation 16.3; and
e. it was not reported to the National Treasury within the time prescribed in the
applicable instruction notes.
36. The SIU further contends that Flyfofa misrepresented that it owned, or would
acquire, the aircraft fleet necessary to perform the contract, and that this
misrepresentation induced SAA to contract with it in the first place.
37. In respect of remedy, the SIU's primary position as reflected in the amended Notice
of Motion is no longer, as originally pleaded, an order for repayment of the full
R85,340,863.00, but a debatement-of-account as follows. Flyfofa is to render a full
account within 30 days and the SIU's auditors entitled to audit it within a further 60 days
if disputed, and Flyfofa to pay over any profit shown by that account within 14 days,
together with interest. The SIU seeks costs on the party-and-party scale, including the
costs of two counsel, and, in its most recent papers, wasted costs against Flyfofa.
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G. FLYFOFA'S CASE
38. Flyfofa does not dispute the underlying factual chronology, the conclusion of the
various agreements, or that the sums claimed were in fact paid. Its defence can be
summarised as follows:
a. It was not privy to, and had no duty to police SAA's own internal procurement
and deviation processes;
b. The 2015 Board resolution and SAA's own Supply Chain Management Policy
clauses permit deviation for urgent operational needs, and it properly
authorised the addendum;
c. While it accepts the general legal proposition that a procurement deviation can
require National Treasury consent, it maintains that SAA's own internal
deviation process was properly followed on this occasion;
d. It made no misrepresentation, since the contract required only that it have
lawful authority and control to lease and operate the relevant aircraft, not that
it owns the aircraft outright;
e. It dealt with SAA throughout in good faith, such that it should not, as an
innocent third party, be penalised. Consequences or disgorgement for any
irregularity lies at SAA's own door.
39. It bears noting that, on the assessment of Flyfofa's papers as a whole, its
A nswe ring Affidavit is for the m ost part in the form of a bare de nial. Mr Fis ha's
Supplementary Affidavit is considerably more detailed, but even it consists mostly of
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denials. No documentary evidence is provided e.g. no proof of ownership for either
aircraft, or no correspondence with National Treasury contradicting the SIU's evidence
that no approval was sought, has been placed before the Tribunal by Flyfofa.
40. Flyfofa's own papers deal with its "innocent bystander" defence to some degree.
First, it deals with the SIU's account of the pre-Flyfofa 2014 bridging-solution process, Mr
Fisha's Supplementary Affidavit describes that process as having been "executed in a
manner that circumvented the required competitive processes" and as "irregular,
procedurally flawed, and lacked transparency". He further maintains that mere Board
approval does not cure such irregularities. Second, Flyfofa's own papers accept the
general legal principle that National Treasury consent can be a legal requirement for a
procurement deviation.
41 . Flyfofa does not deal with the SIU's version that the addendum constitutes a public-
private partnership for purposes of Treasury Regulation 16.3.
H. THE APPLICABLE LEGAL FRAMEWORK
i. Sec 217 of the Constitution
42. Section 217(1) of the Constitution requires that an organ of state contracting for
goods or services do so in accordance with a system that is fair, equitable, transparent,
competitive and cost-effective. SAA, as a Schedule 2 public entity, is bound by this
requirement in respect of its own procurement, and its Supply Chain Management Policy
must itself give effect thereto.
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43. The overarching piece of legislation in respect of procurement is section 217 of
the Constitution, which specifically deals with procurement; It reads as follows:
'217. Procurement
any other institution identified in national legislation, contracts for goods or services, it
must do so in accordance with a system which is fair, equitable, transparent, competitive
and cost-effective.
2. Subsection (1) does not prevent the organs of state or institutions referred to in that
subsection from implementing a procurement policy providing for -
a. categories of preference in the allocation of contracts; and
b. the protection or advancement of persons, or categories of persons,
disadvantaged by unfair discrimination .
3. National legislation must prescribe a framework within which the policy referred to in
subsection (2) must be implemented '.
ii. Public Finance Management Act (PFMA)
44. The Public Finance Management Act 1 of 1999 ("the PFMA") was enacted with
the following aims:
a. to regulate financial management in the national government and provincial
governments;
b. to ensure that all revenue, expenditure, assets and liabilities of those
governments are managed efficiently and effectively;
c. to provide for the responsibilities of persons entrusted with financial
management in those governments; and
d. to provide for matters connected therewith.
15
45. Section 38(1 )(a)(iii) of the PFMA reads as follows:
"38. General responsibilities of accounting officers
(1) The accounting officer for a department, trading entity or constitutional
institution-
( a) must ensure that that department, trading entity or constitutional
institution has and maintains- ...
(iii) an appropriate procurement and provisioning system which
is fair, equitable, transparent, competitive and cost-effective;
46. Section 38(2) reads as follows:
"(2) An accounting officer may not commit a department, trading entity or constitutional
institution to any liability for which money has not been appropriated."
iii. Instruction Note 3
47. National Treasury SCM instruction note 3 of 2016/17 states that accounting
officers/accounting authorities must only deviate from inviting competitive bids in cases
of emergency and sole supplier status. These deviations do not require the approval of
the relevant treasury. Emergency procurement may occur when a serious and
unexpected situation poses an immediate risk to health, life, property, or the environment ,
calling an agency to action, and there is insufficient time to invite competitive bids.
48. The emergency procurement provisions provide for accounting officers/authorities
to procure the required goods or services by other means, such as price quotations or
negotiations , in accordanc e with Treasury Regulation 16A.6.4.
16
49. Instruction Note 3 of 2016/17 caps the permissible variation or expansion of an
existing contract, without a fresh competitive process, at 15% or R15 million (whichever
is the lower) for goods or services other than construction.
iv. Regulation 16
50. Treasury Regulation 16A.6.1 prohibits material deviation from an institution's
supply chain management system without prior written approval; Regulation 16A.6.3
permits procurement by other means, without competitive bidding, only where competitive
bidding is impractical in the specific case and the reasons for deviating are recorded and
approved.
51 . Regulation 16A.6.4 requires written notification to the National Treasury, within
thirty days of any deviation so approved.
52. Regulation 16.3 separately prohibits an accounting authority from proceeding with
a public-private partnership without the National Treasury's prior written approval at each
relevant stage.
v. The SIU Act
53. Finally, the SIU Act prescribes the powers and functions of this Tribunal. Section 8
reads as follows:
'8 Powers and functions of Special Tribunal
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(1) A Special Tribunal shall be independent and impartial and perform its functions
without fear, favour or prejudice and subject only to the Constitution and the law.'
54. As stated earlier, the SIU's case is based on the principle of legality. The applicable
case is State Information Technology Agency SOC Ltd v Gijima Holdings (Pty) Ltd5.
In Fedsure Life Assurance Ltd v Greater Johannesburg Transitional Metropolitan
Counci16 and Pharmaceutical Manufacturers Association of SA: In re Ex Parte
President of the RSA7 it was stated that this principle requires, at minimum, that the
exercise of public power be rationally connected to the purpose for which the power was
conferred, and be exercised within the bounds of the empowering framework. See in this
regard section 217, the PFMA and the Treasury Regulations.
I. SPECIAL TRIBUNAL'S REMEDIAL POWERS
55. The principle of legality is relevant as this review is brought in terms of this
principle. As held in Ledla Structural Development (Pty) Ltd and Others v Special
Investigations Unit8 ("Ledla")9, this Special Tribunal is empowered to consider and
decide reviews of procurement decisions brought under the principle of legality.
5 2018 (2) SA 23 (CC)
6 1991 SA 374 CC
7 2000 (2) SA 674 (CC)
8 2023 (2) SACR 1 (CC).
9 CCT 319/21 [2023] ZACC 8
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J. DISGORMENT OF PROFITS
56. The position in respect of the legal effect of an unlawful decision pending its review,
and the position of a party who has contracted and performed under it, was at issue in
Oudekraal Estates (Pty) Ltd v City of Cape Town10 where it was held as follows:
a. that such a decision exists in fact and may have legal consequences until set
aside; and,
b. Holdings (Pty) Ltd v CEO, SASSA (Allpay 2)11 the default remedial
consequence is that the contracting party is not entitled to retain profit made
under the unlawful contract. This is however subject to the interests of justice
enquiry under section 172(1 )(b).
57. I find it essential to list the development of our law post Allpay 2, supra, where it
was held that a party who has contracted and performed in good faith is not to be
treated as a wrongdoer, and that any disgorgement or restitution ordered against it must
have regard to value genuinely provided.
58. The powers included in the Tribunal's arsenal are contained in section 8(2) of the
SIU Act. They include the powers to:
a) Issue suspension orders, interlocutory orders or interdicts on application by
such Unit or party;
10 2004 (6) SA 222 (SCA)
11 2014 (4) SA 179 (CC)
19
b) Make any order, which it deems appropriate so as to give effect to any ruling
or decision given or made by it; and
c) Make any order which it deems appropriate as to costs.
59. The issue of remedy in the review of administrative actions has been at the centre
of numerous judgments in our courts recently. The Allpay II matter had laid down the
guiding principles since 2014. The proper interpretation of the Allpay II judgment had,
however, recently been discussed in the matter of Mafoko Security Patrols (Pty) Ltd
and Others v Mjayeli Security (Pty) Ltd and Others 12.
K. DISCUSSION
a. Lawfulness of the addendum
60. It is common cause that no competitive process preceded the conclusion of the
2019 addendum. The issue to be determined is whether the 17 September 2015 Board
deviation authorisation, or SAA's own Supply Chain Management Policy provisions
permitting deviation for urgent operational need, made provision for this specific deviation.
61 . I am not persuaded that they were. The 2015 authorisation was given for the
original 2016 dry-lease award. The 2019 addendum, on the common cause facts between
the parties, was a materially different transaction. This transaction did the following: It
i. ceded SAA's own domestic overnight freighter operations to Flyfofa,
12 (2025] ZASCA 179.
20
ii. restructured SAA's payment obligation from a conventional lease rental into
a purchase-of-space and compensation-for-use-of-space arrangement
including "ownership costs,". On Flyfofa's own admission, it did so on terms
whose introductory clauses were settled at SAA's request to reflect this
changed operational scope.
62. A deviation authorisation granted for one transaction does not automatically extend
to a later transaction that differs from the first in scope and structure.
63. The value of the 2019 addendum i.e. R85,340,863.00 over 36 months, also
exceeds, by a considerable margin, the threshold at which National Treasury SCM
Instruction Note 3 of 2016/17 permits an existing contract to be varied or expanded
without a fresh competitive process. It is common cause that this threshold is 15% or R15
million, whichever is the lower, for non-construction goods and services. On the papers
before me, no contrary conclusion can be drawn.
64. It is common cause, on the evidence of Mr Khomotso Chadi, SAA's Risk and
Compliance Manager, that no National Treasury approval was sought for the 2019
addendum. Flyfofa's answer is not that Treasury approval was sought and given, nor that
its own SCM Policy dispensed altogether with the need for such approval. Its answer is
rather that its own SCM Policy deviation provisions were properly invoked internally by
SAA .
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65. In my view, this is not an answer to the requirement. I accept the SIU has
established on the papers that a deviation of this kind required both a specifically recorded
and approved deviation. If, as the SIU contends, the addendum in substance restructured
the parties' arrangement into something resembling a public-private partnership for the
operation of SAA's own freighter route, then National Treasury approval was required in
terms of Regulation 16.3. This is not disputed by Flyfofa.
66. I find, accordingly, that SAA's decision to conclude the 1 July 2019 addendum was
not taken in accordance with a system that was fair, equitable, transparent , competitive
and cost-effective as section 217(1) of the Constitution requires. Moreover, it was not
authorised by any deviation properly recorded, approved and reported in accordance with
Treasury Regulation 16A.6 and National Treasury Instruction Note 3 of 2016/17. The
decision was accordingly unlawful and falls to be reviewed and set aside on the ground
of legality.
b. Misrepresentation
67. The SIU's allegation that Flyfofa misrepresented that it owned, or intended to
acquire, the aircraft fleet necessary to perform the contract, is denied. Flyfofa's position
is that the contract required only that it have lawful authority and control to lease and
operate the relevant aircraft, not that it own them.
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68. This version is not farfetched or untenable. No proof of ownership has been placed
before this Tribunal by either party. The dispute therefore remains. It is trite that motion
proceedings are not the proceedings to resolve a dispute of fact. That would require oral
evidence. This Tribunal has not heard any oral evidence.
69. I accordingly make no finding that Flyfofa misrepresented its position as to
ownership. In my view, the review and setting-aside of the addendum in paragraph 66
above does not depend on the establishment of this allegation.
70. In the SIU's Replying Affidavit it disclaimed reliance on the allegations of the
grounding of the aircraft for purposes of the relief sought. I need not resolve that tension
for purposes of the review itself as my finding on unlawfulness does not depend on the
ZS-TGG issue. In my view, it may, however, have a bearing on the accounting exercise I
order below. This, to the extent that Flyfofa was paid for a period during which the
contracted aircraft was not in fact available and no adequate performance is shown.
c. Remedy
71 . Having found the addendum unlawful, I must determine what order is just and
equitable under section 172(1)(b) of the Constitution. The SIU no longer seeks as its
primary remedy, an order for repayment of the entire R85,340,863.00. In its amended
Notice of Motion, it seeks a debatement of account.
7 2 . Flyfofa did render real performance under the addendum . The supply and
operation of freighter capacity over an extended period, does not justify an order requiring
23
repayment of the whole contract price, without taking into account the actual value
provided. This is also no longer sought.
73. At the same time, AIIPay 2, supra, establishes that a party may not simply retain
profit made under a contract later found unlawful. A debatement of account, audited if
disputed, with repayment of any profit shown, properly balances these two
considerations. In conducting or reviewing that account, the parties should, in my view,
specifically address the period during which aircraft ZS-TGG was grounded, and whether
payment continued during that period without adequate performance. I make no finding
on that question now, for the reasons given in paragraph 68 above. It is, however, relevant
to what, if anything, constitutes unjustified profit.
d. Costs
74. The SIU has succeeded on the central issue i.e. the lawfulness of the addendum.
It has, however, not succeeded on its misrepresentation allegation. The applicant, in my
view is still substantially successful. Costs should accordingly follow the result on the
ordinary party-and-party scale. Given the volume and complexity of the record, I consider
the employment of two counsel to have been reasonable.
75. I do not consider it necessary to invoke the principle in Biowatch Trust v Registrar
Genetic Resources13. The SIU has succeeded.
13 2009 (6) SA 232 (CC)
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76. No costs order is made for or against SAA, which has abided, or the Minister,
against whom no relief was sought.
L. STEPS TO BE TAKEN AGAINST INDIVIDUALS RESPONSIBLE FOR THE
IMPUGNED DECISION
77. This tribunal found that the decision by SAA, acting through its Board, to conclude
the addendum, was unlawful. Nothing is said about the personal conduct of any individual
member of the Board as no individual board member is a party to this application and
none of them has had the opportunity to be heard. No evidence was presented on which
members were present at, or voted in favour of the decision to adopt the addendum. No
finding is therefore made in this judgment against any named individual.
78. The SAA (Second Respondent) is referred to the following legal avenues in terms
whereof personal accountability of any director or official involved in the decision can be
pursued:
78.1 Financial misconduct proceedings in terms of sections 81 to 86 of the Public
Finance Management Act 1of 1999. Given that the SAA's Board constitutes
its "accounting authority" for purposes of the Act, this should be initiated by
the SAA itself, or at the instance of the National Treasury or the Third
Respondent, who is the Minister. Not by this Tribunal.
78.2 An application in terms of section 162 of the Companies Act 71 of 2008 for
an order declaring a director delinquent, or placing a director on probation,
on the grounds set out in section 162(5);
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78.3 Further investigation or civil recovery proceedings the instituted by the
Applicant itself against individual officials under sections 4 and 5 of the SIU
Act. This to be done separately from the relief sought before me.
78.4 Referral to the National Prosecuting Authority or the Directorate for priority
Crime Investigation, should the Applicant consider that the facts disclose
conduct falling within the Prevention of and Combatting of Corrupt Activities
Act 12 of 2004; and
78.5 Internal governance steps by the SAA's shareholder, including
consideration of the continued suitability for office of any director who
remains on the Board and was responsible for the decision. This lies within
the power of the Minister as executive authority responsible for the
appointment of SAA's directors.
79. It bears noting that no relief was sought in these proceedings against any Board
members. I do not therefore make any order in this regard. I am however of the view that
the following needs to be stated.
80. The SAA is a public entity under the PFMA. Section 195(1) of the Constitution
requires public administration to be accountable and to maintain a high standard of
professional ethics. Section 217 of the Constitution requires an organ of state contracting
for goods or services to do so in accordance with a system that is fair, equitable,
transparent, competitive and cost-effective.
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81. Those obligations do not end when the tender is awarded. As the Constitutional
Court observed in MEC for Health, Eastern Cape v Kirland Investments (Pty) Ltd 14 :
"82 ... It is to insist on due process, from which there is no reason to exempt
government. On the contrary, there is a higher duty on the state to respect the law, to fulfil
procedural requirements and to tread respectfully when dealing with rights. Government
is not an indigent or bewildered litigant, adrift on a sea of litigious uncertainty, to whom the
courts must extend a procedure-circumventing lifeline. It is the Constitution's primary
agent. It must do right, and it must do it properly. "
82. Measured against this standard, the SAA Board's conduct in this matter
calls for criticism by this tribunal.
83. This conduct has a cost, and it is not only a cost to the SAA alone. This is a
cost to the public.
84. As stated above, I make no finding against any board member. I do however make
recommendations in paragraphs 85.12 and 85.13 of the order below.
M. ORDER
85. In the circumstances, I make the following order:
85.1 The delay by the Applicant in instituting these proceedings is condoned.
14 2014 (3) SA481 (CC) para 82
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85.2 The late filing of the Applicant's Supplementary Founding Affidavit, and the
late filing of the First Respondent's Supplementary Affidavit, are each
condoned.
85.3 The First Respondent's notice in terms of Rule 30(2)(b), dated 4 June 2025,
is dismissed.
85.4 The decision of the Second Respondent to conclude the addendum to the
Dry Lease Agreement dated on or about 1 July 2019 with the First
Respondent, in respect of aircraft MSN 24278, is reviewed and set aside.
85.5 It is declared that the Second Respondent (SAA) is not liable to the First
Respondent, or to any other person or entity, for the payment of any further
amount pursuant to the addendum referred to in paragraph 77.4 above.
85.6 The First Respondent shall, within 30 (thirty) days of this order, deliver to
the Applicant's attorneys of record a full and debated account, supported by
underlying documents, of all amounts received from the Second
Respondent under the addendum referred to in paragraph 77.4, and of the
costs properly and actually incurred by the First Respondent in rendering
performance under it, including a specific account of the period during which
aircraft ZS-TGG was grounded and of any substitute performance rendered
during that period.
85.7 Should the Applicant dispute the account rendered under paragraph 6, it
may, within 60 (sixty) days of receipt of that account, cause it to be audited
by an auditor of its choice, and the First Respondent shall afford that auditor
reasonable access to its books and records for that purpose.
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85.8 The First Respondent shall, within 14 (fourteen) days of the debatement of
the account under paragraphs 76.6 and 76.7 (whether by agreement or by
audit}, pay to the Applicant any amount shown by that account to constitute
profit or unjustified enrichment retained by the First Respondent under the
addendum, together with interest thereon at the rate of 11 % per annum from
the date of this order to the date of payment.
85.9 Any party may approach this Tribunal on the same papers, duly
supplemented, if necessary, in the event of any dispute as to the
implementation of paragraphs 76.6 to 76.8.
85.10 The First Respondent shall pay the Applicant's costs, including the costs of
two counsel where so employed, on the party-and-party scale C.
85.11 There is no order as to costs as between the Applicant and the Second or
Third Respondents.
85.12 The Registrar shall transmit a copy of this judgment to the Minister (Third
Respondent), as the executive authority responsible for the appointment of
the SAA's (Second Respondent) directors and the Chairperson of the SAA's
Board, for consideration of whether any of the steps identified in paragraph
78 above should be taken against any person who was a member of the
SAA's Board at the time the 2019 addendum was concluded by way of
resolution 2015/B53.
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85.13 The Minister shall, within 90 days of the date of this order, file with the
Registrar of this Tribunal a short report confirming whether the steps in para
85.12 has taken place, and if so, what the outcome was.
Appearances:
For the Applicant:
Instructed by:
For the First Respondent:
Instructed by:
Date of hearing:
Date of judgment:
JUDGE FORTUIN
OF TfiE SPECIAL TRIBUNAL
Adv T JB Bokaba SC
Adv M Rakgoale
State Attorney , Pretoria
Adv R van der Merwe
7 & 23 July 2025
11 September 2026
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