Africa Wide Construction (Pty) Ltd v Eskom Holdings Limited (32549/2018) [2021] ZAGPJHC 96 (21 January 2021)

Africa Wide Construction (Pty) Ltd v Eskom Holdings Limited (32549/2018) [2021] ZAGPJHC 96 (21 January 2021)

The court held that Eskom is entitled to raise invalidity of the contract as a collateral challenge without first instituting review proceedings. The defence based on non-compliance with procurement prescripts is valid in law, as contracts concluded by organs of state in breach of statutory procurement requirements are invalid and unenforceable. The applicant's complaints regarding lack of particularity in Eskom's plea do not render the defence bad in law and are not grounds for exception. The authorities support the position that invalidity may be raised as a defence where justice requires, and the collateral challenge is recognised as an exception to the general rule that administrative...

Citation
[2021] ZAGPJHC 96
Parties
Applicant: Africa Wide Construction (Pty) Ltd; Respondent: Eskom Holdings SOC Limited
Court
South Gauteng High Court, Johannesburg
Jurisdiction
South Africa
Judgment Date
21 January 2021
Case Number
32549/2018
Procedural Posture
Civil Procedure / Exception to Plea
Outcome
Exception dismissed with costs.
Judges
BL Makola
Legal Topics
Public Procurement, Invalid Contract, Collateral Challenge, Exception to Plea, Statutory Compliance
Commercial and Corporate Civil Procedure Public Procurement Invalid Contract Collateral Challenge Exception to Plea Statutory Compliance

Case Brief

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Parties

Africa Wide Construction (Pty) Ltd

Applicant

Eskom Holdings SOC Limited

Respondent

Procedural Posture

Civil Procedure / Exception to Plea

Legal Issues

  1. 1 Whether Eskom's plea discloses a valid defence to the claim for payment under the contract.
  2. 2 Whether Eskom may raise invalidity of the contract as a collateral challenge without instituting review proceedings.
  3. 3 Whether non-compliance with procurement prescripts renders the contract invalid and unenforceable.

Ratio Decidendi

The court held that Eskom is entitled to raise invalidity of the contract as a collateral challenge without first instituting review proceedings. The defence based on non-compliance with procurement prescripts is valid in law, as contracts concluded by organs of state in breach of statutory procurement requirements are invalid and unenforceable. The applicant's complaints regarding lack of particularity in Eskom's plea do not render the defence bad in law and are not grounds for exception. The authorities support the position that invalidity may be raised as a defence where justice requires, and the collateral challenge is recognised as an exception to the general rule that administrative...

Court Disposition

Exception dismissed with costs.

Orders

  • The exception is dismissed with costs.