ICT-Works Proprietary Limited v City of Cape Town (6582/2020) [2021] ZAWCHC 119 (18 June 2021)

ICT-Works Proprietary Limited v City of Cape Town (6582/2020) [2021] ZAWCHC 119 (18 June 2021)

The court found that the contract concluded between ICT-Works and the City of Cape Town was unlawful and invalid because it contravened section 33 of the Municipal Finance Management Act. The Council approved a contract for a seven-year period, but the executed contract extended beyond fourteen years, which was a...

Source-derived case information.

Citation
[2021] ZAWCHC 119
Parties
Applicant: ICT-Works Proprietary Limited; Respondent: City of Cape Town
Court
Western Cape High Court, Cape Town
Jurisdiction
South Africa
Judgment Date
18 June 2021
Case Number
6582/2020
Procedural Posture
Review Application / Final Judgment on Main and Counter Application
Outcome
The main application by ICT-Works was dismissed. The City’s counter-application succeeded only to the extent that the contract was declared unlawful and invalid, but accrued rights and payments up to 5 July 2019 were preserved. The City was ordered to pay ICT-Works’ costs in both applications.
Judges
Francis, AJ
Legal Topics
Municipal Finance Management Act, Public Procurement, Contractual Validity, Delay Rule, Principle of Legality, Self Review
Administrative Law Civil Procedure Commercial and Corporate Municipal Finance Management Act Public Procurement Contractual Validity Delay Rule Principle of Legality +1 more

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Parties

ICT-Works Proprietary Limited

Applicant

City of Cape Town

Respondent

Procedural Posture

Review Application / Final Judgment on Main and Counter Application

Legal Issues

  1. 1 Whether the contract between ICT-Works and the City of Cape Town was lawfully concluded in compliance with section 33 of the Municipal Finance Management Act.
  2. 2 Whether the City’s delay in bringing a self-review application to set aside its own decision was unreasonable and should be overlooked.
  3. 3 Whether the contract is invalid due to non-compliance with statutory requirements and whether accrued rights should be preserved.

Ratio Decidendi

The court found that the contract concluded between ICT-Works and the City of Cape Town was unlawful and invalid because it contravened section 33 of the Municipal Finance Management Act. The Council approved a contract for a seven-year period, but the executed contract extended beyond fourteen years, which was a material irregularity. The City failed to provide a reasonable explanation for its delay in bringing the self-review application, and its conduct was found to be egregious. However, the court was constitutionally compelled to declare the contract invalid due to clear and undisputed unlawfulness. To achieve justice and equity, the court limited the retrospective effect of the...

Court Disposition

The main application by ICT-Works was dismissed. The City’s counter-application succeeded only to the extent that the contract was declared unlawful and invalid, but accrued rights and payments up to 5 July 2019 were preserved. The City was ordered to pay ICT-Works’ costs in both applications.

Orders

  • The main application is dismissed.
  • The contract concluded between the parties on 24 February 2011 is declared unlawful and invalid.