Special Investigating Unit and Another v Duneco CC and Others (WC/05/22) [2023] ZAST 9 (23 June 2023)

Special Investigating Unit and Another v Duneco CC and Others (WC/05/22) [2023] ZAST 9 (23 June 2023)

The Tribunal found that the procurement process for PPEs by the Matzikama Local Municipality was fundamentally flawed and did not comply with the Municipality's Supply Chain Management policy, MFMA Circular 100, or statutory requirements. The transaction with Duneco CC was an unsolicited bid, not subjected to a competitive process, and was facilitated through collusion between municipal officials and the supplier. The delay in instituting the legality review was not unreasonable given the investigative challenges and pandemic context; even if unreasonable, it was condoned in the interests of justice. The decision to purchase PPEs from Duneco CC was declared irregular and invalid. The...

Citation
[2023] ZAST 9
Parties
Applicant: Special Investigating Unit; Applicant: Matzikama Local Municipality; Respondent: Duneco CC; Respondent: Nicolaas Jacobus Klazen; Respondent: Aldrich Hendricks; Respondent: Isak Edward Jenner; Respondent: Jafta Booysen
Court
Special Tribunal
Jurisdiction
South Africa
Judgment Date
23 June 2023
Case Number
WC/05/22
Procedural Posture
Legality Review / Final Judgment
Outcome
The application succeeded in part: the decision to purchase PPEs from Duneco CC was declared irregular and invalid; the expenditure was declared irregular; the responsible officials were held liable; costs were awarded as specified.
Judges
JP Daffue
Legal Topics
Municipal Procurement, Irregular Expenditure, Doctrine of Legality, Just and Equitable Relief, Section 32 Mfma, Covid19 Emergency Procurement
Administrative Law Land and Property Civil Procedure Municipal Procurement Irregular Expenditure Doctrine of Legality Just and Equitable Relief Section 32 Mfma +1 more

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Parties

Special Investigating Unit

Applicant

Matzikama Local Municipality

Applicant

Duneco CC

Respondent

Nicolaas Jacobus Klazen

Respondent

Aldrich Hendricks

Respondent

Isak Edward Jenner

Respondent

Jafta Booysen

Respondent

Procedural Posture

Legality Review / Final Judgment

Legal Issues

  1. 1 Whether the procurement process for PPEs by the Municipality complied with statutory and policy requirements.
  2. 2 Whether the decision to purchase PPEs from Duneco CC was irregular and invalid.
  3. 3 Whether the delay in instituting the legality review should be condoned.

Ratio Decidendi

The Tribunal found that the procurement process for PPEs by the Matzikama Local Municipality was fundamentally flawed and did not comply with the Municipality's Supply Chain Management policy, MFMA Circular 100, or statutory requirements. The transaction with Duneco CC was an unsolicited bid, not subjected to a competitive process, and was facilitated through collusion between municipal officials and the supplier. The delay in instituting the legality review was not unreasonable given the investigative challenges and pandemic context; even if unreasonable, it was condoned in the interests of justice. The decision to purchase PPEs from Duneco CC was declared irregular and invalid. The...

Court Disposition

The application succeeded in part: the decision to purchase PPEs from Duneco CC was declared irregular and invalid; the expenditure was declared irregular; the responsible officials were held liable; costs were awarded as specified.

Orders

  • It is declared that the decision taken by the third respondent, acting on behalf of the second applicant during April 2020 to purchase Personal Protection Equipment from the first respondent under order number 103718/0 is irregular and invalid.
  • The amount of R400,027.50 paid by the second applicant to the first respondent in respect of the purchase price of Personal Protection Equipment is declared irregular expenditure in terms of section 32(1)(c) of the Local Government: Municipal Finance Management Act 56 of 2003.