Special Investigating Unit v National Minister in the Department of Public Works and Another (GP11/2021) [2022] ZAST 19 (26 August 2022)

IN THE SPECIAL TRIBUNAL ESTABLISHED IN TERMS OF SECTION 2 (1) OF THE SPECIAL INVESTIGATIONS UNIT AND

SPECIAL TRIBUNALS ACT 74 OF 1996

(REPUBLIC OF SOUTH AFRICA)

In the matter between:

THE SPECIAL INVESTIGATING UNIT

APPLICANT

and

THE NATIONAL MINISTER IN THE

DEPARTMENT OF PUBLIC WORKS

FIRST RESPONDENT

PLEBIAN PROPERTIES (PTY) LIMITED

REGISTRATION NO. 2002/025433/07

SECOND RESPONDENT

JUDGMENT

Summary: administrative law – review of a decision to award a bid and lease agreements concluded pursuant thereto in terms of s 172(1)(a) of the Constitution for breach of s 2 and 217 of the Constitution – just and equitable relief in terms of s 172(1)(b) of the Constitution.

MODIBA J:

INTRODUCTION

[1] This matter displays some of the difficulties the Special Investigating Unit (SIU) may encounter to recover monies the state lost due to alleged procurement irregularities and maladministration in the context of endemic procurement irregularities, corruption and maladministration that has endured over a long period of time. There are just too many cases to investigate with limited resources that the SIU’s efforts may be futile unless legislative changes are introduced to remove the legal inhibitions it is likely to face.

[2] In this case, the SIU seeks to review and set aside a procurement decision that was made more than seventeen (17) years ago and five lease agreements concluded pursuant thereto. The first lease agreement was concluded on 28 April 2004. Then, the SIU did not have the authority and therefore would not have known of the facts giving rise to the relief it seeks until on 27 August 2014 when the President referred to it by proclamation, the investigation of lease agreements concluded by the National Department of Public Works (Public Works). The proclamation covers lease agreements concluded between 1 January 2003 until the date of the proclamation. Over 2300 lease agreements, including those impugned in this review application fall within the scope of the proclamation. It is therefore not surprising that it took the SIU seven years after the proclamation was issued to bring the present application.

[3] Given that as an institutional agent for Public Works in these proceedings the SIU would face the defences Public Works would itself face, it is not also surprising that preliminary points in respect of the delay in instituting the review, prescription as well as improper reliance on hearsay evidence have been raised.

[4] SIU seeks to review and set aside lease agreements and addendum concluded between Public Works and Plebian Properties attached to the notice of motion as annexures X1 to X5 (the impugned lease agreements) in terms of s 172(1)(a) of the Constitution[1]. It also seeks an order that Plebian Properties repays to it, as just and equitable remedy in terms of s 172(1)(b) of the Constitution, an amount of R28, 917 197.00, alternatively R 22, 504 573.00, interest on the amount ordered and legal costs on a punitive scale. The amount claimed represents alleged excessive rental Plebian Properties collected from Public Works on the impugned lease agreements.

Alternatively, the SIU requests that only the determination of the just and equitable remedy be referred to trial.

[5] Plebian properties is opposing the application on six preliminary points and on the merits.

[6] Public Works has not entered the fray. It has furnished the SIU with three affidavits, two deposed to by the Senior Legal Administration Officer in its Legal Department, Mr Ranveer Singh (Mr Singh) and one by its Key Accounts Manager, Durban Regional Office, Ms Irene Nel (Ms Nel). It suffices at this point only to state that Public Works is expressing no substantial interest in the matter as no relief is sought against it. It expressly abides the Tribunal’s judgment and order. I deal with the contents of Mr Singh and Ms Nel’s affidavits at pertinent points in the judgment.

[7] For convenience, I refer to the parties individually by their names.

[8] The SIU filed its supplementary replying affidavit and heads of argument out of time. When approached, Plebian Properties did not agree to the extension of time for the filing of these documents. It is for this reason that the SIU seeks condonation for filing these documents late.

[9] When considering a request for condonation, I enjoy a wide discretion which I must, in principle, exercise with regard to the trite requirement for

condonation, namely good cause, which includes a full explanation for the delay and whether the SIU has prospects of success in the review application..[2] The exercise of the discretion involves a value-based judgment on the facts of the application. The overarching consideration is the interests of justice.[3]

[10] The SIU cites as reasons for the delay an unexpectedly lengthy supplementary answering affidavit which Plebian

Properties enjoyed inordinate time to prepare relative to the time it had to prepare and file its supplementary replying affidavit. The supplementary answering affidavit repeats issues addressed in the answering affidavit and introduces a plethora of new information and documents. The delay in filing the supplementary replying affidavit is not inordinate. The SIU’s intention to proceed with the review application is not in doubt. The review application is ready for hearing. The SIU has prospects of success. It is in the interests of justice that the lawfulness of the procurement process that led to the conclusion of the impugned lease agreements and of be determined. The condonation application stands to be granted, as the SIU has shown good cause for it.

[11] Since it is seeking an indulgence, the SIU will pay the costs of this application.[4]

[12] I first succinctly outline the undisputed facts. Then I deal with the grounds of review. Next, I summarise the issues to be determined. Then, with reference to the parties’ respective cases as set out in their respective papers as well as the applicable legal principles and authorities, determine the issues. An order premised on the findings made in respect of the issues determined concludes the judgment.

UNDISPUTED FACTS

[13] During 2003, Public Works issued an invitation for tender number SAPS12/2003 for official accommodation for the South African Police Service’s (SAPS) Family Violence and Child Protection Unit. Plebian Properties is one of several companies that bid for the tender. Its bid was successfully adjudicated. In the result, on 28 April 2004, Public Works concluded the first lease agreement with Plebian Properties. It would expire on 30 April 2007. In terms

of the first lease agreement, Plebian Properties would provide 935.78 square meters of office accommodation and 19 undercover parking bays on the leased premises situated at 18 Willowton Road, Pietermaritzburg.

[14] After expiry of the first lease agreement, Public Works renewed it by concluding three further lease agreements with Plebian Properties between May 2007 and 1 May 2014. The parties concluded the impugned lease agreements largely on the same terms, save that, after they concluded the third lease agreement, they concluded an addendum to it. In terms of the addendum, Plebian Properties would lease to public works additional office space and eleven more undercover parking bays. For ease of reference, I assign numbers first to five to each of the lease agreements and addendum according to the sequence in which they were concluded. I interchangeably refer to the fourth lease agreement as the addendum.

[15] The fifth lease agreement expired on 30 April 2017. Although a further lease agreement was not concluded between the parties, SAPS remains in occupation of the leased premises.

GROUNDS OF REVIEW

[16] The SIU alleges that when it bid for the tender, Plebian Properties, through its representative Mr Pragasen Nadesen Pillay (Mr Pillay), made misrepresentations to Public Works that it complied with the bid requirements, thereby inducing the awarding of the bid by fraud. This resulted in the alleged levying of excessive rental by Plebian Properties. The SIU also alleges that Public Works officials maladministered the procurement process that resulted in the conclusion of the impugned lease agreements.

[17] It is common cause that when the first impugned leased agreement expired, Public Works did not follow a competitive bidding process to conclude the four subsequent impugned lease agreements. It followed an approved negotiation process. Apart from alleging that the four subsequent impugned lease agreements were grounded on the alleged irregular and maladministered procurement process that led to the conclusion of the first lease agreement and for that reason, the further lease agreements are also irregular and unlawful, primarily, SIU takes no issue with the negotiated procurement process. It only complains that Public Works still failed to use the opportunity presented by the renewal of each subsequent lease agreement to ensure that appropriate rental rates are charged.

[18] It follows that the SIU relies on the following grounds of review:

18.1 non-compliance with the tender specifications;

18.2 misrepresentations by Mr Pillay and Plebian Properties;

18.2 maladministration of the tender process by Public Works’s officials.

[19] Plebian Properties denies these allegations. It opposes the review application on the merits. It has also raised preliminary points set out below:

[20] The preliminary points Plebian Properties raised are as follows:

20.1 procedurally flawed relief;

20.2 failure to provide a record in terms of Uniform Rule 53;

20.3 delay in instituting the review application;

20.4 the claim has prescribed;

20.5 improper citation of the National Minister of Public Works;

20.6 non-compliance with the principle of subsidiarity;

20.7 improper reliance on hearsay evidence.

[21] Plebian Properties has instituted an application to strike out certain material from the SIU answering affidavit. Although, the parties settled this application amicably, they reserved the right to have the issues raised in this application determined together with the review application. They also reserved the costs of the application.

[22] Plebian Properties preliminary points are interwoven with the allegations the SIU set out in support of its grounds of review. For this reason, the SIU contends that the merits of the review application ought to be determined first. It has provided no authority for this proposition. On the Supreme Court of Appeal’s (SCA) authority in Opposition to Urban Tolling Alliance[5] as applied in Alsa Construction[6], I follow the trite approach to deal with the preliminary points first as contended by Plebian Properties.

ISSUES TO BE DETERMINED

[23] It follows that the following issues stand to be determined:

23.1 Plebian Properties’ application to strike out;

23.2 the preliminary issues enumerated in paragraph 20 above;

23.3 whether the procurement process violated s 217 (1) of the Constitution;

23.4 if so, whether in terms of s 172(1)(a) of the Constitution, the impugned decision to award the tender to Plebian Properties and the impugned lease agreements must be declared invalid as a consequence thereof;

23.5 whether just and equitable relief should be granted in terms of s 172(1)(b) of the Constitution and what that relief should be;

23.6 alternatively, whether the determination of just and equitable remedy should be referred to trial.

23.7 in the event that the application succeeds, whether Plebian Properties should be ordered to pay the costs of the application on the punitive scale.

[24] In accordance with the seminal Plascon Evans Rule, I determine the application on the basis of common cause facts, the allegations averred by the SIU which Plebian Properties either admits or barely denies and as such does not raise to a genuine dispute of fact, as well as the allegations Plebian Properties avers.[7] To the extent that Plebian Properties’ averments are far-fetched and untenable, I place no reliance on them.

APPLICATION TO STRIKE OUT

[25] In its application to strike out, Plebian Properties complains about scandalous, vexatious, irrelevant, argumentative and repetitive allegations as well as copious reference to authorities in the replying affidavit, making it unnecessarily prolix and mulcting it with unnecessary costs. It also complains about new material the SIU raised in reply.

[26] Plebian Properties has sparingly identified the material it seeks struck out. The burden Plebian Properties places on the Tribunal to identify this material is undue. It ought to have specifically identified the material. To the extent it fails to do so, its complaint is vague and incapable of determination.

[27] The replying affidavit is indeed repetitive, argumentative and makes copious reference to authorities. Although, as stated, Plebian Properties did not single out the paragraphs subject to this complaint, this material is discernible as it unduly burdened the Tribunal as it did Plebian Properties, rendering the replying affidavit unnecessarily prolix. The replying affidavit is typed in single spacing and together with annexures comprises over 300 pages. Plebian Properties’ heads of argument suffer the same defect. It is pragmatic to address the prejudice Plebian Properties has suffered and the undue burden the SIU saddled the Tribunal with by way of costs, as I do in paragraphs 33 and 134 below.

[28] The complaints Plebian Properties set out in paragraphs 9.1 and 9.2 of the affidavit filed in support of the application to strike out go to the merits of the review application. It is for that reason that I deal with them in paragraphs 92 to 99 of this judgment.

[29] To the extent that paragraph 4.1(b) of the replying affidavit and DGG53 supports the SIU’s contention that it did not unreasonably delay to bring the review application or that the delay ought to be condoned in the interests of justice and demonstrates that Mr Grubb straddled his time between investigating the impugned lease agreements and other lease agreements that were referred to the SIU for investigation in terms of Proclamation R.59, this material is not irrelevant. The charge sheet is also not irrelevant to the review application. The SIU filed it in this application to demonstrate that it has appropriately acted on the fraud allegations against Mr Pillay and Plebian Properties. Thus, there is no merit to the complaints in paragraphs 9.7 and 9.11 of the affidavit filed in support of the application to strike out.

[30] The leave Plebian Properties has been granted, which it sought in the alternative in the application to strike out, to file a supplementary answering affidavit, addresses the prejudice it would have suffered by virtue of the SIU raising new issues in reply.

[31] In the premises, no material falls to be struck out from the SIU’s replying affidavit.

[32] The parties having settled the interlocutory application by agreement, it is pragmatic to order the costs of this application to be costs in the cause, particularly because the parties agreed to the filing of supplementary affidavits, which allowed them to address the issues that led to the interlocutory application. The fact that they have reserved the right to have the interlocutory issues dealt with in the main application does not detract from a pragmatic approach to these costs. I deal with Plebian Properties request that the SIU be mulcted with the costs occasioned by repetitive material and prolix

documents when I consider the costs of the review application.

PRELIMINARY POINTS

Procedurally flawed relief

[33] The issue to be determined at this point is whether, based on the allegations it makes against Plebian Properties, Mr Pillay and Public Works, the SIU may seek a declaration of invalidity to set aside the impugned lease agreements in terms of s 172(1) (a) of the Constitution.

[34] Plebian Properties contends that it is procedurally and substantively incorrect to seek a declaration of

invalidity in terms of s 172(1) (a) of the Constitution to set aside the impugned lease agreements. It contends that the SIU ought to have proceeded by way of a legality review which is apposite when seeking to declare conduct inconsistent with the Constitution invalid as provided for in s 2 of the Constitution or where breach of s 217 of the Constitution is alleged. It cites as authority for this proposition, Gijima[8] and Engineered Systems Solutions.[9]

[35] The SIU is adamant that it followed the appropriate procedure.

[36] I consider the appropriateness of the procedure followed with reference to the regulatory framework the SIU relies on. I find no merit in Plebian Properties’ complaint. For the reasons set out below, I determine this preliminary point in the SIU’s in favour.

[37] The Republic of South Africa is one sovereign State founded on the values of supremacy of the Constitution and the rule of law.[10] The Constitution is the Supreme law of the Republic. Law or conduct that is inconsistent with it is invalid. The obligations imposed by it must be fulfilled and performed diligently and without delay.[11]

[38] The Constitution requires that when an organ of State (such as Public Works) procures goods and services, it must do so in accordance with a system which is fair, equitable, transparent, competitive and cost effective.[12] The Public Finance Management Act (PMFA),[13] and the Preferential Procurement Policy Framework Act (PPPFA)[14] make provision for such a procurement system. The PFMA and the PPPFA also make provision for the proclamation of regulations that regulate public procurement. The regulation so proclaimed in terms of s78 of the PFMA, which the SIU relies on is Regulation 16A 9,1(e) and (f) of the Treasury Regulations.[15] It provides that:

“The accounting officer or accounting authority must:

“(e) Reject a proposal for the award of the contract if the recommended bidder has committed a corrupt or fraudulent act in competing for a particular contract or;

(f) cancel a contract awarded to a supplier of goods or services if the supplier committed any corrupt or fraudulent act during the bidding process or the execution of that contract.”

[39] It follows that when administering the procurement process, Public Works officials are obliged to uphold the values that underpin public procurement as set out in section 217(1) by complying with the applicable statutory and regulatory provisions. The accounting officer has a constitutional obligation to comply with Regulation 16A 9,1(e) and (f).

[40] The Special Investigating Unit and Special Tribunals Act (SIU Act),[16] authorises the President of the Republic to publish a proclamation establishing an investigation unit when he deems it necessary to do so on accounts of the grounds in s 2(2) of the SIU Act, enumerated in paragraph 42 below.[17] The President duly established the SIU in terms of Proclamation R.118 of 2001[18].

[41] The SIU Act authorises the President to refer matters to the SIU for investigation on account of amongst other listed grounds, serious maladministration in connection with the affairs of the State, improper or unlawful conduct by employees of any State institution, unlawful appropriation or expenditure of public money or property, unlawful, irregular or unapproved acquisitive act, transaction, measures or practices having a bearing on State property and intentional or negligent loss of public money or damage to public property.[19]

[42] The President referred to the SIU for investigation matters falling within the terms of reference set out in Proclamation R.59 published on 27 August 2014.[20] The impugned leases agreements fall within the scope of this investigation.

[43] The SIU contends that non-compliance with the bid requirements by Plebian Properties renders the impugned procurement process irregular and unlawful. It also alleges that Public Works officials maladministered the procurement process as foreshadowed in s 2(2) of the SIU Act. The SIU has the power within the framework of its terms of reference as set out in Proclamation R.59 read with s 2(1)(a)(i), 2(2), 4(1)(c) and 5(5) of the SIU Act, to investigate the impugned lease agreements, collect evidence regarding acts and/ or omissions which are relevant to its investigation and institute civil proceedings in a Special Tribunal or any Court of law for any relief to which Public Works is entitled.[21] It is accordingly authorised and has the requisite locus standi to bring this application in its name to recover losses Public Works suffered as a result of the alleged misrepresentations and maladministration.

[44] When deciding a constitutional matter within its power, a Court must declare that any law or conduct that is inconsistent with the constitution is invalid to the extent of its inconsistency.[22]

[45] The SIU alleges that the procurement process violated s 217(1) of the Constitution as a result of the alleged misrepresentations and maladministration. Further, the Public Works accounting officer would have rejected Plebian Properties’ bid had it been aware that Plebian Properties and/or Mr Pillay made misrepresentations when competing for the first lease agreement as alleged. As a result of the alleged misrepresentations, Public Works is entitled to cancellation of the Plebian Properties’ bid.

[46] When deciding a Constitutional matter within its power, a Court may make any order that is just and equitable including an order limiting the retrospective effect of the declaration of invalidity.[23] The Court may also make any order that is just and equitable including an order suspending the declaration of invalidity for any

period on any conditions to allow the competent authority to correct the defect.[24]

[47] On the Supreme Court of Appeal’s authority in Nadasen[25] and this Tribunal’s authority in Caledon River,[26] the Tribunal is a Court of law with the status of a High Court as envisaged in s 166(e) of the Constitution, with constitutional

jurisdiction. It therefore has jurisdiction to grant the relief the SIU seeks.

[48] Contrary to the contention by Plebian Properties, the absence of collusion between Plebian Properties and Public Works’s officials does not render the relief the SIU seeks improper. So is the fact that SAPS has and continues to enjoy beneficial use of the leased premises on what Plebian Properties contends are reasonable market related rentals agreed to between it and Public Works. These issues are irrelevant to the issue under consideration as they go to the merits of the relief the SIU seeks.

[49] The relief the SIU seeks is not only appropriate and procedurally sound, it is consistent with the authority in Gijima and Engineered Systems Solutions.

[50] In Gijima,[27] the Constitutional Court held that:

“[40] What we glean from this is that the exercise of public power which is at variance with the principle of legality is inconsistent with the Constitution itself. In short, it is invalid. That is a consequence of what s 2 of the Constitution stipulates. Relating all this to the matter before us, the award of the DoD agreement was an exercise of public power. The principle of legality may thus be a vehicle for its review. The question is: did the award conform to legal prescripts? If it did, that is the end of the matter. If it did not, it may be reviewed and possibly set aside under legality review.”

[51] The SCA followed the above dictum in Engineered Systems Solutions.[28]

[52] Therefore, this ground of review stands to be dismissed.

Non-Compliance with Uniform Rule 53

[53] Tribunal Rules regulate the conduct of proceedings in the Tribunal. Uniform Rules are only revoked at the Tribunal’s discretion when a situation the Tribunal Rules do not provide for arises.[29] Plebian Properties has not made out a case for the invocation of Uniform 53 in the present circumstances.

[54] This review application is akin to a self-review.[30] The SIU brings it in its own name.[31] It seeks relief to which Public Works is entitled. Therefore, it is an institutional agent for Public Works, stepping into Public Works’s shoes as it were. The Uniform Rule 53 record is for the SIU’s benefit as an applicant. It is within the SIU’s right to avoid being shackled by the Uniform Rule 53 procedure and to use a less cumbersome procedure provided for in Tribunal Rule 10, which is similar to Uniform Rule 6.[32] It opted to bring the review application on the basis of its case as set out in its founding affidavit, supported by the documents it annexed thereto.

[55] Plebian Properties has not established that the Rule 10 procedure is prejudicial to it. Although the SIU furnished Plebian Properties with a record of the decision after it filed its answering affidavit, and that subsequently, Plebian Properties filed a supplementary answering affidavit, it did not cite as reasons for filing the later affidavit, material it learnt of from the record of the impugned lease agreements and the procurement process that led to the conclusion of these agreements. It cited new material as well as irrelevant and vexatious statements set out in the SIU’s replying affidavit. It has not established how the late filing of the record has caused it prejudice. In any event, it had an opportunity to file a supplementary affidavit.

[56] Therefore, this preliminary point stands to be dismissed.

Delay in instituting the review application

[57] Plebian Properties contends that the SIU delayed to bring the review application. In an amended notice of motion dated 23 September 2021, the SIU seeks a declaration that the delay in bringing the present application is reasonable and should therefore be condoned. Alternatively, it contends that the delay should be condoned in the interests of justice.

[58] The test when determining whether there was a delay in bringing a legality-based review application is whether the delay was unreasonable or undue. This is a factual enquiry upon which a value judgment is made, having regard to the circumstances of the matter. Secondly, if the delay is found to be unreasonable, the sequential question is whether in the interests of justice, the Tribunal's discretion should nevertheless be exercised to overlook the delay.[33]

[59] The SIU is not reviewing its own decision. Contrary to the facts in Gijima[34], the SIU did not award the tender to Plebian Properties and wait many years to institute the present application. As already stated, the SIU was only authorised to investigate the impugned lease agreements on 27 August 2014. It is bringing the application in its right and name as authorised. The fact that Public Works never sought to cancel the impugned lease agreements and to recover the money the SIU claims in this application does not divest the SIU of its rights in terms of s 4(1)(c)(i) and 5(5) of the SIU Act. To find otherwise would imply that when an organ of state for any reason, does not institute civil proceedings to recover losses that state has suffered on account of any of the grounds set out in s 2(2) of the SIU Act, the SIU may not do so. Such an interpretation would not only undermine the purpose of the SIU Act as stated in its preamble, it would result in organs of state not fulfilling their constitutional obligations when procuring goods and services for the state with impunity.

[60] Mr Derick Graham Grubb (Mr Grubb), the SIU investigator assigned to investigate the impugned lease agreements has provided a detailed account of his investigative work. The impugned lease agreements are part of 2162 lease agreements the SIU is investigating, entered into by Public Works. This staggering number of investigations evidences endemic allegations of maladministration arising from irregular procurement processes in respect of properties leased by the State. Mr Grubb’s investigation of the matter has been extensive as not only evidenced by his explanation which included elaborate details of his investigative work set out in over 50 pages of a single-spaced document, but also by the documents filed in support of the review application which he had to solicit and study as well as the sites he had to visit and on their basis, interview many witnesses and obtain affidavits from some of them.

[61] However, Mr Grubb only explains his investigation activities from 2016, leaving a period of approximately 16 months since Proclamation R.59 was published unexplained.

[62] In the present application, the alleged loss to the state is a staggering R28 million. Given that the SAPS continues to occupy the leased premises, the consequences of the alleged irregularities and maladministration continue unabated. On the authority in Asla Construction,[35] the 16 months period that Mr Grubb has not accounted for should not prevent an enquiry into the alleged unlawful and unconstitutional

conduct that preceded the conclusion of the first and subsequent lease agreements. Otherwise, Plebian Properties would perpetually

benefit from an alleged unlawful, irregular and mal-administered procurement process. Having benefited from it to date, and given that primarily, the SIU claims a reversal of the effects of the alleged unlawful, irregular and mal-administered procurement process, Plebian Properties has not established prejudice as a result of the delay.

[63] Under these circumstances, the delay in bringing this application stands to be condoned in the interests of justice.

Prescription

[64] Plebian Properties contend that the SIU’s monetary claim, whether based on damages or alleged procurement irregularities as a result of misrepresentation and fraud by Plebian Properties or maladministration by Public Works officials, had become prescribed when the SIU instituted the review on 29 April 2021. The claim constitutes a debt as envisaged in Chapter 3 of the Prescription Act, 68 of 1969. In terms of Section 11 (d) read with Section 12 (3), Public Works had three years from the date they had knowledge of the identity of Plebian Properties and of the facts from which the debt arose within which to institute the claim.

[65] Plebian Properties contend that the period from which prescription started to run ought to be reckoned on the following alternative basis:

65.1 Public Works’ claim against Plebian Properties should have prescribed three years after each of the impugned lease agreements were entered into. On the authority in Kim Diamonds[36], it is entitled to raise this defence, which it enjoys vis a vis Public Works in these proceedings;

65.2 the claim prescribed on 26 August 2017, three years after the President issued Proclamation R.59, authorising the SIU to investigate the impugned lease agreements;

65.3 on 11 October 2016, when Mr Grubb obtained the affidavits of Mr Shaw and Mr Jadoo and Mr Govender’s report, it had knowledge of Plebian Properties identity and the facts on which its claim for excessive rental is based or could have acquired such knowledge by exercising reasonable care. The claim prescribed by the effluxion of time in 2019.

[66] The SIU denies that its claim has become prescribed. It contends that:

66.1 the Prescription Act does not apply under the present circumstances. Its provisions cannot be utilised to overcome fraudulent conduct regarding misrepresentations and maladministration and its consequences;

66.2 the Constitution is the supreme law of the Republic. Law or conduct inconsistent with it is invalid. All obligations imposed by it must be fulfilled. The procurement process violates section 217 (1) of the Constitution. Hence, the procurement process must be declared invalid as prescribed by s 172 (1) (a) of the Constitution and the lease agreements must be set aside. The Tribunal must then determine the most just and equitable remedy as prescribed by s 172 (1) (b) of the Constitution. It is just and equitable that Plebian Properties is ordered to repay the difference between the rentals charged and that which ought to have been charged. To order otherwise would:

66.2.1 permit the Prescription Act to trump section 2 and 172(1)(a) of the Constitution, thus allowing maladministration to go unchecked and unpunished and permitting

Plebian Properties to retain the fruits of its fraudulent misrepresentation;

66.2.2 violate the SIU’s right to have the dispute regarding the just and equitable remedy being adjudicated upon in a court of law as prescribed by section 34 of the Constitution, which is impermissible;

66.2.3 be inconsistent with s 5(5) of the SIU Act, which provides that notwithstanding anything to the contrary in any law, and for the performance of any of its functions under the SIU Act, the SIU may institute civil proceedings in any Court or Tribunal. It is necessary for the SIU to carry out its functions to recover losses in the sum of R 28, 917 187.00, as envisaged by section 4 (1) (c) (i) of the SIU Act and this cannot be prevented by the Prescription Act.

[68] It is important to state upfront that, the SIU is not challenging the constitutionality of the Prescription Act. Finding that, the SIU’s claim has prescribed does not violate its right in terms of section 34 of the Constitution. It is enjoying

its s 34 right in these proceedings where the alleged procurement irregularities and maladministration are being determined.

[69] I draw guidance from the following legal principles: on the face of it, before a debt could be deemed to be due and prescription could start running, s 12(3) requires the creditor to have knowledge of the facts from which the debt arose. Failure to appreciate the consequences that flow from such knowledge does not interrupt prescription.[38] S12(3) does not require the creditor to have any knowledge of any right to sue the debtor nor does it require him or her to have knowledge of legal conclusions that might be drawn from the facts from which the debt arose.[39] Knowledge that the debtor’s conduct is wrongful and actionable is knowledge of a legal conclusion, not one of a fact. Therefore, it falls outside the scope of s 12(3).[40]

[70] Plebian Properties’ contention that the SIU claim became prescribed three years after each of the impugned leases were concluded, alternatively, after the President issued Proclamation R.59 is unsustainable. In its bid, not only did Plebian Properties not disclose the zoning of the leased premises, it also impliedly represented that the premises could be used for the purpose for which they are leased, namely as office accommodation for the SAPS. Public Works only became aware in October 2016 after receiving Mr Jadoo’s report and after Mr Grubb had interviewed Mr Shaw that the leased premises are zoned general industrial (GI) and, therefore, could not be used as offices contrary to its condition of title. The municipality had not issued special consent for such use. These are the minimum facts it required to seek just and equitable relief for excessive rental.[41] Prescription started running against Public Works, and invariably, against the SIU on this date. The running of prescription was not postponed until the SIU became aware of the full extent of its legal rights, or until it had evidence that would enable it to prove its claim confidently. Therefore, prescription was not delayed until the SIU obtained Ms Venooy’s report in 2020.

[71] S 11(d) allows an Act of parliament to provide for a different prescription period. S 5(5) of the SIU Act, does not exclude the Prescription Act from proceedings instituted by the SIU in term of the Act. S5(5) makes provision for the SIU’s locust standi to perform its function, including instituting civil proceedings. If the legislature intended to provide for a longer prescription period in matters falling within the scope of the SIU Act as envisaged in section 11(d) of the Prescription Act, it would have expressly included such a provision.

[72] The facts in Miracle Mile Investments are distinguishable. Therefore, the dictum in that judgment does not benefit the SIU.

[73] For the above reasons, I find that the SIU’s claim for just and equitable relief in the amount it seeks Plebian Properties ordered to pay became prescribed three years after it received Mr Jadoo’s report. This finding would ordinarily be dispositive of the SIU’s claim. However, that the SAPS continues to occupy the leased premises pursuant to the impugned procurement process, the finding in respect of prescription is not dispositive of the legality review. It is only dispositive of the prayer for just and equitable remedy (the SIU’s monetary claim) as prayed for in prayer 1.4 of the amended notice of motion.

[74] The peculiar challenges the SIU will face in its attempts to recover money lost as a result of the grounds set out in s 2(2) of the SIU Act during this era of endemic procurement irregularities, corruption and administration are patently manifest. Due to limited resources, it may not be able to institute these claims within the time provided for in section 12(3) of the Prescription Act. Given how endemic corruption has become and the drain it puts on the economy, the provision of government services and on livelihoods, the legislature ought to consider extending the prescription period in these matters.

Improper citation of the National Minister of Public Works

[75] Plebian Properties complain that the SIU failed to cite Public Works officials who made decisions in respect of the impugned procurement process and in particular, Ms Nel whose involvement in the procurement process Mr Grubb was aware of.

[76] Mr Grubb subsequently obtained an affidavit from Ms Nel and filed it as an annexure to the SIU’s supplementary replying affidavit. In her affidavit, Ms Nel does not deal with the impugned procurement process. She does not even mention her role in the impugned procurements process. She only makes reference to site visits she and other officials conducted after the tender was awarded and her role in administering finances in terms of the impugned lease agreements. The fact that she does not remember visiting the leased premises prior to the tender being awarded takes Plebian Properties’s basis for opposition no further. The SIU did not need to cite Ms Nel or any other Public Works official who was involved in administering the tender.

[77] On the authority in M G Holmes[42] and SAFCOR Forwarding[43], the Minister is properly cited. The Minister is the official with political responsibility over Public Works. He opted not to oppose the application, but to abide the Tribunal’s decision. It is common cause that the impugned lease agreements were concluded between Public Works and Plebian Properties. Public Works officials acted within the scope and duty of their employment with Public Works when they administered and adjudicated upon the impugned procurement process.[44] In these proceedings, the role of these officials is only indispensable as possible witnesses.

[78] Therefore, this preliminary point stands to be dismissed.

Non-compliance with the principle of subsidiarity

[79] Plebian Properties has misconstrued the basis of the SIU’s case. It is not one for contractual damages. The principle of subsidiarity does not preclude the SIU from seeking a legality review of the impugned leases agreements and a consequential constitutional remedy. As already stated, the SIU seeks a legality review based on breach of s 2 and s 217 of the Constitution. It is not seeking contractual damages. It seeks to recover the loss the state allegedly suffered as a result of breach of these constitutional provisions on the basis of constitutional relief provided for in s 172(1)(a) and (b) of the Constitution.

[80] As already mentioned, notwithstanding a declaration that the SIU’s monetary claim has prescribed, a live dispute regarding the legality of the impugned procurement process remains. If found to be unconstitutional, the Tribunal will have to device a constitutional remedy to correct the alleged unlawfulness that persists from the procurement process. When rafting the constitutional remedy, the Tribunal enjoys a wide discretion to design a remedy for even complex, exceptional or apparently irresolvable situations.[45]

[81] Therefore, this preliminary point stands to be dismissed.

Hearsay evidence

[82] Plebian Properties complain that the SIU’s founding affidavit, deposed to by Mr Grubb is based on inadmissible hearsay evidence and ought to be struck off. It also complains that Mr Grubb has not sourced affidavits from Public Works officials who were involved in the impugned procurement process as evident from documents filed in support of the application as well as the record of the impugned decisions.

[83] In the founding affidavit, Mr Grubb does not profess to have personal knowledge of the facts set out in therein. He cites “intimate knowledge of all the facts peculiar to the application”. Mr Grubb deposed to the founding affidavit on the basis of his investigations and findings, supported by the relevant documentary evidence. During his investigations, he identified irregularities and further investigated them. He also elicited further investigation by Mr Jadoo and Mr Govender.

[84] Mr Jadoo investigated Mr Grubb’s findings in relation to the use of the leased premises contrary to their zoning. On the basis of the title deed, plans for the leased premises and the applicable regulations and policies, he objectively verified and confirmed Mr Grubbs findings. Mr Govender measured the leased premises in accordance with the applicable building regulations and found that the leased premises only have sufficient space to accommodate 6 undercover parking bays. The evidence of these witnesses depends on their credibility and therefore it is admissible. Mr Grubb places reliance on the evidence of Mr Govender and Mr Jadoo as set out in their respective affidavits. Therefore, Mr Grubb’s evidence is admissible to the extent it is corroborated by the evidence of these factual witnesses.

[85] On the basis of the evidence of these factual witnesses, Mr Grubb obtained expert evidence dealt with later in this judgment. Plebian Properties’s complaint that Ms Venooy’s expert report was not filed under oath is stale. The SIU remedied this by filing her affidavit as an annexure to its supplementary replying affidavit filed on 11 February 2022. Ms Venooy’s expert evidence meets the requirements for the admissibility of expert evidence as set out Linksfield[46] as it logically flows from the undisputed factual evidence adduced by the SIU.

[86] For reasons I set out in 104 to 119 below, Mr Singh’s evidence constitutes inadmissible hearsay.

[87] Therefore, this preliminary point is partially upheld. To the extent he relies on Mr Singh’s evidence, Mr Grubb’s evidence is inadmissible. It is therefore disregarded.

THE MERITS

[88] In its founding affidavit deposed to by Mr Grubb, the SIU makes the following allegations against Plebian Properties:

“During on or about 2003, an invitation for tenders (‘the invitation”) was sent out by the Department for tender number: SAPS12/2003 for office accommodation to be utilised by the SAPS which required office space of 935.78 square meters and 19 undercover parking bays. The closing date of this tender was the 24th November 2003. A copy of invitation is annexure “DGG3.1” hereto. I highlight that pursuant to the invitation it was an implicit requirement that secure parking facilities for 19 light vehicles was to be contained on the leased premises. Hence if any prospective tenderer could not meet these requirements its bid would be declare non-complaint and would be rejected as such by the First Respondent in the adjudication process. In addition, and pursuant to the invitation any prospective tenderer was to ensure that the proposed leased premises meet the requirements of the National Building Regulations and the applicable Municipal by Laws and should the prospective leased premises not meet such requirements, then it would not meet the requirements of the tender and this would result in the tender being excluded as being non-responsive by the First Respondent in the adjudication process. (Emphasis added)

[89] Therefore, the SIU’s complaint is that the Plebian Properties’ bid was unresponsive and ought to have been rejected because:

89.1 the leased premises could not accommodate 19 undercover parking bays on the leased premises;

89.2 Plebian Properties leased premises to be used as office accommodation for the SAPS contrary to the zoning of the property;

89.3 the leased premises did not comply with the National Building Regulations and applicable municipal by-laws.

[90] Even more seriously, the SIU contends that Mr Pillay who signed the bid document and Plebian Properties as the bidder, misrepresented that Plebian Properties complied with these bid requirements, thereby inducing the awarding of the tender by fraud. If Public Works was aware of the misrepresentations when it awarded the tender, it would have rejected Plebian Properties’ bid from the adjudication process in accordance with Treasury Regulation 16A, which provides as follows:

“Avoiding abuse of supply chain management system 16A9.1

The accounting officer or accounting authority must –

(e) reject a proposal for the award of a contract if the recommended bidder has committed a corrupt or fraudulent act in competing for the particular contract; or

(f) cancel a contract awarded to a supplier of goods or services –

(i) if the supplier committed any corrupt or fraudulent act during the bidding process or the execution of that contract; or

(ii) if any official or other role player committed any corrupt or fraudulent act during the bidding process or the execution of that contract that benefited that supplier.”

[90] I deal with Plebian Properties’ version to these allegations at pertinent points below.

[91] I first consider whether the SIU has established a factual basis for these allegations. Then, I consider the conclusion the SIU draws from these allegations as set out in paragraph 89 above.

Parking bays

[92] The SIU alleges that in its bid, Plebian Properties misrepresented that it would provide nineteen undercover parking bays as required by Public Works on behalf of the SAPS. When the addendum was concluded, Plebian Properties further misrepresented that it would provide thirty undercover parking bays. Yet, the leased premises did not have sufficient space to accommodate the required number of parking bays.

[93] The dispute between the Plebian Properties and Public Work’s in respect of the alleged non-compliance with this bid requirement endured over a decade irresolutely. Given how the issue was ultimately resolved, detailing the trajectory of this dispute would serve no purpose.

[94] However, it is important to mention that initially, Plebian Properties disputed that it was required to provide undercover parking bays as the lease agreement does not specify the nature of parking bays. Later Mr Pillay accepted on the basis of the specified requirement in the tender invitation, that the lease agreement is subject to the tender invitation, therefore Plebian Properties was required to provide undercover parking bays. The SIU’s version that the leased premises lacked sufficient space to accommodate nineteen and later thirty undercover parking bays was confirmed by Mr Govender who, at the instance of the SIU inspected the leased premises and measured the parking bays’ space in 2016. Mr Govender’s evidence on this issue is therefore primary and not hearsay evidence. He found that the leased premises could only accommodate six undercover parking bays.

[95] As a result of Mr Govender’s findings, the dispute between the parties tricked down to the rates for open parking bays and the quantum of the alleged excessive rental for parking bays.

[96] The parties have since signed a settlement agreement where Plebian Properties accepts that it failed to provide nineteen and later thirty undercover parking bays as required and that as a result, it overcharged Public Works R 973, 574.40 in rental for parking bays. As at 27 August 2019, in terms of the settlement agreement, Plebian Properties had repaid R474, 029.25 to Public Works. By agreement between Public Works and Plebian Properties, from 1 August 2019 until the debt has been fully extinguished, Plebian Properties is defraying this liability through a monthly deduction of an amount R 40, 000.00 from the rental due on the leased premises. It says that it has fully discharged this liability.

[97] Notwithstanding, it appears that Plebian Properties remains disgruntled with the quantum. As a result, it has presented a contradictory version in these proceedings. In its answering affidavit, Plebian Properties took issue with the settlement agreement, claiming that Mr Pillay signed the settlement agreement on a without prejudice basis and under duress. Yet, at paragraph 9.1 of the affidavit filed in support of the application to strike out, Plebian Properties complains that that Mr Grubb dealt unnecessarily repeatedly with the issue of overcharging in respect of parking bays not withstanding that it is settled between the parties. It styled Plebian Properties’ failure to provide the required number of undercover parking bays ‘a non-issue between the parties’, thus implying that it takes no issue with the settlement including the agreed quantum, which it says it has paid. This probably explains why it honoured the settlement agreement and has not counterclaimed to have it set aside.

[98] It has not asked the Tribunal to resolve these disputes. It only raised them in an attempt to dispute the alleged misrepresentation in respect of the undercover parking bays, which on its version, has turned out to be common cause.

[99] Therefore, I find that in its bid proposal, Plebian Properties misrepresented that it could accommodate nineteen and later thirty undercover parking bays when the leased premises could only accommodate six undercover parking bays.

Use of the leased premises contrary to zoning restrictions

[100] Plebian Properties does not dispute that when it submitted its bid, the leased premises were zoned GI (General Industrial) and that it had not obtained special consent for use of the leased premises as office accommodation. On Plebian Propertius’s version, in 2019, it submitted plans to the municipal authority for the rezoning of the leased premises. It follows that when it was awarded the tender and the first lease agreement was concluded, the leased premises were zoned GI.

[101] Plebian Properties’ Mr Pillay claim that until 2016 when the municipal authority levied a contravention notice on Plebian Properties, he was ignorant of the zoning for the leased premises lacks merit. Plebian Properties’ bid was compiled by its agent Mr Harry Shaw of Shaw and Rall, as Plebian Properties did not have knowledge and expertise on such a bid. Hence, it retained Shaw and Rall to compile the bid on its behalf. Mr Pillay signed the draft lease agreement which was part of the tender invitation. He also signed the tender invitation, thereby confirming his knowledge of its contents. He failed, as required in terms of the draft lease agreement, prior to the conclusion of this lease agreement, to inform Public Works of restrictions to the leased properties’ title deed, thereby misrepresenting to Public Works that the leased premises comply with the zoning requirements. The leased premises are located in an industrial area. The title deed in respect of the leased premises restricts the use of the leased premises to GI. As clearly stated in annexure P12 to Plebian Properties’ answering affidavit (the municipal approval of Plebian Properties building plans dated 23 August 2004), the approval of building plans by the municipal authority does not absolve Plebian Properties from using the premises in accordance the zoning restriction as reflected in the leased premises’ title deed. According to Mr Jadoo, the municipal authority would not have approved the building plan had Plebian Properties clearly indicated that the building would be used as offices for the SAPS.

Compliance with building and safety regulations

[102] It is common cause that, when Plebian Properties submitted its bid, the leased premises, accommodation offered, including all equipment and installations did not comply with the National Building Regulations and the requirements of the Occupational Health and Safety Act of 1993. Compliance had to be evidenced by certificates to this effect, issued by the appropriate authorities. This is also confirmed by Mr Jadoo who studied Plebian Properties’ file with the Municipal Authority and found that it only issued an Occupancy Certificate to Plebian Properties for a segment of the leased premises. In defence to the allegation that it has failed to comply with this requirement, Plebian Properties put up this Occupancy Certificate. It was issued for alteration of office archives and additions to the premises. It is common cause that the certificate is not for the entire premises. Therefore, on Plebian Properties version, to date, it does not have an Occupancy Certificate for the entire leased premises.

[103] Therefore, Plebian Properties gave SAPS occupation of the leased premises notwithstanding that it did not have an occupancy certificate for the entire leased premises.

Whether Plebian Properties induced the awarding of the bid by fraud

[104] Several difficulties arise in respect of the conclusion the SIU seeks to draw from the alleged non-compliance with the bid requirements. As contended by Plebian Properties, neither Mr Grubb nor Mr Singh have personal knowledge of the assertion that Plebian Properties induced the awarding of the bid by fraud. They were both not involved in the bid adjudication process.

[105] It appears that Mr Grubb derived the conclusion he draws in his answering affidavit - that Plebian Properties induced the awarding of the bid by fraud and that Public Works would have rejected Plebian Properties bid if it was aware of the misrepresentation - from information he obtained from Mr Singh. When Plebian Properties complained in its answering affidavit that this evidence constitutes inadmissible hearsay evidence, Mr Grubb sourced an affidavit from Mr Singh, explaining the procurement process. In this affidavit, Mr Singh makes this conclusion. Apart from the fact that Mr Singh’s evidence constitutes hearsay evidence, it presents difficulties that render it inadmissible even in the interests of justice as sought by the SIU. His conclusion constitutes opinion evidence which is wholly inadmissible.

[106] Mr Grubb obtained no evidence from the members of the Tender Committees who evaluated the bids received in respect of the leased premises. In response to this complaint by Plebian Properties in its replying affidavit, the SIU called for and filed an affidavit by Ms Irene Nel. It is alleged that she compiled the document in which the approval of Plebian Properties’ bid was recommended. However, in her affidavit, Ms Nel is silent about her role in the procurement process. She made no attempt to explain the process or confirm the allegations and conclusion in Mr Singh’s affidavit.

[107] Mr Singh does not specify the basis on which he contends that the Tender Committee would have rejected Plebian Properties’ bid had it disclosed that it does not meet the above requirements.

[108] Ms Nel’s recommendation does not reflect that the Tender Committee considered the requirements Mr Singh contends would have disqualified the Plebian Properties’ bid, not only as against Plebian Properties, but as against all the other bidders. The Tender Committee recommended Plebian Properties because it was the only bidder who offered the required square meters of leased premises. Further, the Tender Committee was swayed by the fact that the leased premises are located in a secluded area and would provide privacy to the cohort of users of SAPS services who would be served at the premises. Notably, the later consideration was not a specified bid requirement.

[109] The significance of these short-comings becomes manifest when I determine as I ought, whether there was non-compliance with section 217(1) of the Constitution and whether the Public Works accounting officer ought to have rejected Plebian Properties’ bid as contended by the SIU.

[110] In Allpay 1, the Constitutional Court set out the proper approach when determining whether a procurement process complies with section 217(1) of the Constitution. It held that:

“[32] The starting point for an evaluation of the proper approach to an assessment of the constitutional validity of outcomes under the state procurement process is thus s 217 of the Constitution:

'(1) When an organ of state in the national, provincial or local sphere of government, or 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.'

[33] The national legislation prescribing the framework within which procurement policy must be implemented is the Preferential

Procurement Policy Framework Act (Procurement Act). The Public Finance Management Act is also relevant.

[34] An 'acceptable tender' under the Procurement Act is any 'tender which, in all respects, complies with the specifications and

conditions of tender as set out in the tender document. The Preferential Procurement Regulations (Procurement Regulations) define

a tender as —

'a written offer in a prescribed or stipulated form in response to an invitation by an organ of state for the provision of services, works or goods, through price quotations, advertised competitive tendering processes or proposals;’

[35] An organ of state must indicate in the invitation to submit a tender —

(a) if that tender will be evaluated on functionality;

(b) that the evaluation criteria for measuring functionality are objective;

(c) the evaluation criteria, weight of each criterion, applicable values and minimum qualifying score for functionality;

(d) that no tender will be regarded as an acceptable tender if it fails to achieve the minimum qualifying score for functionality as indicated in the tender invitation; and

(e) that tenders that have achieved the minimum qualification score for functionality must be evaluated further in terms of the applicable prescribed point systems.

[36] The object of the Public Finance Management Act is to 'secure transparency, accountability and sound management of the revenue,

expenditure, assets and liabilities of the institutions' to which it applies, SASSA being one of them. Section 51(1)(a)(iii) provides that an accounting authority for a public entity must ensure and maintain 'an appropriate procurement and provisioning system which is fair, equitable, transparent, competitive and cost-effective; . . ..'

[37] The Treasury Regulations issued pursuant to s 76 of the Public Finance Management Act require the development and implementation of an effective and efficient supply chain management system for the acquisition of goods and services that must be fair, equitable,

transparent, competitive and cost-effective. In the case of procurement through a bidding process, the supply chain management

system must provide for the adjudication of bids through a bid adjudication committee; the establishment, composition and functioning of bid specification, evaluation and adjudication committees; the selection of bid adjudication members; bidding procedures; and the approval of bid evaluation and/or adjudication committee recommendations. The accounting officer or accounting authority must ensure that the bid documentation and the general conditions of contract are in accordance with the instructions of the National Treasury, and that the bid documentation includes evaluation and adjudication criteria, including criteria prescribed by the Procurement Act and the Broad-Based Black Economic Empowerment Act (Empowerment Act).”

[111] The Procurement Regulations apply to all organs of state as contemplated in section 1 (iii) of the PPPFA. Public Works is an organ of state as defined. The tender invitation does not set out the basis on which the bids would be evaluated and the criteria to be used as required in the Procurement Regulations referenced in AllPay. As a result, it is unclear from the tender invitation if the requirements Plebian Properties is alleged not to have complied with

were minimum requirements and if failure to meet them would invalidate the bid.

[112] It is also not clear from the tender invitation if the bids would be evaluated on functionality, the evaluation criteria for determining whether a bid is functional, that the evaluation criteria for measuring functionality are objective, the weight of each criterion, applicable values and minimum qualifying score for functionality. The tender invitation also fails to specify that that no tender will be regarded as an acceptable tender if it fails to achieve the minimum qualifying score for functionality. Notably, the minimum qualification score for functionality is not indicated. Therefore, it is unclear on what basis the Tender Committee evaluated the bids and what conclusions it drew in respect of compliance or non-compliance in respect of each bid requirement by each bidder. Below, I elaborate on the implications of this omission with reference to each bid requirement the SIU seeks to fault Plebian Properties for failing to comply with.

[113] While nineteen parking bays is an express bid requirement, the bid is silent on whether this requirement is a minimum bid requirement or if it is relevant for assessing functionality and the weight to be attached to it for the purpose of assessing the functionality of a bid. The tender invitation does not specify that no tender will be regarded as an acceptable tender if this requirement is not met. Ms Nel’s recommendation as well as her affidavit filed in these proceedings provides no assistance regarding how the Tender Committee determined this bid requirement.

[114] The requirement regarding compliance with the NRB and municipal by-laws as well as use of the premises contrary to its zoning suffers the same flaws and more. It is unclear from the tender invitation whether a bidder was required to comply with the NRB and municipal by-laws when it submitted its bid or at a later stage. While the bid invitation required a certificate of occupancy to be attached to the bid as proof of compliance and by implication, it required compliance with this requirement at the time of bidding, the tender invitation made provision for the lease of premises under construction or to be constructed. It also made provision, in respect of premises that are already constructed, for the alteration of the premises to accommodate the needs of the user department. It is probably why the bid invitation included the certificate below, which Plebian Properties signed:

“CERTIFICATE

COMPLIANCE WITH OCCUPATIONAL HEALTH AND SAFETY ACT NO 85 OF 1993, AS AMENDED

I PRAGASEN NADESEN PILLAY…………………………………………………………..

representing PLEBEIAN PROPERTIES (PTY) LTD…………………….

acknowledge that as SOLE SHAREHOLDER…………………………

Have certain duties, as prescribed by the Occupational Health and Safety Act No 85 of 1993 as amended, agree to ensure that OFFICE……………………are in accordance with the provision as stated in the said Act.

I agree where applicable to comply with the regulations: -

(i) The latest issue of SABS 0142: Code of Practice for the Wiring of Premises”.

(ii) The National Building Regulations and Building Standards Act1977 (Act 103 of 1977) as amended.

(iii) The Municipal by-laws and any special requirements of the local supply authority.

(iv) The local fire regulation.

I furthermore agree to liaise with the Department of Public Works for any reason I am unable perform in terms of this agreement.

______________________

WITNESSES

1. ___________________________

2. ____________________________

[115] The above certificate only records Plebian Properties’ obligation to comply with the specified regulations and by-laws and to liaise with Public Works in the event that it is unable to comply with this requirement. It provides no basis on which to find that the bidders were required to comply with the requirement in respect of the NBR and municipal by-laws at the time of bidding.

[116] Similarly, the tender invitation does not specifically require the premises to be zoned appropriately. In terms of clause 7.2 of the standard lease agreement, the lessor is obliged to obtain consents and authorisations as may be required by competent authorities or title conditions to enable Public Works as the lessee to use the premises as office accommodation. Interpreting this requirement with reference to the purpose of the bid, the context and the wording used, I do not find that zoning was a bid requirement as contended by the SIU. I also do not find that consents and authorisations as may be required by competent authorities or title conditions to enable Public Works as the lessee to use the premises as office accommodation had to be satisfied when the bid was submitted. The bid only imposes an obligation on Plebian Properties to obtain the requisite consents and authorizations.

[117] Although in its bid, Plebian Properties undertook to inform Public Works of any restrictions but never did, there is no evidence that if it had disclosed the title restrictions, it would not have been awarded the bid.

[118] There is therefore no basis for the conclusion the SIU seeks to draw, that Plebian Properties induced the award of the bid by fraud.

[119] In the premises, the evidence and opinion by Mr Grubb and Mr Singh, dealt with above, constitutes in admission hearsay and opinion evidence.

Maladministration and Irregularities in the procurement process

[120] Non-compliance with the applicable legislative and regulatory framework in the procurement process is manifest in the manner in which Public Works formulated the tender invitation and the Tender Committee evaluated it as dealt with above.

[121] Other irregularities are manifest from the manner in which Public Works officials adjudicated the bidding process.

[122] Plebian Properties was the highest bidder. After the bid closed, Plebian Properties’ negotiated the bid price with Public Works and offered to reduce the amount it charged. The opportunity to negotiate the bid price and to offer a lower bid price was not extended to the other bidders, thus giving Plebian Properties an unfair advantage over them. It resulted in Plebian Properties becoming the third lowest bidder. Despite not being the lowest bidder, Plebian Properties was recommended for approval in a motivation Ms Nel submitted to the Public Works Tender Committee. Notably, the recommendation parrots Plebian Properties’ bid and the premises it offers as suitable and does not disclose in what respects the bid fails to comply with the bid requirements.

[123] The renewal of subsequent lease agreements under circumstances were the procurement process that resulted in Plebian Properties being awarded the bid in the first place was irregular and unlawful, was also irregular and unlawful. This is exacerbated by the fact that when it concluded subsequent lease agreements, Public Works still failed to use this opportunity to properly assess Plebian Properties’ bid and ensure its cost effectiveness.

[124] To the extent that Public Works officials failed to formulate the tender invitation in a manner that complies with the PPFA and its regulations as found above, and that it accordingly failed to properly adjudicate the bid, thereby failing to ensure that the procurement process meets the requirements in section 217(1) of the Constitution, they maladministered the procurement process.

[125] Plebian Properties assumption that Public Works’s officials complied with the applicable regulatory and statutory provisions is not a defence to this ground of review as it does not regularise their irregular and unlawful conduct. As evident from Mr Singh’s affidavits, Public Works is aware of the allegations of maladministration against it and has elected not to dispute them.

[126] According to Mr Singh, the cost of relocating the SAPS to other premises impeded Public Works from cancelling the lease agreement when it discovered in the latter part of 2006 that Plebian Properties had not provided the requisite number of undercover parking bays. Hence, Public Works afforded Plebian Properties an opportunity to remedy this omission. It never did so. This decision by Public Works also does not sanitize the procurement process from the findings made in this judgment. Such a decision is itself irregular and may have caused a tremendous loss to the State. It is unlikely that the costs of relocating Public Works would have equated to the loss the SIU is seeking to recover in this review.

[127] The above irregularities are material. They infract every requirement in s 217 of the Constitution. They render the procurement process unfair and not equitable as against other tenderers whose bids were rejected even though they may have qualified in aspects that Plebian Properties’ bid did not qualify for the tender. The procurement process was also not economic and cost effective because the bids were not properly adjudicated in respect of both functionality and price.

[128] It therefore cannot survive a declaration of invalidity in terms of s 172(1)(a) of the Constitution. It falls to be declared invalid.

JUST AND EQUITABLE RELIEF

[129] The just and equitable remedy sought by the SIU may not be granted, as the claim it seeks under this remedy has prescribed. It is therefore note necessary to determine the merits of this claim.

[130] This Tribunal is not limited to the just and equitable remedy proposed by the SIU. When formulating a just and equitable remedy in terms of section 172(1)(a) of the Constitution, the Tribunal may make any order that is just and equitable, including an order limiting the retrospective effect of the declaration of invalidity;

and an order suspending the declaration of invalidity for any period and on any conditions, to allow the competent authority to correct the defect.

[131] It concerns me that the SAPS continues to occupy the leased premises pursuant to an irregular and unlawful procurement process. I have also not been advised whether Plebian Properties’ continues to collect excessive rental on the leased premises as alleged. The SAPS’s continued occupation of the leased premises raises the question whether the declaration of invalidity of the procurement process and the setting aside of the lease agreement ought to have a retrospective effect or not and whether the declaration ought to be suspended or not and if so, on what conditions, to allow Public Works to remedy the irregular and unlawful procurement process. No facts have been placed before the Tribunal to enable it to make this determination. This Tribunal’s order in respect of just and equitable relief should not have the effect of disrupting the services the SAPS renders at the leased premises to the most vulnerable members of society.

[132] It is therefore appropriate that the parties are afforded an opportunity to file further affidavits addressing the issues raised in 132 above for the determination of the appropriate just and equitable relief.

COSTS

[133] Although the SIU has succeeded in obtaining an order in terms of section 172(1) (a) of the Constitution, it has not succeeded in proving the fraud allegations against Plebian Properties and in obtaining an order that Plebian Properties repay the amount it claimed in respect of excessive rental. The SAPS continues to occupy the leased premises. As a result, an order giving effect to the declaration of invalidity is yet to be made. The SIU sought punitive costs against Plebian Properties on the basis that it induced the awarding of the tender by fraud. Having not proved that allegation, the SIU is not entitled to costs on this scale.

[134] It is also questionable whether the SIU is substantially successful in these proceedings and whether it is entitled to the costs of the application. Compensation to Plebian Properties for costs occasioned by unnecessarily prolix papers as referenced in paragraph 33 of this judgment also remains hanging. It is therefore appropriate to also afford the parties an opportunity to address the Tribunal on the question of these and the costs of the review application when just and equitable relief is determined.

[135] In the premises, the following order is made:

ORDER

1. The SIU’s application for the late filing of its replying affidavit is granted with costs against the SIU.

2. The delay by the Special Investigating Unit (SIU) in bringing this application is condoned.

3. The decision of the first Respondent to conclude with the second Respondent lease agreements and addendum attached to the notice of motion as annexure X1 to X5 (the impugned lease agreements), is declared invalid and set aside as prescribed section 172 (1) (a) of the Constitution.

4. The impugned lease agreements are declared invalid and set aside as prescribed section 172 (1) (a) of the Constitution.

5. The orders in paragraph 3 and 4 of this judgment are suspended pending the determination of just and equitable relief.

6. The costs of the application as well as the costs occasioned by unnecessarily prolix papers are reserved for determination together with the just and equitable relief.

7. The Tribunal Registrar is directed to arrange a case management meeting with the parties for the purpose of issuing directives for the determination of just and equitable relief and the costs referred to in paragraph 6 of this order.

JUDGE L.T. MODIBA

PRESIDENT OF THE SPECIAL TRIBUNAL

APPEARANCES

Counsel for the applicant Adv. S Nankan

Attorney for the applicant Mr V Naidoo, Viren Naidoo & Associates

Counsel for the 2nd respondent: Adv. Y Moodley SC

Attorneys for the 2nd respondent: Mr P K Pillay, Ananda Pillay Attorneys INC

Date of hearing:

1 March 2022

Date of Judgement:

26 August 2022

Mode of delivery: this judgment was handed down electronically on 8 March 2022 by transmission to the parties’ legal representatives by email, uploading on Caselines and releasing it to Saflii. The time for handing down the judgment is deemed to be 10am.

[1] Constitution of the Republic of South Africa, 1996.

[2] Du Plooy fn1 at 216H–217A. See also Gumede v Road Accident Fund 2007 (6) SA 304 (C) at 307C–308A

[3] Grootboom v National Prosecuting Authority 2014 (2) SA 68 (CC) at paragraph 42.

[4] Erasmus, Superior Courts Practice, D5 Costs in General, Rule 2. The grant of an indulgence, fn 71 and the cases cited there.

[5] Opposition to Urban Tolling Alliance and Others v South African National Roads Agency Ltd and Others [2013] 4 All SA 639 (SCA) para [26].

[6] Asla Construction (Pty) Ltd v Buffalo City Metropolitan Municipality 2017 (6) SA 360 (SCA) para [13].

[7] See Plascon Evans Paints Limited v Van Reibeeck Paints (Pty) Limited [1984] ZASCA 51; 1984 (3) SA 623 (A) and Room Hire Co (Pty) Limited V Jeppe Street Mansions (Pty) Limited 1949 (3) SA 1155 (T) AT 1163.

[8] State information Technology Agency SOC Ltd v Gijima Holdings (Pty) Ltd 2018 (2) SA 23 (CC)

[9] Special Investigating Unit and Another v Engineered Systems Solutions (Pty) Ltd (216/2020) [2021] ZASCA 90 (25 June 2021)

[10] S 1 of the Constitution.

[11] S 2 and s 237 of the Constitution.

[12] S 217(1) of the Constitution.

[13] Act 1 of 1999.

[14] Act 5 of 2000.

[15] Proclaimed in Government Gazette number 27388 published on 15 March 2005.

[16] Act 74 of 1996 (the SIU Act).

[17] S 2(1)(a)(i) of the SIU Act.

[18] Proclaimed in Government Gazette number 22531 published on 18 July 2001.

[19] S 2(1)(a)(i) of the SIU Act read with s 2(2) of the SIU Act.

[20] In Government Gazette number 37946, published on 27 August 2014. The SIU attached the proclamation to its founding affidavit as annexure DGG2.

[21] S 4(1)(a), (b) and (c)(i) of the SIU Act.

[22] S 172(1) (a) of the Constitution.

[23] S 172(1) (b)(i) of the Constitution.

[24] S 172(1) (b)(ii) of the Constitution.

[25] Special Investigating Unit v Nadasen and Another 2002 (4) SA 605 (SCA).

[26] Special Investigating Unit and Another v Caledon Properties (Pty) Ltd and Another, Special Tribunal Case No: GP17/2020. Unreported judgment delivered on 26 February 2021.

[27] Gijima fn 8 at paragraph 40.

[28] Engineered Systems Solutions fn 9 at paragraph 24 to 25.

[29] The Special Investigating Unit (SIU) and Others v Lekabe [2021] ZAST at paragraph 40.

[30] See Buffalo City Metropolitan Municipality v Asla Construction (Pty) Ltd 2019 (4) SA 331 (CC) paragraph 111 (Asla Construction) and the authorities cited there. Also see Gijima fn 8 at paragraph 38.

[31] S 4(1)(c) read with s5(5) of the Special Investigating Unit and Special Tribunal’s Act 74 of 1996 (SIU Act). See also Special Investigating Unit v Fikile Mpofana (Pty) Ltd and Others (GP13/2021) [2022] ZAST 4 (10 February 2022) at paragraph 24.

[32] Jockey Club of South Africa v Forbes [1992] ZASCA 237; 1993 (1) SA 649 (A) at 661 South African Football Association v Stanton Woodrush (Pty) Ltd t/a Stan Smidt & Sons 2003 (3) SA 313 (SCA) at para 5; SIU v Chauke Quantity Surveyors & Project Managers in Association with Listed Entities t/a Chauke Mbenyane Co-Arc Consultants & nine others (45529/2016) [2018] ZAGPPHC 240 (25 January 2018 and Nelson Mandela Bay Metro v Erastyle and Others 2019 (3) SA 559 (ECP) paras 16-26.

[33] Khumalo and Another v MEC for Education, KwaZulu-Natal 2014 (5) SA 579 (CC) at paragraph 45;

[34] Gijima Fn8.

[35] Asla Construction fn1 from paragraph 45 onwards.

[36] Special Investigating Unit v Kim Diamonds (Pty) Ltd 2004 (2) SA 173 at paragraph 3.9.

[37] Standard Bank of SA Ltd V Miracle Mile Investments 67 (PTY) LTD 2017 (1) SA 187 SCA.

[38] Yellow Star Properties 1020 (Pty) Ltd v MEC Department of Development Planning and Local Government, Gauteng 2009 (3) SA 577 (SCA) paragraph [37].

[39] Mtokonya V Minister of Police 2018 (5) SA 22 (CC) paragraph [32] and [36].

[40] Mtokonya fn38 at paragraph [44] – [45].

[41] Minister of Finance and Others v Gore N.O. 2007 (1) SA 111 (SCA) at p.122, paragraph [17].

[42] M G Holmes (Pty) Ltd v National Transport Commission & another 1951 (4) SA 261 (T) at 265F to 265A.

[43] SAFCOR Forwarding (Johannesburg) (Pty) Ltd v National Transport Commission 1982 (3) SA 654 (A).

[44] K v Minister of Safety and Security [2005] ZACC 8; 2005 (6) SA 419 (Cc) and Lourerio v Imvula Quality Protection Pty Ltd 2014 (3) SA 394 (CC).

[45] Electoral Commission v Mhlope 2016 (5) SA 1 (CC) paragraph 132.

[46] Michael & Another v Linksfield Park Clinic (Pty) Limited 2001 (3) SA 1188 (SCA) at paras 34 – 40.