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R100 million tender haunts Northern Cape government

R100 million tender haunts Northern Cape government

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Johannesburg – Northern Cape public works MEC Fufe Makatong received a tongue-lashing from the High Court in Kimberley after she pleaded ignorance of the fact that her department was in contempt of a long-standing court order.

Despite the constitutional provision which states that “an order or decision of a court binds all persons to whom it applies”, Makatong, also the treasurer of the ANC in the province, irked Judge Mmathebe Phatsoane because she said she had no role to play in the matter.

The judge ordered that the judgment be brought to the attention of Premier Zamani Saul – also the chairperson of the ANC in the province.

Judge Phatsoane said: “It may well not have been her responsibility to take the steps necessary to comply with the order. However, she ought not to have been an innocent bystander in the midst of flagrant disobedience of the order. She clearly did nothing to impress upon the officials of her department to act as they were enjoined to do by this court's order”.

After all, said Judge Phatsoane, the Constitution placed an obligation on the premier to exercise executive authority, together with the other members of the Executive Council, by, among others, coordinating the functions of the provincial administration and its departments.

In November 2020, the public works department awarded Samex Consulting a three-year contract worth more than R100 million to oversee the maintenance of hospitals and clinics in the province. A year later, Saul’s ANC-led administration, which ran on a clean governance ticket, pulled all legal tactics possible to escape the contract. But the gamesmanship landed the department in hot water with the court.

After being squeezed into a corner on November 23 last year, Ramona Grewan, head of the Northern Cape public works department, conceded in the Kimberley's High Court that the department's decision to terminate the professional services contract with Samex was inadmissible. Grewan, as the accounting authority in the department, entered into a settlement agreement with Samex.

Judge Mpho Mamosebo then signed off the settlement agreement as a court order, declaring that the premature termination of the contract on August 31 last year was unlawful. The department formally appointed Samex approximately a year earlier on November 13, 2020, but “pursuant to this, the department never gave Samex any instructions to commence work”.

Upon enquiry, the department told Samex that the company had been appointed on an "as and when required“ basis. In August last year, the department informed Samex that its appointment was “irregular in that it was too vague as it did not stipulate which facilities were to be maintained”.

Two months later in October, Samex applied to have the letter set aside, and the department “did not resist the application but adopted a position in terms of which it would undertake a process of redefining Samex's scope of work for purposes of carrying out its obligation under the contract”.

Judge Mamosebo set aside the termination letter in November of that year. Within 10 days of receipt of this order, said the judge, the department and Grewan had to deliver to Samex the terms of reference. Within five days of receipt of the terms of reference from the department and Grewan, Samex should respond to the terms of reference.

Once Samex had responded to the terms of the reference, the department was “directed to perform its obligations in terms of the written agreement concluded between [Samex] and the [department] on 30 November 2020”.

“In the event, the parties do not agree on the terms of reference, the respondents are interdicted from appointing another service provider to render the services in terms of the agreement concluded with the applicant on 30 November 2020 pending the agreement on the terms of reference,” the court ruled.

As of February this year, the department had not complied with the court order. Instead, Samex's sole director, Nyakale Qhojeng, discovered when he visited Dr Harry Surtie Hospital in Upington that the department had appointed an entity trading as Mekan Engineering to render the services akin to those which Samex had been appointed to execute – in contempt of Judge Mamosebo's order.

Samex approached the High Court in March to get a contempt order. Instead of filing an answering affidavit, Grewan and the department had their legal representative depose on the document on their behalf.

"It was not the attorney who had to show cause why his clients should not be held in contempt," Samex argued.

Vuyani Mhlauli, who succeeded Grewan, filed a second answering affidavit on July 14. The department now argued that the Mamosebo order was “unenforceable” because it did not provide for a mechanism to resolve a deadlock. Samex disagreed, saying the court order was binding until set aside. The company said claims that the order was unlawful were “an afterthought and a challenge made at the behest of the respondents designed to frustrate Samex”.

Three days before the contempt judgment was issued on October 29, the department applied to the court, seeking an urgent interdict to set aside the settlement agreement with Samex. This application, filed almost one year after the settlement agreement was made, did not pass the urgency test. In part two of the application, which was still pending, the department sought to set aside the original award of the contract to Samex.

In the contempt of court judgment, Judge Phatsoane found that the department failed to make out a case that the settlement order was without force. Turning to whether the department officials acted mala fide or in wilful disregard of the settlement order, the judge said that “a deliberate non-compliance or disobedience of a court order by the State through its officials amounts to a breach of its constitutional duty to obey court orders”.

Therefore, said Judge Phatsoane, the argument that the department and its head cannot be held in contempt must falter.

“Orders and decisions issued by a court bind all persons to whom and organs of state to which they apply, and no person or organ of state may interfere, in any manner, with the functioning of the court”.

She found that Grewan was the acting head of the department and its accounting officer when the Mamosebo order was issued.

She personally issued a letter to Mekan appointing it contrary to the terms of the order. That in appointing Mekan, she acted out of necessity which provided sufficient basis that she be exculpated cannot avail her for reasons already stated.”

Regarding Mhlauli, the judge said that at all relevant times to the present contempt application, he was the accounting officer responsible for the overall management and day-to-day running of the affairs of the department.

“Clearly, when he took over from Grewan, he did not see to it that the department complied with the terms of the order and ought to be held accountable.” The court absolved the CFO. The court afforded the department another opportunity to comply with the settlement order. However, on November 18 the department applied for leave to appeal the judgment.

Original Article

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