Special Investigating Unit v Kim Diamonds (Pty) Ltd

• Jurisdiction: South Africa
• Judge: Kuny AJ
• Judgment Date: 20 July 2000
• Court: Special Tribunal under Proc R24 of 1977
• Docket Number: NC 1/98
• Counsel: J P de Bruin SC (with him A J R van Rhyn) for the plaintiff. G Farber SC (with him N Segal) for the defendant.
• Citation: 2004 (2) SA 173 (SpT)

Kuny AJ:

[1] Nature of these proceedings D

1.1

The Special Investigating Units and Special Tribunals Act 74 of 1996 (the Act) provided for the establishment of Special Investigating Units for the purpose of investigating serious malpractices or maladministration in connection with the administration of State institutions, State assets and public money as well as any conduct which may seriously harm the interests of the public, and for the E establishment of Special Tribunals so as to adjudicate upon civil matters emanating from investigations by Special Investigating Units and to provide for matters incidental thereto.

1.2

In terms of Proc 17854 published in the Government Gazette on 14 March 1997 the President of the Republic of South Africa established a Special Investigating Unit (referred to F herein as the SIU) and a Special Tribunal. The terms of reference of the SIU were set out in para 4 of the proclamation and were broadly formulated in terms of the provisions of s 2(2) and 2(3) of the Act.

1.3

Mr Justice Willem Hendrik Heath was appointed as Head of the G SIU and Mr Justice Gerhardus Petrus Christiaan Kotze was appointed as Tribunal President.

1.4

By Proc R72 of 1997, gazetted on 11 November 1997, the President amended the terms of reference of the SIU by substituting for para 4 of the prior proclamation the following paragraphs: H

'4.

The terms of reference of the Special Investigating Unit are to investigate in respect of the matters in the Schedule, which matters have a bearing on State or public properly or public money which belongs to or vests in a State institution of the Government of the Province of the Eastern Cape or which, at any time prior to 27 April 1994, belonged to or vested in any former State I or provincial administration which exercised control and administration over any part of the territory which now constitutes the Province of the Eastern Cape, as contemplated in the said Act, any -

(a)

serious maladministration in connection with the affairs of any such State institution; J

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(b)

improper or unlawful conduct by employees of any such State institution; A

(c)

unlawful appropriation or expenditure of public money or property;

(d)

unlawful, irregular or unapproved acquisitive act, transaction, measure or practice having a bearing upon State property;

(e)

intentional or negligent loss of public money or damage to public property; B

(f)

corruption in connection with the affairs of any such State institution; or

(g)

unlawful or improper conduct by any person which has caused or may cause serious harm to the interests of the public or any category thereof, C

which has taken place between 26 October 1976 and 14 March 1997 and have been brought to the attention of the Special Investigating Unit on or before 14 March 1997.'

(My emphasis.)

1.5

On 25 February 1998 under Proc R20 the President, in terms D of s 2(1) of the Act, caused to be published the following proclamation:

'No R20, 1998

SPECIAL INVESTIGATING UNITS AND SPECIAL TRIBUNALS ACT 74 OF 1996 REFERRAL OF MATTERS TO EXISTING SPECIAL INVESTIGATING UNIT AND SPECIAL TRIBUNAL E

Whereas allegations as contemplated in s 2(2) of the Special Investigating Units and Special Tribunals Act 74 of 1996 have been made in respect of the affairs of the State institutions mentioned in the schedule (hereinafter referred to as ''the State institutions'';

And whereas I deem it necessary that the said allegations should be investigated and justiciable civil disputes emanating from F such investigation should be adjudicated upon;

Now, therefore, I hereby, under s 2(1) of the said Act, and after consultation with the Premier of the Province of the Northern Cape refer the matters in the Schedule for investigations to the Special Investigating Unit and for adjudication of any justiciable civil dispute emanating from such investigation to the Special Tribunal G established by Proc R24 of 14 March 1997 and determine that for the purpose of the investigation of these matters, the terms of reference of the Special Investigating Unit are to investigate as contemplated in the said Act, any -

(a)

serious maladministration in connection with the affairs of any such State institution; H

(b)

improper or unlawful conduct by employees of any such State institution;

(c)

unlawful appropriation or expenditure of public money or property;

(d)

unlawful, irregular or unapproved acquisitive Act, transaction, measure or practise having a bearing upon State property;

(e)

intentional or negligent loss of public money or damage to public property; I

(f)

corruption in connection with the affairs of any such State institution; or

(g)

unlawful or improper conduct by any person which has caused or may cause serious harm to the interests of the public or any category thereof, J

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which has taken place between 27 April 1994 and the date of publication of this proclamation. A

SCHEDULE

1.

. . . (Not applicable)

2.

The irregular conclusion of contracts between the Government of the Province of the Northern Cape and Kim-Diamonds (Pty) Ltd for the acquisition on hire-purchase of the Kim-Diamonds Building in Kimberley B and the irregular procedures followed in this regard by officials in the Provincial Tender Board, Departments of Finance and Public Works and the Office of the Premier of the Northern Cape.'

1.6

Arising from the investigation conducted by the SIU pursuant to the terms of reference of Proc R20 relating to the matters referred to in para 2 of the Schedule thereto, the SIU instituted civil C proceedings in the Special Tribunal against Kim Diamonds (Pty) Ltd under case No NC 1198. Initially these proceedings were instituted in the names of the SIU as first plaintiff, the chairperson of the Provincial Tender Board for the Province of the Northern Cape as second plaintiff and the Provincial Government of the Northern Cape as third plaintiff. D

1.7

The matter was set down for hearing before Mr Acting Justice Claassen sitting in this Tribunal in Kimberley on 23 November 1998. On the first day of the trial counsel for the defendant (Mr Levin SC and Mr Segal) informed counsel for the plaintiffs (Mr De Bruin SC together with Mr A J R E van Rhyn) that they objected to the citing of second and third plaintiffs on the basis that these parties had never consented to be joined. The point was conceded by counsel for the plaintiffs and a notice of intention to amend the reg 7 notice (which notice, in effect, F constitutes the 'particulars of claim' in proceedings of this nature) to delete the names of the second and third plaintiffs was served. In due course Mr De Bruin handed in letters from the respective (former) plaintiffs confirming their wish not to be part of the proceedings and stating that they abide by the decision of the Tribunal. When the matter proceeded on the second day, the G defendant objected to the proposed amendment on the basis that once the second and third plaintiffs were removed, there was no longer a 'justiciable dispute' before the Tribunal. It was submitted that the SIU could not 'create issues by itself' and that there was no issue or lis for the Tribunal to decide upon. After hearing full argument Claassen AJ dismissed the defendant's objections to the H amendment of the pleadings and made an order authorising second and third plaintiffs to withdraw, or to be withdrawn, as parties to the suit and granting first plaintiff (the SIU) leave to amend its pleadings accordingly within 10 days of delivery of the judgment. This was apparently done and the matter then proceeded in the name of the I SIU as the sole plaintiff.

1.8

On 22 March 1999 the matter was resumed before Kotze J as President of the Special Tribunal. The matter continued for two days during which time the evidence of two witnesses, Messrs M J

Kuny AJ

van Zyl, the Director-General of the Northern Cape Provincial Government and S J A Goldblatt, the chairperson of the Provincial Tender Board for the Province of the Northern Cape, was led. At the conclusion of the evidence of Mr Goldblatt, counsel for the plaintiff, Mr De Bruin, informed the Tribunal that he intended to call no further evidence. Mr Levin, for the defendant, stated that he intended to call no evidence on behalf of the defendant and the B matter was then adjourned to a date to be arranged for the purpose of presenting the argument.

1.9

During June 1999 the plaintiff filed extensive heads of argument and in August 1999 lengthy heads of argument were filed on behalf of the defendant. C

1.10

Sadly, during this period Kotze J died and it became necessary for another Judge to be appointed to complete the matter. Consequently in November 1999 I was appointed as an Acting Judge to fill the void left by the death of Kotze J and on 13, 14 and 15 December 1999 the Special Tribunal was reconvened in the Witwatersrand D Local Division of the High Court for the purpose of hearing the argument. At that stage Mr De Bruin and Mr Van Rhyn once again appeared on behalf of the plaintiff but in place of Mr Levin for the defendant, Mr G Farber SC appeared together with Mr Segal to argue the matter. I would like to say at the outset of this judgment that I am greatly indebted to counsel for both parties, who not only argued the matter very ably E and at great length on behalf of their respective clients but also presented me with various sets of heads of argument which have been of tremendous assistance to me in understanding the rather lengthy and convoluted facts and issues and in enabling me to decide this matter. F

[2] The evidence upon which I am required to determine this matter

2.1

The parties placed before me several volumes of...