Mphaphuli Consulting (Pty) Limited v Special Investigating Unit and Others

• Jurisdiction: http://justis.com/jurisdiction/166,South Africa
• Judge: GC Muller J
• Judgment Date: 03 March 2022
• Court: Limpopo Division, Polokwane
• Hearing Date: 03 March 2022
• Docket Number: 5232/2021

Muller J:

[1]

The applicant applied to review and set aside a report of the first respondent, the Special Investigating Unit. [1] In addition, the applicant claimed a declaratory order that the investigation by the SIU was unlawful and that it was not

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included in the terms of reference of proclamation No R52 of 2014. [2] It also claimed a declaration that all steps taken by all the respondents following on the report are unlawful and be set aside. And an order that the respondents to stop all the steps taken against the applicant which resulted from the report.

[2]

It also bears mentioning at this early stage that counsel for the applicant abandoned the relief claimed in prayers 3 and 4 of the notice of motion.

The SIU is a juristic person which is established in terms of section 13(1) of the Special Investigating Units and Special Tribunals Act, Act 74 of 1996. [3]

[3]

The applicant is a company who describes itself as a company whose business it is to provide hope to rural communities through accelerated delivery of electricity services to rural communities by utilizing the Integrated National Electrification Programme which is a grant funded by the Department of Mineral Resources and Energy (7th respondent).

[4]

The applicant stated that it was appointed by the GTM as a consultant on 28 February 2012 to render services for accelerating delivery of electricity to communities in its area of jurisdiction. A professional services contract was entered into on 29 August 2015 between the applicant and GTM for the provision of professional engineering procurement construction services and management services for the delivery of accelerated electrical services. It was called "Operation Mabone."

[5]

From the deponents narration of the events leading up to the appointment of the applicant no mention is made that a proper tender process had been followed.

[6]

The contract price initially was for the electrification of 19 500 households at a price of R168 856 689.07. An addendum was entered into on 22 January 2014 in terms whereof the households were increased to 13 325 households for increased contract price of R 231 912 217.61. A second addendum was

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signed on 15 December 2014 which increased the households to 19 178 for an amount of R326 496 722.00.

[7]

Trouble started in August 2016 when GTM refused to pay for services rendered. The parties resorted to mediation, which failed. The applicant instituted proceedings in this court for recovery of the amounts owing. On 18 November 2016 GTM was ordered in terms of a judgment issued by this court to pay the applicant;

(1)

R3 549 892.89

(2)

R21 129 421.29

(3)

R1 810 184.48

(4)

R14 692 073.42

[8]

Application for leave to appeal was refused on 6 March 2017 by the SCA. Subsequently GTM terminated the contract. That order stands until set aside. [4]

[9]

The GTM is still indebted to the applicant in the amount of R9 765 850.89. The applicant instituted action under case number 6949/2019 for the recovery of the said amount. The action is still pending. The applicant says that the SIU is stalling the action.

The applicant has all the remedies in terms of the rules at its disposal to bring the case to conclusion and cannot be heard to complain if it is supine in the conduct of the litigation instituted by it. There is no need to say anything on the merits of the action save to make it clear that since this court in due course will dispose of the action any comment at this stage will be unwise.

[10]

The first issue which the court is called upon to decide is whether the proclamation is sufficiently wide to include an investigation into the propriety of the contract entered into with the applicant.

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[11]

The second issue is whether the Promotion of Administrative Justice Act 3 of 2006 [5] is applicable. Counsel on behalf of the applicant has emphasised during argument that reliance is squarely placed upon PAJA as the basis for the review and setting aside of the report of the SIU. Counsel specifically disavowed any reliance on legality as the basis for the review application.

APPLICABILITY OF THE PROCLAMATION:

[12]

The SIU Act provides 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 and also any conduct which may seriously harm the interests of the public. The SIU may institute and conduct civil proceedings in any court of law or a Special Tribunal in its own name or on behalf of State institutions. [6] The President, in terms of section 2, may establish a SIU whenever he deems it necessary, on the grounds referred to in section 2(2):

"The President may exercise the powers under subsection (1) on the grounds of any alleged-

(a) serious maladministration in connection with the affairs of any State institution; [7]

(b) improper or unlawful conduct by employees of any State institution;

(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;

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(f) offence referred to in Part 1 to 4, or section 17, 20, or 21 (in so far as it relates to the aforementioned offences) of Chapter 2 of the Prevention and Combatting of Corrupt Activities Act, 2004, and which offences was [sic] committed in connection with the affairs of any 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."

(h)

[13]

When the President is satisfied that the establishment of an SIU is justified, he issues a proclamation which must set the terms of reference of the SIU and the particulars regarding the establishment of the SIU. [8]

The functions of the SIU are listed in section 4(1), which states:

"The functions of a Special Investigating Unit are, within the framework of its terms of reference as set out in the proclamation referred to in section 2 (1)-

(a) to investigate all allegations regarding the matter concerned;

(b) to collect evidence regarding acts or omissions which are relevant to its investigation;

(c) to institute and conduct civil proceedings in a Special Tribunal or any court of law for-

(i)

any relief to which the State institution concerned is entitled, including the recovery of any damages or losses and the prevention of potential damages or losses which may by suffered by such State institution;

(ii)

any relief relevant to any investigation; or

(iii)

any relief relevant to the interests of a Special Investigating Unit;

(d) to refer evidence regarding or which points to the commission of an offence to the relevant prosecuting authority;

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(e) to perform such...