THE SUPREME COURT OF APPEAL OF SOUTH AFRICA
JUDGMENT

Reportable
Case No: 610/2021
In the matter between:

MINISTER OF INTERNATIONAL
RELATIONS AND CO-OPERATION

FIRST APPELLANT
DIRECTOR-GENERAL:
DEPARTMENT OF INTERNATIONAL
RELATIONS AND CO-OPERATION

SECOND APPELLANT
DEPARTMENT OF INTERNATIONAL
RELATIONS AND CO-OPERATION

THIRD APPELLANT

and

SIMEKA GROUP (PTY) LTD

FIRST RESPONDENT
REGIMENTS CAPITAL (PTY) LTD

SECOND RESPONDENT
LEMASCENE (PTY) LTD

THIRD RESPONDENT
SERENDIPITY INVESTMENTS SA LLC
FOURTH RESPONDENT
SIMEKA INVESTMENT GROUP (PTY) LTD
FIFTH RESPONDENT

Neutral citation: Minister of International Relations and Co-operation and Others
v Simeka Group (Pty) Ltd and Others (610/2021) [2023] ZASCA
98 (14 June 2023)
Coram:
PETSE DP and MAKGOKA and MOTHLE JJA and KGOELE and
WINDELL AJJA
Heard:
16 August 2022
Delivered: 14 June 2023
Summary: Constitutional and administrative law – procurement process – legality
review – self-review by an organ of state – proper approach to establish whether
irregularities occurred as a matter of fact – evaluation whether irregularities
constitute tenable grounds of review – determination of whether there had been
deviation from procurement prescripts and, if established, the materiality of such
deviation from legal requirements of procurement process – determination of
whether the manifest purpose sought to be served by the procurement process had
been substantially accomplished.

Delay in instituting a legality review – whether delay unreasonable and if so, whether
delay should nevertheless be condoned – legality self-review not subject to strictures
of s 7(1) of Promotion of Administrative Justice Act 3 of 2000 – nevertheless legality
self-review required to be instituted without unreasonable delay – whether delay is
unreasonable is a question of fact – whether unreasonable delay should be condoned
entails a value judgment dictated by constitutional values.

ORDER

On appeal from: Gauteng Division of the High Court, Pretoria (Hughes J, sitting as
court of first instance):
The appeal is upheld with costs, including the costs of two counsel.
The order of the high court is set aside and in its place is substituted the
following order:
'1
The late institution of the application for a legality review is condoned.
The award of the tender for the appointment of a development partner
for the design, construction, operation, maintenance and financing of a
suitable and sustainable office and residential accommodation for South
African diplomatic missions in Manhattan, New York City, New York
pursuant to a request for proposal (DIRCO 10/2015/16) to the joint venture
comprising Simeka Group (Pty) Ltd and Regiments Capital (Pty) Ltd is
declared constitutionally invalid and therefore unlawful.
The award of the tender referred to in paragraph 2 of this order is
reviewed and set aside.
The Project Management Agreement concluded between the
Department of International Relations and Cooperation and Lemascene (Pty)
Ltd pursuant to the award of the tender is declared to be of no legal force and
effect, reviewed and set aside.
The respondents, jointly and severally, are ordered to pay the costs of
this application, including the costs of two counsel where so employed.'

JUDGMENT

Petse DP (Makgoka and Mothle JJA and Kgoele and Windell AJJA
concurring):
Introduction
[1] Since the advent of our constitutional democracy, the procurement of goods
and services by all organs of state must now comply with certain stringent
constitutional and statutory procurement prescripts. The fons et origine of those
prescripts is s 217 of the Constitution.1 Section 217(3), in particular, decrees that the
State must provide legislative measures to give effect to the requirements of s 217(1)
of the Constitution. As a result, this constitutional decree gave birth to two important
pieces of legislation, the first being the Public Finance Management Act2 and, the
second, the Preferential Procurement Policy Framework Act.3

[2] This appeal is one of the multiple cases, too many to enumerate, that have
served before this Court since the advent of the constitutional order ushered in by
the Constitution.4 The dispute in this appeal has its genesis in the award of a tender
by the third appellant, the Department of International Relations and Cooperation
(the Department), to a joint venture comprising the first respondent, Simeka Group
(Pty) Ltd (Simeka Group), and the second respondent, Regiments Capital (Pty) Ltd
(Regiments Capital), on 17 May 2016.

1 Constitution of the Republic of South Africa, 1996.
2 Public Finance Management Act 1 of 1999.
3 The Preferential Procurement Policy Framework Act 5 of 2000.
4 At first the Interim Constitution of the Republic of South Africa Act 200 of 1993 and later the Constitution of the
Republic of South Africa Act 108 of 1996.

[3] Briefly, the tender was for the appointment of a development partner for the
design, construction, operation, maintenance and financing of a suitable and
sustainable office and residential accommodation for South African diplomatic
missions in Manhattan, New York City, New York in the United States of America
(the USA). The substantive question in this appeal ultimately turns on whether the
award of the tender to Simeka Group and Regiments Capital as a joint venture by
the Department was constitutionally valid. For convenience, Simeka Group and
Regiments Capital shall be referred to collectively as the Joint Venture. As alluded
to above, there is an ancillary question that requires determination, namely whether
there was an inordinate delay by the Department in instituting its legality review and,
if so, whether such a delay is inexcusable.

[4] The Department, together with the first appellant, the Minister of International
Relations (the Minister) and the second appellant, the Director-General of the
Department (the Director-General), as co-applicants in the Gauteng Division of the
High Court, Pretoria (the high court) contended that the award of the tender to the
Joint Venture was fraught with multiple material irregularities that rendered the
award unconstitutional and unlawful. Consequently, they sought an order declaring
the award constitutionally invalid and unlawful and, as a consequence, reviewing
and setting it aside. Because of the identity of interest amongst the three parties, the
Minister, the Director-General and the Department shall, for convenience, be
referred to collectively as the government parties. However, whenever the context
dictates otherwise they will be identified by their individual appellations.

[5] The third respondent, Lemascene (Pty) Ltd (Lemascene), fourth respondent,
Serendipity Investments SA LCC (Serendipity) and fifth respondent, Simeka

Investment Group (Pty) Ltd (Simeka Investment), resisted the grant of the relief
sought by the government parties.

[6] I pause here to mention that Lemascene, which was specifically incorporated
for this purpose was, on the one hand, designed to implement the South African part
of the project. On the other hand, Serendipity which is a company incorporated in
the USA was established to carry out the USA's portion of the project.

[7] In the event, the high court (per Hughes J) held that the government parties'
delay in instituting the review proceedings was: (a) inordinate; (b) the explanation
proffered for the delay was woefully inadequate; and (c) the delay itself was
unreasonable. Accordingly, the high court declined to condone the delay and thus
dismissed the application with costs, including the costs of two counsel. Thus, the
government parties were non-suited solely on the basis of delay. Indeed, the high
court called into question the bona fides of the government parties in instituting their
legality self-review, and opined that the institution of the review application was
actuated by ulterior motives. It further held that the 'Department [sought] to evade
its constitutional obligation by way of a self-review' in order 'to avoid a declaration
that [the Department] is responsible for fruitless and wasteful expenditure'. On 14
May 2021 the high court granted the government parties leave to appeal to this Court,
hence the present appeal.

Factual background
[8] As alluded to above, on 4 March 2016 the Department issued a Request for
Proposals (the RFPs) for the appointment of a development partner for the design,
construction and financing of suitable and sustainable office and residential

accommodation for the South African diplomatic missions in the USA. This was
pursuant to an advertisement placed by the Department in the Government Tender
Bulletin requesting proposals. More specifically, the Department made it perfectly
clear that it sought to enter into what it termed a 'long term lease' or, in the alternative,
a 'lease to buy property' option, with a South African incorporated entity that had
'presence or collaboration' in New York and 'able to finance, procure and maintain
accommodation and act as landlord to the Government' of the Republic of South
Africa.

[9] To achieve the Department's objective, prospective bidders were explicitly
requested to 'identify and secure land' – self-evidently in Manhattan, New York City
– and to 'design and develop or redevelop' such land in accordance with the
Department's tender specifications. And, beyond this point, the successful tenderer
would be required to operate, manage and maintain the facilities. This entailed, as
expressly required by the RFPs, that the successful tenderer was expected to 'raise
the required funding to finance both the capital and operational costs of acquiring
and managing the facilities' for the beneficial use of the Department.

[10] The process for accepting any responsive bid entailed the following:
(a) bids would be screened to determine whether they complied with the
requirements of the RFPs, which, inter alia, were:
(i) that each bidder should provide audited financial statements for the immediate
past three years;
(ii) in the case of a Joint Venture or Consortium, each one of the parties forming part
of the Joint Venture or Consortium would be required to provide audited financial
statements;

(b) bidders were required to provide proof that they would be able to raise the
required capital to fund the project;
(c) as required by Treasury Regulations with respect to procurement of goods and
services for organs of state, the bids would be evaluated by the Bid Evaluation
Committee (BEC) and if they met the required threshold, they would then proceed
to the Bid Adjudication Committee (BAC) which was tasked with the responsibility
of adjudicating the bids to determine if they met the requirements of the bid as
required by the RFPs.

[11] Presumably, because of the magnitude of the scope of the work required in
terms of the RFPs and the substantial financial injection that the project entailed,
only two bids were received by the Department. The one bid was that of the Joint
Venture whilst the other was received from a consortium comprising Lephuthing
Investment
CC
and Menzibali
Construction CC
(Lephuthing/Menzibali
Construction). On 16 May 2016, and after due consideration of the two competing
bids received, the BEC concluded that the bid submitted by Lephuthing/Menzibali
Construction was non-responsive. It was, as a result, disqualified. Instead, the BEC
recommended the bid submitted by the Joint Venture. It bears mentioning that the
Lephuthing/Menzibali Construction consortium was disqualified solely on the basis
that it had not submitted audited financial statements of the parties comprising the
consortium. Curiously, the Joint Venture, too, failed to meet this express
requirement of the RFPs and yet it was allowed to proceed to the next stage of the
process ostensibly because the BEC was satisfied with the Joint Venture's proposal
with reference to both its financial and capability attributes. I shall revert to this
aspect later.

[12] As already indicated above, the BEC recommended to the BAC that the Joint
Venture be awarded the contract for the project envisaged in the RFPs. For its part,
the BAC accepted the recommendation and, on 16 May 2016, forwarded its own
recommendation to the Director-General, further indicating that it 'concurs with the
recommendation' of the BEC.

[13] In addition, the BAC recommended that 'the Project Team travels to New
York to conclude the selection process of the three (3) shortlisted site[s]; supported
by the officials from the missions through site inspection'. The Director-General
accepted the recommendation and awarded the tender to the Joint Venture.
Consequently, on 17 May 2016, the Director-General wrote to the Joint Venture in
accordance with a draft letter prepared for him by the BAC – awarding the tender to
the Joint Venture, advising the latter that it was appointed as 'the preferred bidder
for the ... project'.

[14] It is apposite at this juncture to emphasise that the RFPs made plain that the
successful bidder was itself required to provide finance for the construction of the
office and residential accommodation as stipulated in the RFPs. There was no doubt
that the RFPs contemplated that the Department would become purely a lessee either
to hire the accommodation for the duration of the lease, alternatively, the Department
would lease the accommodation with a view of purchasing it when the lease
ultimately terminated by effluxion of time. Accordingly, no capital outlay of
whatever nature would be required from the Department. This is evident from the
scope of the work spelt out in the RFPs that the successful tenderer would be required
to provide.

[15] Following the award of the tender, a Steering Committee was established
comprising representatives of the Department, the Joint Venture and the National
Treasury and its primary objective was to monitor the implementation of the project.
Its chairperson was Ms Bernice Africa, the Department's Chief Director: Property
and Facilities Management. The committee proposed, amongst other things, that the
envisaged lease agreement should constitute a finance lease. In terms of s 76(3) of
the Public Finance Management Act 1 of 1999 (the PFMA) read with Regulations
13.2.4 and 16 of the Treasury Regulations,5 a finance lease requires the approval of
the National Treasury. The Treasury Regulations make provision for four categories
of approval, namely Treasury Approval I (TA I); Treasury Approval IIA (TA IIA);
Treasury Approval IIB (TA IIB) and Treasury Approval III (TA III). Upon being
approached to grant the requisite approvals, the National Treasury instead granted
exemptions in relation to TA I, TA IIA and TA IIB, stating that the exemptions were
granted by virtue of 'the developments that have already taken place'. However, the
National Treasury insisted on due compliance with respect to TA III. To this end,
the National Treasury required that the Department submit certain documentation,
namely:
(a) the final draft Public Private Partnership (PPP) agreement;
(b) the final draft nominee agreement;
(c) the final financial model, including detailed information on contingent liabilities
and the impact of exchange rate movements on project cash-flows;
(d) the PPP contract management plan; and
(e) documents indicating the preferred bidder's capacity and track record in the
financing, design and construction of buildings (American company) and facilities
management (South African company).

5 The Regulations were published in Government Notice R225, Government Gazette no 27388 dated 15 March 2005.

[16] At the first meeting of the Steering Committee held on 21 June 2016 attended
by representatives from both Simeka Group and Regiments Capital on the one hand,
and the Department on the other, it was, inter alia, agreed that:
(a) an offer to purchase the land had been 'verbally accepted by the current owners'
and that it was envisaged that a written agreement should be concluded by 30 June
2016 with a deposit of US $1 million payable within 60 days thereafter;
(b) that the transaction had by then metamorphosised into a finance lease and that
the Department would consider contributing towards the purchase of the land;
(c) that Simeka Group would represent the Department as the latter's agent in the
acquisition of the land with the South African Government in effect becoming the
purchaser of the land.

[17] At its subsequent meeting held on 19 January 2017, the Steering Committee
agreed that the Department would pay a non-refundable deposit of US $60 million
towards the acquisition of land for the project in terms of a Project Preparation
Agreement (the PPA) that was at that stage envisaged.

[18] At this juncture two points of fundamental importance should be made. First,
it was by now envisaged that the Department would finance both the acquisition of
the land and the construction of the offices and residential accommodation. Second,
this development represented a radical departure from what the RFPs had envisaged
and required when the project went out on tender. As a rationale for this radical
departure from what the RFPs contemplated, it was explained that it would be best
for the Government 'to take title of the property for purposes of [diplomatic]
immunities and privileges'. The Steering Committee further agreed that:
(a) the PPA should be submitted by 27 January 2017;

(b) TA III application should be submitted to the National Treasury by 31 March
2017; and
(c) the 'targeted' date for the TA III approval was 30 April 2017.

[19] What happened next was that on 25 March 2017 the Government, represented
by the Department, on the one hand and Lemascene and Regiments Capital on the
other, concluded the PPA. In terms of clause 4.1 of the PPA, Lemascene would
represent the Government and, as the latter's agent, identify potential project sites
and 'enter into negotiations with owners [of land]' and thereafter 'present such
[p]roject [s]ites in their order of priority to the Department' for it to identify a
preferred site of its choice. Following this, Lemascene would then 'procure ... the
Land Purchase Agreement' to be concluded between Lemascene and Serendipity as
agents for the Department. The PPA explicitly provided in clause 4.5 thereof that
Lemascene and Serendipity 'shall have no beneficial interest or rights nor assume
any obligations in terms of or in the Land Purchase Agreement or the chosen site ... '
This meant that the Department would be the sole party to purchase the land and
generally fund the project. This was, of course, at variance with the explicit
requirements of the RFPs that provided that the successful tenderer would solely
bear such an obligation.

[20] Clause 7 of the PPA, inter alia, provided that '[t]he Department shall make an
advance payment of US$ 9 000 000.00 (nine million US Dollars), representing ...
twenty per cent (20%) of the purchase price of the Project Sites ... to Lemascene for
the execution of the Preparatory Work' which is inclusive of the payment of a deposit
of US $5 million. It bears mentioning that the total purchase price of the property in

terms of the agreement concluded on 29 June 2017 between Serendipity – in its
representative capacity – and the land owners was US $47 850 000.

[21] On 29 August 2017, and as explicitly provided for in the PPA, the Department
acting in collaboration with Lemascene, prepared a letter under the hand of its then
Director-General addressed to the National Treasury in terms of which an
application was made for the TA III approval. In support of its application, the
Department provided the National Treasury with a report in terms of Treasury
Regulation 16.5.6. The Department also expressed its confidence as to the feasibility
of the project as well as its 'strategic operational and financial benefits ownership'
that it had 'interrogated thoroughly', emphasising that the project 'would provide
value for money for [the] Government'. The Department, being overly confident of
the viability of the project, proposed to the National Treasury that it 'be afforded the
opportunity to present the project to the National Treasury colleagues on 11
September 2017'.

[22] But there was a new twist of events that ultimately scuppered the entire
project. In the wake of allegations that had enjoyed wide-spread publicity to the
effect that a member of the Joint Venture, ie Regiments Capital, was associated with
a notorious family perceived to have corruptly siphoned vast sums of money from
the government and more especially from State-owned entities, the National
Treasury expressed grave misgivings about granting the required TA III approval.

[23] In order to circumvent and allay what by all accounts had become justifiable
concerns raised by the National Treasury, Simeka Group wrote to the Department
confirming that it had taken note of the 'concerns raised by the National Treasury

committee' that had convened to consider 'the TA III approval application of the
project'. It then proposed that Regiments Capital should withdraw from the Joint
Venture so that Simeka Group could then proceed with the project on its own. This
proposal found favour with the Department. Pursuant thereto Simeka Group,
Regiments Capital, Lemascene and Serendipity concluded a termination agreement
during December 2017 in terms of which Regiments Capital terminated the Joint
Venture. Regiments Capital further undertook to, inter alia: (a) relinquish any and
all of its rights, title and interest in the project; and (b) irrevocably procure the
resignation of directors nominated by it to the board of directors of Lemascene.

[24] Although the sole objective of the termination agreement was to enable
Simeka Group, as an untainted entity, to proceed with the implementation of the
project to its intended conclusion, the National Treasury was still not convinced and,
as a result, refused to grant TA III approval. The entrenched position taken by the
National Treasury in refusing to grant the TA III approval precipitated a crisis for
both the Department and Simeka Group. In an endeavour to extricate itself from the
resultant quagmire, the Department consulted the State Attorney who, on 29 June
2018, wrote to the attorneys representing the respondents indicating, inter alia, that
the award of the tender to the Joint Venture was fraught with irredeemable
irregularities. Consequently, the Department went on to intimate that it would bring
a review application to the high court to have the award of the tender to the Joint
Venture declared constitutionally invalid and unlawful. Some three months
thereafter this litigation commenced.

[25] On 10 October 2018, the government parties instituted review proceedings in
the high court seeking the following relief:

'1
Declaring the award of the tender for the appointment of a development partner for the
design, construction, operation, maintenance and financing of a suitable and sustainable
office and residentia1 accommodation for South African diplomatic missions in
Manhattan, New York City, New York (DIRCO 10/2015/16) to the joint venture
comprising the first and second respondents to be unlawful and / or unconstitutional and
/or invalid;
Setting aside the award of the aforesaid tender to the joint venture comprising the first and
second respondents;
Setting aside the Project Preparation Agreement concluded between the third applicant and
the third respondent pursuant to the awarding of the tender to the first and second
respondents;
Directing the first, second, third and / or fourth respondents to repay to the third applicant
the Rand equivalent of US $9 million, together with interest thereon at the prescribed rate
of interest calculated from the date of this order to date of payment.'
In this Court, as was the case in the high court, the relief sought in terms of paragraph
4 of the notice of motion was not pursued. Thus, nothing more need be said of this
prayer.

[26] As already mentioned, the review application failed before Hughes J who
dismissed it solely on the basis of delay. Consequently, the high court did not enter
into the substantive merits of the review.

[27] It is timely at this juncture to observe that in its review, the government parties
relied on a number of alleged irregularities in the tender process. In particular, they
asserted that:
(a) the two parties that had responded to the RFPs were not treated equally in that
Lephuthing/Menzibali Construction's bid was disqualified because it had not
provided the required audited financial statements whereas the Joint Venture was

not, despite the fact that it too had failed to provide the required audited financial
statements;
(b) as for Regiments Capital as a party to the Joint Venture, no financial statements
at all were provided;
(c) both the BEC and BAC ignored the requirements of the RFPs in order to favour
the Joint Venture;
(d) the Joint Venture failed to meet the RFPs' requirement to provide proof that it
had the ability to raise the requisite funding for the project;
(e) once the tender was awarded to the Joint Venture, and pursuant to decisions taken
by the Project Steering Committee, the Department was burdened with the obligation
to fund the project whereas this should have been the sole responsibility of the Joint
Venture in compliance with both the RFPs and the contract concluded between the
parties.

Nature of the review
[28] It is helpful at this juncture to get one uncontentious preliminary issue out of
the way. The logical point of departure in a matter such as this is to determine
whether the review is one to be dealt with under the Promotion of Administrative
Justice Act 3 of 2000 (PAJA) or the principle of legality. I have above said that the
issue is, in the context of the facts of this case, uncontentious. The parties are in
agreement that this review falls to be dealt with under the principle of legality,6 since
it is the Department that seeks to invalidate its own decision. Whilst cognisant that
Gijima generated widespread interest amongst academic commentators and even

6 See, for example in this regard: State Information Technology Agency SOC Limited v Gijima Holdings (Pty) Limited
[2017] ZACC 40; 2018 (2) SA 23 (CC) (Gijima) para 41; MEC for Health, Eastern Cape and Another v Kirland
Investments (Pty) Ltd [2014] ZACC 6; 2014 (5) BCLR 547 (CC); 2014 (3) SA 481 (CC) (Kirkland).

attracted trenchant academic criticism, it is, however, not necessary for present
purposes to say more on that score.7

[29] In Fedsure Life Assurance Ltd and Others v Greater Johannesburg
Transitional Metropolitan Council and Others,8 the Constitutional Court said that:
'It seems central to the conception of our constitutional order that the legislature and the executive
in every sphere are constrained by the principle that they may exercise no power and perform no
function beyond that conferred upon them by the law'.9
The Constitutional Court went on to elaborate that:
'… a local government may only act within the powers lawfully conferred upon it. There is nothing
startling in this proposition - it is a fundamental principle of the rule of law, recognised widely,
that the exercise of public power is only legitimate where lawful. The rule of law – to the extent at
least that it expresses this principle of legality – is generally understood to be a fundamental
principle of constitutional law. This has been recognised in other jurisdictions. In The Matter of a
Reference by the Government in Council Concerning Certain Questions Relating to the Secession
of Quebec from Canada the Supreme Court of Canada held that:
"Simply put, the constitutionalism principle requires that all government action comply with the
Constitution. The rule of law principle requires that all government action must comply with the
law, including the Constitution. This Court has noted on several occasions that with the adoption
of the Charter, the Canadian system of government was transformed to a significant extent from a
system of Parliamentary supremacy to one of constitutional supremacy. The Constitution binds all
governments, both federal and provincial, including the executive branch (Operation Dismantle
Inc. v. The Queen, [1985] 1 S.C.R. 441, at p.455). They may not transgress its provisions: indeed,

7 See, for example, in this regard: C Hoexter 'South African Administratice Law at Crossroads: The PAJA and the
Principle
of
Legality'
(2018)
Administrative
Law
in
the
Common
Law
World,
available
at
https://adminlawblog.org/2017/04/28/cora-hoexter-south-african-administrative-law-at-a-crossroads-the-paj-and-
the-principle-of-legality/; S Woolman 'The Amazing, Vanishing Bill of Rights' (2007) 124 South African Law Journal
762, 784; R H Freeman (2019) Constitutional Court Review Vol 9, 521-535.
8 Fedsure Life Assurance Ltd and Others v Greater Johannesburg Transitional Metropolitan Council and Others 1999
(1) SA 374; 1998 (12) BCLR 1458 (Fedsure).
9 Fedsure para 58.

their sole claim to exercise lawful authority rests in the powers allocated to them under the
Constitution, and can come from no other source".'10 (Footnotes omitted.)

[30] Almost two years later, in Pharmaceutical Manufacturers Association of
South Africa and Another: In re Ex Parte President of the Republic of South Africa
and Others,11 the Constitutional Court explained that the principle of legality is 'an
incident of the rule of law'12 which is a founding value of the Constitution itself.13
Ngcobo J further clarified the principle of legality in Affordable Medicines Trust and
Others v Minister of Health and Another,14 as follows:
'The exercise of public power must therefore comply with the Constitution, which is the supreme
law, and the doctrine of legality, which is part of that law. The doctrine of legality, which is an
incident of the rule of law, is one of the constitutional controls through which the exercise of public
power is regulated by the Constitution.'15

[31] On this score, it is as well to remember that s 2 of the Constitution decrees
that the Constitution is 'the supreme law of the Republic' and that 'conduct
inconsistent with it is invalid. In that event, s 172(1)(a) of the Constitution enjoins
the courts to declare any conduct inconsistent with it to be invalid. What is clear
from this Constitutional imperative is that once a court has found that any conduct
is, as a fact, inconsistent with the Constitution, such a court is obliged to declare it

10 Ibid para 56.
11 Pharmaceutical Manufacturers Association of South Africa and Another: In re Ex Parte President of the Republic
of South Africa and Others 2000 (2) SA 674; 2000 (3) BCLR 241.
12 Ibid para 17.
13 The source of this is s 1 of the Constitution which provides that:
'The Republic of South Africa is one, sovereign, democratic state founded on the following
values:
(a) Human dignity, the achievement of equality and the advancement of human rights and freedoms.
(b) Non-racialism and non-sexism.
(c) Supremacy of the constitution and the rule of law.' (My emphasis.)
14 Affordable Medicines Trust and Others v Minister of Health and Another [2005] ZACC 3; 2006 (3) SA 247 (CC);
2005 (6) BCLR 529 (CC).
15 Ibid para 49.

invalid. It has no choice in the matter. It is therefore against this backdrop that the
application by the government parties in the high court seeking the review of the
Department's own decision in awarding the contract to the Joint Venture in the first
place and the subsequent wholesale variation of the requirements of the RFPs by the
Steering Committee, thereby relieving the Joint Venture of its contractual
obligations, falls to be considered.

Brief contentions of the parties
[32] In this Court, as in the high court, the overarching contentions of the
government parties is that the Joint Venture woefully failed to satisfy even the barest
minimum of the criteria prescribed by the RFPs in that:
(a) the Joint Venture failed to submit audited financial statements for the three years
preceding the tender as required;
(b) that the bid documents were submitted solely in the name of Simeka Group
whereas the RFPs dictated that in the case of a joint venture, the parties to the joint
venture ought to do so;
(c) the Joint Venture failed to provide proof of its ability to raise the requisite funding
for the project and, instead, only submitted a letter that purported to prove the ability
of Simeka Group and the latter's associate shareholders; and
(d) for what they were worth, the financial statements submitted by the Joint
Venture, such as they were, revealed that the Joint Venture lacked the financial
ability to perform the project.

[33] Moreover, the government parties contended that the agreement concluded
pursuant to the tender was a radical departure from what the RFPs had required and
envisaged. Insofar as the delay in instituting the review proceedings is concerned,

upon which the review application faltered in the high court, the edifice of the
government parties' case rested on three pillars. First, it was argued that there was
no delay, but if there was, such delay was adequately explained, and in any event,
not unreasonable. In addition to this, it was contended that the high court's decision
to the contrary was due to a misconception of the true facts on its part. Lastly, the
government parties submitted that the pervasive unlawfulness in the award of the
tender in the first place and the subsequent conclusion of the PPA, militated in favour
of the delay being overlooked and for the review and setting aside of the award of
the tender to follow as an inevitable consequence.

[34] For its part, the Joint Venture contended that the non-suiting of the
government parties solely on the basis of delay is unassailable. With regard to the
substantive merits of the review, the Joint Venture submitted that the contention that
the 'responsiveness criteria' were not satisfied, thus justifying the setting aside of the
award on this basis, has not been established on the papers. Counsel argued that even
if they were established, these were neither material nor did they occasion any
prejudice to the Department and therefore cannot provide a basis for the award of
the tender to be set aside.

[35] It was further submitted on behalf of the Joint Venture that the conclusion of
the PPA bore no relevance to the award of the tender and that, in any event, the
financial contribution by the Government to the acquisition of the land as envisaged
in the PPA was not proscribed by the RFPs. Accordingly, this case requires this
Court to determine first and foremost whether there was any non-compliance with
the requirements of the RFPs. If so, whether, once established, such non-compliance
with the tender requirements as required by the law was material. Of course, the

constitutional and legislative procurement framework and prescripts will be central
to the determination of the dispute between the protagonists in this litigation.

Constitutional framework
[36] The logical point of departure in a case such as this is of course s 217 of the
Constitution itself. The section provides:
'(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.

Statutory framework
[37] The most relevant legislation in the context of the facts of this case is the
PFMA. According to its Preamble, the PFMA seeks, inter alia, to 'regulate financial
management in the national and provincial governments; to ensure that all revenue,
expenditure, assets and liabilities of those governments are managed efficiently and
effectively'. The object of the PFMA is set out in s 2 thereof. It is 'to secure
transparency, accountability, and sound management of revenue, expenditure, assets
and liabilities of the institutions 16 to which [the PFMA] applies'. In addition,

16 Section 3 provides, inter alia, that the Act applies, to the extent indicated, to departments which are defined s 1 of
the PFMA to mean ‘a national or provincial department or a national or provincial government component.’

s 51(1)(a)(iii) of the PFMA requires that an accounting authority for a department
must ensure and maintain 'an appropriate procurement and provisioning system
which is fair, equitable, transparent, competitive and cost effective'.

Legal approach
[38] It is apposite at this juncture to say something about the proper approach to
the role that procedural requirements play in procurement matters. In Allpay
Consolidated Investment Holdings (Pty) Ltd and Others v Chief Executive Officer of
the South African Social Security Agency and Others,17 the Constitutional Court
disapproved of this Court's approach to procedural requirements when this Court
opined that these should 'not be considered on their own merits, but instead through
the lens of the final outcome'.18 The Constitutional Court cautioned that such an
approach 'conflates the different and separate questions of unlawfulness and
remedy'. It emphasised that '[i]f the process leading to the bid's success was
compromised, it cannot be known with certainty what course the process might have
taken had the procedural requirements been properly observed'. 19 This dictum
assumes, in my view, significance in this case for reasons that will become apparent
later. The Constitutional Court went on to observe, with reference to international
authority, 20 that 'deviations from fair process may themselves all too often be
symptoms of corruption or malfeasance in the process'.21 The Constitutional Court
then proceeded to explain that insistence on compliance with process formalities
served a three-fold purpose, viz:

17 Allpay Consolidated Investment Holdings (Pty) Ltd and Others v Chief Executive Officer of the South African Social
Security Agency and Others [2013] ZACC 42; 2014 (1) SA 604 (CC); 2014 (1) BCLR 1 (CC) (Allpay Consolidated).
18 Ibid para 24.
19 Ibid para 24.
20 Transparency International Handbook For Curbing Corruption In Public Procurement (2006) at 35 & 42.
21 Allpay Consolidated para 27.

(a) it ensures fairness to participants in the bid process;
(b) it enhances the likelihood of efficiency and optimality in the outcome; and
(c) it serves as a guardian against a process skewed by corrupt influences.22

[39] Insofar as the requirement of materiality is concerned, O'Regan J aptly
captured the core of this requirement in African Christian Democratic Party v
Electoral Commission and Others23 when she said that in essence the question is
'whether what the applicant did constituted compliance with the statutory provisions
viewed in the light of their purpose'.24 And, as already indicated above, the logical
starting point in this enquiry is s 217 of the Constitution. On this score, what
Moseneke DCJ said in Steenkamp NO v Provincial Tender Board of the Eastern
Cape (Steenkamp)25 is instructive. The learned Deputy Chief Justice said:
'Section 217 of the Constitution is the source of the powers and function of a government tender
board. It lays down that an organ of state in any of the three spheres of government, if authorised
by law may contract for goods and services on behalf of government. However the tendering
system it devises must be fair, equitable, transparent, competitive and cost-effective. This
requirement must be understood together with the constitutional precepts on administrative justice
in section 33 and the basic values governing public administration in section 195(1).'26
Hot on the heels of Steenkamp, this Court explained this theme in Millennium Waste
Management as follows:
'The final Constitution lays down minimum requirements for a valid tender process and contracts
entered into following an award of tender to a successful tenderer (s217). The section requires that

22 Ibid.
23 African Christian Democratic Party v Electoral Commission and Others [2006] ZACC 1; 2006(3) SA 305 (CC);
2006(5) BCLR 579 (CC).
24 Ibid para 25.
25 Steenkamp NO v Provincial Tender Board of the Eastern Cape [2006] ZACC 16; 2007 (3) SA 121 (CC); 2007 (3)
BCLR 300 (CC).
26 Ibid para 33.

the tender process, preceding the conclusion of contracts for the supply of goods and services,
must be "fair, equitable, transparent, competitive and cost-effective".'27 (Footnotes omitted.)

[40] In similar vein, Schutz JA, in emphasising the importance of adhering to
relevant legal prescripts, had occasion to observe in Premier of the Free State
Provincial Government and Others v Firechem Free State (Pty) Ltd (Firechem),
that:28
'One of the requirements of such a procedure is that the body adjudging tenders be presented with
comparable offers in order that its members should be able to compare. Another is that a tender
should speak for itself. Its real import may not be tucked away, apart from its terms. Yet another
requirement is that competitors should be treated equally, in the sense that they should all be
entitled to tender for the same thing. Competiveness is not served by only one or some of the
tenderers knowing what is the true subject of tender. One of the results of the adoption of a
procedure such as Mr McNaught argues was followed is that one simply cannot say what tenders
may or may not have been submitted, if it had been known generally that a fixed quantities contract
for ten years for the original list of products, and some more, was on offer. That would deprive the
public of the benefit of an open competitive process.'29

[41] Finally, it is necessary to make reference to the National Treasury Regulations
issued in terms of s 76 of the PFMA. The Treasury Regulations place a high premium
on the need to develop and implement an effective and efficient supply chain
management system in regard to the procurement of goods and services. That system
is required to be fair, equitable, transparent, competitive and cost-effective as
decreed by s 217 of the Constitution. The learned author of The Law of Government

27 Millennium Waste Management (Pty) Ltd v Chairperson of the Tender Board: Limpopo Province and Others [2007]
ZASCA 165; [2007] SCA 165 (RSA); 2008 (2) SA 481; 2008 (5) BCLR 508; 2008 (2) SA 481 (SCA) para 4.
28 Premier of the Free State Provincial Government and Others v Firechem Free State (Pty) Ltd [2000] ZASCA 28;
2000 (4) SA 413 (SCA); [2000] 3 All SA 247 (A) (Firechem).
29 Ibid para 30.

Procurement in South Africa 30 says the following in regard to the underlying
rationale for a competitive and fair procurement process:
'One of the primary reasons for the express inclusion of the five principles in section 217(1) of the
Constitution is to safeguard the integrity of the government procurement process. The inclusion of
the principles, in addition to ensuring the prudent use of public resources, is aimed at preventing
corruption.'31

[42] Of fundamental importance in the context of the facts of this case is Treasury
Regulation 16A which pertinently regulates supply chain management processes in
relation to, inter alia, government departments. In Allpay Consolidated, the
Constitutional Court emphasised, albeit in a difference context, that '[t]he facts of
each case will determine what any shortfall in the requirements of the procurement
system – unfairness, inequity, lack of transparency, lack of competitiveness or cost-
efficiency – may lead to…'.32 As already indicated above, in awarding the tender and
pursuant to which the Department concluded the contract and PPA with the Joint
Venture, the Department was exercising public power. And as we are here dealing
with a self-review by a government department, the principle of legality is the only
permissible avenue through which the decisions at issue here may be reviewed.
Accordingly, as Madlanga J and Pretorius AJ observed in State Information
Technology Agency SOC Limited v Gijima Holdings (Pty) Limited (Sita),33 the
pertinent question is:
'[d]id 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.'34

30 Bolton The Law of Government Procurement in South Africa 2007.
31 Ibid at 57.
32 Allpay Consolidated para 43.
33 State Information Technology Agency SOC Limited v Gijima Holdings (Pty) Limited [2017] ZACC 40; 2018 (2)
BCLR 240 (CC); 2018 (2) SA 23 (CC).
34 Ibid para 40.

[43] In this case there was no dispute that the process preceding the award of the
tender did not accord with the dictates of s 217 of the Constitution. This is because
the BEC and the BAC, both of which were central to the ultimate award of the tender,
failed at every turn in conscientiously discharging their constitutional and statutory
responsibilities. This then raises the question as to whether the Department acted
contrary to the dictates of the Constitution which is the supreme law in this country.35

[44] Before us, lead counsel for the government parties addressed the substantive
merits of the review first, and the issue of delay last. In this judgment, I shall adopt
the same approach.36

[45] It is timely at this stage to address the substantive merits of the review itself.
Two important points in this regard need to be emphasised. First, in a review of
administrative action taken under the procurement process, courts are enjoined to
assess the evidence that impugns the procurement process to establish whether such
evidence justifies the conclusion that any one of the grounds of review has been
established. And, as the Constitutional Court held in Allpay Consolidated, albeit in
a different context, if the reviewing court finds that 'there are valid grounds for
review, it must declare the procurement process to be constitutionally invalid and set
it aside.'37

[46] What the Constitutional Court said in Allpay Consolidated bears repeating.
The Constitutional Court stated that:

35 Section 2 of the Constitution decrees that the Constitution ‘is the supreme law of the Republic; law or conduct
inconsistent with it is invalid, and the obligations imposed by it must be fulfilled.’
36 Compare: South African National Roads Agency Limited v City of Cape Town [2016] ZASCA 122; [2016] 4 All
SA 332 (SCA); 2017 (1) SA 468 (SCA) para 81.
37 Allpay Consolidated paras 44 and 45.

'The materiality of irregularities is determined primarily by assessing whether the purposes the
tender requirements serve have been substantively achieved.'38

[47] In dealing with the substantive merits of the review itself, it will be helpful to
set out again in broad terms what the RFPs required of prospective bidders for the
tender under consideration in this case. The following represents the key components
of the tender gleaned from the RFPs that were not met by the Joint Venture:
(a) bidders were required to submit audited financial statements for the three-year
period preceding the tender;
(b) the successful bidder was required to acquire the land and provide office and
residential accommodation at own cost;
(c) the prospective bidders were required to demonstrate that they had the requisite
financial resources to undertake the project; and
(d) where a bid is submitted by a consortium or joint venture, each member of the
consortium or joint venture was required to submit audited financial statements for
the three-year period preceding the bid.

[48] As already indicated in paragraph 10 above, only two bids were received by
the closing date. One of them was disqualified at the outset since it had not provided
audited financial statements for the preceding three financial years as required. The
remaining tender, submitted by the Joint Venture, was referred to the BEC for
evaluation. Having considered the bid, the BEC recommended to the BAC that it
ought to be accepted. For its part, the BAC, in turn, recommended to the
Director-General that the Simeka Group's bid should be accepted. This

38 Ibid para 58.

recommendation found favour with the Director-General who accepted it and
thereafter concluded an agreement with Simeka Group.

[49] Against the foregoing backdrop, the complaints raised by the government
parties will now be considered. In order to avoid prolixity, not all of the complaints
raised against the award will be traversed in this judgment. This judgment will be
confined to those complaints that either individually or cumulatively lead to one
conclusion that the BEC or BAC or both deviated in material respects from the
requirements of the RFPs.

Failure to submit complete set of audited financial statements
[50] Amongst the criteria stipulated in the RFPs, is that set out in clause 7.1.2. It
required bidders who submit bids either as a consortium or joint venture, to submit
audited financial statements for each member of the consortium or joint venture.
Simeka Group does not have qualms with this criterion, nor does it dispute that it
failed to provide audited financial statements for the preceding three years. Simeka
Group attributes its failure to do so to the fact that it was in the process of changing
its auditors. The failure by Simeka Group to meet this requirement was heavily relied
upon by the government parties both in the heads of argument and in oral argument
before us.

[51] Whilst accepting that Simeka Group failed to submit audited financial
statements, counsel for the respondents argued that the BEC required to evaluate the
bid elected to overlook this requirement presumably because it 'saw no difficulty
with this requirement' for the reason that it considered that the requirements of clause
7.1.2 had been satisfied. Instead the BEC 'urged that the financial statements ... must

be forwarded to Internal Audit for [thorough investigation] of the financial position
of the company'. Building on this, it was contended that the BEC must be taken to
have either waived this requirement because the provisions of the RFPs permitted
waiver, or, alternatively, decided to 'prequalify the Simeka Group' provided that its
unaudited financial statements were 'sent to Internal Audit for thorough
investigation'.

[52] I do not think that the contentions advanced on behalf of the respondents can
avail them. To uphold these contentions would undermine the letter and spirit of
s 217 of the Constitution that seeks to ensure that the procurement of goods and
services by organs of state is 'fair, equitable, transparent, competitive and cost-
effective'. As the Constitutional Court aptly put it in Allpay Consolidated:
'Compliance with the requirements for a valid tender process, issued in accordance with the
constitutional and legislative procurement framework, is thus legally required. These requirements
are not merely internal prescripts that ... may [be] disregard[ed] at whim. To hold otherwise would
undermine the demands of equal treatment, transparency and efficiency under the Constitution.'39

[53] In these circumstances counsel's reliance on Airports Company South Africa
v Tswelokgotso Trading Enterprises CC (Airports Company)40 does not assist the
respondents. Airports Company was concerned with an entirely different issue and
the passage upon which counsel relied was made in the context of the facts of that
case. Nor is it helpful for the respondents to invoke the case of City of Cape Town v
Aurecon South Africa (Pty) Ltd (Aurecon).41 What the Constitutional Court said in

39 Para 40.
40 Airports Company South Africa v Tswelokgotso Trading Enterprises CC [2018] ZAGPJHC 476; 2019 (1) SA 204
(GJ) para 28.
41 City of Cape Town v Aurecon South Africa (Pty) Ltd [2017] ZACC 5; 2017 (6) BCLR 730 (CC); 2017 (4) SA 223
(CC).

Aurecon,42 was in the context of determining the question whether the delay in
instituting the review was unreasonable or not. And the Constitutional Court there,
said that since the BEC and BAC were domestic committees mandated by the City
itself for purposes of the tender process their knowledge had to be imputed to the
City.43

Failure to submit relevant documentation by each member of the Joint Venture
[54] The RFPs required, in terms of clause 7.1.3 thereof, that where a bid is
submitted in the name of, for example, a Joint Venture, the bid documents must be
submitted in the name of all the parties to the joint venture. Here, the crux of the
complaint is that the bid documents were submitted in the name of Simeka Group
only, excluding Regiments Capital that was said to be a party to the Joint Venture.
In this case, there is no dispute that the bid documents were in the name of Simeka
Group only. The submissions advanced by the respondents in contesting this ground
are multi-pronged. The first is that the Department itself had, in its letter of 26 April
2018 addressed to the National Treasury, effectively asserted that this ground lacked
substance. It was therefore argued that the Department has not explained why it later
changed tack in its review application and contended that its acceptance of the bid
documents of Simeka Group was an error without explaining how the error came
about.

[55] Moreover, counsel for the respondents relied on Buffalo City Metropolitan
Municipality v Asla Construction (Pty) Limited (Asla)44 in which Cameron J in a

42 Ibid para 39.
43 Ibid.
44 Buffalo City Metropolitan Municipality v Asla Construction (Pty) Limited [2019] ZACC 15; 2019 (6) BCLR 661
(CC); 2019 (4) SA 331 (CC).

minority judgment emphasised that courts '[s]hould be vigilant in ensuring that state
self-review is not brought by state officials with a personal interest in evading the
consequences of their prior decisions'.45 I do not think that the respondents' reliance
on the remarks of Cameron J in Asla is necessarily helpful for present purpose. What
is clear from this passage is that Cameron J's remarks were made in the context of
determining whether an unreasonable delay ought to be overlooked. What is of
paramount importance is whether there is evidence that the state officials have
brought the self-review application for ulterior motives. In this case the conspectus
of the evidence, such as it emerged from the record, does not suggest that this is the
position. Thus, the passage from Asla seized upon by the respondents finds no
application in the present context where the issue has solely to do with
non-compliance with the requirements of the RFPs which is not in dispute. In Govan
Mbeki Municipality v New Integrated Credit Solutions (Pty) Ltd,46 this Court was
dealing with a similar situation when it stressed that the conduct of the officials who
institute a legality review should be scrutinised to ensure that they do not
unjustifiably claim high moral ground in circumstances where it is through their own
malfeasance that the illegality complained of came about.

The Joint Venture's ability to raise the required funding
[56] Insofar as the Joint Venture's ability to raise the required funding is concerned,
the government parties invoked clause 7.1.6 of the RFPs. This clause stipulated,
amongst others, that the 'minimum requirements to be met by bidders in order to
proceed to the next round of the evaluation process' were 'proven ability to raise the
required funding in the form of a financial institution letter'. Allied to this clause are

45 Ibid para 139.
46 Govan Mbeki Municipality v New Integrated Credit Solutions (Pty) Ltd [2021] ZASCA 34; [2021] 2 All SA 700
(SCA); 2021 (4) SA 436 (SCA) para 45.

clause 2, Item 3 of clause 7.2.2 and clause 9.6.5. The latter clauses stipulated that
the successful bidder must be 'able to finance, procure and maintain, accommodation
and act as landlord to the Government of the RSA' and to 'demonstrate its ability to
finance the property acquisition ... at ... own cost and risk' respectively. To that end
'the audited financial statements of the Bidders' would be scrutinised.

[57] The clauses to which reference has been made in the preceding paragraph
were no doubt designed to serve at least three critical purposes. The purpose of
clause 7.1.6 was to require the bidders to satisfy the Department by way of
objectively verifiable information that the bidders had sufficient funds to deliver on
what the RFPs contemplated, hence bidders were required to demonstrate their
ability to do so. Finally, bidders had to demonstrate their ability to raise the required
funding by providing a letter from a financial institution to do so. The letter of 12
April 2016 submitted by the Joint Venture from Rand Merchant Bank (RMB)
purported to demonstrate the Joint Venture's ability to raise the required funding.
However, at best for the Joint Venture this letter confirmed only one thing, namely
that 'Simeka and its shareholders' were long-standing clients of the Firstrand Group
and therefore RMB expressed confidence in the ability of Simeka's shareholders 'to
provide the requisite equity and deliver the project successfully'.

[58] The government parties contended that the shortcomings in the letter from
RMB were palpable. First, the letter said nothing about the ability of the Joint
Venture to raise the required funding. Second, on its fair reading, the letter did not
purport to confirm that the Joint Venture had the ability to provide the requisite
funding having regard to the fact that the project would cost in excess of
US $159 000 000. More fundamentally, argued the government parties, the

conclusion of the PPA represented a radical departure from what the RFPs had
required. Consequently, there was in fact no competitive process, so the argument
concluded. It was submitted that the terms of the PPA reinforced the notion that the
Joint Venture lacked the ability to raise the required funding. It was therefore argued
that the cumulative effect of these factors was that the public was deprived of the
benefit of an open competitive process. In support of these contentions, the
government parties called in aid the decision of this Court in Firechem.47

[59] The common thread running through the respondents' counter argument is that
none of the complaints raised by the government parties has merit. The broad stroke
of the argument is that the BEC and BAC had both satisfied themselves that the
requirements of the tender had been met. As to the letter from RMB, it was argued
that it 'confirm[ed] a number of things', namely that: (a) RMB stated its ability to
fund the transaction; (b) RMB was aware of the nature of the Project that it was
willing to finance; (c) it was aware that the Project involved Simeka and Regiments
Capital as a joint venture; (d) Serendipity had been incorporated; and (e) it knew
what was required in terms of funding.

[60] However, what is beyond question is that the RMB's letter did not explicitly
state that Simeka Group and Regiments Capital, as parties to the Joint Venture,
individually had the requisite ability to raise the required capital. The RFPs required
bidders themselves to demonstrate their ability to fund the project and not, as has
been seen in this case, the ability of RMB to fund the project. Differently put, the
ability required by the RFPs is that of the Joint Venture and not RMB.

47 Firechem para 30. See also: Asla paras 89-92.

[61] As is invariably the case when it comes to procurement of goods and services
by organs of state, the RFPs is designed to serve at least two crucial purposes. First,
it informs the prospective bidders of what is required of them. Second, it
foreshadows the terms of the contract that would be concluded between the organ of
state and the successful bidder to be incorporated in the contract. In the context of
the facts of this case, there can be no doubt as to what the RFPs required.

[62] This judgment therefore concludes that the Joint Venture was not able to
provide what the Department desired and unambiguously required. Furthermore,
having regard to the irregularities of which the government parties complain in this
litigation, a finding that such irregularities have been established and are material
must ineluctably lead to the conclusion that the ensuing contract concluded between
the Department and the Joint Venture during May 2016 falls to be declared
constitutionally invalid and thus unlawful.

Delay
[63] This then brings me to the issue of delay. Insofar as the substantive merits of
this case are concerned, this judgment has already concluded above that the award
of the tender was contrary to the dictates of s 217 of the Constitution and the RFPs
itself. Coupled with this, is the fact that those intimately involved in the
implementation of the project subsequently agreed on something that was
fundamentally at variance with the requirements of the RFPs. Therefore, it is now
timely to determine whether the admitted delay was, as the high court found, both
unreasonable and unexplained. In the event that the delay is found to be
unreasonable, it will be necessary to determine whether it should nevertheless be
overlooked.

[64] It is as well to remember that here, we are dealing with a legality review which
is not subject to the time constraints prescribed by s 7(1) of PAJA.

[65] Nevertheless, even before the advent of our constitutional order and the
enactment of PAJA, our courts had long held that reviews must, as a general rule, be
instituted without undue delay. The rationale for this time-honoured requirement
was explained by Brand JA in Associated Institutions Pension Fund and Others v
Van Zyl and Others48 as follows:
'It is a longstanding rule that courts have the power, as part of their inherent jurisdiction to regulate
their own proceedings, to refuse a review application if the aggrieved party had been guilty of
unreasonable delay in initiating the proceedings. The effect is that, in a sense, delay would
'validate' the invalid administrative action (see eg Oudekraal Estates (Pty) Ltd v City of Cape Town
and others [2004] 3 All SA 1 (SCA) 10b-d, para 27). The raison d'etre of the rule is said to be
twofold. First, the failure to bring a review within a reasonable time may cause prejudice to the
respondent. Second, there is a public interest element in the finality of administrative decisions
and the exercise of administrative functions (see eg Wolgroeiers Afslaers (Edms) Bpk v
Munisipaliteit van Kaapstad 1978 (1) SA 13 (A) 41).

The scope and content of the rule has been the subject of investigation in two decisions of this
court. They are the Wolgroeiers case and Setsokosane Busdiens (Edms) Bpk v Voorsitter,
Nasionale Vervoerkommissie en 'n Ander 1986 (2) SA 57 (A). As appears from these two cases
and the numerous decisions in which they have been followed, application of the rule requires
consideration of two questions:
(a) Was there an unreasonable delay?
(b) If so, should the delay in all the circumstances be condoned?
(See Wolgroeiers 39 C-D.)

48 Associated Institutions Pension Fund and Others v Van Zyl and Others [2004] 4 All SA 133 (SCA) paras 46 – 48.

The reasonableness or unreasonableness of a delay is entirely dependent on the facts and
circumstances of any particular case (see eg Setsokosana 86G). The investigation into the
reasonableness of the delay has nothing to do with the court's discretion. It is an investigation into
the facts of the matter in order to determine whether, in all the circumstances of that case, the delay
was reasonable. Though this question does imply a value judgment it is not to be equated with the
judicial discretion involved in the next question, if it arises, namely, whether a delay which has
been found to be unreasonable, should be condoned (See Setsokosane 86E-F).'49

[66] Cameron J endorsed this abiding principle in Merafong City Local
Municipality v AngloGold Ashanti Limited50 and reiterated that:
'... The rule against delay in instituting review exists for good reason: to curb the potential prejudice
that would ensue if the lawfulness of the decision remains uncertain. Protracted delays could give
rise to calamitous effects. Not just for those who rely upon the decision but also for the efficient
functioning of the decision-making body itself.'51

[67] In Khumalo and Another v Member of the Executive Council for Education:
KwaZulu Natal (Khumalo)52 Skweyiya J, whilst acknowledging the indisputable
existence of the delay rule, observed that courts nevertheless have a discretion to
overlook a delay where appropriate. He said:
'[A] court should be slow to allow procedural obstacles to prevent it from looking into a challenge
to the lawfulness of an exercise of public power. But that does not mean that the Constitution has
dispensed with the basic procedural requirement that review proceedings are to be brought without
undue delay or with a court's discretion to overlook a delay.'53

49 See Setsokosane Busdiens (Edms) Bpk v Voorsitter, Nasionale Vervoerkommissie en 'n Ander 1986 (2) SA 57 (A)
at 86 E-F.
50 Merafong City Local Municipality v AngloGold Ashanti Limited [2016] ZACC 35; 2017 (2) BCLR 182 (CC); 2017
(2) SA 211 (CC)
51 Ibid para 73.
52 Khumalo and Another v Member of the Executive Council for Education: KwaZulu Natal [2013] ZACC 49; 2014
(3) BCLR 333 (CC); (2014) 35 ILJ 613 (CC); 2014 (5) SA 579 (CC).
53 Ibid para 45.

[68] In support of this statement Skweyiya J relied on s 23754 of the Constitution
and held:
'... Section 237 acknowledges the significance of timeous compliance with constitutional
prescripts. It elevates expeditious and diligent compliance with constitutional duties to an
obligation in itself. The principle is thus a requirement of legality.

This requirement is based on sound judicial policy that includes an understanding of the strong
public interest in both certainty and finality. People may base their actions on the assumption of
the lawfulness of a particular decision and the undoing of the decision threatens a myriad of
consequent actions.

In addition, it is important to understand that the passage of a considerable length of time may
weaken the ability of a court to assess an instance of unlawfulness on the facts. The clarity and
accuracy of decision-makers' memories are bound to decline with time. Documents and evidence
may be lost, or destroyed when no longer required to be kept in archives. Thus the very purpose
of a court undertaking the review is potentially undermined where, at the cause of a lengthy delay,
its ability to evaluate fully an allegation of illegality is impaired.'55 (Footnotes omitted.)

[69] However, it is as well to remember, as the Constitutional Court in Sita
emphasised, that '[n]o discretion can be exercised in the air' and that '[t]here must be
a basis ... to do so'. The Constitutional Court there concluded that '[t]hat basis may
be gleaned from facts placed [before the court] by the parties or objectively available
factors'.56

54 Section 237 which is headed 'Diligent performance of obligations' provides:
'All constitutional obligations must be performed diligently and without delay.'
55 Khumalo paras 46 – 48.
56 Sita para 49.

[70] Reverting to the aspect of the discretion vesting in a court to condone a delay
in instituting review proceedings, it bears emphasising that the Constitutional Court
cautioned that:
'While a court "should be slow to allow procedural obstacles to prevent it from looking into a
challenge to the lawfulness of an exercise of public power", it is equally a feature of the rule of
law that undue delay should not be tolerated. Delay can prejudice the respondent, weaken the
ability of a court to consider the merits of a review, and undermine the public interest in bringing
certainty and finality to administrative action. A court should therefore exhibit vigilance,
consideration and propriety before overlooking a late review ... .'57 (Footnotes omitted.)

[71] In determining the issue of whether the delay in instituting the review
proceedings was unreasonable, the high court held, with reference to judicial
authority,58 that the delay in this instance was unreasonable. And that the extent of
the delay militated against such delay being overlooked.

[72] In essence, the high court reasoned:59
'The conduct of the Department in unacceptable. This is apparent from the fact that National
Treasury on 26 January 2018 actually placed the Department on terms to take action in light of the
irregularity they had determined. The Department ... was dogmatic when it did not heed the advice
of the irregularity provided on 16 October 2017. In fact, it proceeded ahead as though the
pronouncement by National Treasury had not been made and that the Department was correct in
awarding the tender to Simeka.

... the Department has failed to be open, responsive, forthright and accountable, as a State organ
ought to be, who seeks a self-review ... the Department ... has not submitted a full explanation for
the unreasonable delay in launching this review application.'

57 Department of Transport and Others v Tasima (Pty) Limited [2016] ZACC 39; 2017 (1) BCLR 1 (CC); 2017 (2)
SA 622 (CC) (Tasima I) para 160.
58 Tasima I para 48. See also: Asla paras 48 – 54; Khumalo paras 48-49.
59 High court judgment paras 45-46.

[73] It then continued:
'The crucial correspondence of 16 October 201760 has been omitted and no reason is advanced for
such omission. There is no information regarding how the decision was researched to do an about
turn after it had been persisting with the project even in light of the irregular pronouncement. In
essence, the conduct of the Department from the beginning was that they need not seek
condonation and when called to explain just provided a weak response. Thus, where there is no
full explanation this amounts to no explanation to explain the delay.

Therefore, there is no basis upon which I can overlook the inordinate delay, that being the case, I
therefore cannot be expected to exercise my discretion to afford the Department the relief it
seeks.'61 (Footnotes omitted.)

[74] The high court was nevertheless cognisant of the implications of the National
Treasury's refusal to grant the TA III approval for the project, describing the refusal
as 'monumental'. It also acknowledged that the inevitable consequence of the
National Treasury's refusal to grant the TA III approval meant that 'the lease of the

60 This was a reference to the letter addressed by National Treasury to the Department which reads:
'PROCUREMENT OF OFFICE AND RESIDENTIAL ACCOMODATION FOR SOUTH AFRICAN MISSION IN
NEW YORK CITY

I refer to the meeting between your department and the National Treasury (NT) on 19 January 2018 concerning the
procurement of land and development for the mission in New York City. I also refer to the procurement process issues
identified by the Office of the Chief Procurement Officer of NT communicated to your department in a letter dated
16 October 2017 (attached.)

The National Treasury will not be in position to issue Treasury Approval III for the Public Private Partnership (PPP)
to implement the project if the procurement issues are not resolved by your department. It is therefore advisable that
the department starts a new tender process and ensures that the correct procurement processes are followed.

As accounting officer you, should decide whether either-
(a)
to continue with procuring the land through the appointed service provider which is likely to entail irregular
expenditure given the procurement issues raised by the OCPO and/or the absence of Treasury approval III for the PPP;
or
(b)
to cancel the transaction with the service provider, which will result in fruitless and wasteful expenditure if
the deposit for the purchasing of the land is forfeited.
The department should consider soliciting its own legal opinion on the purchase of the land in the light of the
procurement process issues identified by the Office of the Chief Procurement Officer and all legal requirements
applicable to the transaction.'
61 High court judgment paras 47-48.

land already secured in the United States of America ... brings the entire project to
an abrupt halt'.62

[75] The high court, however, concluded that 'Simeka [was] now at the short end
of the stick, due to the Department seeking to avoid a declaration that it is responsible
for fruitless and wasteful expenditure'.63

[76] I interpose here to observe that the implication of the statement quoted in the
preceding paragraph is that the review proceedings were not instituted bona fide and
that the government parties were instead actuated by ulterior motives, thereby in
effect seeking 'to evade [their] constitutional obligation by way of a self-review'. In
coming to this conclusion the high court relied on a decision of this Court in Altech
Radio Holdings (Pty) Limited and Others v City of Tshwane Metropolitan
Municipality.64

[77] Ultimately, the high court exercised its discretion and, as already indicated,
refused to condone the delay concluding that 'the possible breach of legality does
not outweigh the undue delay absent an explanation'. (Emphasis added.)

[78] The high court's refusal to condone the delay in this case raises the question
whether in so doing, it exercised its discretion judicially. On this score, it is as well
to bear in mind that the discretion vesting in the high court was a narrow discretion

62 High court judgment para 51.
63 Ibid para 63.
64 Altech Radio Holdings (Pty) Limited and Others v City of Tshwane Metropolitan Municipality [2020] ZASCA 122;
2021 (3) SA 25 (SCA) paras 69 – 70.

that is invariably called a discretion in the true sense.65 And accepting, as one must,
that courts are enjoined to 'exhibit vigilance, consideration and propriety' before
overlooking a late review, this then sharply raises the question whether in the context
of the facts of this case, the interests of justice dictate that the admitted delay should
be overlooked.

[79] That the government parties delayed in instituting the review proceedings
(which the protagonists agreed was – in a worst case scenario – approximately 29
months) brooks no argument to the contrary. The government parties sought to
overcome this procedural obstacle by proffering an explanation therefor. In essence,
they asserted that:
(a) whilst this is admittedly a self-review, it was however explained that once the
National Treasury was adamant that procurement processes undertaken by the
Department were irregular, it became necessary to consult with members of the BEC
in order to 'ascertain whether they had an answer' to the National Treasury's
statement questioning the regularity of the procurement process;
(b) because the members of the BEC 'were all in diplomatic missions scattered
around the world' assembling them for consultation with counsel in South Africa
turned out to be a protracted and time-consuming mission;
(c) on 26 April 2017, and after consulting members of the BEC, the Department
responded to the National Treasury's queries;
(d) in the interim, on 26 January 2018, the National Treasury painted its colours to
the mast and unequivocally stated that it would not grant the requisite TA III
approval;

65 See in this regard: Media Workers Association of South Africa and Others v Press Corporation of South Africa Ltd
[1992] 2 All SA 453 (A); 1992 (4) SA 791 (A) at 800G-H.

(e) on 15 and 18 May 2018, the National Treasury again indicated in no uncertain
terms that it remained unpersuaded and persisted in its stance that the tender process
was irregular and therefore remained resolute that the TA III approval would not be
granted; and
(f) finally, given the enormity of the task, collating the mound of documentation
provided to counsel for purposes of drafting the founding papers, the preparation of
the review application papers was, despite best endeavours by counsel, also time-
consuming.

[80] In Swifambo Rail Leasing (Pty) Limited v Passenger Rail Agency of South
Africa,66 a delay of three years was condoned in circumstances where the full extent
of malfeasance at PRASA was concealed from the Board.67 There, this Court, inter
alia, held that some of the important considerations that would weigh heavily with a
court considering the question as to whether to condone delay, are the interests of
justice 68 and the public interest. In the context of the facts of this case these
considerations loom large, especially in the light of the breath-taking amount of
public funds involved and the extent to which the requirements of the RFPs were
deviated from both during evaluation and adjudication stages and, significantly,
when the PPA was concluded. And as the Constitutional Court observed in Allpay
Consolidated, the 'facts of each case will determine what any shortfall in the
requirements of the procurement system' as prescribed by s 217 of the Constitution
should lead to.69

66 Swifambo Rail Leasing (Pty) Limited v Passenger Rail Agency of South Africa [2018] ZASCA 167; 2020 (1) SA 76
(SCA) (Swifambo).
67 Ibid paras 34 and 36.
68 Swifambo paras 40-42. See, for example, Grootboom v National Prosecuting Authority and Another [2013] ZACC
37; 2014 (2) SA 68 (CC); 2014 (1) BCLR 65 (CC); [2014] 1 BLLR 1 (CC); (2014) 35 ILJ 121 (CC) para 51.
69 Allpay Consolidated para 43.

[81] In Aurecon, the Constitutional Court held that '[t]he interests of clean
governance ... require judicial intervention' where irregularities uncovered by an
investigation raised a spectre of corruption, collusion or fraud in the tender process.
In such circumstances a court might well be justified in 'look[ing] less askance in
condoning the delay'. 70  Although the government parties have disavowed any
reliance on corruption, collusion or fraud in this case, both in their heads of argument
and before us, it is to be noted that in Central Energy Fund SOC Ltd and Another v
Venus Rays Trade (Pty) Ltd and Others,71 this Court said that, as a general rule even
innocent counterparties are not entitled to benefit or profit from an unlawful contract.

[82] The substantive merits of the appeal have already been addressed above.72
The conclusion reached in relation thereto, and for the reasons already articulated,
is that the entire procurement process in this matter was riddled with unexplained
irregularities. This is borne out by objective facts which reveal that the requirements
of a constitutionally fair, equitable, transparent, competitive and cost-effective
procurement system were flouted at every turn. What is more, is that once the tender
was awarded to the Joint Venture, the members of the Steering Committee arrogated
to themselves the power to deviate from the requirements of the RFPs in a most
fundamental way that was at odds with both constitutional 73  and statutory
prescripts.74

70 Aurecon para 50.
71 Central Energy Fund SOC Ltd and Another v Venus Rays Trade (Pty) Ltd and Others [2022] ZASCA 54; 2022 (5)
SA 56 (SCA) para 42.
72 See paras 48 – 64.
73 Section 217 of the Constitution.
74 See, for example, ss 2, 3(a) and 38 of the Public Finance Management Act 1 of 1999.

[83] Whilst the RFPs, for example, envisaged a long term lease or 'lease to buy
property option' that entailed that the entity ultimately awarded the tender would
'identify and secure land', 'design and develop' the land to the Department's
specifications, 'operate, manage and maintain the facilities' and, importantly, 'raise
the required funding to finance both the capital and operational costs of acquiring
and managing the facilities', all of these were altered in material respects after the
award of the tender. This material and extra-ordinary deviation had the effect of
relieving the Joint Venture of its financial obligations which thereafter became the
sole responsibility of the Department contrary to what the RFPs had required.
Consequently, the requirements of a constitutionally fair, equitable, transparent,
competitive and cost-effective procurement system were subverted in the most
egregious manner.

[84] It bears emphasising that all of this occurred against the backdrop that the
project in issue was massive and required substantial financial resources from the
successful bidder. It is therefore unsurprising that ultimately, the RFPs caught the
attention of only two bidders, one of which was disqualified at the outset for failing
to meet the requirements of the RFPs.

[85] Whilst one must accept that the Department could have acted with more
urgency than it did in unravelling the facts, given that it sought to review its own
decision, sight should nevertheless not be lost of the fact that the bureaucratic
machinery is notorious for moving slowly even though the exigencies of a particular
case might require that matters be dealt with expeditiously. However, it must be
emphasised that recognising this reality in no way seeks to excuse laxity. It is more
to say that, notwithstanding the constitutional dictates of a responsive and

accountable public administration, the reality is that public administration in our
country has over time been allowed to slide to a quagmire of inefficiency. This is a
state of affairs that is antithetical to the values underpinning our constitutional order
that the citizenry holds dear.

[86] In this case, the tender was awarded to the Joint Venture – which in effect was
the only bidder after Lephuthing/Menzibali Construction had been disqualified at
the evaluation stage – on 17 May 2016. Pursuant thereto, on 24 March 2017, the
PPA was concluded. Thereafter, several steps, including applications made to the
National Treasury for approval of TA I; TA II and TA III, aimed at implementing
the project, were taken. Although the National Treasury had been instrumental in
some of the steps taken, it subsequently began to question the propriety of the tender.
This led to an exchange of correspondence between the Department and the National
Treasury over several months in which the latter raised questions about the
legitimacy of the procurement process. Ultimately, on 18 May 2018, the National
Treasury advised the Department that it would not grant the requisite TA III
approval.

[87] The review proceedings were then instituted on 10 October 2018. Thus,
reckoned from the date of the award of the tender, ie. 17 May 2017, the legality
review was instituted approximately 29 months thereafter. Although not entirely
comparable to the facts of the present case in which corruption, collusion or fraud
have been disavowed, in Swifambo this Court condoned a delay extending over three
years.

[88] As already indicated above, in refusing to overlook the admitted delay in
instituting the legality review, the high court exercised a narrow discretion. When
exercising a narrow discretion a court must, in the words of Hefer JA in Shepstone
& Wylie and Others v Geyser NO,75 'decide each case upon a consideration of all
relevant features, without adopting a predisposition in favour of or against' 76
granting appropriate relief.

[89] Accordingly, the power of an appellate court to interfere with the exercise of
such a discretion is circumscribed. The ambit of this power was described by the
Constitutional Court in Biowatch Trust v Registrar Genetic Resources and Others77
thus:
'   the ordinary rule is that the approach of an appellate court to an appeal against the exercise of a
discretion by another court will depend upon the nature of the discretion concerned. Thus where
the discretion contemplates that the Court may choose from a range of options, the discretion
would be a discretion in the strict sense ...
"[T]he ordinary approach on appeal to the exercise of a discretion in the strict sense is that the
appellate court will not consider whether the decision reached by the court at first instance was
correct, but will only interfere in limited circumstances; for example, if it is shown that the
discretion has not been exercised judicially or has been exercised based on a wrong appreciation
of the facts or wrong principles of law. Even where the discretion is not a discretion in the strict
sense, there may still be considerations which would result in an appellate court only interfering
in the exercise of such a discretion in the limited circumstances mentioned above.'78

75 Shepstone & Wylie and Others v Geyser NO 1998 (3) SA 1036 (SCA); [1998] 3 All SA 349 (A).
76 Ibid at 1045I-J. See also in this regard: MTN Service Provider (Pty) Ltd v Afro Call (Pty) Ltd [2007] ZASCA 97;
[2007] SCA 97 (RSA); [2008] 1 All SA 329 (SCA); 2007 (6) SA 620 (SCA) para 16.
77 Biowatch Trust v Registrar Genetic Resources and Others [2009] ZACC 14; 2009 (6) SA 232 (CC); 2009 (10)
BCLR 1014 (CC).
78 Ibid para 29.

The rationale for this principle is, as Cloete J aptly observed, that a narrow discretion
'requires in essence the exercise of a value judgment and there may well be a
legitimate difference of opinion as to the appropriate conclusion".'79

[90] In Florence v Government of the Republic of South Africa80 the Constitutional
Court elaborated on this theme and said:
'Where a court is granted wide decision-making powers with a number of options or variables, an
appellate court may not interfere unless it is clear that the choice the court has preferred is at odds
with the law. If the impugned decision lies within a range of permissible decisions, an appeal court
may not interfere only because it favours a different option within the range. This principle of
appellate restraint preserves judicial comity. It fosters certainty in the application of the law and
favours finality in judicial decision-making.'81

[91] Therefore, for interference by this Court with the exercise by the high court
of its discretion not to overlook the delay in this case to be warranted, it must be
satisfied, for example, that the high court's discretion has not been exercised
judicially or has been exercised based on a wrong appreciation of the facts or wrong
principles of law. Moreover, as the Constitutional Court emphasised in Giddey NO
v JC Barnard and Partners,82 that '[I]f the court [of first instance] takes into account
irrelevant considerations, or bases the exercise of its discretion on wrong principles,
its judgment may be overturned on appeal'.83 It is thus to that topic that I now turn.

79 Bookworks (Pty) Ltd v Greater Johannesburg Transitional Metropolitan Council and Another 1999 (4) SA 799 (W)
at 800E-F.
80 Florence v Government of the Republic of South Africa [2014] ZACC 22; 2014 (6) SA 456 (CC); 2014 (10) BCLR
1137 (CC).
81 Ibid para 113.
82 Giddey NO v JC Barnard and Partners [2006] ZACC 13; 2007 (5) SA 525 (CC); 2007 (2) BCLR 125 (CC).
83  Ibid para 22. See also: Erf One Six Seven Orchards CC v Greater Johannesburg Metropolitan Council:
Johannesburg Administration and Another 1999 (1) SA 104 (SCA) at 109 A-B.

[92] Bearing in mind the legal principles discussed in paragraphs 65 – 70 above in
regard to the proper approach when a court considers whether an unreasonable delay
should nevertheless be overlooked, I proceed to deal with the question whether in
this instance the high court exercised its discretion judicially when it refused to
overlook the delay. For reasons that will become apparent below, it is my judgment
that in the context of the facts of this case the high court failed to exercise its
discretion judicially. Put differently, it exercised its discretion based on a wrong
appreciation of the true facts or wrong principles of law. In Asla, the Constitutional
Court explained that '[I]n both assessments the proverbial clock starts running from
the date that the applicant became aware or reasonably ought to have become aware
of the action taken'.84 The Constitutional Court then continued:
'The approach to undue delay within the context of a legality challenge necessarily involves the
exercise of a broader discretion than that traditionally applied to section 7 of PAJA. The 180-day
bar in PAJA does not play a pronounced role in the context of legality. Rather, the question is first
one of reasonableness, and then (if the delay is found to be unreasonable) whether the interests of
justice require an overlooking of that unreasonable delay.'85

[93] I pause here to observe that the principle that one can extract from the passage
quoted in the preceding paragraph is that where the delay is found not to be
unreasonable that would in itself strongly militate in favour of overlooking the delay
and thus, paving the way for the court to enter into the substantive merits of the
review. Indeed, this is what the minority judgment in Asla recognised in instances
where there was no delay, noting that in that event a declaration of unlawfulness
should invariably follow describing this as a default position that accorded with the
principle of legality. 86

84 Asla para 49.
85 Ibid para 50.
86 Ibid para 118.

[94] Even in circumstances where the delay is found to be unreasonable, the
Constitutional Court tells us in Asla that a court will still be required to determine
whether such a delay should nevertheless be overlooked. This is what the Court said:
'Courts have the power in a legality review to refuse an application where there is an undue delay
in initiating proceedings or discretion to overlook the delay. There must however be a basis for a
court to exercise its discretion to overlook the delay. That basis must be gleaned from the facts
made available or objectively available factors.'87 (Footnotes omitted.)
The Constitutional Court then continued:
'The approach to overlooking a delay in a legality review is flexible. In Tasima I, Khampepe J
made reference to the "factual, multi-factor, context-sensitive framework" expounded in Khumalo.
This entails a legal evaluation taking into account a number of factors. The first of these factors is
potential prejudice to affected parties as well as the possible consequences of setting aside the
impugned decision. The potential prejudice to affected parties and the consequences of declaring
conduct unlawful may in certain circumstances be ameliorated by this Court's power to grant a just
and equitable remedy and this ought to be taken into account.'88(Footnotes omitted.)

[95] Moreover, Khumalo also tells us that 'an additional consideration in
overlooking an unreasonable delay lies in the nature of the impugned decision and
considering the legal challenges made against that decision'.89 We are also reminded
by Asla that the merits of the impugned decision 'must be a critical factor when a
court embarks on a consideration of all the circumstances of a case in order to
determine whether the interests of justice dictate that the delay should be condoned.
It would have to include a consideration of whether the non-compliance with
statutory prescripts was egregious'.90

87 Ibid para 53.
88 Para 54.
89 Para 57.
90 Para 56.

[96] The Constitutional Court went further and said:
'... [T]he extent and nature of the illegality may be a crucial factor in determining the relief to be
granted when faced with a delayed review. Therefore, this Court may consider, as part of assessing
the delay, the lawfulness of the contract under the principle of legality.'91 (Emphasis added.)

[97] Accordingly, the more egregious the non-compliance with constitutional and
statutory prescripts is when viewed against the extent and unreasonableness of the
delay the more a court will be inclined to overlook the delay. As it was put in Asla,
reviewing courts are therefore enjoined to 'balance the seriousness of the possible
illegality with the extent and unreasonableness of the delay'.92 On this score it is well
to remember that maladministration is inconsistent with the rule of law and
antithetical to our constitutional ethos that seeks to foster an open, accountable and
responsive government.

[98] In determining the issue of whether there was a delay in instituting the review,
the high court considered a number of factors. After outlining the general approach
to such issue, the high court observed that courts are generally intolerant of undue
delays because they undermine the court's ability to properly adjudicate disputes
between parties. It further noted that there should be a satisfactory explanation for
the delay. In evaluating the explanation proffered for the delay, the high court held
that it was patently deficient because the Department had, inter alia, woefully failed
to explain how the decision to award the tender was reached. This was further
compounded, the high court opined, by the fact that the Department had initially
defended its decision even in the face of grave concerns raised by the National

91 Asla para 58.
92 See minority judgment of Cameron and Froneman JJ in Asla para 147.

Treasury. In the event, the high court concluded that 'there was no basis upon which
[it could] overlook the inordinate delay'. Hence the dismissal of the application.

[99] Insofar as the delay in instituting the review is concerned, counsel for Simeka
Group argued that putting the facts in their proper perspective there can be no doubt
that the delay in this case was unreasonable. Further, so argued counsel, the
explanation proffered for the delay, such as it was, did not cover the entire period.
In elaboration, it was submitted that the decision sought to be reviewed was made
on 17 May 2016 and yet the review was instituted 29 months thereafter, on
18 October 2018. This, despite the fact that National Treasury had written to the
Department on 16 October 2017 indicating that '[T]here were some irregularities –
set out in detail in the letter from the National Treasury – in the appointment of
Simeka Group (Pty) Ltd'.

[100] In this case, there seems to be no dispute that the government parties delayed
in instituting the review proceedings. Thus, the crucial question that arises for
determination is whether the delay should be overlooked. The test for determining
this aspect of the case has been described as a flexible one, based on the proven facts
of each case and other objectively available considerations.93 Various factors bear
on this issue. First, this calls for a 'factual, multi-factor and context sensitive' enquiry
in which a whole range of factors are considered and evaluated.94 In this regard a
court is enjoined to take into account:
(a) any potential prejudice to interested parties;

93 Central Energy Fund SOC Ltd and Another v Venus Rays Trade (Pty) Ltd and Others [2020] ZAWCHC 164 para
290.
94 Valor IT v Premier, North West Province and Others [2020] ZASCA 62; [2020] 3 All SA 397 (SCA); 2021 (1) SA
42 (SCA) para 30.

(b) the potential consequences of setting aside the impugned decision; and
(c) how such potential prejudice could be ameliorated by invocation of s 172(1)(b)
of the Constitution which empowers a court deciding a constitutional issue to make
'any order that is just and equitable'.

[101] Secondly, the nature of the impugned decision and the extent and nature of
the illegality bear on this issue. On this score, Asla tells us that the stronger the
prospects of success, the more will a court readily incline in favour of overlooking
an unreasonable delay. Finally, the conduct of the functionaries is also relevant.
Here, the court must be vigilant to ensure that a self-review is designed to 'promote
open, responsive and accountable government rather than self-interest of state
officials seeking to evade the consequences of their prior decision'.95 I pause here to
observe that curiously, in the context of the facts of this case, the Departmental
officials persisted in their spirited defence of their decision to award the tender to
the Joint Venture even in the face of relentless promptings from the National
Treasury that the award was bedevilled by irredeemable irregularities.

[102] As already mentioned above, the conclusion of the high court was that the
delay in instituting the review proceedings was unreasonable. It then went on to hold
that:
(a) Simeka Group was not complicit in any corruption and whatever was asserted by
the Department to support the allegations of corruption was simply unsubstantiated;
(b) the Department had always been an enthusiastic supporter of the project;
(c) the 'entire process of attaining the land, leasing thereof, paying of the deposit and
payment of preparatory works and costs, occurred within the prescripts of the

95 Asla para 120.

Request for Proposals, the PPA … with the cooperation and consent of the
Department';
(d) the Department supported the award even after the National Treasury had
pronounced that the award of the tender was irrational; and
(e) the Department withheld the damning letter from the National Treasury stating
that '[T]here were some irregularities in the appointment of Simeka Group (Pty) Ltd'.

[103] Counsel for the respondents contended that the Department 'did nothing for
the 17 month period from the award of the tender' on 17 May 2016 and when the
National Treasury pointed out the irregularities on 16 October 2017. It was therefore
argued that it did not avail the Department that it was oblivious to these irregularities
until the National Treasury alerted it to them. This, asserted the respondents, was not
the end of the Department's difficulties. When, on 26 January 2018, the National
Treasury implored the Department to 'start a new tender process and ensure that the
correct procurement processes [were] followed', the Department should have there
and then immediately launched its review application and yet failed to do so until
some eight months thereafter, on 10 October 2018. Ultimately, it was submitted that
the sum total of these factors ineluctably lead to one conclusion which is that the
delay was unreasonable. Therefore, so it was argued, the conclusion of the high court
on this score was unassailable.

[104] In the light of the foregoing, it was submitted on behalf of the respondents that
there would be no basis for this Court to interfere with the high court's exercise of
the discretion vested in it not the condone the delay. That the high court was vested
with a discretion in the true sense is beyond question. Thus, the powers of this Court
to interfere with the exercise of such discretion are circumscribed. The

Constitutional Court explained the ambit of such a discretion, albeit in a different
context, thus:
'A court of appeal is not entitled to set aside the decision of a lower court granting or refusing a
postponement in the exercise of its discretion merely because the court of appeal would itself, on
the facts of the matter before the lower court, have come to a different conclusion; it may interfere
only when it appears that the lower court had not exercised its discretion judicially, or that it had
been influenced by wrong principles or a misdirection on the facts, or that it had reached a decision
which in the result could not reasonably have been made by a court properly directing itself to all
the relevant facts and principles.'96 (Footnotes omitted.)
On this score both Tasima I97 and Asla98 say that an unreasonable delay cannot be
'evaluated in a vacuum'. The court must in that event determine whether the delay
ought to be overlooked, and the basis for doing so 'must be gleaned from the facts
… or objectively available factors'.

[105] It was further submitted on behalf of the respondents that the obdurate stance
adopted by the Department in defending the award of the tender when the National
Treasury questioned its rationality is a clear indicator that it still believed that the
award of the tender was in line with constitutional prescripts. Whilst at first blush
there is much to be said for the proposition that the Department is to a large extent
the author of its misfortune, it is however necessary to put things in their proper
perspective.

[106] Although the high court considered the question whether the delay should be
overlooked and some of the relevant factors that bear on this question, it did not

96 National Coalition for Gay and Lesbian Equality and Others v Minister of Home Affairs and Others 2000 (2) SA
1; 2000 (1) BCLR 39 para 11. See further: Mathale v Linda and Another [2015] ZACC 38; 2016 (2) BCLR 226 (CC);
2016 (2) SA 461 (CC) para 40.
97 Tasima I para 159.
98 Asla para 53.

consider, as it appears from its judgment, the interests of justice as enjoined by
judicial authority, having regard both to the requirements of the RFPs and the
material deviation from what the RFPs had required. That the deviation from the
requirements of the RFPs was egregious brooks no argument to the contrary. As
already pointed out in para 11 above, the RFPs explicitly required that the successful
bidder must itself acquire land and provide finance for the construction of the office
and residential accommodation. The Department was only to be a lessee and hire the
accommodation for the duration of the lease. All of this, was materially varied after
the award of the tender pursuant to the decisions taken by the members of the
Steering Committee.

[107] The foundation upon which the underlying reasoning of the high court rested
in declining to overlook the delay has already been summarised in paragraph 7 above
and need not be repeated here. Those factors were central to the way in which the
high court ultimately exercised its discretion not to overlook the delay. Due to the
fact that the high court was influenced by wrong principles or could not reasonably
have made its decision had it properly directed itself to all the relevant facts and
principles, the foundation for its decision must necessarily disintegrate. Moreover,
it is not in dispute that during both the evaluation and adjudication stages there were
material deviations from the requirements of the RFPs. This much was not contested
by the respondents. Instead, the high water mark of their case, as I understood
counsel, was that the department's role-players who were instrumental in evaluating
and adjudicating the tender did not bother to take the high court into their confidence
and explain why they took the decisions they did. That there was no explanation
proffered from the officials of the Department who were intimately involved in these
processes to explain how these deviations came about, as should have been the case,

cannot in my view redound to the benefit of the respondents. These relevant factors,
too, were not adverted to by the high court in the exercise of its discretion. Nor, it
seems, was the high court cognisant that it was dealing with a legality review and
therefore vested with broader discretion than that traditionally applied to reviews
under PAJA.

[108] As it turns out, the interests of justice and the unexplained egregious material
deviations from the tender requirements coupled with the onerous financial burden
that the revision of the tender requirements post its award to Simeka Group are all
relevant factors that, amongst others, were not sufficiently accorded due weight by
the high court in determining whether the unreasonable delay should be overlooked.

[109] As to the interests of justice, the remarks of the Constitutional Court in
Brummer v Gorfil Brothers Investments (Pty) Ltd and Others99 are instructive. The
Constitutional Court there said that:
'The interests of justice must be determined by reference to all relevant factors including the nature
of the relief sought, the extent and cause of the delay, the nature and cause of any other defect in
respect of which condonation is sought, the effect on the administration of justice, prejudice and
the reasonableness of the applicant's explanation for the delay ... .'100

[110] In similar vein, this Court emphasised in Aurecon South Africa (Pty) Ltd v
City of Cape Town,101 with reference to judicial authority, that '[w]hether it is in the
interests of justice to condone a delay depends entirely on the facts and
circumstances of each case. The relevant factors in that enquiry generally include

99 Brummer v Gorfil Brothers Investments (Pty) Ltd and Others 2000 (5) BCLR 465; 2000 (2) SA 837 (CC).
100 Ibid para 3.
101 Aurecon South Africa (Pty) Ltd v City of Cape Town [2015] ZASCA 209; [2016] 1 All SA 313 (SCA); 2016 (2)
SA 199 (SCA) para 17.

the nature of the relief sought, the extent and cause of the delay, its effect on the
administration of justice and other litigants, … the importance of the issue to be
raised, and the prospects of success'.

[111] Notwithstanding the fact that the explanation for the delay is not entirely
satisfactory in certain respects, this shortcoming is compensated by the strong
prospects in favour of the Department. In particular, the enormous financial burden
that would be assumed by the Department following the material deviations from
the tender requirements as against the huge financial rewards that the Simeka Group
stands to reap if the tender remains intact in its revised form. As already indicated
above, the tender envisaged that Simeka Group – and not the Department – must
alone provide the funding for the project and bear sole responsibility for the
operational costs of the project. The cumulative effect of these factors and the high
stakes, especially for the Department, impels the conclusion that the delay ought to
be overlooked and the substantive merits of the review be considered. In these
circumstances, the present is an appropriate case where the high court should have
exercised its 'broader discretion in the context of a legality review' by overlooking
the unreasonable delay encountered in this case.

[112] To sum up: approaching the matter holistically, one cannot say with
conviction that the government parties were not in certain respects tardy in bringing
the review application. Thus, to a limited extent, one is constrained to share the
reserve expressed by the respondents that the review application could and should
have been instituted much earlier than what happened in this case. Nevertheless, that
the delay in this case, although inordinate, did not manifest indifference to what was
at stake is a weighty consideration that must tip the scales in favour of overlooking

the delay. This is particularly so, if the interests of justice, the substantive merits of
the review itself, and the extent of the material deviations from the requirements of
the RFPs coupled with the whopping amount that would be foisted on the
Department and indeed the fiscus if the review is dismissed solely on the basis of
delay without regard to the substantive merits of the review. Accordingly, given the
egregious nature of the infractions that occurred during the procurement process in
this case, the interests of justice dictate that procedural obstacles ought not to be
allowed to stand in the way of inquiring into the lawfulness or otherwise of the
exercise of public power.

[113] It is therefore my judgment that the high court failed to properly exercise a
judicial discretion as enjoined by judicial authority. The inevitable consequence of
this conclusion is that this Court is at large to itself exercise the discretion and, for
the reasons already stated, to overlook the delay in instituting the review
proceedings.

Relief
[114] In paragraph 4 of their notice of motion, the government parties sought an
order directing the respondents to repay the Rand equivalent of the deposit that the
Department paid towards the acquisition of the land in the USA. The Department
paid a deposit of US $9 million. It also claimed interest on this amount at the
prescribed rate from the date on which the high court order repayment of the deposit.
The conclusion reached in this judgment as to the merits of the review is that the
award of the tender to the Joint Venture was not in accordance with constitutional
prescripts. In terms of s 172(1)(a)102 of the Constitution our courts are obliged to

102 Section 172(1)(a) provides:

declare any law or conduct that is inconsistent with the Constitution invalid to the
extent of its inconsistency. However, in order to ameliorate the harsh consequences
flowing from a declaration of invalidity, our courts are empowered under s 172(1)(b)
of the Constitution to make 'any order that is just and equitable'.

[115] Although the power of the court under s 172(1)(b) has been described as wide,
it is, however, 'bounded ... by considerations of justice and equity'.103 In this case,
the parties agreed in the high court to separate and postpone the relief sought in terms
of prayer 4 of the notice of motion for later determination. Thus, the parties'
agreement in regard to this aspect of the case need not detain us for present purposes
and nothing more needs to be said on this aspect.

Costs
[116] There remains the question of costs to address. The government parties were
represented by four counsel in this Court. Whilst content with costs of two counsel
in the high court, lead counsel for the government parties asked for costs of four
counsel in this Court in the event of the appeal being successful.

[117] It is trite that a court enjoys a wide discretion in considering the question
whether costs of more than one counsel in any particular matter should be allowed.
Such discretion must be exercised judicially on a consideration of all the relevant
factors. The question always is, as Colman J posited in Koekemoer v Parity
Insurance Co Ltd and Another:104

'When deciding a constitutional matter within its power, a court-
(a) must declare that any law or conduct that is inconsistent with the Constitution is invalid to the extent of its
inconsistency.'
103 Sita para 5.
104 Koekemoer v Parity Insurance Co Ltd and Another (Koekemoer) 1964 (4) SA 138 (T).

'... whether, in all the circumstances, the expenses incurred in the employment of more than one
counsel were "necessary or proper for the attainment of justice or for defending the rights of the
parties", and were not incurred through "over-caution, negligence or mistake".'105
The learned Judge went on to mention, amongst others, the following as being some
of the relevant considerations: (a) the volume of evidence (oral or written) dealt with
by counsel or which she or he or they could reasonably have expected to be called
upon to deal with: (b) the complexity of the facts or the law relevant to the case; (c)
any difficulties or obscurities in the relevant legal principles or in their application
to the facts of the case; (d) the importance of the matter in issue, in so far as that
importance may have added to the burden of responsibility undertaken by counsel.106
This is by no means an exhaustive list. Ultimately, how a court should exercise its
discretion is essentially a matter of fairness to both sides.

[118] The general rule is that costs of four counsel will be allowed only if it is clearly
shown that the employment of more than two counsel was justified for purposes of
doing justice between the parties.107 The proper approach has been formulated in
various forms. In Stent v Roos,108 where costs of three counsel were sought, Innes
CJ stated that before costs of three counsel could be allowed, it must be shown that
a reasonable litigant would not have gone to court without the assistance of the third
counsel. In Umhlatuzi Valley Co., Ltd. v Hulett & Sons, Ltd,109 albeit in a different
context, Dove-Wilson JP stated that he was unable to say that the case before him

105 Id at 144F-145A. See also: Reilly v Seligson and Clare Ltd 1977 (1) SA 626 (A) at 641E-H.
106 Koekemoer at 144H.
107 Compare: South African Railways and Harbours v Illovo Sugar Estates Ltd and Another 1954 (4) SA 425 (N) and
the cases therein cited where three counsel were engaged.
108 Stent v Roos 1909 TS 1057 at 1064.
109 Umhlatuzi Valley Co., Ltd v Hulett & Sons, Ltd. 1914 35 NPD 224 at 226.

was one of such extraordinary difficulty or complexity as to warrant overriding the
Taxing Master's disallowance of the fees of third counsel.110

[119] What Jansen JA said in Scott and Another v Roupard and Another,111 with
reference to the remarks of Hiemstra J in the court of first instance, bears mentioning.
The learned Judge of Appeal stated the following:
'[I]t must be a very complicated case either as to the facts, which should require considerable
research and investigation, or because it involves very difficult and novel points of law before
costs of more than two counsel may be allowed.'112

[120] In Commissioner for South African Revenue Service v Hawker Air Services
(Pty) Ltd; Commissioner for South African Revenue Service v Hawker Aviation
Services Partnership and Others,113 this Court overturned the judgment of the court
of first instance where the latter court had awarded the costs of four counsel. Writing
for a unanimous court, Cameron JA, although he did not pertinently say anything
about the fact that costs of four counsel had been allowed in the high court because
its judgment was ultimately overturned, he nevertheless alluded to the fact that the
judgment was incorrect and the punitive scale114 of costs on the 'attorney and own
scale' were all predicated on the harsh criticism against SARS's office which this
Court found unjustified.

110 See also: Grobelaar v Havenga 1964 (3) SA 522 (N) at 530C where Harcourt J said that when more than two
counsel are involved it must be an exceptional case to warrant allowance of their fees.
111 Scott and Another v Roupard and Another 1972 (1) SA 686 (A).
112 Ibid at 690F.
113 Commissioner for South African Revenue Service v Hawker Air Services (Pty) Ltd; Commissioner for South African
Revenue Service v Hawker Aviation Services Partnership and Others [2006] ZASCA 51; 2006 (4) SA 292 (SCA);
[2006] 2 All SA 565 (SCA).
114 Ibid para 2-3.

[121] Whilst there can be no doubt that in preparing for the institution of the review
proceedings counsel would have waded through voluminous documentation in order
to distil the crux of the case of the government parties, I remain unpersuaded that
costs of four counsel on appeal will be justified. I have earlier alluded to the fact that
lead counsel was content with the costs of two counsel in the high court where
considerable work would have been undertaken in collating various documents, and
yet, counsel was happy to live with costs of two counsel without demur. We also
had the advantage of perusing the record and hearing argument on issues that were
germane for purposes of the appeal. In these circumstances, and taking a broad view
of the matter, I do not consider that it would be fair for purposes of doing justice
between the parties to allow the costs of four counsel on appeal. In this regard, it is
not without significance that although the respondents were represented by three
counsel on appeal, they asked for costs of two counsel only.

[122] Before making the order, I am constrained to mention that the finalisation of
this judgment was inordinately delayed due to a concatenation of various factors that
are unnecessary to traverse in this judgment. The cumulative effect of these factors
rendered it impossible for this judgment to be finalised expeditiously in keeping with
the abiding traditions of this Court. Nevertheless, I take full responsibility for this
delay which is deeply regretted.

[123] In the result the following order is made:
The appeal is upheld with costs, including the costs of two counsel.
The order of the high court is set aside and in its place is substituted the
following order:
'1
The late institution of the application for a legality review is condoned.

The award of the tender for the appointment of a development partner
for the design, construction, operation, maintenance and financing of a
suitable and sustainable office and residential accommodation for South
African diplomatic missions in Manhattan, New York City, New York
pursuant to a request for proposal (DIRCO 10/2015/16) to the joint venture
comprising Simeka Group (Pty) Ltd and Regiments Capital (Pty) Ltd is
declared constitutionally invalid and therefore unlawful.
The award of the tender referred to in paragraph 2 of this order is
reviewed and set aside.
The Project Management Agreement concluded between the
Department of International Relations and Cooperation and Lemascene (Pty)
Ltd pursuant to the award of the tender is declared to be of no legal force and
effect, reviewed and set aside.
The respondents, jointly and severally, are ordered to pay the costs of
this application, including the costs of two counsel where so employed.'

X M PETSE
DEPUTY PRESIDENT
SUPREME COURT OF APPEAL

Appearances:

For appellants:

G I Hulley SC (with S A Wentzel,
L Segeels-Nchube and V J Heideman)
Instructed by:

State Attorney, Pretoria
State Attorney, Bloemfontein

For respondents:

A E Bham SC (with L Sisilana and L S Crow)
Instructed by:

Mkabela Huntley Attorneys Inc., Sandton
McIntyre Van der Post, Bloemfontein

THE SUPREME COURT OF APPEAL OF SOUTH AFRICA
MEDIA SUMMARY OF JUDGMENT DELIVERED IN THE SUPREME COURT OF APPEAL

From:
The Registrar, Supreme Court of Appeal
Date:

14 June 2023
Status:
Immediate
The following summary is for the benefit of the media in the reporting of this case and does not
form part of the judgments of the Supreme Court of Appeal
Minister of International Relations and Cooperation and Others v Simeka Group (Pty) Ltd and Others
(610/2021) [2023] ZASCA 98 (14 June 2023)
Today the Supreme Court of Appeal (SCA) upheld the appellants’ appeal with costs including costs of
two counsel. It further set aside and replaced the order of the Gauteng Division of the High Court,
Pretoria (the high court).
The appeal, involving the Minister of International Relations and Cooperation, the Director General:
Department of International Relations and Cooperation and the Department of International Relations
and Cooperation as the first to third appellants respectively (the government parties), and Simeka Group
(Pty) Ltd (Simeka Group), Regiments Capital (Pty) Ltd (Regiments Capital), Lemascene (Pty) Ltd
(Lemascene) and Serendipity Investments SA LLC (Serendipity) as the first to fourth respondents
respectively, concerned a dispute which had its genesis in the award of a tender for the appointment of
a development partner for the design, construction, operation, maintenance and financing of suitable
and sustainable office and residential accommodation for South African diplomatic missions in
Manhattan, New York City, New York in the United States of America. The tender was awarded on 17
May 2016 by the third appellant, the Department of International Relations and Cooperation (the
Department), to a joint venture comprising the first and second respondent namely, Simeka Group and
Regiments Capital (the Joint Venture).
The substantive question before the SCA entailed a legality review concerning whether the award of
the tender to the Joint Venture, by the Department, was constitutionally valid and thus unimpeachable.
In addition to the reviewing of the tender award, the anterior question to be determined by the SCA was
whether there was an inordinate delay by the Department in instituting its legality review and, if so,
whether such a delay was inexcusable.
On 4 March 2016, the Department issued a Request for Proposals (the RFPs) for the appointment of a
development partner for the purposes indicated above. More specifically, the Department made it clear
that it sought to enter into a ‘long term lease’ or, a ‘lease to buy property’ option with a South African
incorporated entity that had ‘presence or collaboration’ in New York and ‘able to finance, procure and
maintain accommodation and act as landlord to the Government’ of the Republic of South Africa. To
achieve this objective, prospective bidders were explicitly requested to ‘identify and secure land’ in
Manhattan, New York City and to ‘design and develop or redevelop’ such land in accordance with the
Department’s tender specifications. The RFPs further required that the successful tenderer ‘raise the

required funding to finance both the capital and operational costs of acquiring and managing the
facilities’ for the beneficial use of the Department. On 17 May 2016, after evaluation and
recommendation by the Bid Evaluation Committee (the BEC) and adjudication by the Bid Adjudication
Committee (BAC), the tender was awarded by the Director General to the Joint Venture as the preferred
bidder for the project as the other competing bidder, a consortium comprising Lephuthing Investment
CC and Menzibali Construction CC, was disqualified on the basis that it had not submitted audited
financial statements in compliance with the requirements of the RFPs.
Following the award of the tender to the Joint Venture, a Steering Committee (the Committee)
comprising representatives of the Department, the Joint Venture and National Treasury, whose primary
objective was to monitor the implementation of the project, was established. The Committee proposed
that the envisaged lease agreement should constitute a finance lease which, according to legislation,
requires the approval of National Treasury. Upon being approached to grant the requisite approvals,
National Treasury granted exemptions in relation to Treasury Approval I – Treasury Approval IIB, stating
that the exemptions were granted by virtue of ‘the developments that have already taken place’.
However, National Treasury insisted on due compliance with respect to Treasury Approval III (TA III)
which required the Department to submit certain documentation namely, the final draft Public Private
Partnership (PPP) agreement, the final draft nominee agreement, the final financial model, the PPP
contract management plan and documents indicating the preferred bidder’s capacity and track record
in the financing, design and construction of buildings and facilities management.
At the Committee’s first meeting held on 21 June 2016, it was agreed that an offer to purchase the land
had been verbally accepted by the current owners and that a written agreement should be concluded
by 30 June 2021; thereafter the transaction had metamorphosised into a finance lease and the
Department was expected to contribute towards the purchase of the land; and Simeka Group would
represent the Department as its agent in the acquisition of the land with the South African Government
effectively becoming the purchaser of the land. At a subsequent meeting held on 19 January 2017, the
members of the Committee agreed that the Government would pay a non-refundable deposit of US $60
million towards the acquisition of land for the project in terms of a Project Preparation Agreement (PPA)
that was at that stage envisaged. The Committee further agreed that the PPA should be submitted by
27 January 2017, the TA III application should be submitted to National Treasury by 31 March 2017
and the target date for the TA III approval was 30 April 2017. Subsequently, on 25 March 2017, the
Government, represented by the Department on the one hand and Lemascene and Regiments Capital
on the other, concluded the PPA.
The PPA explicitly provided, in clause 4.5 thereof, that Lemascene and Serendipity ‘shall have no
beneficial interest or rights nor assume any obligations in terms of or in the Land Purchase Agreement
or the Chosen Site’ meaning that the Department was going to be the sole party that would purchase
the land and generally fund the project which was at variance with the explicit requirements of the RFPs
that provided that the successful tenderer would solely bear such an obligation. Clause 7 of the PPA
further provided that the Department shall make an advance payment of USD 9 000 000.00, which
represented twenty per cent of the Project Sites’ purchase price, to Lemascene for the execution of the
Preparatory Work which is inclusive of the payment of a deposit of US $5 million.
On 29 August 2017, and as explicitly provided for in the PPA, the Department, acting in collaboration
with Lemascene, prepared a letter under the hand of the then Director General to National Treasury in
terms of which an application was made for the TA III approval. The Department proposed to present
the project to National Treasury on 11 September 2017. However, in the wake of allegations that a
member of the Joint Venture, ie Regiments Capital, was associated with a well-known family perceived
to have corruptly siphoned vast sums of money from the government, National Treasury expressed
some misgivings about granting the required TA III approval. In reaction to this, Simeka Group wrote to
the Department, proposing that Regimens Capital should withdraw from the Joint Venture so that
Simeka Group could then proceed with the project on its own. This found favour with the Department
and subsequently the Joint Venture concluded a termination agreement during December 2017 in terms

of which Regiments Capital terminated the Joint Venture. Regardless of this, National Treasury was
still not convinced and, as a result, refused to grant TA III approval.
The Department consulted the State Attorney who, on 29 June 2018, wrote to the attorneys
representing the respondents indicating, inter alia, that the award of the tender to the Joint Venture was
fraught with irregularities. On 10 October 2018, the government parties instituted review proceedings
in the high court. The review application failed before the high court and was dismissed solely on the
basis of delay which the high court held was inordinate, unreasonable and not adequately explained.
Consequently, the high court did not enter into the substantive merits of the review.
In addressing the first issue, the SCA pointed out that this case required the SCA to determine firstly,
whether there was any non-compliance with the requirements of the RFPs and if so, whether non-
compliance with the tender requirements as required by the law was material. The SCA then went on
to state that in this case there was no dispute that the process preceding the award of the tender did
not accord with the dictates of s 217 of the Constitution because both the BEC and the BAC that were
central to the ultimate award of the tender failed at every turn in faithfully discharging their constitutional
and statutory responsibilities. Additionally, the SCA reasoned that when it comes to procurement of
goods and services by organs of state, the RFPs are designed to serve at least two crucial purposes,
that being to inform the prospective bidders of what is required of them and also to foreshadow the
terms of the contract that will be concluded between the organ of state and the successful bidder. In
concluding on the first issue, the SCA held that Simeka Group was not able to provide what the
Department desired and unambiguously required and that in having regard to the irregularities of which
the government parties complain, a finding that such irregularities have been established must
ineluctably lead to the conclusion that the ensuing contract concluded between the Department and
Simeka Group during May 2016 falls to be declared constitutionally invalid and thus unlawful.
On the issue of the inordinate delay by the Department in instituting its legality review, the SCA held
that there was no dispute that the government parties delayed in instituting the review proceedings,
thus raising the critical question for determination as to whether the delay ought to be overlooked. The
Court further held that in the context of the facts of this case, the high court failed to exercise its
discretion judicially in that it exercised its discretion based on a wrong appreciation of the true facts or
wrong principles of law. The SCA reasoned that although the high court considered the question
whether the delay should be overlooked and some of the relevant factors that bear on that question, it
did not consider the interests of justice as enjoined by judicial authority, having regard both to the
requirements of the RFPs and the material deviations from what the RFPs had required. The interests
of justice and the unexplained egregious material deviations from the tender requirements coupled with
the onerous financial burden that the revision of the tender post its award to the Simeka Group were all
relevant factors that, amongst others, were not sufficiently accorded due weight by the high court in
determining whether the unreasonable delay should be overlooked. In conclusion, the SCA, on this
point, held that the high court failed to properly exercise a judicial discretion as enjoined by judicial
authority.
In the result, the SCA made an order upholding the appeal with costs including costs of two counsel
and further setting aside and substituting the order of the high court, granting relief to the appellants as
prayed in their notice of motion.
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