Judge slams ‘grave injustice’ as 17-year legal row ends between architects and Eastern Cape government

After 17 years of brutal legal warfare that went all the way up to the highest courts in the country, the Supreme Court of Appeal has finally put an end to the Eastern Cape government departments’ efforts to stop a firm of architects from being paid what started off as R42-million in damages.

The drawn-out court battle has seen interest of more than R110-million accrue on the amount that was owed in 2007. The in duplum rule (that would see interest on a debt cease to run when the total amount of arrears interest accrued to an amount equal to the outstanding principal debt) had been waived somewhere along the line.

“It is evident from the above discussion that a grave injustice has been done to Ikamva. For an exceptionally long period it has been repeatedly prevented from executing on a valid judgment debt. Various courts, including this court, have pronounced on the validity of the judgment debt,” Supreme Court Judge Nambitha Dambuza said in her ruling last week.

She said the state departments “persistently used the courts and public funds to frustrate execution [of the court order in Ikamva’s favour]”.

The origins of the case were in 2003 when the Department of Public Works offered to appoint Ikamva as “consulting architects and principal agents” for maintenance work at Frere Hospital in East London.

An agreement was signed on 15 September 2003.

In March 2007, the Department of Public Works appointed the Coega Development Corporation (Coega) as the implementing agent for the same project. Coega appointed a different firm of architects to do the work that Ikamva had been contracted to do.

On 9 July 2007, the Department of Public Works wrote to Ikamva, informing the firm that the provincial government would not be honouring its obligations under the contract. Ikamva sued for R41-million for breach of contract.

The government departments that had been sued (Health and Public Works) filed a court plea stating that the contract was invalid as it was unconstitutional and in breach of the Preferential Procurement Policy Framework Act and its regulations.

In papers before the court in a review application, it was stated that there was no tender process followed before the appointment of Ikamva Architects. As the total value of the contract was about R70-million, it did not fall under the exceptions where this could be allowed.

At the time of their appointment, according to papers before court, there also was no budget allocated for the project. But Johan de Beer from Ikamva Architects said there was no tender procedure in place for these contracts and they were awarded on a roster system. The high court also found for Ikamva Architects in this regard.

Ikamva asked for more details. The government departments ignored this request. Ikamva obtained an order forcing the departments to provide more details relating to the plea within 10 days. The departments then complied. But Ikamva’s lawyers filed another application for further details. Again, the departments ignored the application.

This time the judge issued an order compelling the departments to provide the necessary details and noted that, should they ignore this court order as well, their defence would be struck.

The departments ignored that court order but appealed when it became clear that their defence had indeed been struck. An appeal followed, but this was dismissed.

The departments could have complied with the court order and brought an application to reinstate their defence, but they only did the latter and then withdrew it.

On 1 December 2015, Ikamva applied for a default judgment against the two departments and this was granted for R41-million.

The court also refused the government departments leave to appeal and a further application to have the judgment rescinded. A warrant of execution was then issued in favour of Ikamva.

In her reasons for refusing to rescind the judgment, Judge Belinda Hartle said the departments were litigating in a reckless manner and chose to “ignore the prejudice they had caused to Ikamva and to the public purse”.

A series of applications for leave to appeal, appeals, reviews, applications and cross-appeals in the high court, the Supreme Court and the Constitutional Court followed, spanning more than 15 years.

An order to attach government property to cover the damages owing to Ikamva was obtained but then suspended by agreement between the parties.

In September 2019, the departments returned to the high court with a self-review application seeking an order that Ikamva’s appointment as a consultant for the Frere Hospital project, and the contract concluded pursuant to that appointment, be reviewed and set aside. This too was unsuccessful.

Ikamva’s legal team then instructed the sheriff to proceed with the attachment of all the office furniture, equipment and vehicles of the two government departments.

The sheriff drew up inventories framed in similar terms, that the attached goods were: “All the office furniture and related office equipment and vehicles of the Department of Public Works, Health, Eastern Cape, Qhasana [Dukumbana] Building, Bhisho,” to the value of R42-million. An application to stop this attachment was sought and dismissed by the court.

Another order to attach more property from the government was issued on 10 March 2021, this time for the attachment of a bank account that belonged to the Department of Health.

More litigation followed and the court was asked to rule whether it was even possible to attach a bank account belonging to the government.

At this stage, the MEC of finance entered the fray, seeking leave to intervene and also to challenge the validity of the warrants of execution.

The court found that Ikamva could attach a bank account, saying that, under the circumstances, there was no legal basis for the order sought by the departments of permanently preventing execution of a valid and binding order, which was not susceptible to being set aside.

The Supreme Court confirmed this ruling last week.

But attorney Gary Stirk and his clients awaited one more ruling. The departments again applied for leave to appeal a ruling dismissing their applications to rescind the original default judgment and to strike the departments’ defence, in vain. DM

This story first appeared in our weekly Daily Maverick 168 newspaper, which is available countrywide for R35.