May 11, 2017

A push in the right direction for public interest

Another ground-breaking judgment applauded by the general public was handed down on 5 April 2017 by the KwaZulu-Natal High Court in the matter of Westwood Insurance Brokers (Pty) Ltd v Ethekwini Municipality and Others (8221/16) [2017] ZAKZDHC 15 (5 April 2017) when the Court found the conduct of several employees of the eThekwini Municipality careless enough to resolve that such employees be held personally liable for some of the legal costs occasioned by this application.

During May 2015, the eThekwini Municipality advertised a tender to procure water loss insurance for damage from underground leaks.  As part of the procurement process, bidders had to comply with certain requirements which included being registered with the Financial Services Board as well as having underwriting insurance. NC South West Brokers (NCSWB), one of the bidders, was awarded this tender despite its not meeting these requirements. Consequently, another bidder, Westwood Insurance Brokers (WIB), challenged the award in court.

The municipality insisted that NCSWB had met all the requirements of the procurement process with some officials going as far as making statements under oath that this was in fact the case. The Court, however, found that awarding the tender was “highly questionable” and that there was a “lack of transparency and accountability on the part of public officials and persons performing public duty”.

The Court also found that the litigation brought on by this case was “wasteful” and that the costs of defending it should not be for the public’s account. It ruled that the Government officials who improperly awarded this tender should be held personally liable for a portion of the legal costs, unless they could prove that they acted in a proper manner.

Judge Pillay afforded the implicated officials an opportunity to submit affidavits setting out reasons why they believed they should not be held personally liable. However, none of these officials could explain how the whole procurement team could have found NCSWB to have met all the requirements which led to NCSWB landing the tender. Judge Pillay went on to state that their decision in awarding NCSWB the tender “was so bizarre that unsurprisingly even those who participated in making it cannot explain it”. As a result, he ordered that 50% of WIB’s legal costs be paid by NCSWB, with the remaining 50% to be paid by the implicated officials in equal shares.

It is common practice that the unsuccessful party to any legal action usually pays the legal costs of the successful party. In the case of a Government official acting in his official capacity, the relevant Government Department would have to cough up such costs, which is what makes this ruling so momentous in that it seems that finally our Government officials themselves may just have to start taking responsibility for the role they play in their sometimes questionable conduct in matters concerning public interest.

Author : Almie Fourie

Robin Twaddle & Associates ©2017, All rights reserved. - Disclaimer