In a legal battle that has spanned 15 years and at least 17 high court judges, the Eastern Cape government will head back to court this week in its gargantuan fight with a contractor over R41m in fees.
Ikamva Architects claims it lost R41m in fees when it was removed as principal agent on a R1.6bn project to renovate East London’s Frere Hospital.
Ikamva accepted the repudiation by the provincial departments of public works and health of its 2003 contract and summary replacement by the Coega Development Corporation, but sued in the Bhisho high court for what it said was profit on fees it would have earned from the multiyear project.
At least 17 Eastern Cape high court judges — sitting alone or as full benches — have already adjudicated the dispute between the firm and the departments, which now include that of finance.
Successive judgments have effectively found Ikamva was legally entitled to payment, with scathing comments that the government departments were serial defaulters and entirely responsible for the circumstances in which they found themselves, wasting considerable resources to avoid compliance with court orders.
The Supreme Court of Appeal (SCA) twice found against the departments, and the Constitutional Court once.
But the government has continued to litigate.
The provincial treasury has allocated R120m to cover Ikamva’s capital claim, interest on the debt and legal costs should government ultimately lose the case.
But based on informal discussions within Eastern Cape legal circles about the costs of the litigation by Ikamva thus far, that allocation may not be enough.
On Thursday, it will apply for a rescission of a November 2011 court order by then acting judge Buyiswa Majiki, which underpins the entire subsequent slate of litigation. The application comes as the government's third appeal is pending before the SCA.
Majiki’s order came after Ikamva endured a three-year struggle to “discover” contract documents — a legal process compelling parties to a dispute to provide documents to the other side.
She gave the departments 10 days to make discovery, failing which their defence would be struck out, and Ikamva could apply for judgment against them.
State attorney Sabelo Mgujulwa has said that, at the time, he was unable immediately to obtain instructions from departmental legal advisers; nor could he obtain contract documentation to comply with Majiki’s order, because the Coega Development Corporation would not release the documents.
The documents were eventually delivered to Ikamva’s lawyers, albeit out of time or incomplete. Mgujulwa's view was that government provided a large set of documents, “constituting substantial and good faith compliance” with the order.
None of the parties appealed against Majiki’s order but when Ikamva sought default judgment against the departments based on her order, judge Duncan Dukada said the order was ambiguous, ruling Ikamva must first apply to the court for the government’s defence to be struck out.
Writing for a full bench in an Ikamva appeal against Dukada’s decision, then Makhanda judge Clive Plasket found the Majiki order was “clear”, even if it was drafted differently from the usual order for such cases.
“I take this to be a strong indicator that an order having an effect different to the usual order was intended [by Majiki],” Plasket found.
The government applied for special leave in the SCA to appeal the Plasket judgment, and lost.
Successive judgments have effectively found Ikamva was legally entitled to payment, with scathing comments that the government departments were serial defaulters
It then sought condonation for its failure reflected in Majiki’s order, withdrew the application for condonation, and was landed with punitive costs by judge Murray Lowe, who remarked the protracted, stubborn refusal to comply with a court order represented “a waste of public monies” and “tells a sorry tale”.
In December 2015, then acting judge Thembekile Malusi awarded Ikamva default judgment for an amount of R41.03m, refusing to allow any appearance by the departments’ lawyers because of Majiki’s order.
Government next lost an application for leave to appeal Malusi’s decision, lost another application to rescind Malusi’s judgment, lost an Eastern Cape full bench appeal against the rescission application, lost an application to the SCA for special leave to appeal the Eastern Cape full bench appeal, and finally lost an application to the Constitutional Court for leave to appeal.
In 2021, judge Thami Beshe dismissed an application by the government for a self-review of the tender, rejecting argument that a proper procurement process was not followed in Ikamva’s appointment, flouting constitutional prescripts for fairness, transparency, competitiveness and cost-effectiveness.
She criticised the government for not disclosing how the appointment was made, while Ikamva argued that a roster system was followed for its appointment.
Also in 2021, the provincial department of finance joined public works and health to stave off a sheriff’s writ of attachment of health’s Standard Bank account which Ikamva sought to control to recover the debt owed by the government.
Writing a judgment for a full bench constituted by judge president Selby Mbenenge to deal with issues of law, deputy judge president David van Zyl stayed the writs.
But, in the process, he reopened the debate around the validity or correctness of the Majiki order, stating: “It must be accepted that the Majiki order was erroneous on the basis that it followed a one- as opposed to two-stage procedure.”
This thread in the judgment has now opened the door for the departments to go back to the beginning, seeking a rescission of Majiki's order.
In its December 2022 appeal judgment confirming Beshe’s findings that the original default judgment in Ikamva’s favour was valid and binding, the SCA confirmed that “public policy requires finality in litigation”.
Ikamva’s lawyers have taken up the refrain, stating in heads of argument already filed with the Bhisho high court that “the litigation in this matter cries out for finality”.
Thursday’s rescission case will be argued before the newest proposed member of the Eastern Cape high court bench, acting judge Ivana Bands. She was recently recommended by the Judicial Service Commission for permanent appointment as a judge by President Cyril Ramaphosa.
Ikamva will argue that Bands’ court has been “unprocedurally” constituted as an appeal court over all prior courts that have found against the provincial government.
Ikamva and its lawyers have already been excoriated in Van Zyl’s judgment for raising concerns about Mbenenge’s involvement in case-managing the matter as judge-president, when he had appeared as an advocate on behalf of government in an early leg of the matter.
Ikamva’s conduct and tone in objecting “to these routine matters borders on contempt and undermines respect for the judiciary”, Van Zyl wrote, awarding a punitive legal costs order against the firm.
Ikamva and the state attorney for government declined to comment.
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