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07/09/2012 00:38

Pragmatic judgment sets a dangerous precedent | Opinion & Analysis

HERE seems to be no end to the unacceptable state of the public procurement system in SA. The extent of the corruption and technical incompetence in many government departments has reached an intolerable level.

Commentators often bemoan the economic consequences of maladministration or point to the inhumane conditions in which many citizens continue to live as a result of the lack of service delivery. But the latest decision of the North Gauteng High Court is a reminder of another insufferable consequence a growth, which although borne out of practical necessity, now threatens to undermine fundamental principles of the legal system itself.
http://www.bdlive.co.za/opinion/2012/09/05/pragmatic-judgment-sets-a-dangerous-precedent

The result is quite sobering. An invalid contract riddled with corruption is not cancelled because the consequences would be too disastrous. The basis for this remedy is the legal requirement that orders must be just and equitable. In deciding what was just and equitable, Judge Matojane looked for guidance from the Supreme Court of Appeal, which recently held that: The guideline involves striking a balance between the applicants interests on the one hand and the interests of the respondents on the other. That is, that a balance must be struck between legality and certainty. Originally, it seemed, the appeal courts attitude was that the invalidity of a contract cannot depend on the discernibility of harsh consequences flowing from such invalidity. But the approach has evolved with time because of the practical consequences of invalidating contracts. It developed the principle that not every slip in the administration of tenders necessarily needs be visited by judicial sanction. Therefore, the mere failure to comply with one or another administrative provision would not mean that the whole procedure would be void. Ironically, in another matter involving the South African Social Security Agency and Cash Paymaster Services, the appeal court held that considerations of public interest, pragmatism and practicality should inform the exercise of judicial discretion on whether to set aside administrative action. But these decisions raise interesting questions about the consequences of the courts decisions towards invalid contracts. In the decision handed down last week, the complainants alleged that the tender process was fundamentally flawed at every level, that the entire process lacked transparency and that it was questionable whether Cash Paymaster Services

Last week, the court handed down judgment in a spat between several companies that cried foul when the South African Social Security Agency awarded a tender to Cash Paymaster Services for the provision of payment services for social grants around the country. The value of the tender is about R10bn and it involves the distribution of social grants to more than 14.8-million of SAs poorest: pensioners, disabled people, and children. The total value of the distributed grants is about R500bn. After dismissing two grounds of review, Judge Elias Matojane held that the process followed by the agency was irrational, unfair and inconsistent with the requirements of section 217 of the constitution, the Public Finance Management Act and the Promotion of Administrative Justice Act. But despite finding that the tender was fundamentally flawed at every level, the court decided not to set aside the contract. According to Judge Matojane, the material consequences for social-grant recipients of setting aside the contract would have been too great.

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bdlive.co.za

07/09/2012 00:38

Pragmatic judgment sets a dangerous precedent | Opinion & Analysis

could actually do the job. There have been newspaper reports of all sorts of political meddling. This was not a case of an administrative slip-up but rather an example of corruption at its worst. The Constitutional Court has stated that the ultimate purpose of a public remedy is to afford a prejudiced party administrative justice, to advance efficient and effective public administration and to entrench the rule of law. But it has to be said that all three are undermined in the current decision. And that is not an indictment of Judge Matojane per se: the decision was obviously difficult since many vulnerable people require the social grant services (although his order is suspiciously thin). Rather, it is on something more fundamental; it is that, in trying to be flexible, the pendulum has swung too far to the side of pragmatism with the result that the law has been relinquished and the implementation of the legal principle of precedent now means that a dangerous example has been set.
http://www.bdlive.co.za/opinion/2012/09/05/pragmatic-judgment-sets-a-dangerous-precedent

Solik is the office and research co-ordinator at the civil society group, Ndifuna Ukwazi.

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