R230 million legal claims against Gauteng Department

Jack Bloom MPL

DA Gauteng Caucus Leader

45 legal claims totalling R230 million have been made against the Gauteng Infrastructure Development Department since 2009.

This information has been provided in terms of an application I made under the Promotion of Access to Information Act.

The department has paid out R 7 855 146 to settle 26 of the claims, while three of the claims were dismissed.

A R41.9 million claim by Group 5 and a R10.7 million claim by Inathi Technology Holdings (Pty) Ltd have also been settled but no payment figure was given.

The department has so far spent R 9 795 861 in legal fees on these claims.

Here are details on three of the larger claims:

  • Country Cloud Trading cc  / DID                  R 20 500 000.00

Cancellation of the completion contract by DID unlawfully prior to payment of the remobilization fee by another contractor who had a joint venture with Country Cloud Trading cc. DID sued on the basis of failure to exercise the duty of care. Judgment in favour of the Department The Plaintiff applied for leave to Appeal.

  • Ilima JV / GPG DID                                           R 21 500 000.00

Illima sued the Department for mobilization fees of R21 million. The Department did not pay this as Illima had produced a fraudulent tax clearance. DID is defending the matter and successfully defended the summary judgment application. Pleadings are still being exchanged. Pending in court.

  • Rent-Works Africa (Pty)Ltd/ DID               R 29 155 707.91

Summons issued against the Department for non- payment of rentals dating back 01 December 2006 to 31st January 2012 for office equipment hired by the then Imphopoma Entity. Matter not referred to State Attorney. Department willing to settle. The parties agreed on settlement in the amount of R16m, after which the Plaintiff decided to proceed to court and not settle. May 2012 but the judge decided that the matter is too complicated for an application and it must go to trial. Trial date not yet allocated

Most of the claims are due to incompetence and poor contractual arrangements. Much money has already been wasted because of the legal claims, and more money will still have to be paid out.

The department needs to tighten up contract management and ensure that it has the right skills to avoid unnecessary legal claims in future.