Supreme Court of Appeal rules in favour of property mogul Sisa Ngebulana in legal battle with the Special Investigating Unit over an invalid government lease
The Supreme Court of Appeal (SCA) in South Africa has ruled in favour of two entities associated with property mogul Sisa Ngebulana in their legal battle with the Special Investigating Unit (SIU) over an invalid government lease. The lease, reportedly valued at R612 million, was concluded in September 2009 between the Department of Public Works (DPW) and Phomella Property Investments for the Department of Justice (DOJ) to occupy Phomella’s Salu building in Pretoria.
The SIU applied in the North Gauteng High Court in February 2017 to set aside the lease between Phomella and the DPW and for Phomella and Rebosis, which was owned by the Amatola Family Trust of which Ngebulana was the “guiding mind” at the time, to pay back R104 million in wasteful expenditure incurred during the lease. The SIU contended that the lease covered an area greater than the DOJ needed and that the DPW had failed to follow an open bidding process in concluding the lease. Additionally, the prior requirement of a needs assessment of the space required by the DOJ had not been met.
A high court judge found that the lease was invalid, but did not order Phomella and Rebosis to pay the R104 million that the SIU applied to the court for. The SCA judges agreed with the high court judge regarding the ruling not to order Phomella and Rebosis to pay back the money. The SCA judges wrote that the findings by the high court included that Phomella and Rebosis were unaware of any irregularities in the conclusion of the lease, and the DOJ required less than the entire Salu building.
The SCA judges found no basis to uphold the SIU’s appeal against the failure of the high court not to order Phomella and Rebosis to pay R104 million. They wrote that no undue benefit was received under the lease by Phomella, Rebosis, or Mr Ngebulana, and that none of the high court findings can be faulted.